Formation Defense in Contract Law: Undue Influence and Incapacity in Murphy v. Julio

Overview

This paper analyzes whether Mrs. Murphy has valid formation defenses against a contract transferring her business equity to Don Julio under common law. The analysis examines two primary defenses: undue influence through coercion and threats, and lack of contractual capacity due to intoxication at the time of contract formation.

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IRAC Writing # 2

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IRAC Writing # 2

Formation Defense

Issue

Under common law, does Mrs. Murphy have a formation defense for the business contract she entered into with Don Julio to give him her business equity?

Rule

Undue influence – this takes place whenever an individual or entity persuades the other party to approve a contract or agreement. Notably, this takes place when the vulnerable or weaker party can be persuaded to take such action.

Capacity – specific parties are regarded as unable to come into an agreement if they are intoxicated: the contract can be deemed void and null when the other party understands about the condition of the other party.

Analysis

Suppose a party takes advantage of its susceptibility to persuasion to coerce them into entering a contract, which constitutes a formation defense. Also, if any party enters into an agreement while intoxicated and the other party knows of this, the agreement is voidable. “Three days after Don Julio started seeing Mrs. Murphy, Don Julio began to take special notice on Mrs. Murphy’s business empire. One afternoon, after a long day of exploring the hills of California, Don Julion gave Mrs. Murphy a bottle of 1986 Graud Larose Wine. They began to drink the bottle, and after a few glasses of wine, Mrs. Murphy began to tell Don Julio how passionate she is about having him around. Don Julio gave Mrs.

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