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BSEN 395 Flashcards

1
Q

Role of the Law

A
  1. settling disputes
  2. establishment of rules
  3. protection
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2
Q

Major Systems of Canadian Law

Common v.s Civil exam

A
  1. Common Law: judgement of courts (case law). stare decises to let a decision stand. precedent. applies if decision:
    judges own court, court of equal rank persuasive. only binding if court of higher rank. court not bound by own decisions and can change mind.
  2. Civil Law: codification (statutes). procedural and substantive. judges not bound by other decisions.
  3. Private law: rights between individuals
  4. Public law: government control of public
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3
Q

Charter of Rights and Constitution

A
  1. 1982 Constitution Act
  2. BNA Act 1867. Section 91 Federal, 92 provincial
    Section 2 Fundamental Freedoms:
    -Conscience and Religion
    -Thought, belief and expression. Freedom of press and other media
    -Freedom of association
    -Peaceful Assembly
  3. Section 33 not withstanding clause. overrides fundamental freedoms and legal rights. need renewal every five years.
  4. Section 15** applies to individualsTyp not just government interference. no discrimination: race, creed, colour, religion, sex, age, national ethnic origin , mental or physical disability.
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4
Q

Types of Law

A
  1. Procedural: how law is enforced
  2. Substantive: the rights and obligations imposed by law
  3. Public: government and persons
  4. Private: between individuals
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5
Q

Contract

A

mutually enforceable agreement.

governs exchange

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6
Q

Elements of a Contract

A 
intention to create legal relations
offer
acceptance
consideration
capacity
legality
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7
Q

Intention to create legal relations

A
  1. meeting of minds. consensus ad idem.
  2. must intend to be bound.
  3. strangers in commercial relationship presumed to have intent. close family not usually
  4. invitation to treat, ads are not offers, invite offers, seller may accept or reject. same with goods on shelf, not intent to contract. purchasing the good is the contract. taking the product to the till is intent to buy.
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8
Q

Carbolic Smoke Ball

A

promises form ads in certain limited conditions may be construed as intention to create legal relations

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9
Q

Offer

A
  1. complete price, parties, product, performance
  2. any business deal start with an offer.
  3. incomplete offer misses an element (invitation to do business)
  4. must be communicated to other party. can be spoken but must be between two honourable people, written or inferred by conduct (if stand by and accept benefit knowing other side expects payment)
  5. an offer is open for acceptance: for a set time if stated, for a reasonable time or until the offeror loses capacity
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10
Q

Acceptance

A
  1. clear, unconditional, communicated to the offeree
  2. has to be a binding acceptance (without it being subject to something before the deal)
  3. made in a manner requested and in time
  4. good acceptance cannot be taken back. silence cannot be acceptance
  5. if want to make counter offer. rejecting offer –> continuing negotiation–>counter offer
  6. offeror must know you have accepted but exception:
    Mailed Acceptance Rule (Post Box Rule)
    -a mailed acceptance is effective from the date posted not the date received. if use snail mail in an offer use the words while supplies last. all other mods, till it reaches the offeror
  7. Unilateral contract, acceptance through specified action. offer made to world at large. can revoke prior to completion of act. if already started can’t revoke.
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11
Q

Electronic Offer

A

Statute

-I agree or send, is acceptance. can opt out through terms of use.

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12
Q

Consideration

A
  1. each party in the contract must get something with value in eyes of law. forebearance (giving up legal rights)
  2. **technically exchange of promises not the actual goods themselves.
  3. must be precise, no consideration no contract. courts don’t care if the consideration adequate. buyer/seller beware (covert emptor)
  4. gratuitous promises: not accompanied by consideration. give but don’t have to do anything in return. not enforceable, must get something in return. the exception is gratuitous services: must be performed with care and skill
  5. Past consideration: can’t be something received before promise made or something already entitled to receive at law.
  6. seal as consideration: formal mode of intention. no consideration if the contract is under seal. exception.
  7. quantum meruit: as much as he deserves. reasonable sum for work rendered.
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13
Q

Debtor-Creditor Relations

A
  1. Foakes v. Beer
  2. gratuitous reduction of debt, agree to accept less than owed then cannot go back and demand full amount
  3. exceptions: sign under seal, something other than money, payment before due date, third party makes payment.
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14
Q

Promissory Estoppel

A
  1. if a party suffers an adverse effect or change to remain in a contract where certain obligations are forgiven.
  2. Promissory estoppel is the legal principle that a promise is enforceable by law, even if made without formal consideration, when a promisor has made a promise to a promisee who then relies on that promise to his subsequent detriment.
  3. granting party is estopped from going back on the promise to forgive the obligation.
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15
Q

Capacity

A 
minors
mentally incompetent or impaired
first nations
enemy aliens
bankruptcy
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16
Q

Minors

A
  1. can only be bound by contracts for the necessities of life according to your station in life
  2. contract enforceable by minor but not against. minor can sue but can’t be sued. contract at own peril. even minor who lied about age can repudiate
  3. exceptions include beneficial contracts of service such as apprenticeships
  4. when minors turn 18, if continue in a contract they are bound if they want out, they should repudiate as soon as possible.
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17
Q

Mentally Impaired/Incompetent

A
  1. the court will not enforce a contract when a party is obviously impaired
  2. if it isn’t obvious or the impaired person is hiding their impairment the contract may be enforceable
  3. as soon as not impaired, must repudiate immediately or implied ratification
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18
Q

First Nations, Labour Unions and Enemy Aliens

A
  1. in Canada Indian Act limits contract ability
  2. can’t pledge land for security, can’t go on reserve to seize goods without permission
  3. corporations used to be able to limit their capacity now they cannot.
  4. Labour Unions: able to enter in to contracts. collective bargaining agreements. enabled by legislation.
  5. If we go to war with a country or put economic sanctions on them, the courts will not help in contract difficulties
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19
Q

Bankruptcy

A
  1. if you declare bankruptcy then you will lose capacity to contract.
  2. normally declared for you.
  3. can only contract for necessaries.
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20
Q

Legality

A
  1. voidable if doesn’t comply with statute or policy.
  2. can’t contract with unlicensed trades or professions
  3. can’t agree to repay embezzlement
  4. can’t restrain competition,
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21
Q

Statute of Frauds

A
  1. types of contracts that must be in writing for the -courts to enforce:
  2. must include price, parties, product and performance. requires signature
    - year or more to complete
    - contracts for land/land interests
    - contracts to be an executor or adminstrator of a will (estate)
    - contracts in consideration of marriage
    - a contract where you agree to be responsible for the debt of another. guarantee/cosign
  3. guarantee is a promise to the bank saying that if the debt fails, they can come after you. creditor, debtor and guarantor. every guarantee to be enforceable must be accompanied with a “Guarantee’s Acknowledgement”- notarized certificate of independent legal advice for his/her guarantee.
  4. indemnities need not be in writing (compensation of loss)
22
Q

Parole Evidence Rule

A
  1. if you have a written contract then the court will not listen to spoken terms not written that vary the contract.
  2. exception: if you can prove that another side deal exists (collateral agent) then the court will listen. or if the oral agreement stands alone as a separate agreement
23
Q

Unenforceable Contracts due to Mistakes

A
  1. contract doesn’t express true terms: mistake of law or mistake of fact
    - mistake of law: presumed to know the law so extremely rare
    - mistake of fact: existence of subject matter or identity of party: mistake so fundamental as to change the fundamental nature of the contract then contract is void.
  2. non est factum: unilateral mistake about the nature of document. defense if illiterate, inform or blind. avoid liability on written agreement if established and not aware of true nature of doc.
  3. common mistake: both parties share the mistake that the subject matter of the contract exists
  4. mutual mistake: where each party thinking something diff, contract voidable
  5. unilateral mistake: is when one party to contract is mistaken. if the mistake is about an essential issue in the contract then the contract is voidable.
  6. rectification if fix typos or editorial errors.
24
Q

Misrepresentation

A
  1. statement or conduct that inducts the other party to enter contract. voidable at option of injured party. recission: revocation of legal contract
    Types of Misrepresentation
  2. innocent: false statement of material fact honestly believed to be true. voidable (recission) court put in position they were before contract
  3. negligent: carelessly mislead. voidable and damages tort
  4. fraudelent: intentional lie.voidable, recission and damages tort.
  5. nondisclosure: no obligation to disclose except certain relationships: insurance, partnership (fiduciary obligation), special trust/confidence
25
Q

Undue Influence and Duress

A

DURESS: contract signed to avoid serious threat. voidable at option of person once out of duress.
UNDUE INFLUENCE: when you trust someone so much you do not apply
your own judgement
person’s judgement is not own.
*special relationship but not spousal.
-voidable at option of weaker party
-onus shifts to dominant party to prove otherwise.
-no undue influence if: agreement is fair and reasonable under the circumstances 2 full disclosure is made prior to the formation of contract 3. weaker party free to seek independent legal advice. dominant party can avoid undue influence charges if send weaker party to ind legal advice. **

26
Q

Privity of Contracts

A
  1. only parties have rights under contract. cannot incur liability if not party. exceptions
    -prior interests in land: buy takers land subject to the rights of others who have acquired prior interest in property before purchase. rights run with land.
    -trusts: agreement or arrangement whereby party holds property for benefit of another
    constructive trust: normally beneficiary not party, gave no consideration so no rights.beneficiaries not party can enforce terms under equity.
    -promises under seal: third party enforce for their benefit if made under seal
27
Q

Statutory Assignment

A
  1. third party transfer of benefits or rights. assignment of rights that an assignee may enforce if certain conditions are met by the assignment
  2. to be enforceable: must be written, absolute (capture all members of a class), express notice to all affected parties, subject to all rights/objections of existing agreement. assignee to first give notice to debtor has priority not first in order.
  3. death to executor, bankruptcy to trustee
28
Q

Novation

A
  1. sub of parties to an agreement or replacement of one agreement by another agreement
  2. allowed because consensual amongst parties, terminate original agreement and replace it
    - new debtor assumes complete liability
    - creditor accepts new debtor as principal debtor not agent/guarantor
    - creditor must accept new contract in full satisfaction and substitution for old.
  3. novation allows the transfer of contractual rights to third party. effective release for assigning party
29
Q

Equitable Assignment and Vicarious Performance

A

Equitable Assignment
1. can only assign rights not obligations
2. assignee not sue in own name, in name of assignor who has assigned their rights.
Vicarious Performance:
performance of contract by third party but contracting party remains liable. ex) employees.

30
Q

How does a contract end?
tenders
discharge of contract

A
  1. Performance: providing the good or service per terms of contract or tender of payment
  2. illegal tender of payment, cannot pay an obligation with more coins of a denomination than fit in a bank roll of that coin type.
  3. tender of payment: money paid. tender of performance:act. tender of debt: if proper tender made and is refused by creditor interest stop and debtor need not attempt to pay again.
  4. Discharge of contract: by agreement if you agree to end contract, by assignment if assign to third party then out, substitution agreement: can agree to replace with another, waiver: replace your rights in contract. or contract end because clause in contract that allows it. by operation of law Bankruptcy Act. gvt can declare a class of contracts illegal
31
Q

Breach of Contract

A
  1. fundamental breach: failing to deliver an essential item in contract. right to end contract. breach of condition. non fundamental breach of warranty. breach of warranty right to costs.
  2. express repudiation: saying you are done, right to end contract
  3. implied repudiation: if you give someone the impression the contract is over they can act like it is over. possible right to end contract
32
Q

Force Majeure/Doctrine of Frustration

A

major unforseen event outside control of parties that prevents performance.
contract rendered impossible due to force majeure. must not be fault of either party. contract discharged.

33
Q

Doctrine of Substantial Completion**

A
  1. if a contract is 98% ish complete, the non completing party can walk away with the consequence of losing that 2% value of the work done.
34
Q

Remedies (contracts)

A
  1. restitutio integrum: court put in position as if contract was honoured. allow you to claim for losses flowing from contract failure
  2. mitigation: is the idea that you cannot claim for losses you could have reasonably prevented:
    liquidated damages clauses: company can agree to pay specified money amounts in the event of a contract failure
    excomption: in a contract you can seek agreement to not be liable for certain things
  3. if breach: consequented losses, damages, loss of profits/damaged goods relationship, cost to fix problem (recovery of costs)
35
Q

More Remedies
Specific Performance
Injuncion
Quantum Meruit

A
  1. specific performance. insist contract be honoured: unique land unique items shares in a company or patent
  2. injunction: court order to do or to stop doing something agreed to in a contract
  3. quantuam meruit: fair market value is owed if no prior agreement for price
36
Q

Agency

A

is the relationship between a principal (having the power and control of the relationship) and the agent (representative of the principal) and a third party with whom the agent contracts for the principal.
contract between principal and the agent

37
Q

Agency created by:

A
  1. express agreement. P hires A oral or written
  2. by conduct if Principal acts like someone is their agent over a period of time, that person is agent in eyes of third party. agency estoppel or apparent authority. agent has ostensible authority to contract. legit belief agency relationship exists
  3. out of necessity, if it is necessary to preserve life or property, any act done by an agent binds a principal
  4. by operation of law: bankruptcy, you lose power to contract and receiver becomes agent.
38
Q

Principal’s Duties

A

power, money, person
honour contracts entered into according to instructions
pay agreed to commissions and expenses

39
Q

Agent’s Duties

A
  1. obey all instructions
  2. cannot delegate responsibilities
  3. keep in contact with Principal
  4. act in best interests of the principal
  5. no secret commissions
  6. account for all profits
  7. relationship of utmost good faith, only truth
  8. use all skills, knowledge and training to benefit
  9. confidentiality
    if doesn’t follow instructions and enters contract, agent is bound
    breaching duties can result in end of relationship and no pay
40
Q

Undisclosed Principals and Agent Lying

A
  1. if third party does not know you are an agent for undisclosed principal, then you are bound if anything wrong
  2. if the agent lies about their authority or relationship, agent is liable under contract with third party unless the principal likes the deal, then they can ratify (approve) by granting authority to the agent after ratification.
41
Q

How does an agency relationship end?

A
  1. by agreement, can end at a set time or pre agreed event
  2. by notice, if you get a notice saying you want to end agreement
  3. in the event the principal loses capacity to contract, so does the agent: death, insanity, bankruptcy.
42
Q

Sole Proprietorship

A
  1. ease set up
  2. register get your business
  3. retain all the profit
  4. tax advantage
  5. write off losses and expenses against income
  6. you have all the work
  7. business and personal liability
  8. hard to get financing
  9. personal rate of tax
43
Q

Partnership (joint ventures)

A
  1. help with work, ideas, contract and finance
  2. share profits
  3. should have partnership agreement
  4. joint and several business and personal liability
  5. personal rate of tax
44
Q

Corporations

A
  1. tax breaks
  2. corporate tax i less on first 250K
  3. separates ownership and management
  4. cost to incorporate
  5. report to share holders
  6. technical problems.
45
Q

Partnership/Partnership Act

A
  1. business in common with a view to profit
  2. partners are agents of each other, have power to bind each other in contract
  3. joint liability for debts and obligations. equal shares
  4. dead partners severally liable for firm debts. estates pay of debts.
  5. partners have joint several liability for firm wrongs and misapplication of money
  6. as a partner not liable for anything that happened before you joined as well as everything after you have retired
  7. share in partnership property never real property. it is a share in assets
  8. you cannot use the firm for individual profit. can be sued to pay it back.
  9. dissolution under Partnership Act
46
Q

Nature of Partnership

A
  1. each partnership take part in management
  2. no partner entitled to remuneration
  3. Section 22: partnership agreements can vary or change rights and obligations to each other
  4. partners own property and revenue and share liabilities equally unless otherwise agreed to
  5. not entitled to pay but entitled to share in profits
  6. new partners require unanimous consent. unanimous agreement to get rid of partner.
47
Q

Dissolution of Partnership

A
  1. agreement
  2. specific term for ending
  3. death or bankruptcy
  4. incompetence, insanity or disability
  5. apply to courts to end partnership
48
Q

How Terminating Partnership Valued to Compensate Departing Partners

A
  1. you get initial investment back
  2. you equally share outstanding revenue and assets
  3. you equally share liabilities (expenses)
  4. you are only liable for costs that occurred while you were partner
49
Q

Limited Partnerships

A
  1. under the Limited Partnerships Act you can create ltd partnerships.
  2. you need at least one partner to be a general partner who runs the business and makes management decisions
  3. unlimited number of limited partners, who are investors but must remain silent about business management
  4. silent partner only liable for investment contribution unless they take an active role in business
  5. if active, become liable as general partners
50
Q

Corporations

A
  1. creatures of statute created by:
    - Royal Charter
    - Letters Patent
    - Special Act Corporation
    - General Act:
    - Canada Business Corporate Act
    - Alberta Business Corporate Act
51
Q

To Incorporate

A
  1. name search. name declined if inappropriate or makes someone giggle.
    names will be declined if it implies a government connection
  2. articles of incorporation
  3. directors document
  4. pay a fee, registered office
52
Q

Advantages of Incorporation

A 
1. small business rate of tax
in AB 12%, fed 15%, 2@ small business rate. 18% combined after tax breaks
2. easy transfer of business
3. separate management and ownership
4. ease of finance
5. limited liability
6. can be generational

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