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Law and ethics exam > contracts > Flashcards

contracts Flashcards

1
Q

contract

A

an enforceable voluntary agreement between two or more parties

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2
Q

two terms in contracts

A
  1. express terms - conditions that have been discussed and agreed upon
  2. implied terms - conditions that have not been discussed and taken for granted
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3
Q

letter of intent

A

basic terms of future contract - not enforceable!!

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4
Q

Five ways to void a contract

A
  1. mistakes
  2. misrepresentation
  3. duress
  4. unconscionability
  5. frustration
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5
Q

three features to void mistakes

A
  1. must be significant and non-trivial
  2. must be mutual
  3. existed at the same time the agreement was made
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6
Q

three features of misrepresentation

A
  1. innocent
  2. negligent
  3. fraudulent (most serious type)
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7
Q

duress

A

improper pressure, threats or coercion to get a party into a contract

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8
Q

unconscionability

A

a contract so unfair, oppressive or one sided that the court will not enforce

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9
Q

waiver

A

an act or instance of waiving a right or claim

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10
Q

estoppel

A
  • one party relies on actions of another instead of the contract
  • principle that prevents someone from arguing something or asserting a right that contradicts what they previously said
  • the action that the court can use to prevent a party from enforcing the strict wording of the contract that puts the other party at a disadvantage
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11
Q

quasi-contract

A

obligation of one party to another imposed by law independently of an agreement between parties

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12
Q

quantum meruit

A
  • company must be paid the amount the work is worth even without a contract
  • when a service ahs been requested and performed with out a payment agreement in place
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13
Q

change order vs change directive

A

change order: paperwork for changes to contracts

change directive: additional work paid at cost-plus. ordered by consultant NOT owner

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14
Q

privy

A

a condition where only parties to the contract can enforce the contract

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15
Q

four conditions for a breach of contract

A
  • inability to perform
  • inadvertence - unintentional
  • disagreement
  • lack of profit
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16
Q

specific performance

A

court order to perform a specific act that would remedy the damages (sell property)

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17
Q

injunction

A

prohibits a party from starting or continuing to do something that is threatening or invading the legal rights of another

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18
Q

three limitations of damage recovery

A
  1. mitigation - injured party takes steps to reduce loss
  2. damages cant be speculative - must have proof
  3. remoteness - loss must be reasonably foreseeable
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19
Q

consequential vs liquidated damages

A

consequential damages: indirect loss - loss of business

liquidated damages: estimates of loss written in contract

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20
Q

3 ways a contract termiantes

A
  1. it ends once both parties complete their obligations
  2. when its agreed to end early or if on party ends it (breaches)
  3. completion of performance
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21
Q

fundamental breach

A
  • a breach that goes to the root of the contract and deprives the innocent party of all or most of the benefit of contract
  • one party is not keeping their party of the deal by failing to complete contractual terms forcing the other party to not complete their own responsibility
  • if a party does not perform an obligation, the injured party CAN terminate the contract and sue
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22
Q

Simple breach

A

a breach that does not entitle the innocent party to treat the contract as ended in order to permit the innocent party to stop performing their part of the contract

  • injured party CANT terminate the contract but can sue
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23
Q

repudiatory breach

A
  • when one party lets the other know that they do not intend to perform their obligations without justification
  • innocent party can terminate the contract
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24
Q

anticipatory breach

A
  • one party declares to the other party before the time of performance of an obligation they intend to breach
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25
Q

restrictive by express conditions

A
  • contracts have special or supplemental conditions, which are assigned greater importance. Special meaning takes precedence over standard form
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26
Q

contra proferentem

A

a contract is ambiguous (vague), the courts choose the interpretation that favours the party who did not write the contract

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27
Q

parole evidence rules

A
  • when a contract is written and clear, evidence is not admissible to add to, vary or contradict the words
  • a contract rule that prohibits evidence that contradicts or adds to the contract terms
28
Q

five essential elements for an enforceable contract

A
  1. offer must be made and accepted
  2. mutual intent to enter the contract
  3. consideration
  4. capacity of contract
  5. lawful purpose
29
Q

Two types of authority a principal can provide to an agent?

A

express authority: actual authority, created by a contract between principal and agent

apparent authority: implied authority, created by representatives made by the principal and third party. an agent can be authorize to only do certain acts

30
Q

hold harmless agreement (indemnity agreement)

A

an agreement by one party to bear the financial loss of another party for a specific event (insurance)

31
Q

most common type of indemnity

A

insurance policy - insurance company pays for the losses

32
Q

vicarious liability

A

rule of law that makes one party liable for the acts of another (employer liable for negligence of its employees)

33
Q

indemnification clause

A

protects one party from liability if a third party/entity is harmed in any way.

obligates one party to compensate another party for losses or damages

34
Q

extras vs credits

A

extra: increase to contractual price
credit: decrease to contractual price

35
Q

who is responsible for changes??

A

the owner!

36
Q

impact costs

A

costs that rise from the inefficiency created by delays, interferences or changes

37
Q

Three contract administrations

A
  1. authority
  2. timeliness
  3. field review
38
Q

three goals of a contract

A
  1. work done on time
  2. on budget
  3. highest quality
39
Q

call for tenders

A

request from owner to bidder for delivering a defined set of goods or services

40
Q

can an offer be accepted to create a contract?

A

Yes. but an invitation to treat cannot

41
Q

four steps for bidding process

A
  1. prepare bid documents
  2. submit bids
  3. examine bids
  4. award contract
42
Q

what must the tender documents state?

A
  1. all relevant information

2. process and criteria for awarding the contract

43
Q

seven types of delivery systems

A
  1. request for qualification (RFQ) - based on qualifications
  2. invitation to tender - owners evaluate bids
  3. request for quotes - informal
  4. request for standing offer
  5. request for proposal (RFP)
  6. letter of interest/pre-qualification
  7. hybrid
44
Q

3 categories for procedural issues

A
  1. fairness and good faith
    - no obligation to be fair with pre-contractual negotiations
  2. openness and transparency
    - no legal requirement to make available, the reasons and results of the procurement process
  3. cost of fairness and transparency
    - a fairness monitor checks that the procedures have been followed, not measured for compliance
45
Q

Five project delivery methods

A
  1. design-bid-build
    - owner designs, contractor builds
  2. design-build
    - owner conceptualize, contractor design and build
  3. design-build-operate
    - owner conceptualize, contractor builds and operates for a certain time period
  4. design-build-operate-finance
    - owner conceptualize, contractor builds and operates and invests
  5. construction management
    - owner hires everyone directly
46
Q

Five Payment Methods

A
  1. fixed/stipulated sum
  2. cost-plus
  3. unit-price
  4. alliance
  5. public-private-partnership (P3)
47
Q

purpose of interprovincial and international trade agreements

A
  • sets out rules about transfers of goods and services between two countries/provinces
  • must be transparent, accessible and fair
48
Q

standard form contract

A
  • needs to be tailored to specific project

- developed for general needs of a project

49
Q

fixed price contract

A
  • goods and services provided for a lump-sump amount
  • can be know as a stipulated price contract/lump sum contract
  • all risk to contractor
50
Q

cost plus contract

A

contract is paid for the actual cost of the goods/services performed, plus an overhead fee an profit

51
Q

unit-price contract

A
  • owner pays amount for unit or quantity of work ($/m3)
52
Q

construction management contracts

A
  • not based on a payment scheme, rather is focused on how work will be done
53
Q

design-build contract

A
  • owner contracts out designers, construction and inspection of a project. but still retains control over the project
54
Q

alliance agreement

A
  • a relationship forming contract in which all parties share economic success or failure
  • usually cost-plus
55
Q

three major clauses to an alliance agreement

A
  1. no blame clause
  2. clearly defined gainshare/painshare scheme
  3. understanding roles
56
Q

private-public-partnership agreement

A
  • partnership agreement that binds the public and private sectors
  • private source of capital is sources, constructed and the recoup costs through long term leasing of facility (toll bridge)
57
Q

service agreement

A
  • professional contract which defines cope of work and outcomes
58
Q

licensing agreement

A
  • grants the rights to parties, right to use equipment, processes or land
  • used for copyrights
59
Q

Grubstake agreement vs option agreement

A

grubstake: people invest in return for shares of the outcome
option: buy shares or do work in exchange for interest in a property

60
Q

9 crucial aspects/sections for contracts

A
  1. scope of work
  2. contract time
  3. changes
  4. damages and bonuses
  5. warranty
  6. termination
  7. indemnification
  8. exclusions/waivers/limitations
  9. dispute resolution
61
Q

two major types of damage clauses

A
  1. penalty clauses
    - nominal fee which must be paid for non-performance.
    - non-enforceable
  2. liquidated damages clause
    - damages suffered as a result of late performance
    - enforceable
62
Q

exclusion clause

A
  • clause to exclude damages or remedies available by innocent parties under certain circumstances
  • favour the party who didn’t draft the clause
63
Q

limitation clause

A
  • partially limit liabilities or remedies

- favour the writer of the clause

64
Q

waiver clause

A
  • conditions the rights under the contract can be given up
65
Q

bankable vs bankability

A

bankable: contracts are acceptable to lenders financially
bankability: issues when a borrower does not have sufficient assets to secure a loan

Law and ethics exam (29 decks)

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