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GMGT: 3300 Comm Law Final > Legal Relation, Capacity, Legality, Void and Voidable Contract > Flashcards

Legal Relation, Capacity, Legality, Void and Voidable Contract Flashcards

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1
Q

Intention to create legal relations: Contract specifications

A

In order to have contract, has to be legal intention on the part of both parties to be legally enforceable agreement

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2
Q

Intention to create legal relations: Plaintiff (offeror) and defendant roles (offeree) during trial

A

It is assumed by offeror or plaintiff, defendant or offeree must rebut its existence

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3
Q

Example with Mom and Son having dinner and legal considerations.

A

Mom invites son over for dinner and promises to make meal. Son accepts but now can’t come fore dinner. Mother sues the son as there was an offer, acceptance and consideration of her making the meal. Up to son to rebut presumption of intention to create legal consequences

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4
Q

Example with Mom and Son and loan agreement

A

Son borrows money from mom, in 20 years mom retires and needs money. Son can say it was a gift as around his birthday.

If you are borrower , keep situation informal

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5
Q

Capactity

A

ability of parties to bind themselves in contract

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6
Q

What is required when binding a contract of an individual and what do you assess?

A

mental competency, assess consequences of making a contract promise and enforceable rights and obligations created with it

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7
Q

What if there is no capacity in the contract?

A

Contract is void

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8
Q

Types if incapacity - No Capacity

A

no ability at all to assess contract, vegetative state

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9
Q

Types if incapacity - States of diminished (limited) Capacity x2

A

Minors
Lunatics and Drunkards

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10
Q

Types if incapacity - States of diminished (limited) Capacity - Minors

A

contract unenforceable/voidable against minor, minor can run away

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11
Q

Quantum Meriut Bases

A

Reasonable Price

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12
Q

How can minors be accepted into contract (2)

A

pay reasonable price for necessary purchases, not contract price. Beneficial contract services like work or with parent/guardian consent

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13
Q

Types if incapacity - States of diminished (limited) Capacity - Lunatics and Drunkards -> how is it voidable

A

Party of drunkard can prove the other party was aware of their condition when signing the contract. Can accept with sober or decline

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14
Q

When are Lunatics and drunkards are liable.

A

They buy for reasonable price, necessary goods. it is unnecessary goods that are voidable

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15
Q

Legality of contract

A

object of contract must be legal

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16
Q

Essence of legality of contract

A

Contract/activities cannot offend offend public policy or violate the law

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17
Q

What is the presumption of contact and what if it is wrong?

A

Presumption is that contract is legal with no violations. If wrong, it was never formed at all

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18
Q

Courts:; What if contract is VOID?

A

court assists parties to prior conditions

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19
Q

Courts: What if contract VOID and illegal?

A

court refuses any assistant to parties with recovery of peroperty

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20
Q

Restraint of Trade - Free Open Market and courts preference

A

Optimal situation of economy so courts don’t like to enforce as diminishes competition

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21
Q

Restraint of Trade - Non Competition Clause and examples of competition behaviour

A

Does not allow employee who leaves a company to create a business that can be direct competitor

Ex: contact previous employees, clients, release private info

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22
Q

Impugning a contract

A

assault, impeach, attack its integrity

23
Q

Plaintiff and defendant roles with Impugning a contract

A

Plaintiff does nothing, it is defendant who want to impugn the contact as they need to avoid something

24
Q

If contract is valid then ______ is successful

Defendant is successful if they can prove contract is either (3)

A

Plaintiff

void, voidable or unenforceable

25
Q

Void contract definition

A

never in law formed at all i.e no contract formed or established

26
Q

Void contract consequence with two parties and title or ownership

A

Title or ownership doesn’t pass under void contract. Party of void contract (A) can apply to court for return of property transferred under agreement to rogue thief (B).

27
Q

Void contract consequence with three parties and title or ownership

A

Title or ownership doesn’t pass under void contract and original holder could recover from innocent third party (C) if got transferred from B

28
Q

What is the innocent 3 party?
1. acronym
2. Name

A

ISTP4V
Innocent Subsequent Third Party for Value

29
Q

What was flawed about Void Contracts with A and ISTP4V

A

A always gets it back, C can sue B but would rather have the good so A and C competing over only thing that has value

30
Q

What did the equity courts create in regards to this Voidable contract dilemma with Party A, Party B (Rogue thief) and Party C (ISTP4V)

A

Voidable Contract

31
Q

What happens to the property under courts of Equity and voidable contract? Party C and Clause of Party A

A

Party C the ISTP4V would end up with property. A can get property by rescinding the contract to make it void before it reaches C (ISTP4V)

32
Q

How to get contract rescinded and made voidable?

A

informally by communicating that contract is rescinded and sending notice to court. As soon as it is received, it is void.

33
Q

What is the distinction between void and voidable contracts

A

When an innocent subsequent third party for value is involved (ISRP4V)

34
Q

Void Agreements ABC

A

no title passes and consequently ISTP4V cannot obtain a good title from a person that obtained the goods under void contract

35
Q

Voidable Contracts ABC

A

enforced until declared void through rescission. Title can pass through parties. Recipient can transfer to ISTP4V who then obtains the title/ownership even if intermediary acquired by rendering it voidable.
A can prevent property title from transferring if they rescind it BEFORE ISTP4V obtains it

36
Q

How can contract be void? (4)

A

Missing element or uncertain
Non est factum (not my mark)
Mistakes
Error in reading contract/transcript

37
Q

void contract - Missing element or uncertain

A

offer is too vague in description

38
Q

void contract - non est factum “not my doing or mark”

A

individuals fooled into enter written contracts when not literate or misled to nature of document

39
Q

void contract - mistakes (2)

A

error in identity or subject

40
Q

void contract - mistake of identity

A

thinking you sold to someone else (identity fraud)

41
Q

void contract - mistake of subject matter

A

You sell something but the party buying thinks what you are selling is different

42
Q

void contract: 3 elements meeting rectification by courts

A
  1. complete agreement between parties and free from ambiguity, and not conditional
  2. Parties had no further negotiations to amend contract
  3. Change in written document appears to be error in recording and easily explained
43
Q

How can contract be voidable? (4)

A

Misrepresentation
Undue Influence
Duress
Diminished Capacity

44
Q

Voidable - Misrepresentation manifested contained in the contract

also what do purchaser and vendor prefer with the terms

A

Party misrepresents what contract says. Ex buy a car it has 100,000 miles but u find out it has 200,000 miles

Purchaser = any terms recited
Vendor= minimal contract with few terms

45
Q

Voidable - Misrepresentation manifested outside the contract

A

Misstatement that influence decision of party in favour entering contract

Example: Negotiations

46
Q

remedies available depend on types of misrepresentation and description (3)

A

Innocent misrepresentation: party believed information was true it is rescinded

Negligent: rescission rewarded with damages

Fraudulent misrepresentation: party deliberately attempts to deceive the other party - damages for deceit and rescission

47
Q

Misrepresentation vs statements

A

false assertion relating to statements of facts and afford remedy
VS
opinionated statement, no remedy

48
Q

Caveat Emptor
1. Also called
2. How does it work for Buyer
3. How does it work for Purchaser

A
  1. (buyer take care)
  2. buyer of goods must take them with their defects unless some fact about their quality has been misrepresented
  3. Purchaser investigate and find out more abut product
49
Q

Contracts of utmost good faith (uberimma fides)
1. What is it?
2. What is it the reverse of ?
3. 2 Examples

A
  1. duty for one to give full details about a purchase
  2. reverse of caveat emptor
  3. Insurance and Securities contract
50
Q

Doctrine of merger and how do we correct it?

A

warrants cease to exist after closing so we must create a clause to correct this

51
Q

Voidable contract - Undue Influence

A

domination of one part over the mind of others to deprive the latter of making independent decision. Contract formed by undue influence is voidable at option of victim

52
Q

Voidable contract - Undue Influence
2 elements

A
  1. prove there is a special relationship between victim and dominator
  2. circumstances were such that domination was possible
53
Q

Proving undue influence not responsible of dominant party in order to salvage contract the court looks at (3)

A
  1. degree of domination plausible
  2. extent of benefit
  3. is there independent legal advice
54
Q

Voidable Contract - Duress and examples

A

illegitimate pressure: threatening physical force or exertion of physical force, economic duress

GMGT: 3300 Comm Law Final (12 decks)

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