CH 8

Question 1

what are the three exceptions to enforcing a contract

Answer 1

an unequal relationship between the two parties

misrepresentation or important mistake concerning the contract

a defect within the contract itself

Question 2

what is a voidable contract

Answer 2

an aggrieved party has the option to enforce a contract or end it

Question 3

what is a void contract

Answer 3

a contract that that has a defect so substantial that it cannot be enforced

Question 4

WHAT DO YOU CALL THE ABILITY to make binding contracts

Answer 4

LEGAL CAPACITY

Question 5

how would one describe a contract made by a minor

Answer 5

contracts made by minors are voidable

Question 6

what do you call the age at which someone become an adult for legal purposes

Answer 6

age of majority

Question 7

what are the two exceptions for legal capacity for minors

Answer 7

1 Minors are obligated by contracts for essentials known as “necessaries” (for example, food, shelter, and so on that the minor does not have already).
2 Minors are bound to beneficial contracts of service (if not unfair to the minor).

Question 8

what happens to a contract when economic duress is established

Answer 8

the contract is voidable

Question 9

what do you call The threat of economic harm that coerces the will of the other party and results in a contract.

Answer 9

economic duress

Question 10

what is duress

Answer 10

The threat of physical or economic harm that results in a contract.

Question 11

what is undue influence + example

Answer 11

Unfair manipulation that compromises someone’s free will or choice.

a contract between an elderly person and their caregiver

contract is voidable

Question 12

what do you call : A false statement of fact that causes someone to enter a contract.

Answer 12

misrepresentation

Question 13

what is a Rescission:

Answer 13

The remedy that results in the parties being returned to their pre-contractual positions.

Question 14

what 5 things are needed to show that there was misrepresentation

Answer 14

is false
is clear and unambiguous
is significant to the decision of whether or not to enter into the contract
induces the aggrieved party to enter into the contract
is concerned with a fact and not an opinion

Question 15

define fraudulent misrepresentation

Answer 15

The speaker has a deliberate intent to mislead or makes the statement recklessly without knowing or believing that it is true.

Question 16

define negligent misrepresentation

Answer 16

The speaker makes the statement carelessly or negligently.

Question 17

define innocent misrepresentation

Answer 17

The speaker has not been fraudulent or negligent, but has misrepresented a fact.

Question 18

what types of misrepresentation can damages in tort be used as a remedy

Answer 18

fraudulent

negligent

Question 19

what is a legal mistake

Answer 19

An error made by one or both parties that seriously undermines a contract.

A legal mistake is much more narrow than an everyday mistake.
1 A simple oversight or error is not a mistake.
2 It must seriously undermine a contract.

Question 20

what is a common mistake plus example

Answer 20

A legal mistake may also occur if both parties have made the same error (known as common mistake).

If Kerry’s car appears to be old and relatively worthless, and she and Sean negotiate on that basis for a relatively low price, their agreement is based on a common mistake if the car turns out to be a valuable antique.

Question 21

what is the two step process for unconscionability

Answer 21

proof of inequality in the positions of the parties.

proof of an improvident bargain or proof of exploitation

Question 22

Give an example of economic duress.

Answer 22

Economic duress includes threatening to break a contract known to be very important to the other side, provided the coercion went beyond ordinary commercial pressure to a force or compulsion that prevented the other side from giving true consent to the proposal.

Question 23

Name one statute that makes certain kinds of contracts illegal.

Answer 23

Any of the three examples given are acceptable: the Criminal Code, the federal Competition Act, and Ontario’s Real Estate and Business Brokers Act.

Question 24

How does the Statute of Frauds affect contracts?

Answer 24

Contracts caught by a writing requirement, contained in the Statute of Frauds or equivalent, must be evidenced in writing to be enforceable.

Question 25

What four types of contracts relevant to business law are required to be in writing?

Answer 25

Contracts not to be performed within a year, contracts dealing with land, contracts of guarantee, and contracts for the sale of goods above a set minimum must all be in writing.

Question 26

what is a contract of guarantee

Answer 26

A guarantee is a promise to pay the debt of someone else, should that person default on the obligation. A guarantee must generally be evidenced in writing

Question 27

what is the statue of frauds

Answer 27

some contracts must be in writing

Contracts of Guarantee
Contracts Not to Be Performed Within a Year
Contracts Dealing With Land

Question 28

three things needed to show that there was no undue influence

Answer 28

he or she has explained the proposed transaction to the weaker party.

the weaker party appears to understand the proposed transaction.

the weaker party is proceeding with the transaction on a free and informed basis.

Question 29

what happens to a contract if it violates public policy or statute

Answer 29

it is voidable

Question 30

three needs for economic duress

Answer 30

1. threat made in bad faith
2. victim could not reasonably resist
3. victim acted promptly after pressure was gome

Question 31

how to prove that there was no undue influence

Answer 31

there was independent legal advise
or
there was no advantage

Question 32

what are some things needed for unconsionability

Answer 32

• no fair minded person would offer
• no fair minded person would accept

there must be a great deal of inequality
there must be explotation