Lecture 3

Question 1

What is a contract?

Answer 1

-An agreement between two or more capable people for a legal consideration to do or not to do some lawful and genuinely intended act

Question 2

What are the 5 essential elements of a contract?

Answer 2

1. Capacities of the parties
2. Mutual Agreement
3. Genuine Intention
4. Legal Consideration
5. Lawful subject matte

Question 3

What is the capacity of the parties?

Answer 3

Everyone has legal capacity to enter a contract but some special classes are the exception.

Question 4

Who is considered an infant under civil law?

Answer 4

Anyone under the age of 18

Question 5

What are some powers of an infant in regards to a contract?

Answer 5

A contract with an infant is void or voidable at the option of the infant. (unless it is a contract for necessities)

Question 6

What period of time does an infant have to void a contract?

Answer 6

An infant has the right to void a contract until he reaches the age of the majority and therefore for a reasonable period of time (Depends on the circumstances)

Question 7

Whats the exception that an infant cannot void a contract?

Answer 7

When the constract is for necessities meaning anything that is befitting to the infants station of life.

Question 8

What are some necessaries?

Answer 8

Food, shelther, clothing

By necessary, that what is befitting the infant’s station in life. The life style that an ifant is accustomed to.

Question 9

Are parents legally responsible for the wrongdoing of their children?

Answer 9

No, if the parents are not in control of their child.

Question 10

What is the exception to the rule of the parent not being legally responsible for their child?

Answer 10

If the parent is in direct control of the child at the time of the incident and the parent knows that the child has the propensity (likelihood) to commit the unlawful act

Question 11

What two things need to be proved to void a contract of mental incompetence?

Answer 11

1) Have to satisfy a court that person was mentally incompetent, intoxicated by alcohol and/or drugs
2) the other party knew that the person was mentally handicapped or influenced by alcohol or drugs

Question 12

What is an alien?

Answer 12

A person who is not a citizen of canada

Question 13

What are the parameters of a contract with an alien?

Answer 13

We do not distinguish aliens in this country and contract is lawful

Question 14

What is an enemy alien?

Answer 14

Person of another country that canada is in a declared state of war with

Question 15

What are the parameters of a contract with an enemy alien

Answer 15

-Contract is both unlawful and illegal
Unlawful: Conrary to the law
Illegal: Would be an offence, criminal offence

Question 16

What are the three different methods to carrying out a business?

Answer 16

1. Sole proprietorship
2. Partnership
3. LLP (limited liability practice)

Question 17

What is a sole proprietorship?

Answer 17

One person owns the entirety of the business. This person may have employees, may share profits with said employees.

Question 18

What are the advantages of a sole proprietorship?

Answer 18

1. Simplest form of business
2. Have final say in what you want done
3. Least expensive to establish

Question 19

What are the disadvantages of a sole proprietorship?

Answer 19

1. Strictly on your own
2. Personally liabile
3. Must pay all debits individually

Question 20

What is a partnership?

Answer 20

When two or more persons carry on a business in common in the view towards sharing of profits

Question 21

What are some disadvantages of a parternership?

Answer 21

1) Joint and several liability
2) if one partner does something wrong, all parters are legally liable for the partners actions (can be sued for the action of one)
3) If someone is wronged by a partner they will usually go after all the partners because they don’t know who holds the money
4) if is a personal liability so personal assets can come under attack too (not just partnership assets){

Question 22

whats a limited partner?

Answer 22

A party that is not involved in any part of actually running the business. Only limited to investing money. No advising in business policy, no signing authority, etc.

Question 23

When does partnership end?

Answer 23

1) Death of a partner
2) one partner advices that he is leaving
3) court order

Question 24

What can a partnership agreement do?

Answer 24

• If one partner causes a loss or injury then that partner will be solely responsible for the loss.
• When a public person sues all four partners in the partnership the other partners can sue the partner that got them sued in the first place

Question 25

What does a buy-sell agreement do?

Answer 25

1) provides the other partners with an opportunity to buy out any partner that wants out fo the firm or dies
2) if a partner dies their spouse will get their share of assets and the partnership dies
3) the deceased portion is bought out byt he other partners from the wife and split (sold) between them

Question 26

What is a corporation?

Answer 26

• An artificially created person (made up of shares)

- a legally entity unto itself

Question 27

What does corpus mean?

Answer 27

Person in latin

Question 28

What must a corporations name end in?

Answer 28

1) corporation
2) company limited
3) limited
4) Ltd
5) Corp.
6) Co. Ltd
7) Inc.
8) Incorporated

Question 29

What are the 3 areas of law in a master and servant relationship?

Answer 29

1) Employee > employer
2) owner > contractor
3) principal > agent

Question 30

Whats a Fiduciary Relationship (Uberrima Fidei)

Answer 30

• Agent must always act in the est interest of the principal

- Relationship of trust