BSLW6604 Lecture Notes - Lecture 7: Clean Hands, False Statement, Equitable Remedy
8 Jun 2018
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1. Avoidance of a Contract
a. Misrepresentation
i. False statement made by a party
b. Mistake
i. Unilateral
1. Doesn’t set aside contract unless other party knew of mistake and tried to
take advantage
ii. Bi-lateral mistake
c. Duress
i. Threat of harm
ii. Economic duress counts
d. Under influence/disparity of bargaining power
i. One person taking advantage of a position of power over another person
e. Unconscionability
i. When a contract is so unreasonably detrimental to the interest of a contracting
party as to render the contract unforceable
f. Impracticality
i. War, embargo, crop failure
g. Incapacity
i. Sui juris: of one’s own right
ii. Minor (18 in most states)
iii. Mental defect
iv. Adults usually can enter into binding contracts with minors if the legal guardians
have authorized the agreement
h. Illegality
i. Illegal activities
1. Statutory violations
2. Violations of public policy not expressly declared by statute
ii. Covenant not to compete
1. Geographic scope and length of time
i. Voidable
i. Depending upon jurisdiction, a minor has the right to repudiate certain contracts.
Any contract with a minor is thus a voidable contract. If a minor were to enter
into a contract with an adult, the adult would be bound by the contract, whereas
the minor could choose to avoid performing the contract
2. Contract Interpretation
a. Statute of Frauds: certain contracts must be in writing
i. Over $500
ii. Marriage
iii. Sale of land
iv. Contact cannot be performed within one year
v. Suretyship / ownership of debt
vi. Wills
b. Caveat Emptor: buyer beware
c. Assignment
i. Allowable unless expressly prohibited
d. Parol Evidence Rule
i. Written contract constitutes an “integration of agreement”
ii. Litigants cannot assert facts that existed before the contract was formed if those
facts contradict existing written contract
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