big bank - 1.CanBigBank' A:No....

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1. Can Big Bank's President rescind the contract?  A: No. Rescission requires that the parties must be able to be returned to the position they were in before the contract was  made. Here, one parties has substantially performed 5/6ths of the contract. Therefore, rescission will not be permitted. Under what circumstances can a contract be rescinded by either party? A: Unilateral rescission is affirmatively permitted upon clear and convincing evidence of fraud, mistake, illegality, coercion,  duress, and as a defense upon a preponderance of evidence that the contract is adhesive or unconscionable. What facts have to be alleged and proven? What is the result of a contract that is rescinded?  A: Fraud: material misrepresentation intended to induce justifiable, detrimental reliance and causing damages. Mistake: material error of fact by one party, where the other party knew or reasonably should have known of the  first party's mistake. Illegality: contract violates public policy (constitutional, statute or regulation). Coercion: One party removes the other party's voluntary assent though actual or threatened force or intimidation. Duress: One party's voluntary assent is lost due to extrinsic circumstances (e.g., intoxication, illness, injury). Adhesion: contracting circumstances provide no opportunity to negotiate and the only option is to accept or reject. Unconscionableness: Overwhelmingly greater bargaining power combined with unreasonably favorable terms. 2. Big Bank's President also threatens legal action. What potential causes of action could you foresee him bringing in court? A: Breach of contract for failure to perform the express contract terms.  Would he be successful? A: No, because (1) bank prevented Systems from obtaining a good faith modification necessary to performance by not  having a key person available to approve the change, and (2) Systems suffered an unforeseeable external delay which  discharges or permits a delay in performance under the theory of Force Majeure, or alternatively commercial impracticability. Why or why not? What arguments could Systems Inc. raises in its defense? A: Force Majeure: "Act of God" preventing timely performance; prevention, as explained above. commercial impracticability,  where contract is made practically impossible to perform due to not reasonably foreseeable event. What are Big Bank's potential damages?  A: ASsuming Bank has a case (which it doesn't), lost profits due to the delay in Systems' breach.
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