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Legal and Ethical Aspects > 1 Contractual Obligations > Flashcards

1 Contractual Obligations Flashcards

1
Q

Four elements must be present at the outset in order for the contract to be valid:

A
  • enlightened consent
  • capacity of party
  • object
  • cause
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2
Q

The consent process begins with a contractual proposal referred to as __ and is completed with what is termed __ by the party receiving the offer.

A

offer
acceptance

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3
Q

To lead to a contract, the offer must meet two conditions:

A
  • it must contain the essential elements of the prospective contract;
  • clearly indicate the willingness of the offering party to be bound in case of acceptance.
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4
Q

Expiry occurs in three types of situation:

A
  • when it is turned down by the person to whom it is proposed;
  • when it is not accepted within the time period provided for acceptance;
  • when it is revoked by the person offering it.
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5
Q

The acceptance, like the offer, must satisfy two conditions to form a valid contract:

A
  • it must correspond to the essential elements of the contract;
  • it must clearly manifest the willingness of the accepting person to be bound by the offer
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6
Q

An acceptance that does not correspond to the essential element of the offer constitutes a

A

counteroffer

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7
Q

An obligation is “solidary” when two or more debtors are obligated for ___ and each can be required separately to ___

A

the same thing
honour the obligation in its entirety

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8
Q

An obligation is “joint” when two or more persons are obligated for ___ and each can be required to perform the obligation separately but ___

A

the same thing
only up to his or her portion of the debt.

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9
Q

Enlightened consent implies that two requirements are satisfied:

A
  • the offeror must inform the other party
  • the accepting party must seek information
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10
Q

Contracts formed on the basis of any of the following defects of consent may be voided: (3)

A
  • error or fraud (induced error)
  • fear
  • lesion (undue exploitation of a weakness of the other party)
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11
Q

Error is a misinterpretation of reality. For it to be recognized and justify the voiding of the contract, the error mus meet three conditions:

A
  • it must relate to the nature of the contract or an essential element of it;
  • be material to the contract;
  • be excusable.
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12
Q

one party is induced to commit an error for the purpose of entering into a contract. This is a case of …

A

Fraud

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13
Q

the exploitation of one person by another, resulting in a significant disproportion between the prestations of the respective parties to the contract. This is a case of…

A

Lesion

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14
Q

In general, all persons are considered to have the capacity to enter into a contract. The following are the exceptions to the rule: (3)

A
  • minors
  • incapable persons of full age
  • bankrupts
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15
Q

What is Emancipation?

A

ends the incapacity of the minor

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16
Q

Full emancipation is obtained through

A

marriage

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17
Q

The Bankruptcy Act states that bankrupt persons are incapable of entering into contracts involving

A

their property

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18
Q

In general, a contract is not required to be in writing. A ___ contract is as valid as a written contract and obligates the parties in the same way.

A

verbal or tacit

19
Q

a non-negotiable contract is also called a contact of

A

adhesion

20
Q

The courts can modify provisions in contracts of adhesion if the obligations they contain are: (3)

A
  • illegible or incomprehensible
  • external
  • abusive
21
Q

Clauses that do not make sense to a reasonable person

A

“Illegible or incomprehensible” clauses

22
Q

__ clauses are those stipulated in a document other than the contract

A

“External”

23
Q

__ clauses are contrary to good faith in that they excessively and unreasonably disadvantage the client

A

“Abusive”

24
Q

Two rules of interpretation deserve particular attention:

A
  • true common intention
  • interpretation in favour of the debtor
25
Q

what does the true common intention of the parties mean?

A

carries more weight than the literal meaning of the words.

26
Q

The other causes of contract extinction: (6)

A
  • prescription
  • compensation
  • novation
  • release
  • bankruptcy
  • resolution of contract
27
Q

means by which a person or organization acquires, or is released from, an asset or an obligation simply by the lapse of time

A

Prescription

28
Q

There are two types of prescription:

A
  • acquisitive prescription
  • extinctive prescription
29
Q

Acquisitive prescription is

A

a means of acquiring a right of ownership by possessing the asset for a certain period of time.

30
Q

This type of prescription prevents legal action by persons who have not availed themselves of their rights within the
time period prescribed by law.

A

Extinctive Prescription

31
Q

the prescriptive period for a claim for damages is __ years from the date the elements of liability were known.

A

three

32
Q

For compensation to apply, the debt must be: (3)

A
  • Certain
  • Liquid
  • Exigible
33
Q

EXIGIBLE DEBT

A

Compensation applies only between two debts whose payments are mutually exigible.

34
Q

Novation

A

the replacement of an old debt by a new one or the replacement of one debtor by another.
Novation causes the old debt to be extinguished and the new debt to take its place.

35
Q

Condition For novation to apply,

A

the parties must have shown their willingness to effect it. This intention must be clearly indicated.
The intention of the parties can be inferred from their conduct and from the circumstances of the transaction.

36
Q

when it comes to novation, to protect itself, the financial institution can: (2)

A
  • Prepare a letter of credit amendment
  • Obtain new guarantees
37
Q

Release from debt is a contract by which

A

a creditor frees the debtor from an obligation. Accordingly, the creditor discharges to the debtor

38
Q

Bankruptcy frees a person from

A

almost all debts and contractual obligations. incurred at the time of bankruptcy

39
Q

The Bankruptcy and Insolvency Act exempts certain kinds of debt from release: (6)

A
  • court-imposed fines in penal matters;
  • amounts owed for stolen property;
  • amounts owed for property obtained under false representation;
  • arrears in child support;
  • damages ordered by the court for intentional injury to another person or for sexual assault;
  • student loans, if the bankruptcy is filed within 10 years of the end of the studies.
40
Q

A formal notice must be made in writing. It does not have to be drafted by a lawyer.
Certain facts must be stated: (3)

A
  • default claimed;
  • desired remedy
  • a time frame
41
Q

A debtor who does not honour the obligations of the contract commits a fault. He or she can then be ordered to compensate the other party for damages caused by the breach. This is known as

A

the principle of liability arising from contracts.

42
Q

Three essential elements must be proved for the court to be able to determine liability and require that compensation be paid:

A
  • A fault was committed
  • Damages were sustained
  • A causal link exists between the fault and the damages sustained
43
Q

Fault is the failure to

A

carry out the obligations stipulated in the contract

44
Q

To be truly effective, a penal clause must satisfy a certain number of conditions: (3)

A
  • explicit amount of damages
  • conditions for triggering the penalty and terms of payment;
  • state whether the clause allows continued performance of the obligation in addition to payment of the penalty.

Legal and Ethical Aspects (8 decks)

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