Question

Don, an elderly man, lives with his nephew Evan. Don is entirely dependent on Evan for support and his care. Evan advised Don to "invest" in Evan's new consulting business or Evan will no longer support him. Don liquidated his other investments and a trust fund, and signed a contract with Evan giving all his investments and trust funds to Evan for Evan's new business.

Later, Don had doubts about Evan's new consulting business and wanted out of the contract.

There are several recognized defenses that someone who demonstrates a lack of genuine assent can use to try & avoid the agreement. They are:

1) unconscionability

2) duress

3) undue influence

4) fraud

Do you think any of these other claims could be made by Don to have the contract set aside? Why & how?

Answer 1

Contracts generally helps in establishing legal agreement between two or more parties. In reference to the context of this scenario we can see that there was contract which was voidable as there was no mutual consent from the side of Don, hence making an unenforceable contract.

Evan, his nephew forced him and even threaten him thathe will not look after him if Don did sign the contract which promises that Don will give himmoney. Don was depended on Evan and thus looking into the necessity Don signed the contract, but later on he realized that there is something wrong. So looking into this situation I can say that this contract was not valid, as no one can force someone into any contract.

In the given case, DON can set aside the contract with Evan and the contract is unenforceable even if Don has signed the contract and the reason for this is, it was not the result of free and mutual consent between the parties, and it was a forceful act based on Evan's conditions. Both the parties are not competent as DON is an older man and there is no legal consideration involved.

Undue Influence: The defense that Don can use is of undue influence because here one party has influenced the other party, thus overcoming that party's free will and a contract entered under such situations lacks voluntary consent and is therefore voidable.

Duress: Another defense is of duress where a party has entered into a contract because of the fear created by threats and a party who signs a contract under duress can choose to avoid the entire transaction.

Fraud:  Another element of defense is that even intend to deceive by concealing the material facts of the business since it is given that Don had doubts about Evan's new consulting business.