Legal Relation, Capacity, Legality, Void and Voidable Contract

Question 1

Intention to create legal relations: Contract specifications

Answer 1

In order to have contract, has to be legal intention on the part of both parties to be legally enforceable agreement

Question 2

Intention to create legal relations: Plaintiff (offeror) and defendant roles (offeree) during trial

Answer 2

It is assumed by offeror or plaintiff, defendant or offeree must rebut its existence

Question 3

Example with Mom and Son having dinner and legal considerations.

Answer 3

Mom invites son over for dinner and promises to make meal. Son accepts but now can’t come fore dinner. Mother sues the son as there was an offer, acceptance and consideration of her making the meal. Up to son to rebut presumption of intention to create legal consequences

Question 4

Example with Mom and Son and loan agreement

Answer 4

Son borrows money from mom, in 20 years mom retires and needs money. Son can say it was a gift as around his birthday.

If you are borrower , keep situation informal

Question 5

Capactity

Answer 5

ability of parties to bind themselves in contract

Question 6

What is required when binding a contract of an individual and what do you assess?

Answer 6

mental competency, assess consequences of making a contract promise and enforceable rights and obligations created with it

Question 7

What if there is no capacity in the contract?

Answer 7

Contract is void

Question 8

Types if incapacity - No Capacity

Answer 8

no ability at all to assess contract, vegetative state

Question 9

Types if incapacity - States of diminished (limited) Capacity x2

Answer 9

Minors
Lunatics and Drunkards

Question 10

Types if incapacity - States of diminished (limited) Capacity - Minors

Answer 10

contract unenforceable/voidable against minor, minor can run away

Question 11

Quantum Meriut Bases

Answer 11

Reasonable Price

Question 12

How can minors be accepted into contract (2)

Answer 12

pay reasonable price for necessary purchases, not contract price. Beneficial contract services like work or with parent/guardian consent

Question 13

Types if incapacity - States of diminished (limited) Capacity - Lunatics and Drunkards -> how is it voidable

Answer 13

Party of drunkard can prove the other party was aware of their condition when signing the contract. Can accept with sober or decline

Question 14

When are Lunatics and drunkards are liable.

Answer 14

They buy for reasonable price, necessary goods. it is unnecessary goods that are voidable

Question 15

Legality of contract

Answer 15

object of contract must be legal

Question 16

Essence of legality of contract

Answer 16

Contract/activities cannot offend offend public policy or violate the law

Question 17

What is the presumption of contact and what if it is wrong?

Answer 17

Presumption is that contract is legal with no violations. If wrong, it was never formed at all

Question 18

Courts:; What if contract is VOID?

Answer 18

court assists parties to prior conditions

Question 19

Courts: What if contract VOID and illegal?

Answer 19

court refuses any assistant to parties with recovery of peroperty

Question 20

Restraint of Trade - Free Open Market and courts preference

Answer 20

Optimal situation of economy so courts don’t like to enforce as diminishes competition

Question 21

Restraint of Trade - Non Competition Clause and examples of competition behaviour

Answer 21

Does not allow employee who leaves a company to create a business that can be direct competitor

Ex: contact previous employees, clients, release private info

Question 22

Impugning a contract

Answer 22

assault, impeach, attack its integrity

Question 23

Plaintiff and defendant roles with Impugning a contract

Answer 23

Plaintiff does nothing, it is defendant who want to impugn the contact as they need to avoid something

Question 24

If contract is valid then ______ is successful

Defendant is successful if they can prove contract is either (3)

Answer 24

Plaintiff

void, voidable or unenforceable

Question 25

Void contract definition

Answer 25

never in law formed at all i.e no contract formed or established

Question 26

Void contract consequence with two parties and title or ownership

Answer 26

Title or ownership doesn't pass under void contract. Party of void contract (A) can apply to court for return of property transferred under agreement to rogue thief (B).

Question 27

Void contract consequence with three parties and title or ownership

Answer 27

Title or ownership doesn't pass under void contract and original holder could recover from innocent third party (C) if got transferred from B

Question 28

What is the innocent 3 party? 1. acronym 2. Name

Answer 28

ISTP4V Innocent Subsequent Third Party for Value

Question 29

What was flawed about Void Contracts with A and ISTP4V

Answer 29

A always gets it back, C can sue B but would rather have the good so A and C competing over only thing that has value

Question 30

What did the equity courts create in regards to this Voidable contract dilemma with Party A, Party B (Rogue thief) and Party C (ISTP4V)

Answer 30

Voidable Contract

Question 31

What happens to the property under courts of Equity and voidable contract? Party C and Clause of Party A

Answer 31

Party C the ISTP4V would end up with property. A can get property by rescinding the contract to make it void before it reaches C (ISTP4V)

Question 32

How to get contract rescinded and made voidable?

Answer 32

informally by communicating that contract is rescinded and sending notice to court. As soon as it is received, it is void.

Question 33

What is the distinction between void and voidable contracts

Answer 33

When an innocent subsequent third party for value is involved (ISRP4V)

Question 34

Void Agreements ABC

Answer 34

no title passes and consequently ISTP4V cannot obtain a good title from a person that obtained the goods under void contract

Question 35

Voidable Contracts ABC

Answer 35

enforced until declared void through rescission. Title can pass through parties. Recipient can transfer to ISTP4V who then obtains the title/ownership even if intermediary acquired by rendering it voidable. A can prevent property title from transferring if they rescind it BEFORE ISTP4V obtains it

Question 36

How can contract be void? (4)

Answer 36

Missing element or uncertain Non est factum (not my mark) Mistakes Error in reading contract/transcript

Question 37

void contract - Missing element or uncertain

Answer 37

offer is too vague in description

Question 38

void contract - non est factum "not my doing or mark"

Answer 38

individuals fooled into enter written contracts when not literate or misled to nature of document

Question 39

void contract - mistakes (2)

Answer 39

error in identity or subject

Question 40

void contract - mistake of identity

Answer 40

thinking you sold to someone else (identity fraud)

Question 41

void contract - mistake of subject matter

Answer 41

You sell something but the party buying thinks what you are selling is different

Question 42

void contract: 3 elements meeting rectification by courts

Answer 42

1. complete agreement between parties and free from ambiguity, and not conditional 2. Parties had no further negotiations to amend contract 3. Change in written document appears to be error in recording and easily explained

Question 43

How can contract be voidable? (4)

Answer 43

Misrepresentation Undue Influence Duress Diminished Capacity

Question 44

Voidable - Misrepresentation manifested contained in the contract also what do purchaser and vendor prefer with the terms

Answer 44

Party misrepresents what contract says. Ex buy a car it has 100,000 miles but u find out it has 200,000 miles Purchaser = any terms recited Vendor= minimal contract with few terms

Question 45

Voidable - Misrepresentation manifested outside the contract

Answer 45

Misstatement that influence decision of party in favour entering contract Example: Negotiations

Question 46

remedies available depend on types of misrepresentation and description (3)

Answer 46

Innocent misrepresentation: party believed information was true it is rescinded Negligent: rescission rewarded with damages Fraudulent misrepresentation: party deliberately attempts to deceive the other party - damages for deceit and rescission

Question 47

Misrepresentation vs statements

Answer 47

false assertion relating to statements of facts and afford remedy VS opinionated statement, no remedy

Question 48

Caveat Emptor 1. Also called 2. How does it work for Buyer 3. How does it work for Purchaser

Answer 48

1. (buyer take care) 2. buyer of goods must take them with their defects unless some fact about their quality has been misrepresented 3. Purchaser investigate and find out more abut product

Question 49

Contracts of utmost good faith (uberimma fides) 1. What is it? 2. What is it the reverse of ? 3. 2 Examples

Answer 49

1. duty for one to give full details about a purchase 2. reverse of caveat emptor 3. Insurance and Securities contract

Question 50

Doctrine of merger and how do we correct it?

Answer 50

warrants cease to exist after closing so we must create a clause to correct this

Question 51

Voidable contract - Undue Influence

Answer 51

domination of one part over the mind of others to deprive the latter of making independent decision. Contract formed by undue influence is voidable at option of victim

Question 52

Voidable contract - Undue Influence 2 elements

Answer 52

1. prove there is a special relationship between victim and dominator 2. circumstances were such that domination was possible

Question 53

Proving undue influence not responsible of dominant party in order to salvage contract the court looks at (3)

Answer 53

1. degree of domination plausible 2. extent of benefit 3. is there independent legal advice

Question 54

Voidable Contract - Duress and examples

Answer 54

illegitimate pressure: threatening physical force or exertion of physical force, economic duress