Unit 6: Contract Law Flashcards
What are the 3 sources of law in Canada?
1) Statute Law (municipal, provincial, federal)
2) Case Law (court interprets legislation)
3) Common Law (historical results become body of law)
There are 3 types of estates in land:
1) Fee Simple
2) Leasehold
3) Life Interest
The most common type of real estate and considered the absolute owner of the land applies to _________
Fee Simple
In Leasehold, the owner of the land is the _________ and the other party is known as the _______
Lessor and Tenant / Lessee
In _________ the tenant has an interest in the land for the duration of their lifetime.
Life Estate
___________ in Alberta confers a life interest to a spouse who has lived in the property during the marriage, but who is not listed on the title as owner.
The Dower Act
Dower Act only applies to income properties if…
at least one of the spouses has resided on the property at some point during marriage
3 Questions to confirm Dower Rights:
1) Is the owner the only name on the title?
2) Is the owner married?
3) Has either spouse lived there during marriage?
________________ requires that certain contracts be in writing and that those contracts be signed by all parties bound by it.
Statute of Frauds
Which contracts apply to a Statute of Frauds in Alberta?
- Sale / transfer of land
- Answering for a debt or duty of another
- Contracts not able to be completed within 1 year
2 Methods to creating contracts
1) Express Contract
2) Implied Contract
Is an implied contract legally enforceable?
Yes
Depending on the relationship between parties to a contract it is considered either…
Bilateral (exchange or mutual promises) or Unilateral (one person makes an obligation)
A contract may be classified as either __________ or ____________ depending on whether the obligation(s) have been fulfilled by all parties
Executory or Executed
Essential elements of a contract include:
- parties have legal capacity
- object of contract is lawful
- intent to enter into a contract
- consideration of promises
- both parties must agree
- parties must have all facts and free will
Real Estate agents should consider the following capacity issues when signing contracts:
- Intoxication / substance Impairment
- Incompetence (mental disease)
- Age
- Language
Consideration in the contract must be of monetary value?
No
Mistakes in understanding can happen 3 ways:
1) Common mistake (everyone has same mistake)
2) Mutual mistake (each party mistaken, but different mistakes)
3) Unilateral Mistake (one party makes mistake but other doesn’t correct them)
Validity of Contracts can be broken down into…
- Valid
- Void (1+ essential elements missing)
- Voidable (one party challenges validity)
- Illegal
_______ may be included by any party but must have a specified period after which it expires.
Conditions
_____________ means the party would need to waive or remove conditions before the timeline expires in order for it to proceed
Conditions Precedent
__________ means the condition is presumed to be met by the deadline if no notice is provided otherwise.
Conditions Subsequent
In Alberta, we use conditions _______ for real estate purchase contracts.
Precedent
_________ are the essential details of the contract and represent the points of agreement.
Terms
Does specific work to be done by one party before the contract is accepted, an example of a term or condition? (e.g. seller to replace broken window)
Term
Only the original parties to a particular contract can enforce and be bound by that contract, refers to…
Privity of Contract
5 Ways to terminate a contract:
1) Performance (completion)
2) Mutual Agreement
3) Frustration (e.g. act of god)
4) Operation of Law (failure to renew license, bankruptcy)
5) Breach (one fails to fulfill)
Breaches can arise in 3 ways:
1) One party says they will not perform duties on time
2) One party makes it impossible to perform
3) Failure to perform on time
Breach of Contract may result in…
- Monetary Damages
- Quantum Meruit
- Specific Performance
- Injunction