1. Contracts Defenses to Enforcement
Defenses Arising At Formation
1. Unilateral Mistake*: a) a party’s mistake of fact (NOT OF LAW); b) the mistake is material, not trivial; c) enforcement of the contract would be ‘unconscionable’; and d) claimant does not bear the risk of the problem (by contract, by the facts, or for policy reasons). (Often for obvious clerical errors).
2. Mutual Mistake: a) mistake of FACT going to basic assumption of the contract; b) made by both parties; c) material (not trivial); d) claimant does not bear the risk of the problem (by contract, by the facts, or for policy reasons). Bearing the risk includes a party who should have known better, but disregarded the issue.
3. Mental Incapacity (Infancy): a) below age of majority; b) if unfair, ‘infant’ (usually) has the option to void if not a good bargain; c) voiding must occur within reasonable time of reaching majority (FL. Relates this to its statute of limitations period), or it is deemed “ratified.” Major exceptions: for necessities, where the infant misrepresents age.
4. Mental Incapacity (Impairment): a) qualifying mental impairment; b) other party takes advantage of the impairment (sometimes terms “lack of adequate return consideration) – if so, impaired may seek denial of enforcement – usually at impaired’s option – but may be “void” if person had been adjudged legally impaired prior to date of contracting – otherwise it would need proving.
5. Mental Incapacity (Drugs/Alcohol): FL. does not appear to specifically cover this, but probably still has common law on it. Don’t mix up with criminal standards for intoxication/impairment…..
6. Unconscionable Contract: a) adhesion (unfair bargaining power); and b) possible boilerplate (small print); and c) unconscionable to enforce.
All of these occur before, during formation – the problem arises at formation.
Don’t forget that “Statute of Frauds” is one of the defenses as well.
Easier to succeed arguing mutual mistake rather than unilateral…
Understand and properly attribute the void vs. voidable distinction with regard to these defenses. Most are “voidable,” but some may be outright “void.”
These share similarities – but focus on specific facts for which a defense was created.
*Florida is currently working out use of 2-prong, 3-prong,or 4-prong test. Also whether party seeking enforcement against unilateral mistake must help to cause it.
© 2018 Paul J. Carrier, Paul J Carrier, LLC Blue – Category Recognition; White – Specific Category; Yellow – “Black Letter” Rules (to be memorized); Green – Main Factual Issues – Analysis; Red – Upper-Level, Integrated Comprehension