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22 Cards in this Set
- Front
- Back
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Elements of a contract |
Elements of a contract: - offer and acceptance - capacity of parties to contract - consideration - genuine intention - legality of Object |
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Contract |
Contract:
An agreement between legally capable parties for a consideration, demonstrating intent to do something for which is legal |
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Offer and acceptance |
To accept a contract, an offer must be made and accepted
- offer must be definite and communicated - acceptance must be definite & communicated
- when offer is made, the person must be ready to undertake the obligations under the agreement once the offer is accepted
Lack of action is not consent |
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Offer may lapse for what reasons |
- Not accepted within time specified - Not accepted within reasonable time ( if time limit is not specified) - either party dies or becomes mentally incapacitated - offer may be revoked (must be communicated before it is accepted)
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Capacity to consent |
Certain classes of people lack ability, competence or capacity to enter contract
- minors : Protects them so they are not taken advantage of due to their youth or lack of experience - persons with diminished contractual capacity ( must be able to prove they were not capable of making rational decisions at time and that other Party to contract knew this) - person of unsound mind, or incapacitated thru drink/drugs |
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Consideration |
Consideration: Evidence that the parties intend to be bound by the contract
- what one party gives or promises to give in exchange for the act or promise of the other party
-no consideration means no contract Except when sealed - sealing contract means the parties have given contract deep thought, read all provisions and intend to be bound by it
- Consideration must have monetary value
- a promise made upon past consideration is no consideration
- need not be adequate
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Genuine Intent |
Genuine Intent: The intention of the parties to create legally binding agreement |
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Legality of Object |
If the ojbect of a contract is to commit an act that violates common law or statue law, the court will rule it void and possibly illegal |
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Void contract |
Void contract:
Treated as if it never existed
Cannot confer rights on anyone and does not have legal effect |
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Voidable contract |
Voidable contract: Can be affirmed or rejected by agreivable party |
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Reasons for voiding a contract |
Reasons for voiding a contract: - Mistake - Misrepresentation - Undue influence - Duress |
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Mistake |
mistake about terms of contract
Or
mistake in assumptions about important facts related to contract but not in contract (Error in judgement is not enough to void a contract) |
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Misrepresentation |
Misrepresentation:
An incorrect statement which may convince the party to enter contract
- innocent misrepresentation - concerning material facts - fraudulent misrepresentation - false statement made deliberately - non disclosure concealment - failure to disclose material facts
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Undue influence |
Undue influence:
Contract signed because of overpowering influence of another person |
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Discharge of contract |
Agree to cancel a contract or amend its terms - Performance (parties fulfil obligations) - Agreement (agree to terminate) - Frustrations (impossible to fulfil obligations) - Operation of law (laws change rendering contract impossible) - Breach of contract (one of the parties fails to perform obligations) |
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Gratuitous promise |
Gratuitous promise:
A promise to another when the element of bargain is missing
- does not constitute as contract, not enforceable by law |
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Illegal contract |
May include tort, fraud or agreement to commit a crime Court will not assist - from an illegal cause, legal action cannot be taken |
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Counter offer |
- when a new term is introduced, it becomes counter offer and may be accepted or rejected by originating party - if counter offer is refused, other party cannot go back and accept original offer - Counter offer invalidates original offer |
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How can misrepresentation affect a contract? |
Contract is voidable at option if agrieved party
- court may rescind the contract and require both parties to resume their original status or may award cash for damages |
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Fraudulent misrepresentation |
False statements made deliberately - law imposed by court is recission of contract and award damages to injured party |
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Duress |
Entering a party due to the use of violence or threat
- voidable at option of agreived party |
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Breach |
Breach One party fails to perform all or part of obligations
If one party has taken benefit, cannot be repudiate
- if other party has taken no benefit, they have right to damages
- injured party isnexcused from further damages |
