Contracts and Sales Multistate Bar Practice Exam

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What does the term "absence of defenses" imply in contract formation?

All parties must have equal bargaining power
There must not be any legal barriers preventing enforcement
All terms must be negotiated fairly
Parties should act in good faith throughout the negotiation

The correct answer is: There must not be any legal barriers preventing enforcement

The term "absence of defenses" in contract formation refers specifically to the idea that there are no legal barriers that would prevent the enforcement of the contract. This means that a contract is valid and enforceable only if none of the parties can bring up defenses such as fraud, duress, undue influence, incapacity, or illegality. If any of these issues are present, they can serve as a defense against the enforcement of the contract. In this context, while concepts such as bargaining power, fairness in negotiation, and good faith are important in the broader aspect of contract law and can affect the interpretation and enforcement of contracts, they do not directly pertain to the legal state of the contract's validity in terms of defenses. Essentially, "absence of defenses" zeroes in on legal impediments specifically related to contract enforcement rather than the fairness or equality of the negotiation process.