CONTRACTS IN WRITING Flashcards
What does it mean to be “in writing”?
- No specific “form” required – just needs to be in writing (certainty as to terms)
- can be across multiple documents (but cannot rely on oral promises to connect them)
essential terms of the contract must be in writing
- names of the parties;
- subject matter of the contract
- consideration (except guarantees);
- payment details; and
- signature of the paying party
Contracts that must be in writing
a) Statute of Frauds
b) Sale of Goods Act
c) Consumer Protection Act
Statute of frauds (4)
Guarantees
Agreements made in consideration of marriage
Agreements not to be performed by either party within one year
Contracts relating to land
Guarantees
= A conditional promise to pay another person’s debt if the debtor defaults must be in writing to be enforceable
Indemnities
= a promise to pay on behalf of a third party if the other contracting party performs (co-signing, not conditional upon default)
- DO NOT have to be in writing (except in B.C.)
Agreements made in consideration of marriage
Historically referred to marriage contracts such as a bridal dowry
* Today contracts relating to marriage are governed by Family Law Legislation but must still be in writing to be enforceable
Agreements not to be performed by either party within one year (exceptions)
Indefinite time period set out I the contract (e.x. standing agreements).
Where one of the parties is expected to perform within the year, but the other is not, then it will not apply.
Contracts relating to land
Any transaction involving real estate MUST be enforceable in writing.
* Includes leases
Exceptions:
* Repairs to a building
* Building contracts for a house (i.e. not the sale of a house)
* Room and board arrangements
Sale of goods act
- applies to every province except BC and Ontario
– contracts for the sale of goods must be evidenced by some note or memorandum signed by the party to be charged, or they are unenforceable. - usually >$50
Evidence that will also be sufficient (aside from writing) under the Sale of Goods Act:
Acceptance: any conduct of the buyer in relation to the goods that amounts to recognition of an existing contract of sale.
Part Payment: credit toward paying the purchase price;
Earnest: token sum (or article) given to seal the bargain.
Consumer protection act
- only applies to B2C not B2B
- Direct Agreements >$50 – i.e. door-to-door sales
Interpretation of contracts
Court begins with normal meaning of words.
Court will then consider “trade usages” and local customs.
* Courts will make every effort to enforce the contract.
Implied terms (definition)
= a term not expressly included by the parties in their agreement but which, as reasonable people, would have included had they put their minds to it.
* E.x. Good Faith: Every contract in Canada now has an implied duty of good faith between the contracting parties. (Bhasin).
* E.x. Nickel Developments Ltd.
Privity of Contract
= the parties to the contract (i.e. the relationship that exists between parties to a contract).
* Rule: If there is no privity of contract between persons, then there is no right to obtain a legal remedy in contract law
* You can still sue in tort, if a tort was committed, since privity of contract is not required to bring a tort claim
How to get around Privity of Contract
(1) Novation
(2) Vicarious Performance
(3) Trusts
Other exceptions to the rule:
* Insurance (e.x. life insurance)
* Undisclosed principal
* Contracts concerning land (leases)
* Exemption Clauses (principled exception)
* Enurement clause
Novation
Terminate the first contract and create a new contract with the same or similar terms, with only the third party to the contract.
Vicarious Performance
Where a 3rd party performs on behalf of the promisor who remains responsible for proper performance.
* Employee of corporation performs contract on behalf of corporate employer; but corporation (not employee) remains liable in K law for performance.
Trusts
Where property has been transferred to a person who “administers” the property (trustee or administrator) for the benefit of another (beneficiary)
Constructive trusts
an equitable remedy that permits the beneficiary to force the trustee to perform (usually transfer property to him/her)
Contracts concerning land (leases)
The new owner must respect the previous lease agreement, and the lease holder must respect the promises made to the previous owner to the new owner.
Assignment
= Transfer by a party of its rights under a contract to a third party, cannot transfer burdens
chose in action = intangible right to “enforce the contract”
choses in possession = tangible goods
Parties to the Assignment
Promisor: Party 1 to the contract, who is promising to do something.
Assignor: Party 2 to the contract, who is assigning their rights under the contract.
Assignee: Party 3 who is receiving the rights from Party 2.
Equitable Assignment (common law rule):
offers a way for the courts to enforce the transfer based on fairness, even if those criteria aren’t fully met
