Contract Law Flashcards
For a legally binding agreement to be enforceable by the courts, it needs to meet what requirements
Agreement between the parties
Parties need capacity to enter into a contract
Genuine intention to form a binding legal relationship
Supported by consideration
Lawful intent formalities
What are the twin elements of an agreement
Offer
Acceptance
Prior to a contract, the parties sometimes exchange communications which is reffered to as what?
Letter of intent
Expresses the intention to enter into a contract BUT an agreement to agree in the future is not a valid contract
Example of an owner in breach of a contract?
Do not make proper payments as required in the contract.
What could lead to a contractor breaching
Failure to carry out work
Lack of performance
not completing work within reasonable time.
Termination of contract by performance?
Contract comes to an end naturally when parties have satisfactorily completed all of the obligations under the contract.
Usually happens after final inspection
Termination of contact by agreement?
Contract may be ended anytime effectively by an oral agreement
System of settlement of disputes without resorting to the courts, is called what ?
Arbitration
What is a Change Order?
Agreement between owner and contractor to make a certain change in the contract work for an agreed price or method of payment such as cost plus, unit price, time and materials.
Builders lien rights are created by?
Provincial legislation
What do builder liens require?
Owners to maintain a lien fund by holding back a percentage of all payments to contractors for a certain time.
Statutory lien holdback in Alberta?
10%
Provisions for the interim release of holdback allows?
Owner to release major lien holdback on a subcontractor work when no liens have been registered in connection to the work.
Open bidding?
Open form of competitive bidding is most commonly used for public projects.
Criteria for selecting a builder/contractor
Price
Reputation
Past Performance
Experience
Safety
Financial Status
Bonding
What may be done to ensure contractor is financially stable to ensure good bonding..
Financial status check can be done to ensure contractors are not at there limits of obtaining bonds. so ya dont invite tha fuckas
The purpose of a Bid Bond?
Ensures the owner that the contactor Whose bid is accepted will, within the required time period, enter into a contract with the owner and provide contract security (PERFORMANCE BOND)
What is a Performance bond?
Commitment by bonding company to compensate for loss sustained to the owner for up to face value of the bond against any losses that result from failure of the contractor to perform in accordance with contract
If contractor fails to meet performance bond contract requirements?
Owner has right until bond expiration to call bonding company to rectify the default or compensate the owner by means of damages
Labour and Material Payment bond?
Commitment by surety to pay for labour and materials furnished to the contractor for use on the project.
What is a Payment bond
Commits surety up to face value of the bond to ensure that the principal pays the obligee.
In a payment bond whos the principal whos the obligee
Principal - Owner
Obligee - Contactor
When is a payment bond used?
When contractor has concerns about the owner ability to pay for the work.
What is this a picture of?
Criteria for selecting a Builder/Contractor
