Formation Defense in Contract Law
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Questions and Answers

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?

<p>Misrepresentation (A)</p> Signup and view all the answers

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

<p>The agreement may not be enforced by courts under certain circumstances. (B)</p> Signup and view all the answers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<p>Can ratify or disaffirm contract shortly after</p> Signup and view all the answers

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

<p>Usually treated as capacity to enter binding contracts</p> Signup and view all the answers

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

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

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