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14 Cards in this Set
- Front
- Back
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What are the defenses to contract formation? |
1) Mistake 2) Misrepresentation 3) Duress 4) Undue Influence 5) Unconscionability |
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What is a mistake? |
A belief that is not in accord with the facts |
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What determines if a mistake is a mistake of facts? |
The mistake concerns the basic assumption on which the contract is made. |
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What are the two kinds of mistakes? |
Mutual and Unilateral |
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What is required for a mutual mistake? |
1) Both parties share mistaken belief about a fact existing at the time of K. 2) Must be a material basic assumption 3) Must materially affect the exchange 4) There was no assumption of risk |
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What is required for a unilateral mistake? |
1) Must go through all mutual mistake factors 2) The affect of the mistake is such that enforcement of the K would be unconscionable, or there would be severe harm against the mistaken party, or non-mistaken party can be returned to the status quo 3) The party had no reason to know of the mistake or his fault caused the mistake |
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What is misrepresentation? |
Generally, an assertion that is not in line with the true facts |
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What are the two kinds of misrepresentation? |
1) Intentional 2) Innocent / Negligent |
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What is the definition of intentional misrepresentation? |
An assertion made with knowledge of falsity with intent to induce a contract. |
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What are the four elements of intentional misrepresentation? |
1) Must know or believe that the assertion is false. 2) The person making the assertion is not confident that the assertion is true 3) Must induce actual reliance 4) Must be justifiable reliance |
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What four element must you have for innocent / negligent misrepresentation? |
1) Untrue assertion of fact (i.e. Affirmative statement, concealment, non-disclosure) 2) Assertion relates to a material fact 3) Must be actual reliance 4) Must be justifiable reliance |
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When is there a duty to disclose a fact? |
1) When law requires it 2) When there is a relationship of trust 3) If an assertion made is true but it is later discovered that it is now false 4) One party knows the other party is laboring under a basic assumption where failure to disclose would violate good faith and fair dealing 5) The information is not equally available and reasonably easy to access by both parties. |
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What elements are required for duress? |
1) Unlawful threat 2) No reasonable alternative but to accept |
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What are examples of improper threats? |
1) What is threatened is a crime or a tort 2) Criminal prosecution - even if justified 3) Bad faith use of civil process 4) The threat is a breach of duty of good faith and fair dealing under a contract with the recipient. |
