Activity 1
In determining whether or not Don can set aside the contract with Evan, it is important first to determine whether a valid, enforceable contract ever came into existence or was formed between the parties. According to MacMillan and Stone (2012), the essential elements of a valid contract include offer and acceptance, consideration, capacity, intention to create legal relations, and legality. In the present case of Done and Evan, a contract came into being when Don unilaterally accepted Evan’s offer in the form of advice to invest in his (Evan’s) new consulting business and went on to sign the contract.
However, Don can still set aside the contract with Evan for lack of legal validity and enforceability as it is illegal and contrary to the Statute of Frauds. Under the Statute of Frauds, a party may withdraw from a contract or recover the value of the contract if it is proved that they were induced to enter into the contract through undue influence, duress, or fraud. In Williams v. Walker-Thomas Furniture Co. (1965), it was held that a contract could be set aside where there is inequality in the bargaining power of the parties. In this case, given Don’s advanced age and his dependence on his nephew Evan for support and care, it may be argued that Evan unconscionably took advantage of Don by threatening that he would no longer support him if he did not invest in his consulting business. The duress, undue influence, illegality, fraudulent inducement, and unconscionableness of the contract between Don and Evan thus rendered the contract voidable by Don.
Activity 2
Yes, the sale was originally subject to the statute of frauds. The Statute of Frauds requires particular types of contracts such as those involving sale of land or transfer of interest in the real immovable property to be in writing and be signed by the parties to the contract. The purpose of this according to Mann and Roberts (2016) is to prevent fraud involved in proving oral contracts (p. 303). Hence, since the Statute of Frauds only applies to involving interest in land, the contract of sale between Mary and Tom was subject to the Statute of Frauds even though it was orally made. Moreover, according to Blum (2007), only contracts that cannot be performed or completed within a period of one year can be subject to the statute of fraud. In the present case between Mary and Tom, the contract was to be performed between April 2012 and April 2013 which is a year and hence the statute should be applicable at this point.
The contract for the sale of the property is valid, and hence Tom can relinquish possession of the property because of the doctrine of promissory estoppel, which according to Miller (2014) is one of the exceptions to the requirement of the Statute of Frauds. From the facts, Tom and Mary had agreed that Tom would own and live on the property until April 15, 2013, and Mary must have relied on this to her detriment. Tom can, therefore, be compelled to move out of the property after the expiry of the contract. However, based on the parole evidence rule, any statement not contained within the original contract cannot be relied upon by the parties or the court when interpreting contract (Blum, 2007). Thus, since the agreement to have Tom lives in the property for some time was not captured in the initial contract of sale, it is part of parole evidence and cannot be used to push Tom out of the property.
References
Blum, B.A. (2007). Contracts: Examples & Explanations. New York: Aspen Publishers Online
MacMillan, C., & Stone, R. (2012). Elements of the law of contract. Russell Square, London: University of London
Mann, R.A., & Roberts, B.S. (2016). Business law and the regulation of business. New York: Cengage Learning
Miller, R.L. (2014). Business law today, Comprehensive: Text and cases: Diverse, Ethical, online, and global environment. Boston, Mal Cengage Learning.
