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80 Cards in this Set
- Front
- Back
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What is a contract? |
An agreement between two parties that is enforceable in a court of law |
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What is contract law based upon? |
The assumption that those who enter contracts have equal bargaining power, which is rarely the case |
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When does an economic breach occur in a contract? |
When one party calculates that it is more financially rewarding to breach the contract than to perform it |
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Is it within a business' rights to breach a contract in order to pursue more lucrative business opportunities? |
Yes, they do have to pay damages though |
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What are some of the basic elements of a contract? |
An agreement, complete, deliberate, supported by mutual consideration |
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What is the definition of an offer? |
An offer is a promise to enter into a contract, on specified terms, as soon as the offer is accepted |
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What is an invitation to treat? |
form of communication that merely expresses a wish to do business |
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What is a standard form contract? |
take it or leave it contract, where the customer agrees to a standard set of terms that favour the other side |
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Renting a car or borrowing money from a bank is an example of which type of contract? |
Standard form contract |
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What is an offeror? |
Person who makes the offer |
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What is an offeree? |
Person to whom the offer is made |
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Which events can terminate an offer? |
Revocation, lapse, or rejection, counteroffer, or death or insanity |
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What is revocation? |
Withdrawal of an offer |
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What are the two ways an offer can lapse? |
May contain a date in which it expires, may contain no expiry date, it will remain open for a reasonable time
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What is rejection of an offer? |
Refusal to accept an offer |
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What is a counteroffer? |
Rejection of one offer and the proposal of a new one |
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What is acceptance of an offer? |
Complete willingness to enter into a contract on the terms of the offer |
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What is the post box rule in accepting an offer? |
The acceptance is effective at the time of mailing the acceptance, rather than the time of delivery if it is clear that the offeror intends the rule to apply to her offer |
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What is a promissory estoppel? |
A doctrine whereby someone who relies on a gratuitous promise may be able to enforce it |
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Are promises between family members contractual? |
No, common law presumes that they are non-contractual |
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What are the three possible forms of a contract: |
entirely oral, entirely written, both oral and written |
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What is the limitation of liability clause? |
term of a contract that limits liability for breach to something less than would otherwise be recoverable |
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What is an exemption, or exclusion, clause |
term of a contract that identifies events causing loss for which there is no liability |
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What is a liquidated damages clause? |
Specifies how much one party must pay to the other in the event of breach, and is decided beforehand |
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Exceptions to a contract being enforceable are: |
unequal relationship between parties, misrepresentation or important mistakes concerning the contract, defect within the contract itself |
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What is a void contract? |
Contract involving a defect so substantial that it is of no force or effect |
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Who are not able to give consent to form contracts? |
children and those with mental incapacities |
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What is the age of minority? |
age at which a person is recognized as an adult for legal purposes, usually 18 or 19 |
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When a minor reaches the age of majority, are contracts formed when underage enforceable? |
No, there is no impact on these contracts, they are still enforceable |
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What is economic duress? |
threat of economic harm that coerces the will of the other party and results in a contract |
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What is actual pressure in undue influence? |
sometimes a transaction raises because one party has exerted unfair pressure on the other |
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What is presumed pressure of undue influence? |
Relationship that already exists between the parties gives rise to a presumption that the ensuing agreement was brought about by one party's unfair manipulation of the other |
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What must be proven in order to prove that a statement is a misrepresentation? |
false, clear and unambiguous, material to the contract, concerned with a fact and not an opinion |
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What are the 3 categories of actionable misrepresentation? |
fraudulent, negligent, and innocent |
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What is fraudulent misrepresentation? |
Speaker has a deliberate intent to mislead or makes the statement recklessly without knowing or believing that it is true |
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What is negligent misrepresentation? |
speaker makes the statement carelessly or negligently |
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What is innocent misrepresentation |
Speaker has not been fraudulent or negligent, but has misrepresented a fact. Merely innocent by process of elimination |
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What is simple carelessness? |
Signing the document without attention to what it is or what its consequences might be is not enough to evoid enforceability |
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What are restrictive covenants? |
clauses which restrict someone's business activities |
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what are the 2 main kinds of restrictive covenants? |
non-solicitation clause, and non-competition clause |
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what is a non-solicitation clause |
forbids the employee from contacting the business' customers |
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what is a non-competition clause |
forbids competition outright from a certain period of time and is therefore more intrusive |
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What is a guarantee? |
a promise to pay the debt of someone else, should that person default on the obligation |
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How can contracts be terminated? |
Through: Performance, agreement, frustration, breach |
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What is termination through performance? |
When both parties fulfill their contractual obligations to each other, they have performed the contarct |
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What is termination by agreement? |
Parties are free to voluntarily bring their contract to an end |
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what is transfer of contractual rights? |
a party who wants to end his involvement in a particular contract has the option in some circumstances to transfer it to someone else |
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What is the person who is entitled to payment known as? |
A creditor |
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What is the party who is obligated to make a payment known as? |
The debtor |
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What is termination by frustration? |
the doctrine of frustration applies when, after the formation of a contract, an important unforeseen event occurs, such as the destruction of the subject matter of the contract or the death/incapacity of the contracting parties |
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When are pecuniary damages awarded? |
Financial losses |
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What are non-pecuniary damages |
loss of employment, mental distress, and other emotional consequences |
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What is a duty to mitigate? |
Take reasonable steps to minimize losses that might arise from a breach, if the plaintiff fails to mitigate, its damage award will be reduced accordingly |
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What is a 'specific performance' remedy that can be awarded in court? |
Instead of awarding compensation for failing to perform, the court orders the party who breached to do what the contract obligated him to do, only done when the item is unique and cannot be replaced by money |
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What is an injunction |
an authoritative warning or order, |
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what is recission |
restore the parties to the situation they were in before the contract was formed, rather than use compensation to put the innocent party in the position it would have been in had the contract been completed |
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what is restitutionary remedy? |
gives recourse to a plaintiff who has conferred benefits on the defendant in reliance on a contract that cannot be enforced |
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What is corporate liability? |
corporation is responsible for its own actions |
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What are the two types of corporate liability in tort? |
primary and vicarious liability |
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What is primary liability regarding a corporation? |
When it is regarded as the entity that actually committed the tort in question |
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What is a pre-incorporation contract? |
contract that have been entered into by the company's promoters on behalf of the corporation before it has even been created |
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what is fiduciary duty? |
requires a director and officer to act honestly and in good faith with the best interests of the corporation in view |
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What is a self-dealing contract? |
Contract in which a fiduciary has a conflict of interest (must avoid) |
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What are corporation opportunities? |
A business opportunity in which the corporation has an interest (cannot intercept) |
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What is a shareholder? |
Someone who invests in a company by buying shares directly or from other sharedholers |
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What is meant by 'lifting the corporate veil' |
determining that the corporation is not a separate legal entity from its shareholders (holding the shareholders personally liable for the corporations acts) |
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What are preferred shares? |
a share or stock that has a preference in the distribution of dividends and the proceeds on dissolution |
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What are common shares? |
a share that generally has the right to vote, share in dividends, and share in proceeds on dissolution |
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What is tangible property? |
Personal property, which is mobile, value comes from its physical form |
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What is intangible property? |
personal property, value comes from its legal rights, ex bank accounts, insurance policies |
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What is bailment? |
temporary transfer of posession for personal property from the owner to the bailee, ex, lease a vehicle, dry cleaning |
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what is a bailor?
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owner of the property who transfers possession of the bailment |
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What is the bailee? |
person who receives the bailment |
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What is gratuitous bailment? |
Bailment without reward, example being a test drive |
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what is a chattel lease? |
contract where a lessee pays for the use of a lessor's tangible personal property |
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What is an operating lease |
lease where the property is returned to the lessor when the term is up |
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What is a financing lease? |
lease that enables the lessee to finance the acquisition of tangible personal property |
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What is lien? |
the right to retain possession of personal property until a payment for service is received |
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What is an agreement |
composed of an offer to enter into a contract and an acceptance of that offer.
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