Lecture 3 Flashcards Preview

COMM 304 - Business Law > Lecture 3 > Flashcards

Flashcards in Lecture 3 Deck (30)
Loading flashcards...
1

What is a contract?

-An agreement between two or more capable people for a legal consideration to do or not to do some lawful and genuinely intended act

2

What are the 5 essential elements of a contract?

1. Capacities of the parties
2. Mutual Agreement
3. Genuine Intention
4. Legal Consideration
5. Lawful subject matte

3

What is the capacity of the parties?

Everyone has legal capacity to enter a contract but some special classes are the exception.

4

Who is considered an infant under civil law?

Anyone under the age of 18

5

What are some powers of an infant in regards to a contract?

A contract with an infant is void or voidable at the option of the infant. (unless it is a contract for necessities)

6

What period of time does an infant have to void a contract?

An infant has the right to void a contract until he reaches the age of the majority and therefore for a reasonable period of time (Depends on the circumstances)

7

Whats the exception that an infant cannot void a contract?

When the constract is for necessities meaning anything that is befitting to the infants station of life.

8

What are some necessaries?

Food, shelther, clothing
By necessary, that what is befitting the infant's station in life. The life style that an ifant is accustomed to.

9

Are parents legally responsible for the wrongdoing of their children?

No, if the parents are not in control of their child.

10

What is the exception to the rule of the parent not being legally responsible for their child?

If the parent is in direct control of the child at the time of the incident and the parent knows that the child has the propensity (likelihood) to commit the unlawful act

11

What two things need to be proved to void a contract of mental incompetence?

1) Have to satisfy a court that person was mentally incompetent, intoxicated by alcohol and/or drugs
2) the other party knew that the person was mentally handicapped or influenced by alcohol or drugs

12

What is an alien?

A person who is not a citizen of canada

13

What are the parameters of a contract with an alien?

We do not distinguish aliens in this country and contract is lawful

14

What is an enemy alien?

Person of another country that canada is in a declared state of war with

15

What are the parameters of a contract with an enemy alien

-Contract is both unlawful and illegal
Unlawful: Conrary to the law
Illegal: Would be an offence, criminal offence

16

What are the three different methods to carrying out a business?

1. Sole proprietorship
2. Partnership
3. LLP (limited liability practice)

17

What is a sole proprietorship?

One person owns the entirety of the business. This person may have employees, may share profits with said employees.

18

What are the advantages of a sole proprietorship?

1. Simplest form of business
2. Have final say in what you want done
3. Least expensive to establish

19

What are the disadvantages of a sole proprietorship?

1. Strictly on your own
2. Personally liabile
3. Must pay all debits individually

20

What is a partnership?

When two or more persons carry on a business in common in the view towards sharing of profits

21

What are some disadvantages of a parternership?

1) Joint and several liability
2) if one partner does something wrong, all parters are legally liable for the partners actions (can be sued for the action of one)
3) If someone is wronged by a partner they will usually go after all the partners because they don't know who holds the money
4) if is a personal liability so personal assets can come under attack too (not just partnership assets){

22

whats a limited partner?

A party that is not involved in any part of actually running the business. Only limited to investing money. No advising in business policy, no signing authority, etc.

23

When does partnership end?

1) Death of a partner
2) one partner advices that he is leaving
3) court order

24

What can a partnership agreement do?

-If one partner causes a loss or injury then that partner will be solely responsible for the loss.
-When a public person sues all four partners in the partnership the other partners can sue the partner that got them sued in the first place

25

What does a buy-sell agreement do?

1) provides the other partners with an opportunity to buy out any partner that wants out fo the firm or dies
2) if a partner dies their spouse will get their share of assets and the partnership dies
3) the deceased portion is bought out byt he other partners from the wife and split (sold) between them

26

What is a corporation?

-An artificially created person (made up of shares)
-a legally entity unto itself

27

What does corpus mean?

Person in latin

28

What must a corporations name end in?

1) corporation
2) company limited
3) limited
4) Ltd
5) Corp.
6) Co. Ltd
7) Inc.
8) Incorporated

29

What are the 3 areas of law in a master and servant relationship?

1) Employee > employer
2) owner > contractor
3) principal > agent

30

Whats a Fiduciary Relationship (Uberrima Fidei)

-Agent must always act in the est interest of the principal
-Relationship of trust