Chapter 10 – The Law of Contract Flashcards
What is a contract?
An agreement between two or more persons which creates an obligation to do or not to do a particular thing
What is a contract of purchase and sale?
A contract of purchase or sale of land which contains the obligations of the vendor and purchaser with respect to the purchase and sale
What are a contracts seven essentials?
- offer
- acceptance
- consideration
- legal intention
- capacity
- legal object
- genuine consent
What is a void contract?
A contract which never had any legal existence or effect and which is not capable of being enforced
What is a voidable contract?
A contract which exists until repudiated by a party entitled to do so at which time it becomes void
What is an offer?
A proposal to do or refrain from doing some specified thing usually followed by an expected acceptance, counter offer, return promise or act. The person who makes the offer is called the offeror. The recipient of the offer is called the offeree
What is an invitation to treat?
A type of advertisement used by one to induce the public or some individual to submit their own offers. An invitation to treat is not an offer capable of acceptance to form a contract
What are Standing Offers?
There is an exception to the above principle. Certain offers known as “standing” offers can be made to the public at large. These can be accepted by anyone. An example of this type of offer would be the offering of a reward to the public for providing information
What is a Revocation?
The term for the cancellation of an offer communicated by the offeror to the offeree prior to acceptance
What is an Option Agreement?
It is possible to ensure that an offer will be kept open for the stipulated time period by using a type of contract known as an option agreement. Separate consideration is given to keep the offer open. In effect, a separate contract must be formed. “Consideration” is discussed later in the chapter; however, to understand the principle, think of consideration as a payment of money.
What is a counter-offer?
A statement by the recipient of the offer which has the legal effect of rejecting the offer and of proposing a new offer to the offeror (who then becomes the recipient of the “new” offer)
What is a consideration?
The legal term for something of value that is bargained for, and received by, each party to a contract. Consideration may be in the form of a right, interest, profit or benefit accruing to one party. It may also be in the form of an agreement not to do something, or loss suffered by the other
What is a seal?
A contract made without consideration can still be enforceable if it is made under seal.
What is quantum meruit?
“as much as he deserves”. A doctrine that no one who benefits by the labour and materials of another should be unjustly enriched thereby; under those circumstances, the law implies a promise to pay a reasonable amount for the labour and materials furnished, even though a specific contract price may not have been agreed to
What is an infant?
A person under 19 years of age which, generally speaking, is the age of legal competence
What is misrepresentation?
A false assertion of fact which, if accepted, leads one to an incorrect belief about a given situation
What is a caveat emptor?
A Latin phrase translation to “let the buyer beware”, and used in the real estate context to describe the obligation on the buyer of real property to conduct appropriate due diligence on a property before purchasing it
What is a patent defect?
A defect in real property that is visible to the eye or that can be discovered by conducting a reasonable inspection and making reasonable inquiries about the property
What is a latent defect?
A defect in real property that cannot be discovered by conducting a reasonable inspection and making reasonable inquiries about the property
What is a mistake and what are the 3 main ones?
A legal term which describes the situation where a person, under some erroneous conviction of law or fact, does, or omits to do, some act which but for the erroneous conviction, he would not have done or omitted doing
* common mistake;
* mutual mistake
* unilateral mistake
What is a duress a situation?
Where a person is forced to enter into a contractual relationship against his will by the threat of imprisonment either to himself or his family, or the threat of actual physical force
What is undue influence?
Any improper or wrongful constraint, manipulation, or persuasion whereby the will of a person is overpowered and he is induced to do or refrains from doing an act that he would not do or would do if left to act freely
Reasons for a contract to be terminated?
- performance
- agreement to waive performance or substitute another agreement
- nonfulfillment of a condition precedent;
- frustration
- breach of a condition of the contract which is accepted by the injured part
What is a condition precedent?
A legal term for a “subject to” clause. In contract law, a condition precedent calls for the happening of some event or the performance of some act before the contract shall be binding upon the parties
What is frustration?
A legal doctrine that provides that where the existence of a specific thing is necessary for performance of the contract, the duty to perform is discharged if the thing, for reasons beyond anyone’s control, is no longer in existence at the time for performance
What is breach of contract?
Failure, without legal excuse, to perform any promise which forms the whole or part of a contract
What does it mean to “assign”
To transfer over to another (e.g., “I assign all right, title and interest in Blackacre to my wife, Elaine”)
What are the 4 main remedies the court grants?
damages
specific performance
injunction
quantum meruit
What is specific performance?
The court, rather than granting damages in lieu of performance, orders that the terms of the contract be carried out by the party in default
