Ch 7. DEFENSES
A. Minority and Incapacity
i. Minority (Dodson)
Classical gives minor full price back and returns goods to owner- puts parties back in their original positions. This would leave the car dealer SOL w/ a POS car. Ct cites two Modern Minority trends:
Benefit Rule – what does the minor get out of it.
Use Rule – deprecation.
ii. Incapacity(Hauer)
Restatement § 15
(1) Cognitive – can appreciate the nature of the transaction OR
(a)Volitional – can act in a reasonable manner
(2) If other party DOES NOT know of mental defect (acted in good faith), and the parties cannot be put back to their original position without being unfair to one party, the k is not voidable.
B. Duress and Undue Influence
i. Economic Duress (Totem Marine)
Rule(s): Duress exists when you have
Wrongful threat – does not have to be illegal
No reasonable alternative – can’t just sue or wait it out because of financial problems
Causation – threat must be cause for entering into k – whether or not P is in this position because of ∆’s actions
Restatement § 175
(1) improper threat makes contract voidable – means bad faith essentially
ii. Undue Influence (Odorizzi)
Bargaining process for Undue influence
§ Undue susceptibility
§ Excessive pressure
Over-influence/Excessive Pressure:
§ Unusual or inappropriate time
§ Unusual place
§ Demand that business be finished at once
§ Extreme emphasis toward consequences of delay
§ Use of multiple persuaders by dominant side against subservient side
§ Absence of 3rd party to assist subservient party
§ Statements that there is no need/time to consult an attorney.
Restatement § 177
(1) Someone in a position of “trust and confidence” doing persuading not necessary but may be considered.
C. Misrepresentation and Nondisclosure
i. Misrepresentation (Syester)
R. §168 Reliance on Assertions of Opinion
(1) An assertion is one of opinion if it expresses only a belief, w
Latent: possibly would not discover using reasonable diligence – must disclose
Common law: no duty to disclose or do the other party’s work for them. Can’t lie about it or try to hide it.
Modern: seller has a duty to disclose info known to seller but not known to the buyer if it is material.
How is it material?
Its material if a reasonable person would want to know about it because its essential to the value of the property.
D. Unconscionability (Williams, Adkins, Cooper)
Procedural Unconscionability
Absence of meaningful choice – Defects in the bargaining process
o Unequal bargaining power
§ Sophistication
§ Education
§ Take it or leave it (no alternatives for weaker party)
§ How terms are presented (hidden or boilerplate)
§ Fraud
