Final Review: Contract Flashcards
Most contracts do not need to be in writing to be enforceable. What are the exceptions?
- Guarantee
- Contract for the sale of land
- Consumer Credit transaction
What are the requirements of a valid Deed?
- Must make clear on it’s face that it is a Deed
- Executed in the presence of a witness
- Delivered
What types of conveyances MUST be made my Deed?
A conveyance of land.
NOTE: If a gift is made by deed, it is also enforceable, but gifts need not be made by deed (they can just be gifts)
When must a contract claim be brought? (Simple K v. Deed)
K: Within 6 years
Deed: Within 12 years
What are common examples of Invitations to Treat?
- Adverts
- Goods in a shop window (even w price)
- Price lists
When can an offer NOT be revoked?
Bilateral K: Any time before the offeree accepted by starting performance
Unilateral K: Any time before performance has begun
Any collateral K where consideration is given to keep the option open
How can an offer be rejected?
- Expressly
- By counteroffer
- NOT just mere inquiry “would you consider selling for less?” - Lapse of time (if stated, or a reasonable time)
- Operation of law
- A party dies
- Subject matter destroyed
- Illegality
- Condition of offer isn’t met
If an offer stipulates a method of acceptance, may the offeree choose another method?
Yes, if no less advantageous
What is the Postal Rule?
Acceptance is effective when posted, UNLESS:
- it is incorrectly addressed/stamped
- Acceptance by post was not reasonable
- Offer states acceptance is not valid until received
NOTE: Does not apply to email
Is there a presumption when an arrangement is made between family members/friends?
There is a rebuttable presumption that the parties did NOT intend to be legally bound (i.e., no contract formed)
NOTE: If there arrangement is commercial in nature, regardless of their relationship, the presumption is likely rebutted.
Is there a presumption when an arrangement is made in commercial settings?
There is a presumption the parties DID intend to be legally bound, unless there is clear and unambiguous evidence otherwise (e.g., “subject to contract”)
If a minor enters a contract, is it enforceable against the minor?
Generally, the contract is voidable by the minor unless they adopt it when they turn 18.
However, minors can be bound by:
- Contracts for necessary goods and services
- Employment Contracts
If someone without mental capacity enters into a contract (assume not a minor), is it enforceable against them?
Generally, it is voidable by the person without mental capacity ONLY IF the other party knew of their incapacity.
Even then, contracts at a reasonable price for necessities is enforceable.
If someone promises to accept partial repayment of a debt, is this sufficient consideration to be enforceable?
By itself, no.
Exceptions:
- Debt was disputed in good faith
- Claim was uncertain
- Payment is at a different place of time
- Payment is by different means (i.e., goods instead of cash)
- Composition w creditors to all accept than is owed from debtor
When can Promissory Estoppel enforce a contract?
- Promise not to rely on existing legal rights
- Promisee detrimentally relies on that promise
- It would be inequitable for the promisor to renege on their promise
Example: Landlord promised not to reduce tenant’s rent during COVID lockdown. Tenant then uses the extra rent money to buy food and clothes.
When may a 3P enforce a contract? When can they not?
They CAN if:
1. K expressly provides that they can
2. K confers a benefit on 3P with the apparent intent to allow them to enforce it.
- NOTE: Obligation is not enforceable against the 3P, only 3P can enforce
They CANNOT if:
- It is an employment contract
- It is a company’s articles of association
If a 3P has rights under a contract, can the contracting parties change the terms to the detriment of the 3P?
No, if
- 3P has agreed to the term benefitting them,
- 3P has relied on the term benefitting them and the promisor is aware of this, OR
- The promisor should have foreseen the 3P would rely on the term, and the 3P did rely on the term.
What is a “representation”
A term that induces someone to enter a contract.
What is a “term”
A statement of law or fact which is part of the contract.
What are the types of “terms” in a contract?
- Conditions
- Warranties
- Innominate Terms
Conditions v Warranties
Conditions: A term so fundamental it goes to the root of the K.
Warranties: A term incidental to the main terms.
Remedies for breaching a condition v warranty
Breach of a Condition:
- Non-breaching party can terminate the K and sue for damages
Breach of Warranty:
- Non-breaching party can sue for damages.
Remedies for breaching an Innominate Term?
Look at the effect of the breach on the non-breaching party.
Will they lose substantially the whole benefit of the contract? Then breach of condition.
What evidence does the Parole Evidence Rule bar when interpreting a contract? What does it not?
Generally, external evidence CANNOT add to or contradict the terms of a written contract.
The rule does NOT bar introduction of evidence of:
INCORPORATED Terms:
- Inc. terms are ones which the parties had notice of
IMPLIED Terms:
- Implied by statute (CRA, SGSA etc.)
- Industry custom
- Regular and consistent dealings
