Contracts II Outline

Contracts II Outline (D)
 
q       Defenses: Explicit Political, Economical, and Moral Controls on Contracting
·         Affirmative Defense – A defendant’s assertion raising new facts and arguments that, if true, will defeat the plaintiff’s claim, even if all allegations in the complaint are true.
·         What about freedom of contract and defenses?
è      There are some things that society should not be able to buy or bargain for.
è      There are certain types of Ks that the courts want to discourage from happening.
·         Illegality – An act that is not authorized by law. The state of no being legally authorized. The affirmative defense of illegality must be expressly set forth in the response to the opponent’s pleading.
è      In order to protect the integrity of the judicial system, the court will not allow itself to be used to facilitate criminal activity.
è      The court will attempt to discourage criminal activity by denying enforcement to any illegal agreements.
·         Public Policy – Principles and standards regarded by the legislature or by the courts as being of fundamental concern to the state and the whole of society. The principle that a person should not be allowed to do anything that would tend to injure the public at large.
è      A contract, or a contract term, should not be enforced if it violates public policy.
è      In the Matter of “Baby M” – Trial Court (Baby M)
§         Issue – Whether the parties entered into a valid surrogate agreement when the defendant agreed to be a surrogate mother for the plaintiffs’ child by signing an agreement with full knowledge of its terms.
§         Rule – The surrogate – parenting agreement is a valid and enforceable contract pursuant to the laws of the state, and the defendant breached the contract by failing to surrender to plaintiffs the child and by failing to renounce her parental rights to that child.
§         The court did not validated defendant’s defenses of illegality and public policy and validated the contract.
è      In the Matter of “Baby M” – Supreme Court (Baby M II)
§         Issue – Whether a surrogacy contract is valid when it conflicts with the laws and public policy of the state and the actions made may be considered illegal.
§         Rule – The contract is invalid because it conflicts with the laws and public policy of the state and the actions made concerning it were illegal, and perhaps criminal.
§         The court applied illegality and public policy to determine that the contract was not valid.
è      Contract of Adhesion – A standard – form contract prepared by one party, to be signed by the party in a weaker position, usually a consumer, who has little choice about the terms.
§         One in which a party has no alternative but to accept or reject the other party’s terms and there are no options by which the party may obtain the product or service.
§         Elements of a Contract of Adhesion:
►       A party has superior bargaining position over the other.
►       A price for the service is not performed.
►       A party forces the other to sign the contract.
►       A party had expertise that puts the other party at a disadvantage.
►       Disproportionate bargaining power.
è      Unconscionability – Extreme unfairness. The principle that a court may refuse to enforce a contract that is unfair or oppressive because of procedural abuses during contract formation or because of overreaching contractual terms, especially terms that are unreasonably favorable to one party while precluding meaningful choice for the other party. Because unconscionability depends on circumstances at the time the contract is formed, a later rise in market price is irrelevant.
§         The party must show unfairness, overreaching, bargaining disparity or patent unfairness that no reasonable person without duress would accept the contract terms.
è      Any person who possesses legal capacity may be bound by a contract even when it is entered without representation unless there is fraud, overreaching or undue influence which caused the party to enter the contract.
è      Disparity of education or sophistication is not considered grounds for avoidance of a contract.
è      Claim of fraud – parties may rescind the contract because of fraud when the following four elements are met: a material misrepresentation of a fact; known to be false; upon which a party relied; and to its damage.
è      Specific performance – discretionary remedy. It should only be exercised in accordance with principles of equity, and these principles must be left to the judgment and good conscience of the trial court.
è      AC v. CB (Same Sex Parents)
§         Issue – Whether a contract for an agreement between a parent and another person concerning the custody of a child is unenforceable.
§         Rule – A parent may enter into an agreement with another person concerning the custody of a child.
§         Holding – Agreements between parents and others concerning children are subject to judicial modification when such modification is in the best interests of the child.
§         Note – A determination of the best interests of the child, however, must be made on the basis of the evidence before the court.
§         Note – Whether visitation would be against the best interests of the child is a factual determination that must be made on the evidence.
§         Note – Petitioner’s sexual orientation, standing alone, is not a permissible basis for the denial of shared custody or visitation. A person’