Defenses
Which two defenses are automatically void?
Physical harm and Fraud in the execution.
Death is an example of which change in circumstance? And why?
Impossibility because there is no way the contract can be done. (typically only applies to service contracts).
What language would you look for in a condition precedent?
True or False: A material breach can ripen to become a total breach.
True. If a material breach is not cured, it can become a total breach.
What is it called when you pay money to hold a contract open?
An option contract
What is the Traditional minority doctrine? Are there any exceptions?
The exception is for necessities. (shelter, food, medicine, education, etc.
If there's a mutual mistake, what prevents the parties from rescinding the contract?
An allocation of risk (for example an "as is" clause) prevents the party who was assigned the risk from rescinding.
How must an express condition be complied with?
It must be strictly complied with.
True or False: A contract can be both materially breached and substantially performed.
False, they cannot exist together.
What are the two elements of revocation of an offer?
1. The offeror must give notice.
2. Their actions must be inconsistent with wanting to form mutual assent
What is it called when a person you trust uses overpersuasion to get you to sign a K?
Undue influence
If a contract is now worthless and useless, what change in circumstance is this?
Frustration of purpose
What is a condition subsequent?
A condition that cuts short a k.
I'll hire you, but if you do not pass the bar, you cannot continue to work.
If a party suspects that other party is not performing, what can they do/request?
They request adequate assurance that the other party is performing their contractual duties.
What is NOT an example of valid consideration?
1. past consideration
2. gifts
3. pre-existing duty
4. illusory promise
In the volitional test for mental impairment, what is the rule as to when it is voidable?
if the other party knew, or should have known, of the mental impairment.
1. When is impracticability valid? Give an example
2. What are some circumstances that are NOT valid impracticability?
1. When the K is possible, but would be insanely expensive or nearly impossible. The mineral park case is an example.
2. Change in the market, lack of profits, increased costs.
True or False: Substantial performance is an example of an implied condition?
True
What can the nbp do when the bp has committed a material breach?
The nbp is allowed to suspend performance until the issue is cured.
1. There must be a writing that includes the subject matter and the parties (can be satisfied by tacking).
2. There must be a signature. (specifically the signature of the person trying to get out of the K)
3. Must include essential terms: price and quantity
What defense is an assertion of an untrue fact? And what the subcategories?
Misrepresentation:
1. Innocent/negligent
2. Half-truth
3. Concealment
4. Non-disclosure
5. Fraud
Unilateral mistake has all of the elements of the mutual mistake (material, basic assumption of K, voidable unless ROL) but features two more elements in order for it to be voidable (only need one to be voidable).
1. Unconscionable
OR
2. other party has reason to know of mistake.
What are the 3 ways that implied conditions can be avoided?
1. waiver (who can waive it?)
2. Forfeiture
3. Estoppel
Is a party knows they won't perform in time, what can they do? And what are the requirements?
A party can do an anticipatory repudiation.
1. It must be clearly stated and definite.
2. It must be timely (before performance)
3. it may be retracted UNLESS the nbp has already accepted or has done acted to find another option (hiring another contractor).
What are the steps to decide whether or not a court should allow in parole evidence
1. Is the contract integrated? (intended to be the final result of making a contract)
2. If so, is it fully integrated or partially?
If full - Not allowed
If partial - may be allowed to supplement, not contradict.