CH 5 slides

Question 1

What is a contact?

Answer 1

A contract is a deliberate and complete agreement between two or more competent persons, not necessarily in writing, supported by mutual consideration, to do some act voluntarily, and which agreement is enforceable in a court of law.

Question 2

what rules are contacts based off of

Answer 2

Usually judge made laws

Question 3

what do contracts allow their participants to do when making them

Answer 3

It allows participants to create their own rights and duties within a framework of rules enforceable by a judge, if needed.

Question 4

What are the 7 elements of a contract

Answer 4

Agreement between the parties
Completed negotiations
Deliberately made 
Voluntarily made
Between two or more competent persons
Supported by mutual consideration
Not necessarily in writing

Question 5

what are four advantages to contracts

Answer 5

Contracts permit both parties to rely on the terms they have negotiated and plan their business affairs accordingly.

They create binding promises that can be enforced in court.

If a dispute arises between the two parties, there are various options for dispute resolution.

They ensure that each party receives what they bargained for.

Question 6

List 7 different examples of contracts found on the slides

Answer 6

Leases
Sales contracts
Loan contracts
Supply purchase contracts
Employment contracts
Confidentiality agreements
 Even a simple casual sale (a pack of gum) is a contract.

Question 7

what is something that all contracts have in common

Answer 7

ALL contracts are subject to the same legal rules.

Question 8

Is communication of contracts made informally or formally

Answer 8

Both

Question 9

what is the objective standards test in terms of contract law

Answer 9

Asks whether a reasonable person, observing the communication between the negotiators, would conclude that an offer and acceptance had occurred.

Question 10

what does the law assume in terms of bargaining power

Answer 10

The law assumes both sides have equal bargaining power, “had eyes open,” during negotiations.

Question 11

What is rare in terms of bargaining power

Answer 11

Equal bargaining power is rare—one side usually has an advantage

Question 12

what does “had eyes open,” mean in terms of bargaining power

Answer 12

The law assumes both sides have equal bargaining power, “had eyes open,” during negotiations.

Question 13

what will the law occasionally do when there is a weaker side in a dispute. and what does this contradict?

Answer 13

Occasionally, the courts will come to the assistance of the weaker party and set the contract aside.

this contradicts that The law assumes both sides have equal bargaining power, “had eyes open,” during negotiations.

Question 14

what three things must a business consider before suing for a breach in contract

Answer 14

Business relationships
Economic realities
Reputation management

Question 15

what three things do written contracts avoid

Answer 15

Written contracts avoid misunderstandings, costs, and relationship breakdowns.

Question 16

Say someone in contractual negotiations makes what looks like an offer, but isn’t intend as one. And the other party accepts. is this contract binding?

Answer 16

yes

Question 17

In a fixed term long contract. Market forces may fluctuate to put one party at a disadvantage to another. Will contract law help out the disadvantaged party?

Answer 17

No not generally

Question 18

Describe the case of Churchill Falls (Labrador) Corporation Ltd v Hydro-Québec, 2016

Answer 18

The contract, signed in 1969 for a 65-year term between Churchill Falls (Labrador) Corporation Limited (CFLCo) and Hydro-Québec, obligated CFLCo to sell nearly all its power to Hydro-Québec and Hydro-Québec to purchase that entire output at a fixed price.

This was disadvantageous to CFLCo as the price of energy increased

The Court of Appeal decided in favour of Hydro-Québec, concluding that the contract was enforceable as written

Question 19

What case highlighted the importance of putting a written contract in place as opposed to an oral one, even if there is a good relationship between the two parties.

Answer 19

Ontario Inc v Aviya Technologies Inc

Question 20

what will happen to a business that makes a practice of breaching contracts due to bad planning or in order to pursue an apparently more lucrative business opportunity

Answer 20

will certainly be within its legal rights to breach and pay damages in lieu of performance. Such a business is also likely to acquire a reputation in the industry as an unreliable and undependable company. The long-term viability of a business organization is undoubtedly compromised if customers, suppliers, and employees grow reluctant to deal with it.

Question 21

what will happen to a business that insists on strict observance of its legal rights

Answer 21

may damage its reputation in the marketplace. Although a manufacturer may have a valid defence for having produced a defective product, for example, it may be better in the end to compensate the customer voluntarily rather than fight out a lawsuit. A lawsuit in the circumstances of this example may result in a serious blow to reputation and a public relations disaster.