Law Chapter 3 - Contracts

Front 1

A contract is a __________ exchange of......

Back 1

Voluntary exchange of promises or commitments between parties that is legally enforceable.

Front 2

Consensus is normally achieved through _________ and __________.

Back 2

Offer and acceptance.

Front 3

A court finds a contract exists by looking at...

Back 3

subsequent behaviour of the parties.

Front 4

The only requirement that a contract exists is that the terms are ________ and _________.

Back 4

Clear and unambiguous.

Front 5

If important terms are left for later does a contract exist?

Back 5

No!

Front 6

If you didn't read the terms or you misunderstand them, will this render a contract unenforceable?

Back 6

No!

Front 7

An offer is a.....

Back 7

Tentative commitment containing essential terms.

Front 8

What creates the first legal consequence?

Back 8

An offer.

Front 9

An offer isn't binding until...

Back 9

Another party has indicated a willingness to be bound by the stated terms (an acceptance).

Front 10

Invitations to treat/deal are done...

Back 10

Before an offer, and are NOT an actual offer they're simply an invitation to attempt to contract.

Front 11

What are some examples of invitations to treat?

Back 11

Billboard, commercial, brochure etc.

Front 12

If an individual were to grab pharmaceuticals, and bring them to the register, has an offer and acceptance been committed?

Back 12

The offer is bringing the pharmaceuticals to the counter, the acceptance is actually checking them out. So, no.

Front 13

Does a contract have to be in writing?

Back 13

No!

Front 14

What do exemption clauses do?

Back 14

They limit liability.

Front 15

What are 2 requirements for an exemption clause to be enforceable?

Back 15

It must be CLEARLY DISTINGUISHABLE, and communicated BEFORE the contract acceptance.

Front 16

End of an offer can automatically happen by:

Back 16

1. Death

2. Insanity

3. Revocation

4. Rejection

5. Counter-Offer

****Expiry dat, or a passing or a "reasonable amount of time" will be a natural end to an offer.

Front 17

What is revocation?

Back 17

The offerer revoking their offer.

Front 18

If a counter-offer is given, does that signal an end to the original offer?

Back 18

Yes!

Front 19

What is an option agreement?

Back 19

A term where the offerer cannot revoke their offer for a given amount of time.

Front 20

What is a tender agreement?

Back 20

It is when a company requests a bid for a project.

Front 21

What is a standard form contract?

Back 21

It's typically a contract that heavily favours one party. A 'take it or leave it' type deal.

Front 22

One an offer has been made their is a __________ commitment by the offeror to be bound to that offer.

Back 22

Tentative.

Front 23

Acceptance must be _____________ and ____________.

Back 23

Complete and Unconditional.

Front 24

What is acceptance by conduct?

Back 24

The offeree must do something that isn't part of their normal routine to signify acceptance.

Front 25

What is a unilateral contract?

Back 25

Where performance of the contract is the method of acceptance.

Front 26

Does silence constitute acceptance of an offer?

Back 26

NO, unless there is already a pre-existing business relationship.

Front 27

What is the post-box rule?

Back 27

If an offer takes place through the mail, acceptance happens when the letter was mailed back to the offerer.

So if acceptance has to be made by saturday, and the letter of acceptance was mailed back on friday, the contract was accepted in time.

Front 28

Using the post-box rule, where does the acceptance and consequently jurisdiction belong? Also, give the exception to this rule.

Back 28

Where the letter was mailed back. HOWEVER, if an instantaneous form of communication was used like e-mail, fax, or phone, the acceptance belongs to where the offerer is. So in other words the post-box rule really only applies to non-instantaneous forms of communication.

Front 29

Does the post-box rule apply to mailed revocation?

Back 29

No, revocation happens when receiver receives the revocation, not when the letter was mailed.

Front 30

What is the 2nd qualification of a contract?

Back 30

Exchange or commitment of consideration. So it can simply be an exchange of promises.

Front 31

What is a gratuitous promise?

Back 31

When someone commits to doing something and expects nothing in return.

Front 32

Are gratuitous promises legally enforceable?

Back 32

No!

Front 33

What is quantum meruit?

Back 33

The requester is obligated to pay a reasonable price for services if no explicit price was given.

Front 34

If price of goods was not settled on, does a contract exist?

Back 34

No. The price is considered an important term and must be negotiated before a contract can exist.

Front 35

Consideration must have 3 things in particular...

Back 35

1. Legal

2. Possible

3. Have some value.

Front 36

Past consideration is ___ _________________.

Back 36

No consideration. If consideration has been given before a contract exists it could very well be a gratuitous promise.

Front 37

Where a ______ is affixed to a document there is no need to establish consideration.

Back 37

Seal

Front 38

____________ _____ and _______ are two exceptions to the unenforceability of a gratuitous promise or one-sided promise.

Back 38

Promissory Estoppel and seal.

Front 39

Promissory Estoppel can only be used as a....

Back 39

Defence.

Front 40

What are the two general categories of individuals who lack the capacity needed to form a legally binding contract?

Back 40

1. Infants

2. The intoxicated or insane.

Front 41

Void means.....

Back 41

There is no contract to begin with

Front 42

Voidable means.....

Back 42

One party has the right to escape if they so choose to do so (infants are a great example).

Front 43

An infant can void themselves from a contract UNLESS....

Back 43

That contract deals with necessities like food or shelter. In this case they'd be bound to pay a reasonable price.

Front 44

Infants are bound to two types of contracts:

Back 44

1. Necessity-based contracts

2. Beneficial contracts of service.

Front 45

Contracts that are non-necessity may be escapable if one of the minds is....

Back 45

1. Intoxicated

2. Insane

Front 46

For insanity or intoxication to be a defence, what 3 conditions must be satisfied?

Back 46

1. Contracting party was so insane they didn't understand what they were entering into

2. The other party knew, or should have known the insanity

3. If sanity is regained, steps to repudiate the contract were made immediately.

Front 47

Are contracts that are illegal or unlawful void?

Back 47

Yes!

Front 48

What does insurable interest mean?

Back 48

Insurance payout must compensate for a loss and not constitute a windfall.

Front 49

Do parties have to have the intention to be legally bound?

Back 49

Yes!

Front 50

What is price fixing?

Back 50

Where merchants agree to sell their product at common price. This is ILLEGAL.