Blaw 3100 Midterm 2

Front 1

What are infants and minors?
I

Back 1

- Infants – under age of majority (19 in BC)

Front 2

contract made by infants is unenforceable against them, but can enforce the contract against the adult party.
True or False?

Back 2

True.

Front 3

what are necessaries and beneficial contracts of service?
I

Back 3

- Necessary is our things required to function in society. For example, food, clothing, lodging, transportation.
- even if contract is determined necessary, this does not guarantee merchant will get paid in full. The amount used by the minor must be used for necessaries
for example: if money borrowed for school loan is used for gambling, lender cannot recover money.
I

Front 4

What are parents liabilities?
I

Back 4

• Necessaries
• Agency
• Guarantee
• Legislation

Front 5

What are the exceptions to the infants act?

Back 5

• ICBC
• Student Loans
• Employment that benefits them

Front 6

what is "on becoming an adult"?

Back 6

• Minor can ratify contract at age of majority [adults].

Front 7

Give an example of open quote on becoming an adult".

Back 7

for example: if minor agrees to pay $5000 for an automobile in a series of installment payments she cannot be forced to pay. If, however, the minor, after becoming that an adult, makes an installment payment, or provides a written statement indicating it they intend to be bound, the contract will then be binding.

Front 8

What is ratification?

Back 8

• can be in writing, or implied
• must be complete; a minor cannot pick and choose what parts of the contract they like and dislike.
• Certain contracts must be repudiated within reasonable time after becoming an adult
• some contracts must be repudiated

Front 9

What types of contracts must a minor repudiate within reasonable time after becoming an adult to avoid obligations?

Back 9

• Land
• shares in a Corporation
• partnerships
• marriage settlements

Front 10

Describe how contractual relationship progresses.
Hint: multiple stages

Back 10

• First stage [executory contract]
parties enter the contract but minor are not yet obtained benefit from it, and has not yet paid, and is not bound
• Second Stage [partially executory contract]
minor has received goods, but has not yet paid for them, and is not necessarily bound
• Third Stage (executed contract)
minor has obtained benefit under contract and are bound, unless minor can prove no consideration was actually received. [C

Front 11

What are parents' liabilities?

Back 11

• Parents are not responsible for the torts of their children, nor for the contractual obligations.

• parents can be liable when:
- minor is acting as an agent having appropriate authority to bind the parent in contract
- they guarantee minors obligation at the time of the contract entered into
- minor enters and contract for necessaries

Front 12

minors are not as liable for tort as adults
true or false?

Back 12

False. Minors are just as liable for it toward as an adult.
• Merchants occasionally try to get around protection of minor in contract law by suing for tort.

Front 13

If a minor use subject matter of contract in a way that was expected, then must see you under contract.
given example

Back 13

minor rents a car and gets into a car accident while driving

Front 14

If minor use subject matter of contract in a way not contemplated in the contract, can be sued for tort negligence.
Given example

Back 14

minor rents a car and gets in a car accident while off-road and with it

Front 15

What are the details for insanity and drunkenness?

Back 15

• persons of insanity or mental incompetence have same protection as minors. must show the following elements:
- could not understand nature of acting performed
- other party was reasonably aware of incapacity
- upon reaching sobriety, contract must be repudiated immediately

Front 16

what are some examples of limited capacity? Describe each. [c

Back 16

o Corporations
• Can limit capacity within incorporating documents
• Other party must be aware of limits

o Corporate bodies
• Created to accomplish government purposes are limited by legislation
o Foreign aliens and foreign government representatives
• At war, any contract with resident of enemy country is void if detrimental to Canada. If not detrimental, temporarily suspended
• Foreign government representatives have sovereign immunity, but can be waived by their decision

o Trade unions
• Can only enter into contracts related to trade union activities

o Bankruptcy
• Person or corporation that has declared bankruptcy cannot enter into contracts

o Natives
• Indian Act limits Native capacity is limited to property of their reserves

Front 17

When is contract performed illegally?

Back 17

answer later

Front 18

How do you differentiate between illegality to formation of contract and illegality to performance?

Back 18

o Illegal formation of contact is void
o Legal formation of contract while performing an illegal act is reviewable

Front 19

What factors to illegal performance of lawful contract will courts consider?

Back 19

o Intent of the parties
o Action of the parties
o Public policy

Front 20

Is a contract that is illegal at the time it is formed, legitimate and enforceable?

Back 20

No. It will be void and not enforced.

Front 21

In contracts formed illegally courts will not assist parties to their original position unless?

Back 21

one of them is innocent of wrongdoing

Front 22

contracts formed the illegally involved commission of___________________ under____________________ code, or_________________________ conduct.

give an example.

Back 22

- prohibited
- Criminal
- immoral
For Example: selling of drugs is illegal, prostitution is not illegal but it is immoral

Front 23

give examples of types of contracts determined to be illegal.

Back 23

o Contracts to commit crime
• Acts that are contrary to criminal code

o Contracts to commit tort
• Acts that are considered tortuous

o Contracts involving immoral acts
• Immoral acts are not illegal, but go against public policy

o Contracts that are bets and wagers
• Will not enforce contracts relating to gambling activities

o Contracts in restraint of marriage, or in favour of divorce
• Prevention or dissolution of marriage is against public policy

o Contracts that promote litigation
• One person pays another to sue a third party
• Exception is paying a lawyer a contingency fee to proceed with an action on another party

o Contracts the obstruct justice
• Interference with judiciary process is against public policy

o Contracts that injure the state
• Acts that are detrimental to the state

o Contracts that injure public service
• Bribery of public officials

o Contracts between businesses to fix prices or reduce competition
• Controlled by Competition Act, prohibiting agreemen

Front 24

what is intention?

Back 24

• Not all agreements are legal contracts
• Intention to create legal relations must exist
• Protects reasonable expectations, or intentions clearly stated in contract
• Intention is presumed in commercial relationships
• No intention presumed in social or domestic relationships
• Reasonable person test applied in cases of exaggerated claims
o Objective test

• When determining intention, court does not look at state of mind of person making promise, rather they look at reasonable expectations of the promisee
• Would a reasonable person have thought person making the promise was serious and that agreement was legally binding

Front 25

• Examples of issues of intention:

Back 25

o Stated intention of parties
• Parties clearly state they do not wish to legally bind contract

o Commercial relations
• Relationship primarily commercial in nature is presumed to be binding even in absence of evidence or clear instructions to the contrary

o Domestic and social relations
• Agreements between family or friends, presumed there is no legal binding unless legally written in a contract

o Social and business relations
• Relationship involving social and commercial relations will be judged based on individual merits
• Courts use reasonable person test to determine if legally binding contract would have been agreed upon

o Exaggerated claims
• Merchants often exaggerate qualities of their products in advertisements
• Courts use reasonable person test to determine if exaggeration should be taken seriously

Front 26

Describe form of the contract.

Back 26

• Writing is required for Statute of Frauds
o Contracts longer than one year
o Land dealings
o Guarantees and indemnities
o Others