What is an avoidable contract?
A contract where a party may raise defense if sued for breach or file a suit to rescind. The contract is otherwise fully formed and valid.
What are the elements of duress?
A wrongful or improper threat.
No reasonable alternative, but to accept the contract.
The threat induces the making of the contract.
The coercing party causes the distress:
either directly the cause of distress (majority rule), or
simply took advantage of the distress (minority rule).
What is undue influence?
The unfair persuasion of a party by a dominant party or by a party, who by virtue of their relationship with the subservient party, the subservient party would not expect to act in a manner inconsistent with the subservient party’s welfare.
What is fraudulent misrepresentation?
A misrepresentation is fraudulent if the maker intends the assertion to induce a party to manifest his assent, and
the maker knows or believes that the assertion is false, or
does not have the confidence that he states or implies in the truth of his assertion, or
knows that he does not have the basis that he states or implies for the assertion.
What is a material misrepresentation?
A misrepresentation is material if
* it would be likely to induce a reasonable person to manifest his assent or
* the maker knows that it would be likely to induce the recipient to do so.
What is a misrepresentation?
A material or fraudulent statement that is false and induces a party to enter into a contract by justifiable reliance.
What are the elements of a voidable contract under a misrepresentation claim?
If a party’s manifestation of assent is
- induced by a fraudulent or material misrepresentation,
- by the other party,
- on which the recipient is justified in relying,
the contract is voidable by the recipient of the misrepresentation.
What are the differences between a contract claim and a tort claim of misrepresentation?
A contract claim’s relief is the unmaking of the contract otherwise known as rescission.
There is a tender requirement for a contract claim meaning that the adversely affected party must be “ready willing and able” to return consideration or its monetary equivalent, and
Contract claim requires no fraudulent intent.
A tort claim has relief of monetary damages and requires for fraudulent intent. There is no tender requirement.
Under a contract claim for misrepresentation, what are the elements for analysis?
- Fraudulent, or material misrepresentation by the other party (IRAC)
- Adversely affected party’s assent is induced by the misrepresentation (IRAC)
- misrepresentation must only be a substantial contributor to the recipients decision to make the contract 
- the misrepresentation does not need to be the soul or even predominant factor.
- fraudulent misrepresentation is a substantial factor by default
- material misrepresentation is assumed to be a substantial factor unless there are facts to the contrary
- Justifiable reliance on the misrepresentation by the recipient (IAC).
What is unconscionability?
Unconscionability represents both procedural and substantive unconscionability, which is gross unfairness in a contract.
How do you establish an unconscionability claim?
An unconscionability claim requires you to establish both procedural and substantive unconscionability.
How do you establish procedural unconscionability?
Procedural unconscionability is established by proving
- a lack of meaningful choice by the weaker party and
- some defect in the bargaining process.
How do you analyze a lack of meaningful choice by the weaker party for the purposes of establishing procedural unconscionability?
- Is there a gross inequality of bargaining power,
- together with terms unreasonably favorable to the stronger party, and
- is the offer made on a take it or leave it basis?
How do you establish if there is some defect in the bargaining process for the purposes of establishing procedural unconscionability?
Is the unconscionable term or terms
* a product of unfair surprise or
* is there a lack of understanding by the weaker party?
How do you analyze procedural unconscionability?
By using a totality of circumstances, analyzing lack of choice, defect, and bargaining process, look for all relevant circumstances.
Do not need to establish all circumstances or factors, however the more factors present the stronger the procedural unconscionability claim.
What is substantive unconscionability?
It focuses on the fairness of the terms of the bargain, determining whether the terms are oppressive or if there is an overall imbalance
What are the factors to consider when analyzing for substantive unconscionability?
- Are the terms oppressive?
- Is there a gross disparity in consideration or inadequacy of consideration? or
- A sum total of the provisions drive too hard a bargain? Or
- A general overall imbalance with a gross disparity in the values exchanged?
What is the Corbin test for substantive unconscionability?
Asks whether terms are so extreme as to appear unconscionable according to the mores and business practices of the time and place.
Must have facts to support the use of Corbin test such as the time and place and information regarding the business practices of said time and place.
