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26 Cards in this Set
- Front
- Back
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What is a gratuitous promise is it considered a contract? |
-is a promise for which nothing of legal value is given in exchange -this is not considered a contract, as there is no mutual exchange of value |
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What is consideration? |
-exists when a party either gives (or promises to give) a benefit to someone else orsuffers (or promises to suffer) a detriment to themself |
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What is sufficient consideration? |
-may be almost anything of value -however,some things such as love and affection are not enough to support an enforceable contract |
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What is adequate consideration? |
-has essentially the same value as the consideration for which it is exchanged -Although a consideration must be sufficient, it does not have to be adequate |
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What is forbearance to sue? |
-is a promise to not pursue a lawsuit |
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What is past consideration? |
-consists of something that a party did prior to the contemplation of a contract -If a landscaping company accidentally works on your yard and you are delighted with the result and promise to pay for the service, this is not a binding contract as the company provided itsservices before you promised to pay the money (they did not work in exchange for yourpromise) |
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What is mutuality of consideration? |
-requires that each party provide consideration in return for the otherparty’s consideration |
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What is a pre-existing obiligation? |
-is an obligation that existed, but was not actually performed, before thecontract was contemplated |
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What are some notable examples of pre-exisiting obligation? |
-Pre-Existing Public Duty -Pre-Existing Contractual Obligation Owed to a Third Party -Pre-Existing Contractual Obligation Owed to the Same Party |
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What is a pre-existing public duty? |
-A person who owes a pre-existing public duty cannot rely upon that obligation as consideration for a new contract -For example, a firefighter cannot enter into a new contract when responding to your call |
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What is a pre-exisiting contractual obligation owed to a third party? |
-A promise to perform a pre-existing obligation that previously arose under a contract with a third party can be good consideration for a new contract -For example, a musical group can agree with a promoter to do a concert. The group could thenenter a separate contract with a music publisher – despite only doing one thing, the group willderive benefits from both parties. However, the group is also liable to both parties |
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What is a pre-existing contractual obligation owed to the same party? |
-An existing contract cannot be re-negotiated unless it provides benefit to both parties |
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Is promising to forgive an existing debt an enforceable contract? |
-Accepting a lesser amount than the original debt is only enforceable if it is supported by freshconsideration - A promise to accept a smaller sum is enforceable if it is placed under seal or if the debtor givessomething new in exchange for it (for example, payment a day earlier or by cash instead ofcheque) |
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What is a seal and why is it important? |
-is a mark that is put on a written contract to indicate a party’s intention to be bound by the termsof that document, even though the other party may not have given consideration -Importance is that the seal draws the party’s attention to the importance of the occasion and toacknowledge that this is an enforceable promise outside of the traditional bargaining process -An example would be a bank that requires the person guaranteeing a loan to do so under seal |
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What is estoppel? |
- is a rule that precludes a person form disputing or retracting a statement they made earlier |
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What is promissory estoppel? |
-is a doctrine that prevents a party from retracting a promise that the other party has relied upon |
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What are the four requirements required for the doctrine of promissory estoppel to apply? |
-The representor (the party making the promise) clearly indicates they will not enforcetheir legal rights against the representee (the party receiving the promise) -The representee must rely upon the statement in a way that would make it unfair for the representor to retract their promise - The representee must not be guilty on inequitable behaviour -The representor’s statement must be made in the context of an existing legal relationship |
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What is the legal definition of a stranger? |
-someone who did not participate in the creation of the contract -Generally, a court would rule that a person outside of the scope of the contract (i.e. outside the parties involved in the contract) would not be able to take advantage of a contract |
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What is privity of contract? |
-Refers to the relationship that exists between the individuals who create a contract |
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What is assignment? |
-is a process in which a contractual party transfers their rights to a third party |
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What are the definitons of assignor, assignee, and debtor in the context of privity of contract? |
-Assignor: is the contractual party who assigns their contractual rights -Assignee: is the stranger to whom the contractual rights are assigned -Debtor: is the original contracting party against whom the assigned right can be enforced |
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What is a statutory assignment? |
-is an assignment that conforms to the required statute |
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What is a basic example of an assignment by operation of law? |
-for example, a personal representative for a deceased person or a liquidator for a bankrupt entity – the assignee is not required to satisfy personal obligations of a personal nature |
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What is vicarious performance? |
-occurs when a contractual party arranges to have a stranger perform their obligations -So long as the contractual party’s personal skills are not essential to the performance |
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What is a trust? |
-occurs when one person holds property on behalf of another |
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What is a trustee and beneficiary in a trust? |
-Trustee: is the person who holds the property on behalf of the other -Beneficiary: is the person on whose behalf the property is held. The beneficiary, although not a party to the contract, would be able to sue the trustee for not performing their part of the contract |
