week 4 notes Flashcards
minor
21 years by common law; person under the age of 18 by statute
what must minor do to repudiate a contract after it has been fully performed
minor must prove unfair advantage, and must return goods
who might lack capacity?
Minor
Mentally infirm or incapacitated
Intoxicated
Limited by law—some corporations
Bankrupt
adult & minor contract - voidable by who?
If the contract is not fully performed - voidable at minor’s option
Adult who contracts with minor is bound, the option to repudiate is only available to minor
Adult runs risk of the minor repudiating
repudiating long-term contract (minor)
Repudiation must occur within a reasonable time after obtaining age of majority, or the right to repudiate is gone
For a non-necessary item, of a non-continuing nature, if the contract is made while a minor, minor must expressly ratify (acknowledge and agree to perform) to be bound once minor reaches age of legal capacity
Fraudulent misrepresentation re age (minors)
Law will not permit a minor to perpetrate a fraud on a merchant
But, in a contract for non-necessaries law still does not allow merchant to enforce contract against minor who lies about age
Merchant may be able to recover the goods, also criminal sanctions for fraud, AND contract becomes voidable at adult merchant’s option
Statutory protection for contracts with minors
provincial legislation codifies contractual protection for minors, requiring ratification of a contract to be in writing
Sole proprietorship or partnership, minors
Contracts usually voidable at option of the minor
Minor in partnership with adults, minor can avoid or repudiate, adult partners still bound
In continuing contract, if minor continues to accept benefits of contract after reaching age of majority, there is an implied ratification
employment contracts - minors
usually binding, if terms not onerous, minor can terminate on reasonable notice
parental liability
At common law, parents not liable for debts of children
By family law statute, parents have obligations to support children under 16
Parents jointly and severally liable for debts incurred for necessaries. Minor can act as parents’ “agent of necessity” and use their credit to obtain the necessaries of life
drunk or insane: contracts
For necessaries: same rules apply as for minor
Non-necessaries: where person was incapacitated when contracting, and other party knew of incapacity, once person regains capacity they can void
Must be prompt repudiation, otherwise implied acceptance
corporations
have the legal rights of a “natural person”
formal contract
must be in writing to be enforceable
simple contract
most common, can be implied, oral, or written
contingent liability
A contingent liability is a potential obligation that may arise in the future if an uncertain event occurs
Assumed tort liability
Third party assumes liability for tort of another
Must be in writing to be enforceable
mistake of fact
Mistake about existence of the subject matter of the contract
Contract considered to be void ab initio
Mistake about identity of contracting party
Identity of party must be an essential element of the contract
Voidable
Mistake as to the nature of the contract - rare
Document completely different in nature
No opportunity for independent legal advice
Non est factum “not my deed”
Even where an infirmity, party cannot be careless in signing document
unilateral mistake
One party makes a mistake as to terms or nature of contract
Other party is aware of the mistake and allows or encourages contract; rescission
Restitutio ad integrum
Returning parties to the position they would have been in if the contract had never existed
Mutual mistake
Both parties make mistake as to content of agreement
Mistake re: either subject matter, or a fundamental term of the contract
Void ab initio
No consensus ad idem
consensus ad idem
“meeting of the minds”. It’s a fundamental principle in contract law that requires both parties to agree on the terms of a contract for it to be legally binding.
innocent misrepresentation
party makes a false statement thinking it to be true
Induces other party into contract
Can get rescission and no consequential damages; renders contract voidable
fraudulent misrepresentation
statement of fact inducing party to enter into contract
Known to be false
Get rescission and consequential damages for tort of deceit; renders contract voidable
