BCOR 3000 1nd Edition Lecture 15 Outline of Last Lecture I Overview II Mistakes 1 Unilateral 2 Bilateral III Fraudd 1 Inducement 2 6 requirements IV Execution Inception In factum Outline of Current Lecture V Undue Influence VI Duress VII Statues of Fraud VIII When is writing enough IX Parol of Evidence Current Lecture Chapter 12 Defenses to Contract Enforceability CONT D These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Undue Influence Must be a pre existing relationship family or legal Victim has trusted perpetrator Victim can void contract Parent trusting child Client trusting attorney Merely trusting other party is not enough Undue influence arises from relationships in which one party can greatly influence another party thus overcoming the party s freewill A contract entered into under excessive or undue influence lacks voluntary consent and is therefore voidable Undue influence duty to look after your own interests but you are allowed to believe what the other person says You have a pre existing relationship and a second contract what you are trying to get out of EXAMPLES Ex Your mom is at home and a random stranger knocks on the door and someone asks you to buy your house for 200 000 and she says yes Your mom was foolish to take the guys word because she needed to figure out what to sell the house for Because she didn t know him there was no reason to trust him Ex Your son comes to you and says mom to avoid inheritance taxes you need to sell you your house for 200 000 and put in the contract that you can live in the house for the rest of your life if you sell it to me now The house is really worth 350 000 And you say don t tell my brothers and sisters about this Few years later your mom passes and then you tell your brothers and sisters that your mom sold you the house a few years ago The mother was in a very different situation with her son because she can trust he son under her preexisting relationship The brothers would be able to undo the contract Ex Business setting where you have a lawyer The preexisting is the relationship with the lawyer who is on their side so they should be able to trust the lawyer and what he says Ex Hire a consulting company to come in and evaluate our IT department and tell us what to do The consultant says that they should get a new system and the consultant with get the commission Ideally the company should do some research but from the outside preexisting relationship you do not have to do your own research because you rely on the consultant who you have paid to do this Ex Go into a car dealership and say that you have 10 000 to spend give me the best one You cannot get out of this because there is no pre existing relationship Only one contract that is the contract for the car Ex Repeated individual transaction you go into the same dealership and ask for a new car every 3 years while you may go to the same salesperson that is not undue influence simply trusting someone does not bring it into undue influence Duress Physical threat forcing agreement Victim s agreement is not voluntary Economic duress can be recognized but seldom is Duress can be a defense to the enforcement of a contract and a ground for rescission of a contract Statue of Frauds Totally separate concept from fraud Merely a writing requirement Certain contracts are enforceable only if in writing Originally designed to prevent the courts from being defrauded If oral only unenforceable Contracts that should be in writing 1 contracts that last a long time an 2 one you think very little about Statue of Frauds Examples Land Part performance exception All real estate must be in writing oral contract to sell your house or land is unenforceable Ex shopping for a house during the oil boom when the market was tight and a lot of people were buying houses so you go and look at a house It was a young couple selling the house for a good deal I say I want it and she says that her husband is out of town and we will put it in writing but the house is yours Later they say we have decided we won t sell the house There is nothing I can do now because she orally made the contract with you which is unenforceable If you had paid some money on the day then you would have been able to maybe make the contract because then you gave up so Same thing if they would have given you the deed which is ownership even if you haven t paid yet then the oral contract is enforceable Cannot be performed in one year Measure from date contract formed Lifetime contracts oral OK Example Cannot be performed in one year I will shovel all the snow on your drive way until April 15 the duration is under a year so it can be oral If the contact lasted longer than a year then the contract must be in writing Ex take a part of the CPA exam in august 2015 and you say I will tutor you for 20 hours Look at from today October 2014 and august 15 is less then a year so it does not need to be in writing IF you take it in November 2015 and I will tutor you during thanksgiving break October 2014 to November 2015 is more than a year so it must be in writing I will do something for the rest of my life does not have to be in writing because you could die tomorrow Prenuptial agreements cannot be oral This is because it will last decades before a marriage goes bad so who will remember what you said You think long and hard whether to marry someone and once they decide to get married then the pre nup doesn t t matter because we are not going to get divorced Collateral side Promises Usually as a guarantor of a debt Ex friend has bad credit so we need someone to back your debt You say that if they don t pay their car loan back then I will pay it must be in writing is a side promise because you don t think that your friend will not pay back I ll pay her debt totally does not have to be in writing you know you are going to have to pay the debt Absolute promise to pay someone s debt does not have to be in writing Promise to pay someone s debt if they don t pay it has to being writing If it s part of a deal where you get the benefit then it does not have to be in writing If promise to pay your debt it will benefit me ex sell you …