Lecture 4 Flashcards
1
Q
What are three things, disputes usually resolve around
A
- The existence of the contract
- the conduct of the parties at time of negotiating the agreement
- performance of obligations under contract
2
Q
Explain the term mistake?
A
When parties have a different understanding of terms of contract
3
Q
What is another term for shared mistake?
A
Common mistake
4
Q
if theres a shared mistake only in the recording of the terms, what may occur?
A
- Both parties may ask the court to rectify (correct) the agreement, if there is a mistake on the document
- if a mistake is fundamental to the contract, the contract becomes void
- if a mistake goes to the value of subject matter there is no remedy
5
Q
What are the different types of mistakes in regards to contracts
A
- shared mistake
- misunderstanding
- one-sided mistake
6
Q
Explain the term Misunderstanding (mutual mistake)
A
- Each party has a different understanding of the contract, not aware of the other persons interpretation
7
Q
what happens when there is a mistake as to the nature of document signed
A
Contract my be void “non-est factum”
8
Q
Define the term exemption clause
A
-Attempt to limit or eliminate liability for one party to the contract
9
Q
what type of contract are exemption clauses usually found in
A
Standard-form contracts
10
Q
Exemption clauses does not have be brought to the attention of the other party. T OR F
A
False. These clauses have to be brought to the attention of the other
11
Q
Exemption clauses create an equal bargaining position. T OR F
A
False, they create an unequal bargaining position
12
Q
Explain the term Misrepresentation?
A
- False and misleading statements that induce a person to enter a contract
- If a term of contract, can sue for breach
13
Q
Under Misrepresentation, the statement made must be a statement of Fact. T OR F
A
True
14
Q
In what scenario is silence deemed as Misrepresentation
A
When the person who chose to be silent has a duty to disclose the information
15
Q
Misleading another party without knowing or being careless into a contract is called?
A
innocent Misrepresentation
16
Q
In what situations is remedy not possible?
A
- if any wrongdoing by the person claiming rescission (the innocent party doesn’t have “clean hands”
- Not available if the contract is affirmed
- the subject matter is damaged or destroyed
- innocent 3rd party
17
Q
Explain the term Fraudulent misrepresentation
A
- Intentionally and knowingly misleading another to induce him/her to enter a contract
- May seek punitive damages in extreme cases
- Easier to sue for innocent or negligent misrepresentation
18
Q
What is the only remedy offered during an innocent misrepresentation
A
Rescission
19
Q
If made innocent misrepresentation and fail to correct it before the contract is made what happens?
A
The innocent misrepresentation turns into fraudulent misrepresentation
19
Q
If made innocent misrepresentation and fail to correct it before the contract is made what happens?
A
The innocent misrepresentation turns into fraudulent misrepresentation
20
Q
Explain the term Negligent misrepresentation
A
- If person making misrepresentation should have known what he/she was saying was false, he/she was careless
21
Q
Explain the term duress
A
- entering a contract because of coercion.
- Threats may be violence, financial pressure, scandal and can come from a non party
22
Q
What remedy is offered during negligent misrepresentation
A
Rescission, tort of negligence
23
Q
What remedy is offered during Fraudulent misrepresentation
A
- Rescission, tort of deceit (intentional tort), criminal action
24
What is the remedy for misunderstanding
- judge determines the most reasonable option
| - if judge cannot decide, the contract becomes void on lack of consensus
25
What are the exceptions for Uni-lateral mistakes that lead to remedies
If a mistake goes to the identity of the other party, the contract becomes void
- if a mistake goes to the subject matter, the contract becomes void
26
What does Section 361-365 of criminal code deal with
- prohibit knowingly making false representations intended to induce someone to act on the representation
- the falsification of employee records, books and other documents
27
What is the remedy to duress?
- Contract can be voidable
| - criminal offence
28
Explain the term Undue influence
- abuse of trust relationship
29
Remedy of Undue influence includes?
- Contract voidable
- although it can be rebutted by evidence
- sometimes may have to be proven
30
explain the term Unconscionability
- Taking advantage of vulnerable persons situation
- contract grossly unfair to the victim and the bargaining positions of the parties are no where near equal
- Regulated by statute
31
Explain the term Privity
- Only the parties to a contract are bound to it or may enforce it
- no third party can sue even tho they have something to gain from the contract
32
What are the exceptions for privity in law?
1. Agents acting for principals - agents are not a party
2. Novation - new person taking over obligation of another in a contract (new contract is required)
3. employees - contact claused often extend to employees
4. interests in land
5. trusts
33
Define the term Assignment?
- transferring a benefit under a contract to a third party
- A debtor (purchaser) owes money to a creditor (dealer) then assigns debtor obligation to finance companies
- Assignee takes assignment “subject to the equities”
- Assignee cannot be in a better position than the assignor
- only benefits are allowed to be assigned not obligations
34
If debtor fails to pay both assignor and assignee usually join to sue. T OR F
True
35
Statutory assignment allows assignee to sue directly if?
Assignment is absolute (complete and unconditional)
Assignment is in writing
Proper notice was given to a debtor
36
Explain the term Negotiable instruments
- Innocent third party may enforce a negotiable instrument against the person who made it
- freely transferable from party to party
37
Negotiable instruments are controlled by what?
They are controlled by federall bills of exchange act
38
the innocent third party is a negotiable instrument is called? and explain their role?
Holder in due course
o Innocent third party who acquired possession of instrument
o Right to collect whether original obligations met or not
o If instrument is endorsed, that person can also be held liable for amount owed
39
What are some examples of negotiable instruments
- promissory notes - One person promises to pay another a certain sum of money at some future date or on-demand
- Cheque - Drawer orders bank to pay a certain sum of money to a third party (the payee) on demand
- Bill of exchange - an order to any person or business to pay money to someone either now or at a future time
40
What are the ways of ending or discharging a contract
- performance
- breach
- frustration
- agreement
41
explain the term performance?
One party have performed as required under the contract, it is discharged or where failure to perform is minor
42
Explain the term conditions
-- MAJOR TERMS OF THE CONTRACT, IF BREACHED CONTRACT ENDS, AND IF CONDITION IS NOT MET, THE CONTRACT ENDS
43
explain the term warranties
- Minor terms of the contract
- a promise or guarantee made by the seller about the quality or characteristics of a good
- if breached, other party must still fulfill their obligations but damages could be seeked from breaching party
44
explain the term substantial performance?
- o Substantially all obligations have been fulfilled, but a condition is breached in a minor way (not big, tiny little change)
o May seek compensation for the small part breached
o If contract required payment, must be cash unless otherwise specified
Limits on coinage set under currency act
45
explain the term tender performance
ready, willing, and able to perform; other party refuses to accept performance
other party refuses to allow the other party fulfil its obligation
Contract has been breached by refusal; performance no longer required
46
Under tender performance, if a party refuses to accept its debt payment, is it now void
No, the money is still owed but the costs acquired to now get this payment is on the debtor. and he/she has to seek the payment
47
What are three types of contract breaches
Repudiation - refusal to perform
Anticipatory breach - repudiation before the performance
Fundamental breach - breach of very essence of contract
48
Anticipatory breach allows the victim have two options, what are those options?
- treat contract as breached
| - continue to demand performance
49
If the victim of repudiation does not fulfil their own requirement of the contract what happens
He/she will be in breach
50
Under the anticipatory breach, is it possible to change my remedy
NO, REMDY IS BINDING
51
Exemption clause are in state to help lessen liability for breach. T OR F
TRUE
52
A breach of contract can sometimes be deemed as a criminal offence. T OR F
True
53
When is an exemption clause pretty much useless or not valid?
When it is not drawn to the attention of the other party
54
Explain the term Frustration?
Outside, unforeseen event that is out of the control of either party and renders contract either impossible to perform or completely different than what parties contemplated
55
Is frustration a breach? and if there is another way to perform, that was not originally stated, does it still have to be done?
No, frustration is not a breach because it is an outside event, and yes, if there is another way it has to be done
56
What was the remedy associated with frustration and what is it now?
- it is used to be a "nothing we can do mentality"
| - now if the contract is frustrated, both parties undo what has already been done
57
What are the terms to ending a contract based on agreement?
- it takes a contract to end/change a contract
- each side must receive new consideration
-
58
Explain the term contract precedent?
- contract begins only if a certain condition or conditions are met
59
explain the term Condition subsequent
terms in contract specify when continuing obligations will end
e.g. termination date
60
What are the remedies for a breach
Rescission
Damages - putting the victim in a position he/she would have been in if obligations fulfilled
Liquidated damages - term in the contract to limit damages
down payment
The victim must mitigate loss
accounting - when the defendant has profited off their wrongdoing (pay profits of wrongdoing to the victim
- Quantum Meruit - paying a reasonable price for services rendered
61
what type of lawsuit is a sue over contract breach
a civil lawsuit (plaintiff and defendant)
62
What are some equitable remedies involved in contract breach?
- Specific performance - only if the subject matter of the contract is unique
- injunction
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