CONTRACTS Flashcards

Question

Past consideration

Answer 1

= a gratuitous benefit previously conferred upon a promisor = no consideration

Answer 2

A new contract is not formed when a debtor promises to reduce their debt A debtor owed his creditor a large sum of money, and payment was overdue. The creditor agreed to accept a series of installments of the principal, and to forgo her right to interest, if the debtor paid promptly and regularly. The debtor paid the principal as agreed, but the creditor sued for the interest. She succeeded because her promise to accept less than the total sum owing—principal plus accrued interest—was a gratuitous promise and did not bind her.

Answer 3

When the creditor accepts part performance (i.e. a lesser sum of money) in settlement of a debt, and the debtor pays the reduced amount, the entire debt is extinguished - if the parties agree to a lower payment of debt that is an enforceable contract even if there is no consideration

Answer 4

= the court’s exercise of its equitable jurisdiction to estop a promisor from claiming that she was not bound by her gratuitous promise where reliance on that promise caused injury to the promise - a shield, not a sword If someone tells you something and you act accordingly, the person cannot sue even if what they said is untrue (you can throw that stuff out – oh no it's my stuff – too late, I acted accordingly to what you said)

Answer 5

(1) Some form of legal relationship already exists (2) One of the parties promises (perhaps by implication only) to release the other from some or all of the other’s legal duties to him (3) The other party, in reliance on that promise, acts in a way that alters his position and would make it a real hardship if the promisor reneges on his promise.

Answer 6

= loss or harm suffered by a promise who, to his detriment, relied reasonably on a gratuitous promise - US, cause of action, like equitable estoppel

Answer 7

applies to goods supplied on request as well as to services rendered If, for example, A promises to pay B $100 after B has given her and her family an excellent dinner, A is not bound, since she is under no existing legal obligation at the time she makes her promise. If, however, A agrees to pay B $100 after B has requested catering services, A would be bound; in fact, A was already bound to pay B a reasonable price, and she and B have simply agreed later upon what this price should be.

Answer 8

- specialty contract, 20 y allowed to sue - a document under seal is still called a deed and requires no consideration - a seal must be affixed (or the word “seal” written) on the document at the time of signing - certain documents, such as a deed of land and a mortgage, traditionally required a seal even if there was consideration

Answer 9

Reasonable bystander test: did the outward conduct of the parties lack serious intention to create legal obligations?

Answer 10

void: never existed; failed formation = no contract voidable: exist, but can be made void at the option of one of the parties

Answer 11

Minors, Mentally incompetent people, Corporations, Labour unions, associations and other organizations, Aboriginal Band, Bankrupts

Answer 12

Exceptions: still bound by any contract for the supply of necessary/essential goods and services – quantum meruit, only; or beneficial contracts of service (employment/apprenticeship) - may always back out of any other contract but can enforce the contract if they choose to do so

Answer 13

(1) Voidable contracts: for e.x. installments, must back out immediately (2) Ratified contracts: for e.x. buying something where payment happens after date of majority; contract is ratified if paid

Answer 14

same rules as minor

Answer 15

separate legal entities; ultra vires acts of statutory corporations

Answer 16

not separate legal entities; representative actions

Answer 17

recognized as “special unincorporated associations” – representative capacity similar to labour union

Answer 18

under certain contractual disabilities (except for necessities) until discharged from bankruptcy

Answer 19

Criminal Code – court will not enforce a contract that’s a crime Income Tax Act – court will not enforce a contract meant to avoid taxes Competitions Act – restraint on trade Law Society Act Violation of Common Law or Public Policy Indemnity for committing torts is not allowed (Insurance excepted) Contracts considered to be immoral, a perversion of justice, or prejudicial to the interests of the Canadian public

Answer 20

Void for uncertainty: vague or incomplete agreements can be deemed “void” by a court, therefore no contract was ever formed. Vague terms: fair value”, as opposed to explaining how $$ should be determined * incomplete contracts: i.e. missing essential terms such as price or what goods are to be purchased