(1) gENERAL TERM OF THE OFFER: AN OFFER THAT DOES NOT CONTAIN OR CLARIFY ALL RELEVANT TERMS IS NOT NECESSARILY AN UN ENFORCEABLE OFFER. gENERALLY IF MISSING TERM IS NOT A MATERIAL TERM, THE COURT WILL, IF NECESSARY, IMPOSE A REASONABLE INTERPRETATION OF THE TERM.

(2)PRICE:  UNDER COMMON LAW, iF OFFER IS SILENT ABOUT PRICE, THE COURT WILL IMPOSE A REASONABLE PRICE UPON THE OFFER, PROVIDING IF SITUATION INFERS THE  OFFEROR INTEND TO BE BOUND

(3) UNDER R2ND AND UCC, ID OFFER VAGUE, THEN UNENFORCEABLE.  (SALE FOR FAIR PRICE).

(1) COMMON LAW RULE; FOR OFFER GOVERNED BY COMMON LAW, AN AGREEMENT TO CLARIFY A TERM OF THE OFFER AT A LATER TIME DOES NOT MAKE THE OFFER VOIDABLE UNLESS THE TERM IS A MATERIAL TERM SUCH AS PRICE OR QUAINTY.

(2) UCC RULE: FOR OFER GOVERNED BY UCC, AN OFFER CONTAINING AN AGREEMENT TO CLARIFY A TERM AT A LATER TIME DOES NOT MAKE THE OFFER VOIDABLE, EVEN IF THE TERM IS A MATERIAL TERM SUCH AS PRICE. tHE COURT WILL IMPOSE A REASONABLE PRICE UPON THE OFFER, PROVIDING THE SITUATION INFER THAT OFFEROR INTENDED TO MAKE AN ENFORCEABLE OFFER ( OR IN THE CASE OF COMPLETED CONTRACT, PROVIDING THE CIRCUMSTANCES INFER THE PARTIES INTENDED TO FORM AN ENFORCEABLE AGREEMENT.)

AN OFFER FOR THE SALES OF GOODS THAT DOES NOT MENTION SPECIFIC QUANITY BUT RATHER TALKS OF BUYER REQUIREMENTS, OR THE SELLER OUTPUT, IS A VALID ENFORCEABLE OFFER... IE

IF A  OFER TO BUY ALL OF B WOULD IS A VALID OFFER. OR IF B OFFER TO SUPPLY OF OF A WOOD REQUIREMENTS FOR THE NEXT 3 YRS IS AN VAID ENFORCEABLE CONTRACT. THE BUYER AND SELLER WILL BE IN BREACH OF CONTRACT IF THEY DO NOT SUPPLY OR BUY THE GOODS AS CONTRACTED, PROVIDED THAT THE PARTIES DEMANDS ARE PROPORTIONATE TO THE ORIGINAL AGREEMENT.

WHAT ARE THE FOUR METHODS  OF TERMINATING AN OFFER?

AFTER THE OFFER HAS BEEN EXTENDED BUT BEFORE AN OFFER HAS BEEN ACCEPTED THE FOUR METHOD OF TERMINATING AN OFFER:

(1)  WORD OR CONDUCT OF OFEREE REJECTING THE OFFER

(2) LAPSE OF TIME

(3) WORD OR CONDUCT OF OFFEROR REVOKES OFFER

(4) DEATH OF A PARTY PRIOR TO ACCEPTANCE

(1) IF THE OFFEREE TELL OFFEROR THAT HE IS NOT INTERESTED IN ACEPTING OFFER

(2)cOUNTER OFFER: IF THE OFFEREE RESPONDS TO OFFER WITH COUNTER OFFER, THIS WILL TERMINATE THE ORIGINAL OFFER AND THE OFFEROR IS NO LONGER BOUND TO THE OFFER .

(3) ACCEPTING OFFER, UNDER BUT ADDING ADDITIONAL TERMS TO THE OFFER:

A.   COMMON LAW RULE: IF THE OFFEREE ACCEPTS THE OFFER, BUT IN HIS ACCEPTANCE ADDS A NEW TERM NOT INCLUDED IN THE ORIGINAL OFFER, IT HAS THE EFFECT OF TERMINATING THE ORIGINAL OFFER AND CREATING A NEW COUNTER OFFER. IF OFEROR DONT ACCEPT COUNTER OFFER, HE IS NOT BOUND TO THE ORIGINAL OFER.

UCC RULE:  oFERS GOVERNED BY ARTICLE 2 OF UCC ARE NEVER TERMINATED BY ACCEPTANCE COUPLED WITH AN ORIGINAL TERM.  WHEN A DISPUTE OF WHETHER THE OFFEROR IS OBLIGE TO PERFORM THE NEW TERM THE UCC STATES

(1) IF BOTH PARTIES ARE MERCHANTS, THE DEFAULT POSITION IS THAT THE ADITIONAL TERM WILL BE ENFORCEABLE AGAINST THE OFFEROR UNLESS:

A. THE OFERROR EXPRESSLY OBJECTS TO THE ADDITIONAL TERM OR  THE ADITIONAL TERM MATERIALLY ALTERS THE ORIGINAL OFER.

(2) WHER ONE OR BOTH PARTIES ARE NONMERCHANTS, THE OFFEROR WILL NOT BE BOUND BY ADITIONAL TERMS UNLESS HE EXPRESSLY ACCEPTS THE ADDITIONAL TERMS.

an offer is terminated after the lapse of time specified in the offer. usually this time is measured from the time the offer is received. if no time is specified the offer is open for a reasonable time. (1-3 mos).

a. face to face and telephone offer is deemed, in absence of manifestation of a contrary intention to be open only while the parties are conversing.

b. termination upon happening of a particular event: if the offeror stipulates that the offer shall terminate upon the happening of a certain event and the event ocurs before acceptance, the power of acceptance is terminated.

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1. LATE ACCEPTANCE CAN BE UNILATERALLY WAIVED.

2. MUST BE COMMUNICATED

3. OFFEROR MUST COMMUNICATE REPLY, OFERROR SILENCE  CREATES CONTRACT BY SILENCE.

MAJORITY RULE:IF AN OFFERORS DIES BETWEEN THE MAKING OF THE OFFER AND THE ACCEPTANCE, THE OFFER TERMINATED EVEN IF THE OFFEREE IDS UNAWARE OF THE OFFEROR DEATH.

mONORITY RULE: UNDER THE MONITY RULE THE OFFER TERMINATES ONLY IF THE OFFER IS AWARE OF IT.

iNCAPACITY OF OFFER-MAJORITY AND MINORITY RULE

ADJUDICATION OF INCOMPACITY: WHERE THERR IS A ADJUDICATION OF CAPACITY AND THE PROPERTY OF THE OFFEROR IS PLACED IN GUARDINSHIP, ANY UNACCEPTED OFFER IS TERMINATED.

UNADJUDICATED INCAPACITY

IF THERE IS NO ADJUDICATION OF INCOMPACITY, THE RULE IS THAT SUPERVENING MENTAL INCOMPACITY IN FACT TERMINATES THE OFFER IF THE OFEREE IS OR SHOULD BE AWARE OF INCOMPACITY.

IN GENERAL AN OFFER CAN ALWAYS BE REVOKED BEFORE IT HAS BEEN ACCEPTANCE. THERE ARE FOUR EXCEPTIONS TO THIS RULE:

1. OPTION CONTRACT: IF THE OFFEROR PROMISES TO KEEP AN OFFER OPEN AND HAS RECEIVED CONSIDERATION FROM THE OFFEREE IN EXCHANGE FOR THIS PROMISE, SUCH OFFER CANNOT BE REVOKED.

(2) FIRM OFER RULE: UNDER ARTICLE 2 OF THE UCC AN OFFER CANNOT BE REVOKED UP TO THREE MONTHS IF:

A. THE OFFER IS FOR SALE OF GOODS

B. THERE IS A SIGNED WRITTEN PROMISE TO KEEP THE OFFER OPEN. IF OFFER MADE BY MERCHANT, NO CONSIDERATION IS NECCESSARY, BUT MUST BE IN WRITING.

(C)  DETRIMENTAL RELIANCE: AN OFFER CANNOT BE REVOKED IF THERE HAS BEEN DETRIMENTAL RELIANCE BY THE OFFEREE THAT WAS REASONABLE FORSEEABLE.

d.  START OF PERFORMANCE:

UNILATERAL CONTRACTS- START OF PERFORMANCE WILL TRIGGER DETRIMENTAL RELIANCE.

bILATERAL CONTRACTS- START OF PERFORMANCE WILL CONSTITUTE ACCEPTANCE

WHAT IS UNIDROIT RULES REGARDING TERMS OF ACCEPTANCE?

WHAT IS UCITA RULES TERMS OF ACCEPTANCE?

SHRINKWRAPED WARRANTIES (PACKAGED)

SHRINKWRAPPED AND PACKAGED WARRNTIES:  CASES ARE DIVIDED ON WHETHER A PURCHASER IS BOUND BY ARBITRATION CLAUSE CONTAINED IN LIMITED WARRANTY THAT IS PAGED WITHIN THE PRODUCT BOX AND SHRINKWRAPPED WARRANTY (SOFTWARE PROGRAMS)

BOX TOP LICENSES:  WHEN A DISCLAIMER IS NOT EXPRESSES UNTIL AFTER THE CONTRACT IS FORM, THE UCC STATES SUCH DISCLAIMERS, TO THE EXTENT THEY MATERIALLY ALTERS THE AGREEMENT, ARE NOT INCORPORATED INTO THE AGREEMENT.

cLICKWRAP: (DOWNLOADED SOFTWARE: WHERE SOFTWARE IS DOWNLOADED FROM THE INTERNET, WITH LICENSEE BEING REQUIRED TO CLINK i AGREE BUTTON INDICATING AGREMENT TO LICENSOR TERMS, SUCH CONDUCT IS A BINDING ACCEPTANCE OF LICENSOR OFFER.

APROMISE MUST BE SUPPORTED BY CONSIDERATION IN ORDER TO BE ENFORCEABLE. CONSIDERATION REQUIRES A BARGAIN EXCHANGE IN WHICH EACH PARTY INCURS A LEGAL DETRIMENT. THE ELEMENTS OF CONSIDERATION ARE:

1. BARGAIN EXCHANGED

CONSIDERATION IS A BARGAIN FOR PERORMANCE OR RETURN PROMIES WHICH IS GIVEN BY THE PROMISSEE IN EXCHANGE FOR THE PROMISOR'S PROMISE. CONSIDERATION NEED NOT BE FURNISH BY OR TO THE PARTIES THEMSELVES AS LONG AS IT IS PART OF THE BARGAIN EXCHANGE. EVEN IF THE PROMISOR'S PROMISE INDUCED PERFORMANCE OR A RETURN PROMISE BY THE PROMISEE, IF SUCH INDUCEMENT IS NOT SOUGHT BY PROMISOR, THERE IS NO BARGAIN FOR EXCHANGE, IT IS A UNENFORCEABLE GIFT.

2. LEGAL DETRIMENT

A LEGAL DETRIMENT EXITS WHERE THE PARTY:

ENGAGES IN AN ACT THAT THE PARTY WAS NOT PREVIOUSLY OBLIGATES

REFRAINS FROM EXERCISING A LEGAL RIGHT.

PRE-EXITING DUTY DOES NOT CONSTITUTE A LEGAL DETRIMENT.

SURRENDER OD A VALIDLY DISPUTED CLAIM, ONE WHICH THERE IS FACTUAL OR LEGAL UNCERTAINITY AS TO ITS MERITS OR THE RELEASE OF A VALIDLY ASSERTED DEFENSE IS SUFFICIENT CONSIDERATION FOR RETURN PROMISE. FORBEARANCE OF AN INVAILD CLAIM OR DEFENSE MAY ALSO SERVE AS CONSIDERATION IF THE PROPONENT OF SUCH CLAIM OR DEFENSE HAD A GOOD FAITH BELIEF IN ITS VALIDITY AND IF THERE EXIST AN OBJECTIVE UNCERTAINITY AS TO ITS VALIDITY.

gENERALLY, A PROMISE TO PAY A LESSER AMOUNT THEN OWED OR TO PARTIALLY PERFORM A PRE-EXISTING OBLIGATION DOES NOT CONSTITUTE A LEGAL DETRIMENT SINCE THE PROMISOR IS MERELY DOING THAT WHICH HE IS ALREADY OBLIGATED TO DO.

HOWEVER, IF THE PROMISOR TAKES ON A GREATER OBLIGATION THAN IS PROMISED, SUCH AS PAYING OR PERFORMING BEFORE THE OBLIGATION IS DUE, HE INCURS A LEGAL DETRIMENT SUFFIIENT TO FORM CONSIDERATION FOR DISCHARGE OF OBLIGATION,

Illusory promises are so named because they merely hold the illusion of contract. For example, a promise of the form, "I will give you ten dollars if I feel like it," is purely illusory and will not be enforced as a contract.

AN ILLUSIONARY PROMISE CANNOT SERVE AS CONSIDERATION BECAUSE THE PROMISE IS SUBJECT TO CONDITIONS WITHIN CONTROL OF THE PROMISOR ALONE. ESPECIALLY WHERE SUCH CONDITION IS RELATED TO THE CONTRACT PERFORMANCE, OR WHEN THE PROMISOR, AT THE TIME OF THE PROMIS WAS MADE, KNOWS THAT SUCH CONDITION CANNOT OCCUR.

 a peppercorn to the other party. As a result, contracts in the United States have sometimes have had one party pass nominal amounts of consideration, typically citing $1.

1. R 2ND STATES IF NOMINAL CONSIDERATION IS GIVEN AS A MERE FORMALITY IN ORDER TO CREATE A BINDING CONTRACT RATHER THAN A BARGAIN EXCHANGE, THE CONSIDERATION IS INSUFFICIENT.

(2) R 2ND STATES, IN OPTION CONTRACT, A PAYMENT OR PROMISE TO PAY NOMINAL CONSIDERATION IS SUFFICIENT CONSIDERATION TO MAKE ENFORCEABLE A PROMISE NOT TO REVOKE, PROVIDED THE OPTION IS RELATIVELY SHORT (10 DAYS)  AND THE PRICE TO BE PAID IF OPTION IS EXERCISE IS A FAIR PRICE.

THE TYPES OF PROMISES THAT ARE ENFORCEABLE WITHOUT CONSIDERATION ARE:

1. PROMISES THAT INDUCE A FORSEEABLE AND DETRIMENTAL CHANGE IN THE POSITION BY THE PROMISEE (PROMISSORY ESTOPPEL)

2.  A NEW WXPRESS OR IMPLIED PROMISE TO PAY A DEBT THAT HAS BECOME BARRED BY THE STATUTE OF LIMITATION

(3) A NEW EXPRESS PROMISE TO PERFORM ALL OR PART OF A PRE-EXITING OBLIGATION THAT HAS BEEN DISCHARGED IN BANKRUPTCY.

4. WHERE AN ORIGINAL PROMISE IS VOIDABLE TO TO VALID DEFENSE BY PROMISOR SUCH AS MIOSTAKE  MISREPRESENTATION OR UNDUE INFLUENCE, A SUBSEQUENT PROMISE IS MADE.

5. WHERE ORIGINAL PROMISE IS VOIDABLE DUE TO PROMISOR'S INCAPACITY, A NEW PROMISE BY SUCH PROMISOR UPON ATTAINING CAPACITY.

6.  UCC  STATES IN THE CONTRACT FOR SALES OF GOODS, CONTRACT MODIFICATION, RELEASE OF A CLAIM BY SIGN WRITINF AND A WRITTEN PROMISE NOT TO REVOKE THE OFFER.

.

tHE STATUTE OF FRAUD REFERS TO THE REQUIREMENT  THAT CERTAIN KINDS OF CONTRACTS BE MEMORIZED IN A SIGNED PARTIES, INDICATES THAT A CONTRACT HAS BEEN MADE BETWEEN THEM AND STATES WITH REASONABLE CERTAINTY THAT ESSENTIAL TERMS OF THE UNPERFORMED PROMISE, IN THE CASE OF NON-GOODS.

:

THE STATUTE OF FRAUD REQUIRES A WRITING SIGNED BY THE DEFENDANT IN THE FOLLOWING CIRCUMSTANCES:

• CONTRACTS IN CONSIDERATION OF MARRIAGE ( PROVIDE DOWRY OR SHILD SUPPORT)

CONTRACTS THAT CANNOT BE PERFORMED IN ONE YEAR. 

• CONTRACTS FOR THE TRANSFER OF AN INTEREST OF LAND

CONTRACTS BY THE EXECUTOR OF A WILL TO PAY A DEBT OF THE ESTATE WITH HIS OWN MONEY.

• CONTRACT FOR THE SALES OF GOODS OVER 500.00
• MORTGAGES OR DEED OF TRUST
• CONTRACT FOR THE SALES OF PERSONAL PROPERTY SUCH AS ; INTELLECTUAL PROPERTY, ROYALTIES IN THE AMOUNT OF 5,000 OR MORED.
• LEASES OF GOODS OVER 1,000
• AGREEMENT WHICH CREATE SECUIRITY INTEREST IN PERSONAL PROPERTY THAT IS NOT IN POSSESSION OF THE SECURED  PARTY, ANDF AGREEMENT THE ASSIGNMENT FOR THE CONTRACT RIGHTS.

The statute of frauds refers to the requirement that certain kinds of contracts be memorialized in a signed writing.

Traditionally, the statute of frauds requires a writing signed by the defendant in the following circumstances:

• Contracts in consideration of marriage.
• Contracts which cannot be performed within one year.
• Contracts for the transfer of an interest in land.
• Contracts by the executor of a will to pay a debt of the estate with his own money.
• Contracts for the sale of goods above a certain value.
• Contracts in which one party becomes a surety (acts as guarantor) for another party's debt or other obligation.

This can be remembered by the mnemonic "MY LEGS": Marriage, one year, land, executor, goods, surety

CONTRACT IN WHICH ONE PARTY BECOMES A SURETY (ACTS AS GUARANTOR ) FOR ANOTHER PARTY DEBY OR OTHER OBLIGATION.

This can be remembered by the mnemonic "MY LEGS": Marriage, one year, land, executor, goods, surety

uNDER THE STATURE OF FRAUD, WHEN CAN A CONTRACT FOR THE SALE OF GOOD BE ENFORCE IN ABSENCE OF REQUIRED SIGNATURE?

CONTRACT FOR THE SALE OF GOODS THAT FALL WITH THE STATUTE OF FRAUD MAY BE ENFORCES, AT LEAST PARTIALLY. IN ABSENCE OF WRITING WHEN:

1. PAYMENT BEEN MADE AND ACCEPTED OR GOODS HAVE BEEN RECEIVED AND ACCEPTED

2. MANUFACTURED GOOD: WHERE SELLER CANNOT SELL SUCH GOODS TO THIRD PARTIES IN THE NORMAL COURSE OF BUSINESS

3. WHERE THE PARTY AGAINST WHOM ENFORCEMENT IS SOUGHT ADMITS IN A PLEADING THAT AN CONTRACT WAS MADE BUT THE CONTRACT IS ONLY ENFORCEABLE UP THE QUANITY OF GOODS ADMITTED.

Rule that prohibits the introduction into a court of law of any oral or written agreement that contradicts the final written agreement. For example, an insurance contract containing clauses and provisions is in writing, and as such this contract cannot be contradicted or modified by any oral statements or agreements that are inadmissible in a court of law.

tHE PAROLE EVIDENCE RULES IS A RULE THAT PROHIBITSM THE INTRODUCTION INTO COURT ANY ORAL OR WRITTEN AGREEMENT THAT CONTRADICTS THE FINAL WRITTEN AGREEMENT.

PAROL REFERS TO VERBAL EXPRESSIONS OR WORDS. VERBAL EVIDENCE, SUCH AS TESTIMONY OF A WITNESS AT TRIAL. IN CONTEXT TO CONTRACT, DEEDS WILLS, OR OTHER WRITINGS, PAROL EVIDENCE REFERS TO EXTRANEOUS (OUTSIDE) EVIDENCE SUCH AS ORAL AGREEMENT (A PAROL CONTRACT) OR EVEN A WRITTEN AGREEMENT, THAT IS NOT INCLUDED IN THE REVELEVANT WRITTEN DOCUMENT.

tHE PAROLE EVIDENCE RULE IS A PRINCIPLE THAT PRESERVES THE INTEGRITY OF WRITTEN DOCUMENTS OR AGREEMENTS BY PROHIBITING THE PARTIES FROM ATTEMPTING TO ALTER THE MEANING OF THE WRITTEN DOCUMENT THROUGH THE USE OF PRIOR AND CONTEMPORANEOUS ORAL OR WRITTEN DECLARATIONS THAT ARE NOT REFERENCED IN THE DOCUMENT.

 When the parties to the negotiations do put their agreement in writing and acknowledge that the statement is the complete and exclusive declaration of their agreement, they have integrated the contract. The parol evidence rule applies to integrated contracts and provides that when parties put their agreement in writing, all prior and contemporaneous oral or written agreements merge in the writing.

WHEN THE PARTIES TO THE NEGOTIATIONS DO PUT THEIR AGREEMENT IN WRITING AND ACKNOWLEDGE THAT THE STATEMENT IS COMPLETE AND EXCLUSIVE DECLARATION OF THEIR AGREEMENT, THEY HAVE INTEGRATED THE CONTRACT.  tHE PAROLE EVIDENCE RULE APPLIES TO INTEGRTATED CONTRACTS( EG. The insurance policy is generally an integrated contract, meaning that it includes all forms associated with the agreement between the insured and insurer).

Courts do not permit integrated contracts to be modified, altered, amended, or changed in any way by prior or contemporaneous agreements that contradict the terms of the written agreement.

COURTS DO NOT PERMIT INTERGRATED CONTRACTS TO BE MODIFIED, ALTERED, AMENDED OR CHANGED IN ANY WAY BY PRIOR CONTEMPOREOUS AGREEMENTS THAT CONTRADICTS THE TERMS OF THE AGREEMENT .

THERE IS FOUR APPROACHES USED BY COURTS UNDER THE PAROLE EVIDENCE RULE TO DETERMINE WHETHER THE WRITTEN IN QUESTION IS A COMPLETE OR PARTIAL INTERGATION OF AGRRED UPON TERMS:

(1) FOUR CORNERS OR PLAIN MEANING RULKE- IF THE WRITING APPEARS  COMPLETE OR FINAL THEN SO BE IT.

(2)  COLLATERAl contract concept-  final writing are deem to be partial integration. The concept of collateral contract may be defined as ‘a contract where the consideration is entry into another contract, and co-exists side by side with the main contract'.   A promise that was not included in the principal contract may be enforced as a collateral contract.

(3) WILLISTON RULE (REASONABLE PERSON)

 IF A WRITING APPEARS TO BE A COMPLETE EXPRESSION OF THE PARTIES AGREEMENT, IT IS COMPLETE UNLESS THERE ARE SOME ADDITIONAL TERMS THAT SHOULD BE ENTER INTO A SEPARATE AGREEMENT

(4) UCC AN R 2ND APPROACH, ALLOWS RELEVANT EVIDENCE AS TO INTENT OF PARTIES, INCLUDING EVIDENCE OF PRIOR NEGOIATIONS.

** MERGER CLAUSE WILL BE ENFORCE ABSENT PROFF OF MISTAKE AND OTHER DEFENSE.

certain defenses , generally those hat affect assent can render a contract voidable by the aggrieved party.

defenses, generally pertain to public law and policy, are void contracts.

Duress in context of contract law is a common law defense, and if one is successful in proving that the contract is vitiated by duress, the contract may be rescinded and voidable.

DURESS IS DEFINED AS A THREAT OF HARM M ADE TO COMPEL A PERSON TO DO SOMETHING AGINST HIS OR HER WILL OR JUDGEMENT, A WRONGFUL THREAT MADE BY ONE PERSON TO COMPEL A MANIFESTATION OF SEMING ASSENT BY ANOTHER TO A TRANSACTION WITHOUT REAL VOLITION.

Duress in contract law falls into two broad categories:

• Physical duress, and
• Economic duress

dURESS IN CONTRACT LAW FALL INTO TWO CATEGORIES

PHYSICAL DURESS- 

DURESS TO PERSON: AN INNOCENT PARTY WHO WISHES TO SET ASIDE THE CONTRACT FOR DURESS NEED TO PROVE ONLY THAT THE THREAT WAS MADE AND IT WAS THE REASON FOR ENTRY INTO CONTRACT. THE OTHER  PARTY BEARS THE BURDEN OF PROOF THAT THE THREAT HAD NO EFFECT ON ASSENT TO CONTRACT. PHYSICAL DURESS CAN BE MADE BY SOCIAL INFLUENCE.

Duress to goods:In such cases, one party refuses to release the goods belonging to the other party until the other party enters into a contract with them. For example, in Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298, the contract was set aside after Hawker Pacific's threats to withhold the helicopter from the plaintiff unless further payments were made for repairing a botched paint job.

ECONOMIC DURESS-

a CONTRACT IS VOIDABLE IF THE INNOCENT PARTY CAN PROVE THAT IT HAD NO OTHER PRACTICAL CHOICE, BUT TO AGREE TO CONTRACT.

[edit] The elements of economic duress

THE ELEMENTS OF ECONOMIC DURESS IS:

1. WRONGFUL OR IMPROPER THREATS

2.  LACK OF REASONABLE ALTERNATIVE (NO LEGAL REMEDY, MARKET SUBSTITUTE OR ANY SOURCE OF FUNDS AVAILABLE)

3.   THE THREAT ACTUALLY INDUCE THE MAKING OF THE CONTRACT

4. THE OTHER PARTY CAUSED THE FINANCIAL DISTRESS

WHAT IS MISREPRESENTATION?

MISREPRESENTATION IS A CONCEPT IN CONTRACT LAW THAT HOLDS THAT WHEN A FALSE STATEMENT OF FACT MADE BY ONE PARTY TO ANOTHER, WHICH HS THE EFFECT OF INDUCING THE PARTY INTO THE CONTRACT, REGARDING THE QUALITY AND NATURE OF THE PRODUCT, A FINDING OF MISREPRESENTATION ALLOWS FOR A REMEDY OF RESCISSION AND SOMETIMES DAMAGES DEPENDING ON THE TYP[E OF MISREPRESENTATION.

i. CRITERIA FOR WHEN A MISREPRESENTATION OCCURED WHEN ONE PARTY MAKES A FALSE STATEMENT WITH INTENTION OF INDUCING ANOTHER PARTY TO CONTRACT. FOR AN ACTION TO BE SUCCESSFUL, THE CRITERA FOR AJUDICATION ARE:

1. A FALSE STATEMENT OF FACTS HAS BEEN MADE

2. THE STATEMENT WAS DIRECTED AT THE SUING PARTY

3. THE STATEMENT HAD ACTED TO INDUCE THE SUING PARTY TO CONTRACT

MISREPRESENTATINS CAN BE

Distortion of Fact

1. AREPRESENTOR MAY MAKE ASTATEMENT WHICH PRIMA FACIE TECHNICALLY TRUE, BUT ONLY TELLS HALF THE STORY. IF A STATEMENT OF FACT IS MADE BUT THE REP FAILS TO INCLUDE INFO WHICH WOULD ALTER THE INTERPRETATION OF THIS FACT, THEN  MISREPRESENTATION HAS OCCURRED.

2. LEARNED FALSITY

WHEN NEW INFORMATION LEARN AND THE CIRCUMSTANCESHAS CHANGE, MISREPRESENTATION CAN RESULT BY SILENCE OF A MATERIAL FACT THAT WAS PREEXISTENT  OR SILENCE OF A NEWLY LEARNED MATERIAL FACT.

Special Relationships

Some relationships also provide that silence can form the basis of an actionable misrepresentation.

SPECIAL RELATIONSHIPS

SOME RELATIONSHIP ALSO PROVIDE THAT SILENCE CAN FORM THE THE BASIS OF AN ACTIONABLE MISREPRESENTATION

1.  FIDUCIARY RELATIONSHIP- A FIDUCIARY RELATIONSHIP IS WHEN ONE OF TRUST AND CONFIDENCE. IT INVOLVES ONE PARTY ACTING FOR THE BENEFIT OF ANOTHER. FOR THIS REASON WHEN ENTERING INTO A CONTRACT, IT IS IMPORTANT THAT FIDUCIARY TO DISCLOSE ALL FACTS WHICH COULD CONSIDERED MATERIAL, EVEN IF NOT EXPRESSLY ASKED ABOUT.

• Contracts ‘Uberrimae Fidei’

A contract uberrimae fidei is a contract of ‘utmost good faith’. Similarly to fiduciary relationships, the parties are required to make known all material facts influencing the contract. Contracts uberrimae fidei

2. UBERRIMAE FIDEI

A CONTRACT UBERRIMAE FIDEI IS A CONTRACT OF THE UPMOST GOOD FAITH. THE PARTIES ARE REQUIRED TO MAKE KNOWN ALL MATERIAL FACTS INFLUENCING THE CONTRACT. CONTRACT UBERRIMAE FIDEI USUALLY ARISE  WHEN ONE PARTY HAS KNOWELDGE WHICH THE OTHER DOES NOT HAVE ACCESS TO. CONTRACT WHICH ARE COMMONLY CONSIDERED TO BE OF  SUCH NATURE INCLUDES CONRACTS OF INSURANCE AND FAMILY AGREEMENTS. THERE MUST BE A DISCLOSURE OF MATERIAL FACTS.

TYPES OF MISREPRESENTATION ARE:

1. FRAUDLENT - INTENTION TO DECEIVE

2. NEGLIGENT- CARELESS MIS REP OF FACT WHILE REP HAD NO REASON TO BELIEVE IT TRUE.

3. INNOCENT- REP HAD REASONABLE GROUND TO BE BELIEVE STATEMENT ID TRUE, BUT FALSE.

WHAT IS UNCONSCIONABILITY OF CONTRACT?

UNCONSIONABILITY IS A TERM USED IN CONTRACT LAW TO DESCRIBE AQ DEFENSE AGINST THE ENFORCEMENT OF A CONTRACT BASED ON THE PRESENCE OF TERMS UNFAIR TO ONE PARTY. TYPICALLY, SUCH A CONTRACT IS HELD TO BE UNENFORCEABLE BECAUSE THE CONSIDERATION OFFERED IS LAKING OR IS OBVIOUSLY INADEQUATE THAT TO ENFORCE THE CONTRACT WOULD BE UNFAIR TO THE PARTY SEEKING TO ESCAPE THE CONTRACT.

IN AND OF ITSELF, INADEQUATE CONSIDERATION IS LIKELY NOT ENOUGH TO MAKE A CONTRACT UNENFORCEABLE. HOWEVER, A COURT WILL CONSIDER EVIDENCE THAT ONE PARTY TO THE CONTRACT TOOK Advantage of its superior bargaining power to insert provisions that makes the agreement overwhelmingly favor the interest of the other party.

Usually for a court to find a contract unconscionable the party claiming unconscionability will have to prove both that there was a problem with the substance of the contract and the process through which that contract was formed. The substantive problem will usually be the consideration, but could also be the terms, interest payments, or other obligations the court finds unfair.

usually for a court to find a contract unconscionable the party claiming unconscionability will have to prove both that there was a problem with the substance of the contract and the process through which that contract was form. the substantive problem will usually be the consideration ( lack of remedy, no risk to party, grater benefit to party, great disparity between cost and selling price, high interst )

Procedural issues that a court could consider include a party's lack of choice, superior bargaining position or knowledge, and other circumstances surrounding the bargaining process.

procedura; issues includes a party lack of choice, superior bargaing position or knowledge, and (inconspicuos writing, uninteligible legal language, lak of opportunty to read, illiteracy, (standardrize contract whereadhesion contract or boilerplate contract) is a contract between two parties that does not allow for negotiation, i.e. take it or leave it.

AN INCIDENTAL BENEFICIARY IS A PARTY WHO STANDS TO BENEFIT FROM THE EXCUTION OF THE CONTRACT, ALTHOUGH THAT WAS NOT THE INTENT OF EITHR CONTRACTING PARTY. IE.

IF A HIRES B TO RENOVATE HIS HOUSE, AND A INSIST THAT YB USE C THEN C IS THE INCIDENTAL BENEFICIARY BECAUSE UNPON A AND B  DID NOT ENTER THE ENTERING THE CONTRACT FOR THE BENEFIT OF C. A WANTS HIS HOUSE RENOATED , B WANT MONEY FOR RENOVATING. IF THE CONTRACT IS BREACHED AND C IS NEVER HIRED, THEN C HAS NO RIGHTS TO SUE

EXP 2. IF A PROMISE TO BUY B A CAR, AND HE FAILS TO DO SO, THE CAR DEALER CANNOT REOVER FOR THE LOST OF THE SALE.

THE TWO COMMON SITUATION IN WHICH THE INTENDED BENEFICIARY RELATIONSHIP IS CREATED IS:

1.  CREDITOR BENEFICIARY- WHEN A OWE C AND A PROMISE B CONSIDERATION IF A PAY C.

2. DONEE BENEFICIARY- WHERE A WISHES TO MAKE A GIFT TO C AND A GREES TO PROVIDE CONSIDERATION TO B IN EXCHANGE THAT B PROMISE TO PAY C THE AMOUNT OF THE GIFT.

THE THREE TEST USED TO DETERMINE WHETHER THE THIRD PARTY BENEFICIARY RIGHTS HAVE VESTED:

1. IF THE BENEFICIARY KNOWS OF AND DETRIMENTALLY RELIED ON THE RIGHTS CREATED;

2. IF THE BENEFICIARY EXPRESSLY ASSENTED TO THE CONTRACT AT THE REQUEST OF ONE OF THE PARTIES; OR

3. IF THE BENEFICIARY FILES A LAW SUIT TO ENFORCE THE CONTRACT