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J - B LAW 301 > Chapter 9: Representations and Terms > Flashcards

Chapter 9: Representations and Terms Flashcards

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1
Q

Contractual Term

A

A provision in an agreement that creates a legally enforceable obligation. Is a promissory statement.

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2
Q

Pre-Contractual Representation

A

A statement one party makes by words or conduct with the intention of inducing another party to enter into a contract.

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3
Q

What happens if you make a false contractual term?

A

You are liable for breach of contract.

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4
Q

What happens if you make a false pre-contractual representation?

A

You are liable for misrepresentation.

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5
Q

Misrepresentation

A

A false statement of an existing fact that causes a recipient to enter into a contract.

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6
Q

Opinion

A

The statement of a belief or judgement.

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7
Q

Future Conduct

A

Not a statement of fact; it is a statement about a person’s future intentions.

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8
Q

If you make a mistake in describing a law, are you liable for misrepresentation?

A

No, as we are all presumed to know the law.

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9
Q

List statements that are non-factual (not actionable as misrepresentation):

A
  • Opinion based on speculation.
  • Description of another’s future intent.
  • Statement of law.
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10
Q

List statements that are factual (actionable as misrepresentation):

A
  • Expert opinion.
  • Description of one’s present intent.
  • Statement of legal consequences.
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11
Q

When can silence be construed as misrepresentation? Hint: there are 6 cases.

A
  • When silence will distort a previous assertion.
  • When a statement is a half-truth.
  • When the contract requires a duty of utmost good faith.
  • When a special relationship exists between the parties.
  • When a statutory provision requires disclosure.
  • When facts are actively concealed.
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12
Q

Give an example of a time when a contract requires a duty of utmost good faith:

A

When dealing with insurance companies.

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13
Q

Give an example of a time when a special relationship exists and silence can be construed as misrepresentation:

A

When your accountant sells you a cottage with known structural damage.

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14
Q

Give an example of a time when a contract includes a statutory provision that requires disclosure:

A
  • Insurance.
  • Financial officers.
  • Domestic contracts.
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15
Q

For a statement to be actionable as a misrepresentation, the deceived party must prove that the false statement ___ the contract (to some degree).

A

Induced.

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16
Q

Recission

A

The cancellation of a contract, by the parties or the court, with the aim of restoring the parties, to the greatest extent possible, to their pre-contractual state.

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17
Q

___ is the only contractual consequence of misrepresentation.

A

Recission.

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18
Q

Recession is a discretionary remedy. What does this mean?

A

It is not a right. The remedy is awarded on the basis of the court’s judgement about what is best according to the rules of reason and justice.

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19
Q

Restitution

A

Involves a giving back and taking back on both sides.

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20
Q

The remedy of recision is often accompanied by…

A

An order for restitution.

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21
Q

Affirmation

A

Occurs when the misled party declares an intention to carry out the contract or otherwise acts as though it were bound by it.

22
Q

When would recission not be available?

A
  1. When there is affirmation.
  2. When restitution is impossible.
  3. When it would affect a third party.
23
Q

Damages

A

Are intended to provide monetary compensation for the losses that a person suffered as a result of relying upon a misrepresentation.

24
Q

Innocent Misrepresentation

A

A statement a person makes carefully and without knowledge of the fact that it is false.

25
Q

What is the only legal remedy available for innocent misrepresentation?

A

Recission.

26
Q

Negligent Misrepresentation

A

A false, inducing statement made in an unreasonable or careless manner.

27
Q

What is the only legal remedy available for negligent misrepresentation?

A

Recission. However, it may also amount to a tort that supports the award of damages.

28
Q

Fraudulent Misrepresentation

A

Occurs when a person makes a statement they know is false or that they have no reason to believe is true or that they recklessly made without regard to the truth.

29
Q

Courts have a very high standard when it comes to proving ___.

A

Fraud.

30
Q

What are the legal remedies available for fraudulent misrepresentation?

A

Recission and damages.

31
Q

What must you prove in innocent misrepresentation?

A
  • False statement of fact or misleading silence.

- Inducing contract.

32
Q

What must you prove in negligent misrepresentation?

A
  • False statement.
  • Made in an unreasonable or careless manner.
  • Inducing a contract.
  • Causing a loss that is not always sufficiently remedied by recission.
33
Q

What must you prove in fraudulent misrepresentation?

A
  • False statement or misleading silence.
  • Made without honest belief in its truth.
  • Made with intent to induce contract.
  • Inducing contract.
  • Creating a loss not always sufficiently remedied by recission.
34
Q

Express Term

A

A statement made by one of the parties that a reasonable person would believe was intended to create an enforceable obligation.

35
Q

Parol Evidence

A

Evidence that is not contained within the written contract.

36
Q

Parol Evidence Rule

A

Evidence outside of the contract (such as oral conversation) cannot be used as supporting evidence for an express term.

37
Q

When is parol evidence admissible?

A
  • To rectify or fix a mistake in a contractual document.
  • To prove that a contract was never really formed or is somehow defective.
  • To resolve ambiguities.
  • To demonstrate that a document does not contain the parties’ complete agreement.
38
Q

Collateral Contract

A

A separate agreement one party makes in exchange for the other party’s entry into the main contract.

39
Q

Is the parol evidence rule applicable in a collateral contract?

A

No.

40
Q

Literal Approach

A

Assigns words their ordinary meaning.

41
Q

Contextual Approach

A

Goes beyond the four corners of the document by looking at the parties’ presumed intentions and their circumstances.

42
Q

Golden Rule

A

Says that words will be given their plain, ordinary meaning unless to do so would result in absurdity.

43
Q

Contra Proferentem Rule

A

Ensures that the meaning least favourable to the author will prevail.

44
Q

Implied Term

A

Arises by operation of law, their through the common law or under a statute.

45
Q

When will a court interfere with a business transaction?

A
  1. When a gap or omission is an obvious consequence.

2. When it is required for the purpose of business efficacy.

46
Q

Give an example of a term implied by the court:

A

The SCC has determined that the employer has to provide reasonable notice before dismissing an employee, even if a contract does not stipulate this or even if the contract expressly says the the employee can be dismissed without notice.

47
Q

Standard Form Agreement

A

Mass-produced documents usually drafted by a party who is in an economic position to offer certain terms on a “take-it-or-leave-it” basis.

48
Q

What is the downside to standard form agreements?

A

They are so long and complex that no one reads them. Customer is at mercy of other party. May lack the consensus ad idem (meeting of the minds).

49
Q

Exclusion Clause

A

A contractual term that seeks to protect one party from various sorts of legal liability.

50
Q

What three things need to be demonstrated in an exclusion clause?

A
  1. The term must be drafted in clear, unambiguous language.
  2. Party must be given reasonable notice.
  3. Must be shown that the party agreed (usually a signature).
51
Q

Does the power imbalance in a contract affect the exclusion clause?

A

Yss. It does not make the exclusion clause invalid, but judges will decide whether the weaker party truly did agree to the clause.

52
Q

Does a signature guarantee that the exclusion clause will work?

A

No, if there are onerous or unusual terms in small print, and the customer is not really given / does not have an opportunity to read them, then the exclusion clause does not apply.

J - B LAW 301 (22 decks)

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