Formation Defense in Contract Law

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What is the main difference between a void contract and a voidable contract?

A void contract has the power to dissolve the legal relationship, while a voidable contract creates no contractual obligation at all.

A void contract creates no contractual obligation at all, while a voidable contract allows one or both parties to dissolve the legal relationship. (correct)

A void contract remains in effect until one party exercises their right to dissolve it, while a voidable contract remains in existence but may not be enforced by courts.

A void contract is always enforceable by courts, while a voidable contract may or may not be enforced under certain circumstances.

Which defense involves one party being forced into an agreement through threats or coercion?

Duress (correct)

Illegality & public policy

Unconscionability

Mistake

In what situation does an unenforceable contract remain in existence but may not be enforced?

When a separate provision within the contract makes it unenforceable under certain circumstances. (correct)

When the contract is void due to events or conditions at the time of formation.

When the contract satisfies the conditions of contractual validity.

When the contract is deemed null and void by one of the parties involved.

Which defense refers to a situation where a party has been misled about the terms of an agreement?

Misrepresentation Signup and view all the answers

What is the key characteristic of an agreement that is considered unenforceable?

The agreement may not be enforced by courts under certain circumstances. Signup and view all the answers

Explain the concept of rescission in the context of voidable contracts.

Rescission refers to the act of one or both parties dissolving the legal relationship in a voidable contract. Signup and view all the answers

How does unconscionability differ from illegality in the context of contract defenses?

Unconscionability relates to contracts that are unreasonably favorable to one party, while illegality concerns contracts that violate laws or public policy. Signup and view all the answers

Discuss the significance of the Statute of Frauds in contract formation defenses.

The Statute of Frauds requires certain types of contracts to be in writing to be enforceable. Signup and view all the answers

Explain how capacity to contract plays a role in avoiding legal obligations at the time of formation.

Capacity to contract refers to the legal ability of parties to enter into a contract. Signup and view all the answers

In what circumstances can a contract be considered void, and what implications does this have on contractual obligations?

A void contract creates no contractual obligation at all, rendering it invalid from the start. Signup and view all the answers

What are the implications of misrepresenting one's age in a contract involving a minor?

Estoppel to the point of reasonable reliance on minor's age Signup and view all the answers

Explain the concept of restitution in the context of voidable contracts involving minors.

Liable for restitution of value of goods/services needed Signup and view all the answers

What options does a minor have upon reaching the age of majority regarding a voidable contract?

Can ratify or disaffirm contract shortly after Signup and view all the answers

In what circumstances can emancipation affect a minor's capacity to enter binding contracts?

Usually treated as capacity to enter binding contracts Signup and view all the answers

What is the role of restitution in cases where a contract with a minor is voidable?

Restitution: risk of loss usually associated with non-minor, unless depreciation or certain tort Signup and view all the answers

Formation Defense in Contract Law

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