Class 4 - Contracts

Question 1

What is the civil code of quebec?

Answer 1

Fundamental legal document in the province of quebec, it consists of a body of rules that govern individuals, the relationship between them, and property

Question 2

What is a contract?

Answer 2

Business agreements that people enter into voluntarily.

Contracts create obligations and these are the building blocks to construct contracts

Question 3

What is a contract of adhesion?

Answer 3

conditions are draws up by only one of the parties and the only choice available to the other party is to accept these conditions or not to enter into the contract (e.g., airline tickets and other transportation contracts)

Question 4

What is a contract by mutual agreement

Answer 4

both parties discuss and agree on all of the conditions of the contract

Question 5

What is a synallagmatic contract?

Answer 5

bilateral contract, both parties agree to perform an obligation

(e.g., “A” pays $10 and “B” gives “A” a book)

Question 6

What is a unilateral contract?

Answer 6

only one party undertakes to perform an obligation (e.g., a will or a pledge to donate to charity)

Question 7

What is an onerous contract?

Answer 7

each party receives something in return for undertaking an obligation to the other party (e.g., “A” receives a book and in return agrees to pay “B” $10)

Question 8

What is a gratuitous contract?

Answer 8

one party undertakes an obligation that benefits the other party, but the other party does nothing for the first person (e.g., an agreement to donate money to a charity, or looking after a friend’s child without being paid)

Question 9

What is a communicative contract?

Answer 9

both parties know in detail how much each has to pay, and what each will receive in return (e.g., a food company buys 10,000 bushels of apples and agrees to pay $3 per bushel)

Question 10

What is an aleatory contract?

Answer 10

full extent of the obligations is uncertain at the time the contract is entered into and will only be established at a later date (e.g., a food company agrees in January to buy all of the apples the farmer will grow during the summer and pay $3 per bushel; the number of apples to be sold and the total number of dollars to be paid will be known only when the apples are harvested in August)

Question 11

What is an instantaneous performance contract?

Answer 11

there is a one-time discharge of the obligations undertaken (e.g., a bicycle is sold and delivered and the price of $175 is paid)

Question 12

What is a successive performance contract?

Answer 12

the obligation is to continue doing something on a regular basis for a specified period of time (e.g., an employment contract by which the employee goes to work every day and receives weekly pay for his or her services, or by which a contractor agrees to mow the company’s front lawn once a week for a fee of $25)

Question 13

What are consumer contracts?

Answer 13

natural person (not a business) acquires, for personal use, some property or service from a business that offers such property or service to the public (such contracts are dealth with a length under the Consumer Protection Act)

Question 14

What are the three basic requirements for an obligation to exist in law?

Answer 14

1. There must be at least two parties who agree to do something for eachother
2. There must be a prestation (benefit) that is the object of the obligation
   - Payment or performance
   - render a service
   - doing or not doing something
3. Must be a lawful reason for undertaking the obligation

Question 15

How do obligations come into existence?

Answer 15

1. Emerge from contracts, agreements that people into with eachother (can be written or verbal except marriage contracts, hypothecs, insurnace etc)
2. Arise from an act carried out by someone (i.e. causing damage to somoene’s property, injuring someone, etc)

Question 16

What is legal vs natural obligation?

Answer 16

Legal: sactioned by law and enforceable before the courts. Failure to discharge your obligations gives the person to whom you are obligated the right to demand performance and/or damages

Natural: binds you in conscience only. You will complete your end of the “deal” only if you feel morally bound to do so

Question 17

What are the elements required to form a valid contract?

Answer 17

1. An exchange,
2. Of consents,
3. Between persons,
4. Having capacity to contract,
5. In any form, unless a special “form” is required, (art. 1414 CCQ)
6. A cause, (arts. 1410 and 1411 CCQ)
7. An object (arts. 1412 and 1413 CCQ)
   All seven elements must be present for the contract to be valid under the term of our Civil Code

Question 18

what is difference between express and tacit concent?

Answer 18

Express when there is a clear indication on the part of a person, such as a statement “yes, I am prepared to buy this printing machine for $47,500

Tacit when nothing is said, but the person carries out some action to indicate acceptance, e.g., a person who walks into a barber to begin cutting his hair. Nothing has been said or written, yet it is clear the person is prepared to pay for having his hair cut.

Question 19

What are the repercussions of making a promise?

Answer 19

• A promise to enter into a contract is not the same as an acceptance
• BUT if someone promises to enter into the contract, the person cannot change their mind and refuse to go through with the deal once the promise is accepted
• A refusal may lead to an action in damages by the person to whom the promise was made

Question 20

When/where does a contract come into existence?

Answer 20

where and when the acceptance of the offer is received

Question 21

How long are contract offers valid?

Answer 21

• If the party making the offer states that the offer will be open for a specific period of time, such as 30 days, the offer cannot be revoked (cancelled) before that time
• If no time period is stated, the offer may be revoked at any time. If no acceptance is received before the time expires, the offer lapses (becomes null). Offer expires ends in a reasonable time

Question 22

What is a counteroffer?

Answer 22

If the acceptance does not correspond to the terms of the offer, it is not really an acceptance at all

Question 23

How can silence be interpreted?

Answer 23

Teacher says it should be interpreted as nothing, book says its a refusal

Question 24

What is an offer?

Answer 24

• a clear, precise, firm proposition containing a genuine intention to enter into a binding contract
• Offer only exists when there is something specific offered (general newspaper ad is simply an invitation to the public to make an offer)

Question 25

What is the general principle of law in quebec regarding freedom of commerce?

Answer 25

• The general principle of law in Québec is that there is complete freedom of commerce and a merchant is free to deal with anyone
• This principle is qualified in that a merchant must have available for sale the advertised merchandise in reasonable quantities
• Both federal and provincial laws govern misleading advertising and misrepresentation

Question 26

What are reasons that may cause an offer to lapse?

Answer 26

Death, bankruptcy or protective supervision occurs before acceptance is received, causes offer to lapse

Question 27

If the offeror is in London and the offeree in Montreal where is the contract formed?

Answer 27

in london (where offeror is)

Question 28

Describe acceptance and counter offer

Answer 28

• Contract is formed upon acceptance
• If acceptance doesn’t equal offer then it’s a counter-offer or a new offer
• Any conditions added to the offer or any changes make it a counter-offer which itself is then subject to acceptance
• An acceptance, therefore, can be described as an unqualified, unconditional acceptance of the offer which is communcated to the person making the offer

Question 29

What are the rules regarding consent?

Answer 29

• Consent must be given freely and willingly - “in a free and enlightened manner” (Art. 1399 Al. 1)
• The exchange of consent can be Express or Tacit
• No undue or illegal pressure → otherwise, this will vitiate (nullify) the consent as well as the contract and all obligations contained in the contract
• Defects of consent, which render the consent meaningless:
  1. Error (art. 1400 CCQ)
  2. Fraud (art. 1401 CCQ)
  3. Fear (arts. 1402 and 1403)
  4. Lesion (arts. 1405 and 1406)

Question 30

What is defect of consent: Error

Answer 30

• Not a simple personal error
• its an error as to the nature of the contract
  e.g. one believes it is a contract of sale and other believes it is a contract of lease

Question 31

What is defect of consent: fraud?

Answer 31

Error induced by fraud: Occurs when one person tricks another into making an error or gives untrue information and, based on that information, the person enters into a contract

A person in possession of the truth would not have entered into the contract at all or may have agreed to the purchase, but at a much lower price

Question 32

What is defect of consent: Fear

Answer 32

If a person uses fear, in the form of violence or threats of violence, to extract someone’s consent, such agreement is not legally valud and cannot produce any legal effects
Fear can also be derived from the use of a position of authority over another person, such as creating a fear for one’s job security

Question 33

What is defect of consent: lesion

Answer 33

• Refers to economic harm, such as taking financial advantage of a person who is presumed not to know better
• Lesion can be used only by persons who do not have full legal capacity, in which case it can be the basis for annulling the person’s consent
• Lesion can apply to contracts entered into by minors and also to those entered into by persons under protective supervision

Question 34

What is capacity in contracts?

Answer 34

• Parties must have the legal capacity to enter into contracts for them to be valid
• The law sets out specific rules as to who can and cannot legally enter contracts
• In general, minors and persons under protective supervision are declared to be legally incapable

Question 35

What level of capacity do persons under protective supervision have

Answer 35

• Inapt adults can’t contract (because they have no legal capacity)
• Are over the age of 18, and for reasons of physical or mental incapacity or disability, are unable to look after their own financial affairs
• Are declared so by court, after sufficient evidence is presented to persuade the court that such persons are incapable, to some degree, of looking after themselves

Question 36

What level of capacity do minors have in contracts?

Answer 36

• 14yrs+ can contract for employment or operating a business
• All minors can contract for usual needs (e.g., clothing, books, food, etc.)
• May be assisted by a tutor (legal guardian) to enter certain contracts or engage in legal actions
• May not avoid responsibility for causing drama
• Can avoid responsibility for contractual undertakings for which they do not have legal capacity
• Are legally represented by mother and father who are “of right” automatically tutors to the minor; if the parents cannot act as tutors, other persons may be appointed as tutors; the tutorship is supervised by a tutorship council made up of three people appointed by the members of the minor’s family
• Under certain conditions a minor may be “emancipated” which gives them legal capacity to enter contracts, either partially, as a result of a judicial decision, or completely, as a result of the minor’s marriage

Question 37

What are the three forms of protective supervision?

Answer 37

1. Permanent/total (Curator appointed by court to look after person’s property)
2. Temporary/partial (Tutor appointed to assist the person)
3. Assistance for some acts/limited time (Advisor appointed to give assistance)

If the incapacity or disability ceases, the protective supervision may be ended by the court and the person’s legal capacity restored

Question 38

What is cause when forming a contract?

Answer 38

Reason for entering a contract is illegal, the contract is not considered valid. (Reason for entering does not need to be expressed in contract)

Question 39

What is object when forming a contract?

Answer 39

Every contract results in the carrying out of a juridical operation such as a sale, lease, or exchange
Only restriction: contracts in which the object is something that is illegal or contrary to public order are illegal

Question 40

What is form when forming a contract?

Answer 40

• Most contracts do not require any particular wording or form to be used
• Certain contracts have a form specified by law that must be used to preserve the validity of the contract
• Applies to: marriage contracts, hypothecs (mortgages), notarial wills, insurance policies, and collective labour agreements