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19 Cards in this Set
- Front
- Back
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Presumption of ability to make contracts, Incapacity generally
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RS 12
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Two incompetence tests for voidable contracts
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RS 15 1 a) and b) - He is unable to understand, OR, he is unable to control actions AND the other party has reason to know. Second part adopted in Orletere.
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What happens when someone is mentally incompetent but the other party doesn't know?
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15(2) : Look at circumstances
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Infancy
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RS 14 - only voidable contract duties until the day before 18th bday. Sheridan - if you can move back, an apartment is not a necessary.
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Misrepresentation - two types that make it voidable
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RS 164 : fraudulent OR material. Definitions in RS 164. Halpert - material.
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two more requirements for misrepresentation
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Must be JUSTIFIABLE reliance (164), must be a fact, not an opinion except in special circumstances (169), Vokes
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Non-disclosure is not USUALLY a misrepresentation, but still
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161, Stambovsky
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Duress definitions
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Hackley v. Headley - When circumstances deprive of free will. RS 175 - no reasonable alternative AND improper threat (defined in 176)
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Undue Influence
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RS 177
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Unconscionability - types
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Procedural and substantive, must have some aspects of both, BUT it's a sliding scale! (Gatton v. T-Mobile)
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Courts' courses of action when unconscionability is found
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RS 208, UCC 2-302
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Developing factors of unconscionability
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Williams v. Walker - absence of meaningful choice (gross inequality of bargaining power!) plus unfavorable terms was enough. Wille v. SWB - uneven bargaining power ALONE is not enough! Gatton v. T-Mobile - Contract of adhesion use establishes minimum degree of procedural U, notwithstanding market alternatives.
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RS definition of mistake
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151 - A mistake is a belief that is not in accord with the facts
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When does a mistake make a contract voidable?
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152 : When it goes to a basic assumption on which the contract is made and has a material affect on the parties, UNLESS a party took the risk of it under RS 154!
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When a party bears a risk of a mistake
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RS 154 - Agreement (as-is clauses, Lenawee sewage house), conscious ignorance (Wood v. Boynton, diamond), etc etc. Also experience may mean a court will find risk is assumed (Sherwood v. Walker, experienced woodcutter.)
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Higher standard for unilateral mistakes
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RS 153 - All the other factors, PLUS unconscionability and other party has reason to know. Caveat emptor - Laidlaw v. Oregon.
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Impracticability definition and factors.
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RS 261. If subject of contract is destroyed and it's neither party's fault, both are excused! Taylor v. Caldwell. Factors, Transatlantic : Contingency must have occurred, risk of unexpected occurrence must not have been allocated by either agreement or custom, and occurrence of contingency must have rendered performance commercially impracticable.
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Lack of impractibility
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Transatlantic Financing Corp - Paying 15% extra , PLUS actual performance, is not commercially impracticable. Also, foreseeable.
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Frustration of purpose
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RS 265, Krell v. Henry
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