Legality & Formalities of a Contract

Question 1

What kind of contracts violate statute law?

Answer 1

• prohibited activites (murder)
• prohibited agreements (fix prices)
• activities with statutory requirements (stopping employees from claiming wsib)

Question 2

The following violate what?

• Contracts designed to interfere with the administration of justice (Paying a witness to give a certain kind of evidence in court)
• Contracts that injure the public service (Giving “kickbacks” to a public service official)
• Contracts that promote unnecessary litigation (Paying someone to start a lawsuit to generate publicity)
• Contracts that suppress evidence of a crime (Entering into an agreement not to report a theft if the wrongdoer pays back the money)

Answer 2

Contracts that violate public policy

Question 3

The following is the definition of what term?

a sum of money paid by the party that committed a wrong to the wronged party as a form of compensation for damages suffered or losses incurred

Answer 3

restitution

Question 4

The following are elements to which remedy in contract law?

• A contract is illegal and granting relief is clearly not contrary to public policy, or
• A party acted in good faith or in justifiable ignorance of whether the contract was legal or illegal

Answer 4

restitiution

Question 5

what is the difference between a formal contract and a simple contract?

Answer 5

formal contract is in writing and sealed by any party who is a promisor (aka deed or covenant)

simple contract can be oral or in writing and is not sealed, but can still be complex

Question 6

Which statute requires that certain types of contracts be in writing and signed by the parties who are to be bound by their promises
Eg contracts for the sale of land

Answer 6

Statute of Frauds

Question 7

The following are technical requirements for which type of contract?

• Identify the parties to the contract by name or description
• Identify the terms of the contract including the offer that has been accepted and the consideration
• Be signed by the party whose promise is being enforced
• Include a printed or stamped signature which may suffice in place of an actual signature

Answer 7

written contract

Question 8

What does it mean to draw a circle next to the signature and label it “LS” and why would you use it?

Answer 8

• Latin for locus sigilli, which means “the place of the seal”
• sufficient evidence that the document is meant to be under seal

Question 9

When would you use a seal to make an agreement legally enforceable?

Answer 9

• Change to a document or clause with no new consideration
• Formal contract
• Corporate contract
• Gratuitous promise

Question 10

Courts typically have a “hands off” approach to interpreting contracts, however, under what circumstances would they intervene?

Answer 10

• when one party lacks the intellectual capacity to protect themselves, acts dishonestly during bargaining, or takes advantage of a position of power
• when one party is under the influence of drugs or alcohol