CONTRACTS IN WRITING

Question 1

What does it mean to be “in writing”?

Answer 1

• 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)

Question 2

essential terms of the contract must be in writing

Answer 2

• names of the parties;
• subject matter of the contract
• consideration (except guarantees);
• payment details; and
• signature of the paying party

Question 3

Contracts that must be in writing

Answer 3

a) Statute of Frauds
b) Sale of Goods Act
c) Consumer Protection Act

Question 4

Statute of frauds (4)

Answer 4

Guarantees
Agreements made in consideration of marriage
Agreements not to be performed by either party within one year
Contracts relating to land

Question 5

Guarantees

Answer 5

= A conditional promise to pay another person’s debt if the debtor defaults must be in writing to be enforceable

Question 6

Indemnities

Answer 6

= 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.)

Question 7

Agreements made in consideration of marriage

Answer 7

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

Question 8

Agreements not to be performed by either party within one year (exceptions)

Answer 8

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.

Question 9

Contracts relating to land

Answer 9

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

Question 10

Sale of goods act

Answer 10

• 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

Question 11

Evidence that will also be sufficient (aside from writing) under the Sale of Goods Act:

Answer 11

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.

Question 12

Consumer protection act

Answer 12

• only applies to B2C not B2B
• Direct Agreements >$50 – i.e. door-to-door sales

Question 13

Interpretation of contracts

Answer 13

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.

Question 14

Implied terms (definition)

Answer 14

= 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.

Question 15

Privity of Contract

Answer 15

= 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

Question 16

How to get around Privity of Contract

Answer 16

(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

Question 17

Novation

Answer 17

Terminate the first contract and create a new contract with the same or similar terms, with only the third party to the contract.

Question 18

Vicarious Performance

Answer 18

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.

Question 19

Trusts

Answer 19

Where property has been transferred to a person who “administers” the property (trustee or administrator) for the benefit of another (beneficiary)

Question 20

Constructive trusts

Answer 20

an equitable remedy that permits the beneficiary to force the trustee to perform (usually transfer property to him/her)

Question 21

Contracts concerning land (leases)

Answer 21

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.

Question 22

Assignment

Answer 22

= 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

Question 23

Parties to the Assignment

Answer 23

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.

Question 24

Equitable Assignment (common law rule):

Answer 24

offers a way for the courts to enforce the transfer based on fairness, even if those criteria aren’t fully met

Question 25

Notice to Promisor

Answer 25

• All assignments require that the promisor be given notice of the assignment.
• Only notice, not consent, is required
• If the promisor ignores the notice and pays/performs for the assignor, then the promisor will be in breach and will be required to pay/perform again to the assignee.

Question 26

Assignee’s title

Answer 26

• The assignee cannot obtain a better title than the assignor (i.e. the assignor can only assign what he/she has).
• The assignment is subject to any rights that the promisor had against the assignee before the promisor received notice of the assignment.
• Equitable right of set-off.
• Right of recission

Question 27

Assignments by Operation of Law

Answer 27

Death, Bankruptcy

Question 28

Consumer Protection Act - what has to be in writing?

Answer 28

• Detailed description of goods/services;
• Itemized purchase price;
• Name, address and contact information of vendor;
• Notice of Statutory cancellation rights;
  Copy must be provided to the consumer.