CONTRACTS (PG. 590-620) Flashcards
CONTRACT
A formal agreement between two or more parties that is done voluntarily and creates rights and obligations among the parties.
CONTRACT LAW
Stipulates the rights and obligations of the parties involved (mutual promises on which parties of the contract can rely)
OFFER AND ACCEPTANCE
Contract begins with an offer, and if accepted, will bind both parties to the terms of the contract
OFFEROR
Person making the offer
OFFEREE
Person accepting the offer
CONSIDERATION
A contract that provides some type of benefit to the other party in exchange for the completion of the promise or service rendered
SEAL
A seal on a contract is sufficient to eliminate the requirement for consideration
INTENTION TO CREATE A LEGAL CONTRACT
The law presumes that both parties intend to honour the terms of the contract
UNDUE INFLUENCE
When one party to a contract dominates another party in such a way as to deprive that person from making a qualified and independent decision
DURESS
When one party to the contract uses threats (physical or otherwise) or economic pressure to coerce the other party into a contract.
MATERIAL MISREPRESENTATION
When one party to the contract makes a false assertion that influences another party to enter into a contract
LEGAL CAPACITY
Parties entering into the contract are over the age of majority (18 or 19) and held responsible for satisfying the terms of the contract
DIMINISHED CAPACITY
Those that are incapcitated due to influence of alcohol or drugs
LEGAL INTENT
The purpose or object of a contract must be legal (not violate any laws)
CONTRACT DISCHARGE
When both parties to the agreement perform their respective obligations satisfactorily
WAIVER
An agreement not to proceed with the original terms of the contract
BREACH OF CONTRACT
A party to a contract who fails to perform his/her required obligations without obtaining a waiver from the other party
DOCTRINE OF FRUSTRATION
External causes create circumstance where performing to the terms of the contract would lead to radically different results or obligations from what the parties originally contemplated
DOMESTIC CONTRACTS
The rights and obligations of both spouses during their relationship, and may also specify the division of property and support obligations following a relationship breakdown
MARRIAGE CONTRACTS
Typically deals with property division and support obligations between the married parties
COHABITATION AGREEMENTS
Specify the rights and obligations of each spouse in a common-law relationship, during the relationship and after the relationship ends
SEPARATION AGREEMENT
An agreement that deals with issues such as child and spousal support, and property division
SHAREHOLDER’S AGREEMENT
Governs the business relationship between two or more individuals who own shares of a private corporation that they operate as active business
BUY-SELL AGREEMENT
A shareholder’s agreement that includes provisions dealing with circumstances under which shares may or must be sold.
RIGHT OF FIRST REFUSAL
If one shareholder wishes to sell his/her shares to an an outside party, the other shareholder’s should be given the opportunity to purchase the sahres on the same terms and conditions as those the third party offers.
TAG ALONG PROVISION
Allows the shareholder certain rights on the sale of another shareholder’s shares to a third party
DRAG ALONG PROVISION
Allows the selling shareholder to require the other shareholders to sell their shares as part of his/her sahre sale to a third party
SHOTGUN PROVISION
A mechanisim disgned to be the ultimate means of resolving shareholder disputes
CROSS PURCHASE ARRANGEMENT
The surviving shareholder(s) agrees to purchase shares the deceased owns at the time of death and obligates the deceased shareholder’s estate to sell the shares. Note: Funded by personally owned insurance
PROMISSORY NOTE ARRANGEMENT
Corporation is the owner and beneficiary of insurance on the life of each shareholder. On death, the corporation receives the insurance proceeds on a tax-free basis.
SHARE REDEMPYION ARRANGEMENT
The corporation is the owner and beneficiary of a policy on each shareholder. On death, the insurance proceeds are used to purchase the shares from the estate of the deceased shareholder
SHAREHOLDER AGREEMENT - OWNERSHIP
Should set out the ownership structure…Who the shareholders are and how many shares of each class they own
SHAREHOLDER AGREEMENT - FINANCING
Require each shareholder to contribute capital to the corporation at given times and in certain amounts
SHAREHOLDER AGREEMENT - MANAGEMENT
Identify who are the directors, shareholder and officers of the corporation
SHAREHOLDER AGREEMENT - DISPUTE RESOLUTION
Provisions for dealing with disputes, such as arbritation and mediation
SHAREHOLDER AGREEMENT - VALUATION
Should provide a method for dtermining the value of the corporation’s shares in certain circumstances
