Title: Chapter 11 Defenses to Contract Enforceability
1Chapter 11Defenses to Contract Enforceability
2Learning Objectives
- Under what circumstances may genuineness of
assent be lacking? - What is the difference between a mistake of law
and mistake of fact? - What elements must exist for fraud?
- What contracts must be in writing to be
enforceable? - What is parole evidence?
3Genuineness of Assent
- Mistake
- Mistake of Value (contract is enforceable)
- Mistake of Fact
- Unilateral Mistake of Material Factmistaken
party does not have the right to cancel contract
unless (1) the non-mistaken party knew or should
have known about the mistake, or (2) there is a
clerical error. - Bilateral Mistakesif both are mistaken either
one can cancel the contract.
4Fraudulent Misrepresentation
- Innocent party can cancel the contract.
- Plaintiff must show
- Misrepresentation of a material fact (not
opinion) by conduct, silence or words - Intent to deceive
- Innocent party must justifiably rely on the
misrepresentation. - Plaintiff must have suffered a legal injury
5Undue Influence Duress
- Undue Influence
- Arises from a special relationship of trust.
- A stronger party overcomes a weaker partys free
will by exerting psychological influence. - Duress
- Threat of physical force or extortion
- Can serve as basis for rescission of contract.
- Economic need, by itself, is not duress.
6Statute of Frauds
- Requires certain contracts to be in writing and
signed to be enforceable. - A contract involving an interest in land.
- A contract that by its terms cannot be performed
within 1 year of execution. - Collateral contracts to answer for the debt of
another. - Prenuptial agreement.
- Contracts for sale of goods over 500.
- Exceptions
- Partial performance and detrimental reliance.
7Parol Evidence Rule
- Prohibits the introduction at trial of evidence
of the parties prior communications that
contradicts the written contract. - Exceptions
- To show Fraud or Mistake
- Subsequent modifications
- Ambiguous Terms
- Prior Dealings
- Obvious or gross clerical errors