3.0 CONTRACTS

Question 1

Contract

Answer 1

Enforceable voluntary agreement that sets out rights, responsibilities and liabilities

Terms can be expressed (written) or implied
Only parties PRIVY (parties in contact) can sue

Question 2

5 contract elements to be enforceable

Answer 2

1. Offer and acceptance
2. Consideration
3. Capacity of contract
4. Intention to create legal obligations
5. Lawful purpose

Question 3

Offer and acceptance contract element

Answer 3

Offer must contain all essential terms

Acceptance must be unequivocal (clear) agreement

Question 4

Invitation to treat

Answer 4

Call of offers or advertisement

Question 5

Rejection

Answer 5

Must be communicated to offerer

Counter offer has effect of rejection

Question 6

Consideration contract element

Answer 6

Each party must give or promise to give something of value

Doesn’t have to be of equal value

Forbearance (giving up right to sue) may be valid consideration

Question 7

Capacity contract element

Answer 7

Minors, drunk, lunatics

Question 8

Intention to create legal relations - contract element

Answer 8

Court will not enforce agreement to agree (provides an expression to form contract in future)

Question 9

Legal purpose - contract element

Answer 9

Contrary to statute or common law

Eg. Contrary to public policy, workers comp

Question 10

Other contract voids

Answer 10

Mistake
Misrepresentation 
Duress 
Unconscionability
Frustration

Question 11

Mistake contract void and it’s 3 prerequisites

Answer 11

1. Mistake must be material (significant)
2. Must be mutual (both parties must have been mistaken)
3. Must have been made at the time the agreement was made

Question 12

Misrepresentation contract void and it’s 3 categories

Answer 12

Misrepresentation: untrue factual statement that induces the other party to enter contract

1. Fraudulent: intentional false statement
2. Negligent: statement carelessly made
3. Innocent: difficult to obtain remedy

Question 13

Duress contract void

Answer 13

Improper/extreme pressure, threats or coercion used to induce a party to enter contract

Question 14

Unconscionability contract void

Answer 14

So unfair, oppressive and one sided that the courts won’t enforce it

Eg. Inequality

Question 15

Frustration contract void

Answer 15

Occurs when an unforeseen event make performance impossible or of no value

Eg. COVID

Force majeure clauses: prescribe consequences of unlikely events

Question 16

Waiver - contract issue

Answer 16

When a party (by words or conduct) relieves the other party of duty to perform

Question 17

Estoppel - contract issue

Answer 17

To be stopped

A party can’t enforce the contract or right under contract that is has waived

Question 18

Repudiation - contract issue

Answer 18

When one party (by words or action) makes it known that it doesn’t intend to perform it obligations under contract

Question 19

Anticipatory breach - contract issue

Answer 19

When one party lets the other know (before the time of performance) that it’ll not be performing its obligations

The anticipatory breach will be a repudiation