BL260-PRINCIPLES OF

BUSINESS LAW
Chapter 10
Chapter 10-Enforceability

BL260
2
Chapter 10
Enforceability of contracts

• Really a misnomer
• Think of defenses in this chapter as challenges to
enforceability because of an absence of genuine assent
(if it helps)

BL260
3
Chapter 10
Consent defects (what I term defenses)

• Misrepresentation
• Fraud
• Duress
• Undue influence
• Unconscionability

BL260
4
Chapter 10
Misrepresentation and the strategic problem of
asymmetric information

• Innocent misrepresentation (avoid the contract)

• Misrep. of material fact (basic assumption/value);
• Justifiable reliance; and
• Not opinion or puffing.
• Fraud/fraudulent misrepresentation (independent
tort/contract void/treble damages)
• Same elements
• Plus intent to deceive

BL260
5
Chapter 10
Misrepresentation and the strategic problem of
asymmetric information (cont.)

BL260
6
Chapter 10
Participation Quiz

What happened in the dance studio case in your

textbook?

A. A widow without family spent over $30K on dance

lessons.
B. The artist formerly known as Kanye sued Jay-Z
because he opened a dance studio with Kim
Kardashian.
C. Caitlynn Jenner sued Kim Kardashian for copying a
dance move that cost $30K to produce.

BL260
7
Chapter 10
Participation Quiz

Gwyneth Paltrow, CEO of Goop, promotes jade eggs for

women’s health.

A. This is an example of science at work.

B. This is an example of innocent misrepresentation.
C. This is an example of fraud.
D. This is perfectly legal because the law does not protect
people who believe in Goop,
https://goop.com/goop-wellness-jade-egg/p/.

BL260
8
Chapter 10
Participation Quiz

A. This is fraud.
B. This is innocent misrepresentation.
C. This is neither fraud or innocent misrepresentation.

BL260
9
Chapter 10
Participation Quiz

A. This is fraud.
B. This is innocent misrepresentation.
C. This is neither fraud or innocent misrepresentation.

BL260
10
Chapter 10
Participation Quiz

A. This is fraud.
B. This is innocent misrepresentation.
C. This is neither fraud or innocent misrepresentation.

BL260
11
Chapter 10
Participation Quiz

A. This is fraud.
B. This is innocent misrepresentation.
C. This is neither fraud or innocent misrepresentation.

BL260
12
Chapter 10
Participation Quiz

A. This is fraud.
B. This is innocent misrepresentation.
C. This is neither fraud or innocent misrepresentation.

BL260
13
Chapter 10
Participation Quiz

A. This is fraud.
B. This is innocent misrepresentation.
C. This is neither fraud or innocent misrepresentation.

BL260
14
Chapter 10
Duress (additional contract defenses)

• May avoid the contract

• Types of duress
• Violence/threats
• Economic threats
• Extortion

BL260
15
Chapter 10
Undue influence (additional contract defenses)

• May avoid the contract (not in eBook)

• Elements
• Fiduciary/care duty
• Unfair (pressure)

BL260
16
Chapter 10
Unconscionability (additional contract defenses)

• May avoid the contract (not in eBook)

• Adhesion contracts

BL260
17
Chapter 10
Statute of frauds (never heard of MY LEGS)

• Some contracts must be in writing to be enforced

• Land
• Not performable within 1 year
• Debt of another (throw in the executor here)
• Marriage
• Goods > $500 (lease > $1,000)

BL260
18
Chapter 10
Participation Quiz

A. Contract needs to be in writing to be enforceable.

B. Contract does not need to be in writing to be
enforceable.

BL260
19
Chapter 10
Participation Quiz

A. Contract needs to be in writing to be enforceable.

B. Contract does not need to be in writing to be
enforceable.

BL260
20
Chapter 10
Participation Quiz

A. Contract needs to be in writing to be enforceable.

B. Contract does not need to be in writing to be
enforceable.

BL260
21
Chapter 10
Participation Quiz

A. Contract needs to be in writing to be enforceable.

B. Contract does not need to be in writing to be
enforceable.

BL260
22
Chapter 10
Participation Quiz

A. Contract needs to be in writing to be enforceable.

B. Contract does not need to be in writing to be
enforceable.

BL260
23
Chapter 10
Interpretation

• Parol evidence rule (final expression/cannot

contradict)
• Ambiguity construed against drafter
• Court may supply terms

BL260
24
Chapter 10
Chapter 10-Enforceability

BL260
25
Chapter 10