Finals Flashcards
privity of a contract
the relationship that exists between parties to a contract
vicarious performance
a third party performs contractual obligations on behalf of the promisor who remains responsible for proper performance (subcontractor)
exception clause
a clause in a contract that exempts or limits the liability of a party
trustee
a person who is trusted
beneficial owner
a person who, although not the legal owner, may compel the trustee to provide benefits to him
trust agreement
the document that conveys property to a trustee to be used for the benefit of a third party beneficiary
resulting trust
a trust relationship recognized when the conduct of the parties demonstrates the intention to hold property for the benefit of the other
constructive trust
a trust relationship imposed by the court to prevent a party from being unjustly enriched by keeping property that should benefit another
undisclosed principal
a contracting party who, unknown to the other party, is represented by an agent
enurement clause
extends the rights and benefits to those inheriting from a party, succeeding the party, or taking an assignment from a party
4 exceptions to the privity of contract rules
- trusts
- insurance
- undisclosed principal
- contracts concerning land
principled exception
allows third parties to rely upon a contractual exemption clause when the parties to the contract intended to include them, and their activities come within the scope of the contract and the exemption clause
2 assignment contracts
first, create unperformed right, subsequently assigned to third party in second contract
assignment
the transfer by a party of its unperformed rights under a contract to a third party
choses in action
rights to intangible property such as patents, stocks, contracts that may be enforced in the courts
choses in possession
rights to tangible property that may be possessed physically
statutory assignment
an assignment that complies with statutory provisions enabling the assignee to sue the other party without joining the assignor to the action
equitable assignment
an assignment other than a statutory assignment
3 requirements for assignee to sue promisor without joining the assignor in the lawsuit (statutory assignment)
- assignment was absolute (unconditional and complete)
- it was in writing
- promisor received notice of it in writing
set off
the right of a promisor to deduct an existing debt owed to him by the promisee
executor
the personal representative of a deceased person named in his or her will
intestate
when a person dies without leaving a will
administrator
the personal representative of a person who dies intestate
negotiable instruments
a written contract containing a promise, express or implied, to pay a specific sum of money to a designated person or to “bearer”
minor breach
a breach of a non-essential term of a contract or of an essential term in a minor respect
major breach
a breach of the whole contract or of an essential term so that the purpose of the contract is defeated
3 ways a breach may occur
- express repudiation
- acting in a way that makes it impossible to perform promises
- failing to perform or poor performance
express repudiation
one of the contracting parties advises the other that it does not intend to perform as promised
anticipatory breach
an express repudiation that occurs before the time agreed for performance
substantial performance
performance that does not comply in some minor way with the requirements of the contract
quasi-contract
an obligation that may arise because one party has received an unfair benefit at the expense of the other
unjust enrichment
unfair benefit
drawing party
the contracting party that prepared the agreement
unconscionable terms
terms agreed to by parties of unequal bargaining power that give an unfair advantage to the powerful party over the weaker party
3 types af remedies
- damages
- equitable remedies
- quantum meruit
2 prereqs. for award of damages
- loss must flow from breach
2. damages must be mitigated
liquidated damages
an amount agreed on to be paid in damages by a party to a contract if it should commit a breach
penalty clause
a term specifying an exorbitant amount for breach of contract, intended to frighten a party into performance
expectation damages
an amount awarded for breach of contract, based on expected benefits or profits
consequential damages
secondary losses incurred by the non-breaching party that were foreseeable at the time of contracting
general damages
an estimated amount for intangible injury that a court may award
nominal damages
acknowledge a breach of contract where there is no real loss suffered
reliance damages
costs of expenditures and wasted effort reasonably made in preparation for performance
punitive damages
used in extreme conditions, used to punish the wrongdoer
5 prerequisites for equitable remedy - need all 5
- damages are inadequate
- claimant has clean hands
- no delay in seeking relief
- cannot negatively affect innocent third party
- sufficient consideration
specific performance
an order requiring a defendant to do a contracted-for act, usually to complete a transaction
injunction - negative convenant
court order restraining a party from acting in a particular manner; prohibits party from committing a breach
interlocutory injunction
temporary injunction preventing immediate harm from being done before full trial of the matter
rescission
restore parties to pre-contract positions
quantum meruit
the fair amount a person deserves to be paid for benefit conferred
5 common law damage remedies
- expectation damages
- consequential damages
- general damages
- reliance damages
- punitive damages
4 equitable remedies
- specific performance
- injunction
- rescission
- quantum meruit
execution
seize and sell a debtor’s chattel’s or arrange for a sale of his lands
garnishment
order requiring the debtor’s employer to retain a portion of their wages each payday to surrender to creditor
contempt of court
a finding by a court that a person has willfully refused to obey a court order and therefore be punished
bailor
owner of goods
bailee
party accepting possession of goods
gratuitous bailment
bailment where one party provides no consideration, no intention to create contractual relationship
bailment for value
contractual bailment, payed
lien
gives bailee right to keep possession of good until bailor pays
the right of sale
give bailee who has lien upon goods stored an additional right to sell the goods - publicly, reasonable amount of time, reasonable price - if the bailor does not end up paying
3 types of transporters (bailment)
- gratuitous carrier
- private carrier - specific goods, contractual
- common carrier - almost strict liability
3 defences of transporters (bailment)
- act of god
- inherent defect in goods - defect when carrier received it
- default by shipper -> bad packing done by shipper
dependent agent
an agent who acts exclusively, or mostly, for a single principal i.e. insurance agent
independent agent
an agent who carries on an independent business and acts for a number of principals i.e. lawyers
agency agreement
agreement between principal and agent whereby the agent undertakes to act on behalf of the principal
power of attorney
type of agency agreement authorizing the agent to sign documents on behalf of the principal
4 duties owed by agent to principal
- duty to comply with agency agreement
- duty of care
- personal performance
- good faith
2 duties owed by principal to agent
- compensate agent for effort
2. pay for agent’s expenses and losses
actual authority
the authority given expressly or implied to the agent by the principal
apparent authority
authority that a third party is entitled to assume that the agent possesses
holding out
representing by words or conduct that a person is one’s agent or has a particular authority
ratification of an agency contract
subsequent adoption by the principal of a contract made by an agent without authority
warranty of authority
a person who purports to act as agent represents that she has authority to contract on behalf of the principal
5 ways of terminating an agency relationship
- Performance
- Frustration
- Death
- Bankruptcy
- Loss of Capacity
indefinite hiring
a contract of employment for an undetermined length of time, with no expectation of termination ro described end date
payment in lieu of notice
payment of the amount of compensation the employee would have earned during the reasonable notice period
constructive dismissal
substantial change to an employee’s job that amounts to termination of the existing employment
dismissal for cause
dismissal without notice or further obligation by the employer when the employee’s conduct amounts to breach of contract
4 reasons for dismissal without notice
- misconduct
- disobedience
- incompetence
- illness
progressive employee discipline
imposing increasingly serious consequences for each event of improper employee behaviour
2 remedies available for wrongful dismissal
- damages
2. reinstatement
employment standards act
imposes minimum contractual obligations on employers
worker’s safety and insurance act
governs workplace injury remuneration -> no fault compensation sceme
occupational health and safety act
governs workplace safety prosecutions -> preventative
human rights code
provides protection from discrimination - accommodate disabilities with limited hardship
pay equity
raise women wages to match those equivalent of men, not applicable v.v.
ontario labour relations act
create unionized environment
PIPEDA
workplace privacy, duties owed to keep employee info safe
partnership agreement
agreement between persons to create a partnership and to set out the terms of the relationship
joint liability
situation where each of a number of persons is personally liable for the full amount of debt
4 steps that should be taken on retirement from a partnership
- notify existing clients
- place notice in official gazette of province
- remove name from register
- letterheads altered to remove name
limited partnership
partnership in which some of the partners limit their liability to the amount of their capital contributions
general partner
a partner in a limited partnership whose liability is unlimited
limited partner
a partner in a limited partnership whose liability is limited to the amount of his or her capital contribution
llp
partnership in which non-negligent partners are not personally liable for losses caused by the negligence of a partner
contractual joint venture
joint venture effected by agreement without the creation of any separate legal entity
equity joint venture
corporation formed and jointly owned by the parties to a joint venture for the purpose of carrying on the venture
associated corporations
one corporation controls the other, or both corporations are controlled by the same person/group
3 conditions to lift corporate veil and find individual within corporation liable
- individual must control corporation
- control must have been exercised to commit fraud, or breach of fiduciary duty
- misconduct was the cause of plaintiff’s injury
letters patent
a document incorporating a corporation, issued by the appropriate authority, and constituting the “charter” of the corporation
articles of incorporation
founding corporate document (charter or constitution of the corporation)
bylaws
internal working rules of corporation
professional corporation
business corporation that may be formed by members of a profession
issued capital
the shares that have been issued by a corporation
paid-up capital
shares that have been issued and fully paid for
par value
nominal value attached to a share at time of issue
pre-emptive right
the right of a holder of shares to protect his percentage ownership in the company by buying the same percentage in any new issue of shares
cumulative right
the right of the holder of a preferred share to be paid arrears from previous years before any dividend is paid on the common shares
corporate governance
rules governing the organization and management of the business and affairs of a corporation in order to meet its internal objectives and external responsibilities
board of directors
governing body of a corporation, responsible for the management of its business and affairs
officers
high ranking members of a corporations management team as defined in the bylaws or appointed by the directors
audit committee
a group of directors responsible for overseeing the corporate audit and preparation of financial statements
compensation committee
committee responsible for setting director and officer pay
nominating committee
committee responsible for proposing and recruiting new directors
5 jobs of directors
- issue shares
- declare dividends
- adopt bylaws
- call meetings of shareholders
- delegate responsibilities/appoint officers
cumulative voting
a method of electing directors by a form of proportional representation
S.122a of CBCA
requires directors/officers act honestly and in good faith with a view to the best interests of the corporation, NOT shareholders
-> fiduciary duty, avoid conflict of interest
S.122b of CBCA
requires directors/officers to exercise the care, diligence, and skill that responsible person would act in comparable circumstances, duty to shareholders
->negligence , comparable to average director
due diligence defence
defence to breach of fiduciary duty; an acceptable standard of care and skill was exercised by a director/officer
good faith reliance
defence to breach of fiduciary duty; reliance on audited financial statements or export reports
corporate indemnity
defence to breach of fiduciary duty; agreement with corporation to reimburse a director for any costs associated with liability for breach of duty
director’s and officer’s liability insurance
defence to breach of fiduciary duty; corporation may purchase liability insurance on behalf of its board
business judgement rule
courts focus on process to arriving at decision; as long as directors exercise prudence and diligence while making a decision, duty of skill and care has been met
strict liability of directors
unpaid wages, taxes, ei
4 specific conducts involving conflict of interest
- disclosure of contracts with corporation
- interception of corporate opportunity
- personal use of corporate information
- competing with corporation
insider trading
the use of confidential information relating to a corporation in dealing in its securities in order to make a profit/avoid a loss
-> pivotal info that isn’t public yet
3 rights of shareholders
- vote at any meeting of shareholders
- receive any dividend declared
- receive remaining property of corporation on dissolution
ordinary resolution
resolution adopted by the general meeting and passed by a simple majority
special resolution
resolution of the general meeting required to be passed by a special (2/3) majority
class rights
special rights attached to a particular class of shares
proxy
a person appointed to attend a general meeting of shareholders and to cast the votes of the shareholder appointing him/her
proxy form
a form required to be circulated to shareholders before a general meeting, inviting them to appoint a proxy if they wish
pre-emptive right
right to purchase additional stocks before the general public
documents of record
documents that a corporation is required to keep and make available to shareholders
-> minutes of meetings, charter, bylaws, register of directors
inspector
person appointed by the court to investigate the affairs of a corporation
appraisal remedy
the right to have one’s shares bought by the corporation at a fair price
derivative action
proceedings brought by one or more shareholders in the name of the corporation in respect of a wrong done to the corporation
-> right of minority shareholder to start action against director for wrongdoing
3 requirements for minority shareholder to bring action in the name on behalf of corporation
- directors refuse to bring up action themselves
- applicant acting in good faith
- be in best interests of the company
winding up
the dissolution of a corporation -> typically used for small/family businesses
oppression remedy
a statutory procedure allowing individual shareholders to seek a personal remedy if they have been unfairly treated -> broadest, most flexible remedy
shareholder agreement
an agreement between two or more shareholders that is distinct from the corporation’s charter and bylaws
unanimous shareholder agreement
a shareholder agreement to which all shareholders are parties
2 rights that may be in a shareholder agreement
- right to participate in management - shareholders promise to elect each other at meetings
- right to fair price for a share interest - agree to a regular method of valuation of their shares
regulatory offences
less serious offences created by government regulation through specialized legislation, agencies, and tribunals
mens rea offences
offences where the prosecution must establish a “guilty mind” on the part of the defendant
offences of strict liability
offences where there is a presumption of guilt unless the defendant can show that they took reasonable care
offences of absolute liability
offences where simply doing the act makes one guilty of the offence
3 categories of offences
- mens rea offences
- offences of strict liability
- offences of absolute liability
the solvency test
in order to protect creditors, test the company of their ability to pay off their debts with their current assets
securities commission
the statutory authority appointed to supervise the issue of securities to the general public, the operation of securities industry, and the stock exchange
prospectus
the document that a corporation is required to publish when inviting the public to subscribe for its securities
indoor management rule
a person dealing with a corporation is entitled to assume that its internal procedural rules have been complied with unless it is apparent that such is not the case
-> contractual liability of corporations
e-retailing
the supply of tangible or electronic goods/services over the internet
web wrap agreement
the acceptance of contractual terms, indicated by clicking on the appropriate icon
click-wrap agreement
requires customer to open terms page before clicking acceptance of them
E-commerce act
rules of contract formation that applies to all internet contracts
Consumer Protection Act
protection available to consumers when they contract with a business online
main tort issue relating to e commerce
defamation - anyone can post anything; is hyperlinking an act of defamation?
infringement
violation of the rights of the owner of the intellectual property
trademark
an identifiable feature that is used by a person for the purpose of distinguishing his goods or services from those of others
- may not always be registered (initial 15y + 5 years renew)
passing off
tort involving misrepresentation of goods to deceive public
cybersquatting
the registration of a domain name containing the trademark of another person, with the intention of selling the domain name to the owner of the mark
alternative dispute resolution
the use of private procedures such as mediation and arbitration to resolve problems - trademark infringement of generic names
copyright
gives the creator of the work exclusive right to copy, produce, distribute that work - life of author + 50 years
royalty
fee paid to the copyright owner for permission to copy the work
moral rights
rights to always be attributed as the creator of work
copyright infringement remedy
damages/infringement
fair dealing
exception to copyright infringement - the use of copyrighted material for fair use (research, education, private study, parody, review, news reporting)
- muse be a fair amount (20%)
digital rights management system (DRM)
a system collecting data about the licensing, payment for, and authenticity of a work
technical protection measures (TPMs)
use of locks for electronic material to block unauthorized use of their copyrighted material
patent
20 year monopoly of new idea/process
proper law of the contract
the law that the parties intended to govern their relationship - parties to name it in their contract
GATT
principle document that formulates the rules for international trade - includes trade-related investment measures - nondiscrimination - all countries to receive most favoured nation treatment
trade-related investment measures
national measures regulating investment that have an impact upon international trade
most favoured nation treatment
the principle that goods imported from one country should not be treated less favourably than those imported from any other country
national treatment
the principle that goods from another country should not be treated less favourably than domestic goods
free trade areas
groups of countries within which customs duties are eliminated
NAFTA
regional trade agreement - exception to GATT
main concern of foreign investment
protect canadian culture - often conflicts with trade agreements
2 steps of managing foreign investment
- investment canada receives notice of foreign investment
2. must get approval of large acquisitions to protect culture
forum non conveniens
refusing to hear a proceeding because another jurisdiction is more appropriate
security for costs
money deposited into the court in case an unsuccessful foreign plaintiff is ordered to pay the legal costs of the successful defendant
party autonomy
the parties’ freedom to determine how their dispute will be resolved
arbitration clause
a term in a commercial contract designating arbitration as the process for resolution of any disputes arising between the parties
commercial arbitration
the use of arbitration methods to solve any disputes arising in commercial environments
