Chapter 6 - Law of Contract Flashcards
contract
agreement between two or more person which creates an obligation to do or not to do a thing
7 essential elements of a contract
Consideration
Offer
Capacity
Genuine consent
Acceptance
Legal object
Legal intention
4 ways of ineffective contract
void, illegal, voidable, unenforceable
void contract
contract which never had any legal existence or effect and which is not capable of being enforced
illegal contract
contract which offends against public policy or a statute
voidable contract
one or both parties has option to rescind. right to rescind limited where one party acted in such a way it becomes inequitable to allow contract to be cancelled
unenforceable contract
essentials of valid contract, but cannot be sue upon for procedural reason (statute requiring it be in writing)
offer
proposal to do or refrain from doing some specified thing usually followed by an expected acceptance, counter offer, return promise, or act.
invitation to treat
ad used to induce the public to submit their own offers. not an offer capable of acceptance to form a contract
when does offer release or expire (6 circumstances)
time limited is specified
to time limit but reasonable time has passed
revocation before acceptance
either party becomes insane or dies before acceptance
counter-offer is made
offer is rejected
option agreement
separate consideration to keep offer open (payment of money)
acceptance
must be a positive act, must be made by method specified or same method as offer
postal acceptance rule
law gives responsibility to offeror to specify how offer is accepted. if mail, assume risks associated with mail
consideration
something of value that is bargained for (right, interest, profit, or benefit)
quantum meruit
as much as is deserved. no one benefits by labour and materials of another should be unjustly enriched. law implies a promise to pay a reasonable amount.
4 quantum meruit examples
- no amount specified
- breach of contract occurred and innocent party performed partly and wants partial payment
- contract void, but work performed on assumption of valid contract
- new contract replaced original and accepted partial performance in place of original contractual obligations
4 exceptions a contract is enforceable against an infant
- provided for in statute
- infant affirms contract after turning 19
- infant performs or partially after turning 19
- does no repudiate contract within 1 year after 19
power of attorney
licensee advise parties to seek legal advice.
s. 29 power of attorney act
valid only while donor is alive, expire when they become incapable or bankrupt
power of attorney - s. 56 land title act
valid for 3 years
common mistake
both parties have same mistake about fundamental term of the contract
mutual mistake
both parties make fundamental mistake, but different mistake.
unilateral mistake
one party mistaken about fundamental term and other party aware but does nothing to correct it. “non est factum = it is not my deed”
duress
enter into contract under threat of physical force or imprisonment
