Contracts Flashcards
What is the philosophy of contracts? (4)
1) Freedom of contract
2) Promised exchanges
3) Bargain
4) Future expectation created
What is the source of contract law?
1) Constitution Act, 1867 Section 92 (13) : Property and Civil Rights
2) Provincial constitutional jurisdiction
3) Mostly left to common law judges to develope
Forming of a contract - Arm’s length
arm’s length - the description of an agreement made by two parties
1) freely and independently of each other,
2) without some special relationship, such as being a relative, having another deal on the side or one party having complete control of the other.
Forming of a contract - Arms length law perspective
- The law assumes that you don’t traditionally make contracts with family members and rather with people at arm’s length. Strangers and such.
- With family and friends the courts do no assume is a legal documentation
How do you make a contract with someone not at “arms length” (family)
- If you do want to go make a contract with family, social settings, etc – you must state explicitly to overrule courts assumption
What are the two things needed to form a contract
Intention to create legal relations. This means two things,
1) ARMS LENGTH
2) THE ACKNOWLEDGEMENT THAT THE OPPOSITE PARTY WILL TAKE TO COURT FOR ENFORCEMENT
The presumption in the formation of a contract? (2)
1) Contract made by parties not a arms length
2) Contract made by parties at arms length
Need for writting? - Is an oral contract legally enforceable?
yes!
Statue of Frauds: three kinds of contracts MUST be written
1) Sale of land
2) guarantees of indemnities (security or protection against a loss or other financial burden)
3) Performance exceeds one year
What is an indemnity?
security or protection against a loss or other financial burden.
Give an example of a Guarantor?
A gives money to B and C promises to pay it back to A
C is the Guarantor
When your hired why is it that your not explicitely given a time frame?
because your looked as hired indefinitive
Are most consumer transactions oral or commercial?
Oral
Are most commercial transaction oral or written?
written. Think Equipment, supplies, and machines
NEED FOR WRITING? Given the fact that most contracts are not obligated to be written, why is it so prevelant?
1) Easy proof if enforcement is required. Signatures equate consent on behave of party
2) Guidance to performance - standards established
NEED FOR WRITING? What kind of writing is required by law?
A Memorandum
NEED FOR WRITING? What is a Memorandum?
Anything on paper which is signed for a certain purpose/ objective
NEED FOR WRITING? Suppose you don’t write a contract and there is no proof of certain actions necessary to honour the contract. What are your options for enforcing these actions when no memorandum is available as proof?
convince the judge that there is a clear motive /CONDUCT of contract (HAIL MARY)
NEED FOR WRITING? What is a Quantum Merui?
a reasonable sum of money to be paid for services rendered or work done when the amount due is not stipulated in a legally enforceable contract.
NEED FOR WRITING? What is a Doctrine of Part Performance?
- Part-Performance doctrine is an equitable principle that allows a court to recognize and enforce an oral contract despite its legal deficiencies
- conduct between the parties that is unequivocally referable to the existence of this contract”
Offer - What is an offer?
an expression of willingness with the apparent intention that it shall become legal and binding when it is accepted by the other party
What does an offer contain? (2)
1) Subject matter
2) Price
What is an offerOR
someone who gives an offer to another
What is an offerEE
someone who receives from someone
At what point is an offer effective?
when the offerEE receives it
What does offer must be distinguished from?
An invitation to treat
What is an invitation to treat?
Not a legal offer. Simply, an invitation to someone or the public to come and make an offer
What is an example of an invitation to treat
displays or advertisments
What is a bilateral contract?
bilateral contract is a reciprocal arrangement between two parties by which each promises to perform an act in exchange for the other party’s act. Normal contract
What is a unilateral contract?
were an offer can only be accepted by performance.
A unilateral contract can be formed by an express offer stating that the offer can only be accepted through performance.
An offer made to the whole world can still in some cases be an offer - name a case
Carbolic Smoke Ball case
What is key in determinng an offer
Substance over form – what it is in fact is more important then the offer
When is an offer terminated? (4)
1) Accepting an offer
2) Revocation
3) Rejection
4) Counter offer
5) Lapse
When is an offer terminated - Revocation expand (2)
1) Cancelling it and no new offers made
2) Cancel before accepted
When is an offer terminated - Rejection
1) straight up rejecting an offer
When is an offer terminated - Counter-offer
1) Kills offer and births a new one
When is an offer terminated - Define Lapse and name two sub categories
Offer expires
1) Express deadline for acceptance passes - expressed lapse
2) Within a reasonable time of making the offer
when is the expiry (lapse) of a subject matter relevant?
When dealing with food as it spoils.
What do we assume by sponantous offers?
There is hireachy of modes of communication that imply urgency and a standard of lapse. For instance, email you assume one to two days, expiry. Phone call you expect an expiry of that day. Face to face you expire immedietly .
When and how is acceptance of a contract achived ? (3)
1) When and must be communicated by offeree to offeror
2) Must be uncoditional
3) In consumer transactions, offers and acceptance are implied by conduct - no words needed
Acceptance of a contracts - What are the excemption to “must ve communicated by offeree to offeror (2)
1) Unilatteral offer - perfome
2) Postal acceptance rule - letter is accepeted when you deposit letter
What distinguishes a contract from a gift?
- Both sides must be promising to give up something during contract – seriousness.
-Both parties must promise, at the time the contract is made, to give up some consideration
this forces them to address their minds to their contractual obligations
What are forms of consideration? (5)
1) Money
2) Service
3) Good
4) Relinquishment of legal rights
5) Relinquishment of legal rights
Does a handshake make a contract legal?
no
What is the concept of mutual consideration?
Each party gives up something of value (consideration)
Does the adequacy of consideration matter?
The AMOUNT of consideration exhanched between two parties is irrelevant
Does consideration given in the past count?
Does not count
What are the exceptions to consideration?
1) Seal is a complete substitude. Gives impression of legality
2) Equity promisory estoppel if detrimental reliance
What is Equity promisory estoppel if detrimental reliance?
legal principle that a promise is enforceable by law, even if made without formal consideration, when a promisor has made a promise to a promisee who then relies on that promise to his subsequent detriment.
What is it called when a party does not pay consideration
a breach
What to do in new settlements (compromises)
Something new consideration must be exchanged between the two parties. You cannot simply reduce the cost of a project but rather an exchange must occur orm else it aint enforceable
When accessing a 2nd contract –
analyze what is given up and what are they getting
Capacity to contract
1) Children
2) Insane people
3) Disabled
Capacity is determined at the time of the contract not at the time of the performance - T OR F
truuuuu
Capacity to Contract - General Rule - Party with incapacity may elect to ratify or repudiate the contract. T or F
Truth
What does the General Rule apply ONLY to:
1) Contracts for necessaries is always binding
2) Contracts for non-necessaries – No shelter or food, games
3) Necessary – need to live (ENFORCEBLE)
