contracts Flashcards
1
Q
contract
A
an enforceable voluntary agreement between two or more parties
2
Q
two terms in contracts
A
- express terms - conditions that have been discussed and agreed upon
- implied terms - conditions that have not been discussed and taken for granted
3
Q
letter of intent
A
basic terms of future contract - not enforceable!!
4
Q
Five ways to void a contract
A
- mistakes
- misrepresentation
- duress
- unconscionability
- frustration
5
Q
three features to void mistakes
A
- must be significant and non-trivial
- must be mutual
- existed at the same time the agreement was made
6
Q
three features of misrepresentation
A
- innocent
- negligent
- fraudulent (most serious type)
7
Q
duress
A
improper pressure, threats or coercion to get a party into a contract
8
Q
unconscionability
A
a contract so unfair, oppressive or one sided that the court will not enforce
9
Q
waiver
A
an act or instance of waiving a right or claim
10
Q
estoppel
A
- one party relies on actions of another instead of the contract
- principle that prevents someone from arguing something or asserting a right that contradicts what they previously said
- the action that the court can use to prevent a party from enforcing the strict wording of the contract that puts the other party at a disadvantage
11
Q
quasi-contract
A
obligation of one party to another imposed by law independently of an agreement between parties
12
Q
quantum meruit
A
- company must be paid the amount the work is worth even without a contract
- when a service ahs been requested and performed with out a payment agreement in place
13
Q
change order vs change directive
A
change order: paperwork for changes to contracts
change directive: additional work paid at cost-plus. ordered by consultant NOT owner
14
Q
privy
A
a condition where only parties to the contract can enforce the contract
15
Q
four conditions for a breach of contract
A
- inability to perform
- inadvertence - unintentional
- disagreement
- lack of profit
16
Q
specific performance
A
court order to perform a specific act that would remedy the damages (sell property)
17
Q
injunction
A
prohibits a party from starting or continuing to do something that is threatening or invading the legal rights of another
18
Q
three limitations of damage recovery
A
- mitigation - injured party takes steps to reduce loss
- damages cant be speculative - must have proof
- remoteness - loss must be reasonably foreseeable
19
Q
consequential vs liquidated damages
A
consequential damages: indirect loss - loss of business
liquidated damages: estimates of loss written in contract
20
Q
3 ways a contract termiantes
A
- it ends once both parties complete their obligations
- when its agreed to end early or if on party ends it (breaches)
- completion of performance
21
Q
fundamental breach
A
- a breach that goes to the root of the contract and deprives the innocent party of all or most of the benefit of contract
- one party is not keeping their party of the deal by failing to complete contractual terms forcing the other party to not complete their own responsibility
- if a party does not perform an obligation, the injured party CAN terminate the contract and sue
22
Q
Simple breach
A
a breach that does not entitle the innocent party to treat the contract as ended in order to permit the innocent party to stop performing their part of the contract
- injured party CANT terminate the contract but can sue
23
Q
repudiatory breach
A
- when one party lets the other know that they do not intend to perform their obligations without justification
- innocent party can terminate the contract
24
Q
anticipatory breach
A
- one party declares to the other party before the time of performance of an obligation they intend to breach
25
restrictive by express conditions
- contracts have special or supplemental conditions, which are assigned greater importance. Special meaning takes precedence over standard form
26
contra proferentem
a contract is ambiguous (vague), the courts choose the interpretation that favours the party who did not write the contract
27
parole evidence rules
- when a contract is written and clear, evidence is not admissible to add to, vary or contradict the words
- a contract rule that prohibits evidence that contradicts or adds to the contract terms
28
five essential elements for an enforceable contract
1. offer must be made and accepted
2. mutual intent to enter the contract
3. consideration
4. capacity of contract
5. lawful purpose
29
Two types of authority a principal can provide to an agent?
express authority: actual authority, created by a contract between principal and agent
apparent authority: implied authority, created by representatives made by the principal and third party. an agent can be authorize to only do certain acts
30
hold harmless agreement (indemnity agreement)
an agreement by one party to bear the financial loss of another party for a specific event (insurance)
31
most common type of indemnity
insurance policy - insurance company pays for the losses
32
vicarious liability
rule of law that makes one party liable for the acts of another (employer liable for negligence of its employees)
33
indemnification clause
protects one party from liability if a third party/entity is harmed in any way.
obligates one party to compensate another party for losses or damages
34
extras vs credits
extra: increase to contractual price
credit: decrease to contractual price
35
who is responsible for changes??
the owner!
36
impact costs
costs that rise from the inefficiency created by delays, interferences or changes
37
Three contract administrations
1. authority
2. timeliness
3. field review
38
three goals of a contract
1. work done on time
2. on budget
3. highest quality
39
call for tenders
request from owner to bidder for delivering a defined set of goods or services
40
can an offer be accepted to create a contract?
Yes. but an invitation to treat cannot
41
four steps for bidding process
1. prepare bid documents
2. submit bids
3. examine bids
4. award contract
42
what must the tender documents state?
1. all relevant information
| 2. process and criteria for awarding the contract
43
seven types of delivery systems
1. request for qualification (RFQ) - based on qualifications
2. invitation to tender - owners evaluate bids
3. request for quotes - informal
4. request for standing offer
5. request for proposal (RFP)
6. letter of interest/pre-qualification
7. hybrid
44
3 categories for procedural issues
1. fairness and good faith
- no obligation to be fair with pre-contractual negotiations
2. openness and transparency
- no legal requirement to make available, the reasons and results of the procurement process
3. cost of fairness and transparency
- a fairness monitor checks that the procedures have been followed, not measured for compliance
45
Five project delivery methods
1. design-bid-build
- owner designs, contractor builds
2. design-build
- owner conceptualize, contractor design and build
3. design-build-operate
- owner conceptualize, contractor builds and operates for a certain time period
4. design-build-operate-finance
- owner conceptualize, contractor builds and operates and invests
5. construction management
- owner hires everyone directly
46
Five Payment Methods
1. fixed/stipulated sum
2. cost-plus
3. unit-price
4. alliance
5. public-private-partnership (P3)
47
purpose of interprovincial and international trade agreements
- sets out rules about transfers of goods and services between two countries/provinces
* must be transparent, accessible and fair
48
standard form contract
- needs to be tailored to specific project
| - developed for general needs of a project
49
fixed price contract
- goods and services provided for a lump-sump amount
- can be know as a stipulated price contract/lump sum contract
- all risk to contractor
50
cost plus contract
contract is paid for the actual cost of the goods/services performed, plus an overhead fee an profit
51
unit-price contract
- owner pays amount for unit or quantity of work ($/m3)
52
construction management contracts
- not based on a payment scheme, rather is focused on how work will be done
53
design-build contract
- owner contracts out designers, construction and inspection of a project. but still retains control over the project
54
alliance agreement
- a relationship forming contract in which all parties share economic success or failure
- usually cost-plus
55
three major clauses to an alliance agreement
1. no blame clause
2. clearly defined gainshare/painshare scheme
3. understanding roles
56
private-public-partnership agreement
- partnership agreement that binds the public and private sectors
- private source of capital is sources, constructed and the recoup costs through long term leasing of facility (toll bridge)
57
service agreement
- professional contract which defines cope of work and outcomes
58
licensing agreement
- grants the rights to parties, right to use equipment, processes or land
- used for copyrights
59
Grubstake agreement vs option agreement
grubstake: people invest in return for shares of the outcome
option: buy shares or do work in exchange for interest in a property
60
9 crucial aspects/sections for contracts
1. scope of work
2. contract time
3. changes
4. damages and bonuses
5. warranty
6. termination
7. indemnification
8. exclusions/waivers/limitations
9. dispute resolution
61
two major types of damage clauses
1. penalty clauses
- nominal fee which must be paid for non-performance.
- non-enforceable
2. liquidated damages clause
- damages suffered as a result of late performance
- enforceable
62
exclusion clause
- clause to exclude damages or remedies available by innocent parties under certain circumstances
- favour the party who didn't draft the clause
63
limitation clause
- partially limit liabilities or remedies
| - favour the writer of the clause
64
waiver clause
- conditions the rights under the contract can be given up
65
bankable vs bankability
bankable: contracts are acceptable to lenders financially
bankability: issues when a borrower does not have sufficient assets to secure a loan
