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J - B LAW 301 > PowerPoint 7 > Flashcards

PowerPoint 7 Flashcards

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1
Q

Most minors’ contracts are ___.

A

Voidable.

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2
Q

What is the process of avoidance for minors?

A
  • Minor has option to accept or avoid contract.
  • Must choose soon after reaching majority.
  • Must return benefits if avoid contract.
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3
Q

Voidable

A

Means that one party (that did not have the capacity) can choose whether to continue the contract or not.

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4
Q

If contract is for ___ ___ ___, there is no violability.

A

Necessities of life.

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5
Q

What types of minors’ contracts are enforceable?

A

Policy of ensuring minors basic needs of life.

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6
Q

What are the categories of enforceable contracts?

A
  • Contracts for necessities of life.

- Employment contracts.

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7
Q

Mentally Disabled Persons

A

Judicially declared mentally incompetent.

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8
Q

Mentally disabled persons have ___ ___ to contract.

A

Total incapacity.

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9
Q

Contracts with mentally incompetent but not judicial declared persons are mostly voidable if…

A

The other party knew of the disability.

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10
Q

For those with mental disabilities, there are ___ ___ that allow various degrees of guardianship.

A

Court orders.

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11
Q

Can you contract for the necessities of life for mentally disabled persons?

A

Yes.

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12
Q

Guardianship Order

A

Guardian is responsible for all decisions (taking away autonomy).

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13
Q

Trustee Order

A

Guardian is responsible for only financial decisions.

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14
Q

Can intoxication render contracts voidable?

A

Possibly.

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15
Q

How can intoxication render a contract voidable?

A

Too drunk to understand circumstances and other party aware of extent of intoxication.

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16
Q

A business corporation is different from a person. True or false?

A

False. They are the same.

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17
Q

If a contract is created in breach of company charter, the contract is ___ and ___.

A

Valid, enforceable.

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18
Q

Only ___ ___ can have capacity.

A

Legal persons.

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19
Q

What are the two types of legal persons?

A
  • Human beings.

- Corporations.

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20
Q

Associations are usually ___.

A

Unincorporated.

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21
Q

What types of organizations are associations?

A

Clubs, charities, societies.

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22
Q

Associations usually lack ___, unless specified by statute.

A

Capacity.

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23
Q

Aboriginal people have full capacity if they are living…

A

Away from band area.

24
Q

Aboriginal people have limited capacity if ___ on band land.

A

Indian.

25
Q

Indian defined under the Indian Act generally lack…

A

Contractual capacity.

26
Q

Can property on band land be used as security for debt?

A

No.

27
Q

Can property on band land be transferred to an outsider?

A

Only with Crown consent.

28
Q

Band Land

A

Property located on Indian reserve.

29
Q

Statute of Frauds is generally in force except in…

A

BC and Manitoba.

30
Q

Statute of Frauds

A

An ancient English statute that stipulates a contract may need evidence in writing.

31
Q

What is covered under the statute of frauds?

A
  • Guarantee for repayment of debt.
  • Sale of interest in land.
  • Contracts not to be performed within one year.
32
Q

How can mistaken identity prevent the creation of a contract?

A
  • Mistake of identity was material (important).

- Other party knew of mistake at time of contract.

33
Q

How can mutual mistake about subject matter prevent the creation of a contract?

A

If no agreement on subject then no consensus. No contract because no true agreement. Better to argue there was no contract.

34
Q

Frustration

A

Contract becomes impossible. The entire benefit of the contract has been destroyed.

35
Q

Can the purchaser recover the price if they received some benefit?

A

No, it is all or nothing. The purchaser can recover price only if no benefit received.

36
Q

Non est factum

A

“This is not my deed,” for example, if someone delivering flowers and they say sign here, but you were actually signing a prenup. Exception to the rule that if you don’t read a contract it is still binding.

37
Q

Duress

A

Illegitimate threat of harm. Can be duress of person, duress of goods, economic duress.

38
Q

Economic duress can be claimed if:

A
  • Threat made in bad faith.
  • Victim could not reasonably resist.
  • Victim acted promptly once pressure removed.
  • Victim protested at the time.
  • Victim did not have legal advice before succumbing.
39
Q

Undue Influence

A

Overpowering will. Rule depends on parties’ relationship. Two types.

40
Q

What are the two types of undue influence?

A
  • Pre-existing fiduciary relationship.

- No pre-existing fiduciary relationship.

41
Q

Difference between fiduciary and beneficiary.

A

Fiduciary owes something to the beneficiary, but the beneficiary owes nothing to the fiduciary.

42
Q

Example of fiduciary relationship:

A

Doctor-patient relationship.

43
Q

Improvident

A

Unfair.

44
Q

Unconscionable Transaction

A

One that no fair-minded person would offer, and no right-minded person would accept.

45
Q

Who is responsible for rebutting presumption in undue influence, the fiduciary or the beneficiary?

A

The fiduciary party.

46
Q

How would a fiduciary party rebut the presumption in undue influence?

A
  • Show the transaction was fair.

- Independent advice.

47
Q

If there is no fiduciary relationship in undue influence, what has to be proven, and by whom?

A

The party alleging undue influence must prove that the contract was unfair.

48
Q

Unconscionable transaction presumed if…

A
  • Contract was improvident.

- Inequality in bargaining power.

49
Q

Is a contract void if it is illegal?

A

Yes.

50
Q

What are examples of illegality?

A
  • Statutory.
  • Common law.
  • Public policy.
51
Q

Mr. Bundy Case

A

Mr. Bundy is old and doesn’t have the right state of mind. Has a son who is criminal and needs money. Son convinced bank manager to lend them money, but says they need collateral. Get Mr. Bundy to sign a cosigning agreement that if he doesn’t pay back the loan, they can take his farm. Looks sketchy, bank manager drives out to their farm. Someone who has a right state of mind wouldn’t think it is a good agreement. Son has bad criminal record so it is obvious the farm would be taken away. Didn’t pass the “smell” test, seems unfair.

52
Q

Prohibition on carrying on business may be limited ___ or ___.

A

Temporally or geographically.

53
Q

Can you limit employee’s ability to work unreasonably?

A

No, limiting temporally or geographically has to be reasonable.

54
Q

Why would restraint of trade be used?

A
  • To keep ex-employee from competitor.

- To keep store vendor from new establishment.

55
Q

What is the burden to prove that a restraint of trade is reasonable?

A

Restraint tested against total circumstances.

J - B LAW 301 (22 decks)

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