FYLSX Defenses to Contract Enforceability 5 — Questions and Answers
Question 1: A contract requires a party to perform an act that was legal when the contract was formed but becomes illegal before performance is due. The defense available is:
- Mutual mistake, because both parties assumed legality when contracting
- Supervening illegality, which discharges the obligor's duty to perform (Correct answer)
- Fraud in the inducement, because the other party should have anticipated the change
- Impossibility, only if the illegal act involves physical impossibility
Correct answer: Supervening illegality, which discharges the obligor's duty to perform
When performance becomes illegal after contract formation due to a change in law, the doctrine of supervening illegality discharges the affected party's contractual duties.
Question 2: Grace is pressured to sign a contract by her domineering adult son, who controls her finances and daily life, even though no explicit threats were made. The appropriate defense is most likely:
- Duress, because her son used improper pressure to obtain her consent
- Undue influence, because her son's dominant position over her substituted his will for hers (Correct answer)
- Incapacity, because elderly persons cannot consent to contracts freely
- Unconscionability, because the contract's terms were oppressive
Correct answer: Undue influence, because her son's dominant position over her substituted his will for hers
Undue influence arises where a dominant party in a confidential or special relationship overcomes the weaker party's free will without resorting to explicit threats.
Question 3: Under the CISG or UCC, when a merchant fails to object to a written confirmation that differs from the oral agreement, and both parties are merchants, what is the effect on the Statute of Frauds requirement?
- The oral contract remains unenforceable because only the written confirmation controls
- The written confirmation can satisfy the Statute of Frauds against the merchant who fails to object within a reasonable time (Correct answer)
- The oral agreement is superseded by the written confirmation in all its terms
- The writing requirement is waived entirely for merchants under the UCC
Correct answer: The written confirmation can satisfy the Statute of Frauds against the merchant who fails to object within a reasonable time
Under UCC §2-201(2), a written confirmation sent between merchants satisfies the Statute of Frauds against the receiving merchant who fails to object within 10 days.
Question 4: Two parties enter a contract for the sale of widgets. Unknown to either party, the factory producing the widgets burned down the day before contracting. The best defense to enforcement is:
- Frustration of purpose, because the purpose of the contract has been eliminated
- Mutual mistake of existing fact, because both parties contracted under a false assumption about the subject matter (Correct answer)
- Impossibility, because performance became objectively impossible after contract formation
- Illegality, because the factory fire violated safety regulations
Correct answer: Mutual mistake of existing fact, because both parties contracted under a false assumption about the subject matter
When both parties contract under a mutual mistake about a material existing fact (here, that the factory still existed), the contract may be voided.
Question 5: Which party may assert mental incapacity as a defense when a person contracts during a lucid interval despite a history of mental illness?
- Either party may raise the defense to void the contract
- No party, because contracts made during lucid intervals are valid and enforceable (Correct answer)
- Only the mentally ill person, if they can prove they lacked understanding at the moment of contracting
- Only the other party, if the mentally ill person later seeks to enforce the contract
Correct answer: No party, because contracts made during lucid intervals are valid and enforceable
A person who contracts during a lucid interval — a period when they have full cognitive capacity — forms a valid, enforceable contract despite a general history of mental illness.
Question 6: A contract for personal services requires famous singer Diva to perform at a concert. Diva loses her voice permanently from illness before the event. Which defense discharges her obligation?
- Frustration of purpose, because the purpose of the concert cannot be achieved
- Supervening impossibility, because personal performance is impossible due to illness (Correct answer)
- Commercial impracticability, because the cost of a replacement performer is excessive
- Mutual mistake, because neither party anticipated her illness at contracting
Correct answer: Supervening impossibility, because personal performance is impossible due to illness
In personal service contracts, the death or incapacitating illness of the performing party makes performance objectively impossible, discharging the obligation.
Question 7: A defendant claims that a contract should not be enforced because, after agreeing to provide catering for a wedding, the venue burned down and the wedding was cancelled. The defendant's strongest defense is:
- Mutual mistake, because neither party knew the venue would burn down
- Impossibility, because the caterer cannot perform at a nonexistent venue
- Frustration of purpose, because the principal purpose of the catering contract has been destroyed by an unforeseen event (Correct answer)
- Illegality, because operating at a burned venue violates safety codes
Correct answer: Frustration of purpose, because the principal purpose of the catering contract has been destroyed by an unforeseen event
Frustration of purpose applies when an unforeseen event destroys the principal purpose of a contract even though performance is technically still possible.
FYLSX Defenses to Contract Enforceability 5
A contract requires a party to perform an act that was legal when the contract was formed but becomes illegal before performance is due.
The defense available is: