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1

Some cts won’t put P into better position than expectation position; but if there’s money to be pushed around, may as well favor non-breaching party.  (Naval Institute)

C

Ex: A agrees to sell house to B.  They make a K for $250k.  FMV of house is $275k.  C comes along and offers A $300k.  A breaches and sells to C.  Disgorgement = $50k  Restitution = $25k

Defenses — Duress & Unconscionability

I

Duress

A

Economic duress ELTS:

1

One party to a contract THREATENS a wrongful act, including breach, that would seriously threaten other party

2

AND no adequate means are avail to avoid or prevent the loss

B

Exploiting other party’s bad situation not due to your own actions gen’y isn’t duress.  (Chouinard)

1

A party gen;y must act WRONGFULLY to CREATE and exploit an untenable situation in order to be causing duress.  Exercising a legal right, even if taking advantage of other party’s misfortune, is not acting wrongfully.  (Chouinard)

2

BUT where there are no alternatives b/c of a failure of competition, duress may be found

a

Stranded whaling ship (Post v. Jones), stranded traveler — contrast w/ Batsakis, where there were alternatives (WWII loan to Greek woman)

II

Unconscionability

A

Two types of uncon’y: substantive and procedural

1

Procedural uncon’y sufficient to void K

2

Subst uncon’y may be sufficient, esp if it indicates procedural uncon’y

B

Procedural

1

Unfair surprise.  (Williams)

a

Where party includes a term that it knows won’t be consistent w/ other party’s r’ble expectations, and doesn’t call attention to it

b

Trad’l view: duty to read, so no unfair surprise doctrine

c

Modern view is more lenient, esp in form or adhesion contracts

i

Ex: dept store buys premises insurance that doesn’t include injuries on elevators, even though dept store expects it and ins co knows store has elevators

2

Factors in procedural: age, education, intelligence, business acumen, relative bargaining power of parties; who drafted contract; whether terms were explained to weaker party; whether alterations to printed terms were possible; avail of alts

C

Substantive

1

Factors in substantive: terms so one-sided as to oppress or unfairly surprise an innocent party; overall imbalance in obligations and rights; significant cost-price disparity

Defenses — Indefiniteness

I

Gen’y

A

Contract too indef if ELTS:

1

Terms are so incomplete or uncertain that they show PARTIES didn’t regard themselves as having completed a K

2

OR agr’t is so indefinite that a COURT can’t determine its material terms w/ r’ble certainty

B

Definiteness req’ts:  (Cheever) (see also UCC § 2-204, Rest §§ 33-34)

1

K must be so definite as to its material terms that promises and perfs to be rendered are r’bly certain

2

Ct must be able to determine intent of parties

3

K must have essential terms so that a ct can decide whether it was broken or not

27

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