M3: Contracts

Question 1

What is a contract

Answer 1

agreement between 2+ parties enforceabl in law

Question 2

Does a contract need to be in writng?

Answer 2

NO

Question 3

Qualities of a contract

Answer 3

1. 2+ competent parties (adults not disabled)
2. Mutual Consideration
3. Act voluntarily
4. enforceable judicially
5. not necessarily in writing

Question 4

pros of contracts

Answer 4

CERTAINTY

defines rights and obligations <3 can be specific or general

Binding promises to create certainty so each party receives what they bargained for

Question 5

Why make a contract?

Answer 5

so no need to go through litigation

Question 6

Is every agreement a contract?

Answer 6

NO!

Question 7

What are the legal ingredients of a contract?

Answer 7

1. intention to create a legal relationship: both must want to enter a relationship that binds them in law
2. offer and acceptance: requires one party offr to do something that other part accept the offer
3. Mutual consdieration: both parties should gain some value!
4. Legality: must conform to the law

Question 8

What makes a valid offer?

Answer 8

an offer is a promise to enter into a contract on specified terms as soon as it is accepted

express/implied identification of:
- parties
- product
- price

other stuff can be general

Question 9

what is acceptance?

Answer 9

Accetance: willingenss to enter into a cntract
-> when offer is uncondiitonalyl accepted!

Question 10

how is acceptance communicated?

Answer 10

if specificed method, that method is mandatory! if not specified than any reasonable communication is allowed

Question 10

acceptance can also be indicated by conduct!

Answer 10

not true in every case but typically true

Question 11

MUTUALity of itnention

Answer 11

for contract to arise there must be a meeting of minds on essential terms, consensus ad idem

Question 12

court test for mutuality of intention

Answer 12

REASONABLE PERSON TEST! understand what the parties said to each other and from what they did following contractual formation

Question 13

consideration

Answer 13

both must exchange something of value

Question 14

how dos the court assess consideration?

Answer 14

not HOW much value is exchanged, just any value has exchanged

Question 15

what if one party does not exchange any value?

Answer 15

unilateral contract which is not enforceable agreement

Question 16

gratuitious promise

Question 17

consideration: forebearsnec

Answer 17

a promise NOT ot do something 9something is being exchanged)

contract: if you pay me 10K i wont sure you for brekaing my leg

Question 18

how can offers be terminated

Answer 18

If offer is revoked befre acceptd: no contract

REVOCATION: withdrawl at any time, as long as communicated before it is accepted, contract doesnt exist

LAPSE: offer expires on a specified time, or reasonable amount of time

REJECTION: offerree rejects it! only be accepted if revied by offeror with a new or revised offer. If the offerree rejects it and then later reopens it IT WILL BE A NEW OFFER! NO LONGER THE SAME

COUNTEROFFER: this is an implied rejection! any change of a material term is a counteroffer that changes the offer

DEATH/INSANITY: if either offeror/offeree dies, contract is assumed to be dead. but if deceased was not anticiapted then their estate can continue the contract

Question 19

is not reading the terms of the contract, does the contract become void?

Answer 19

NO! you have to abide it

Question 20

what are exceptions to contracts?

Answer 20

• unequal relationship (balance of power)
• misrepreseentation of details
• defects in the contract etc.

Question 21

what is void vs voidable

Answer 21

VOID: CONTRACT SO FLAWED THAT IT WAS NEVER VALID! did not ever give rights/obligations; typically a statute is against this

VOIDABLE: Contract with a flaw but not a super serious one that voids the whole contract; when it is rescinded then it is treated as if it never existed; reasons: misrepresentation, undue influence, etc.

Question 22

Voidable contract, 2 options:

Answer 22

1. void it: it is treated as not valid from the start
2. ratify it: it is treated as valid from the start, notwithstanding flaw

Question 23

Recission vs repudiation

Answer 23

Recission: validly and lawfully renouncing the contract; parties allowed to treat contract as if it was void from beginning, AND NO ONE IS PENALIZED! parties are entitled to be put in og position pre-contract. THERE MUST BE A PROPER LEGAL REASON

Repudiation: Unlawful renunitaion of a contract that puts you in the wrong/ Basiclaly this is a party without a proper legal basis decides not to be bound by a contract so THEREFORE THIS IS UNLAWFUL

Question 24

minors are not bound to any contracts that could e deterimental to them only bound by contracts for essentials + beneficial contracts of employment

Question 25

3 categories of misrepresentation

Answer 25

1. fraudulent: deliberate intent 2. negligent: only actionable when special relationship between speaker and plaintiff (requries proof of duty of care) 3. innocent: no intent to decieve so no right to claim dMges

Question 26

remedies to types ofmisrepresentation

Answer 26

fraudutent: RESCISSION + DAMAGES negligent: RESCISSION + DAMAGES innocent: RESCISSION IN CONTRACT

Question 27

Mistake + 3 types

Answer 27

mistake may prevent parties reaching an agreement consensus ad idem; even though there is a meeting of the minds 1. Common mistake: same mistake- so void or voidable 2. Mutual: both parties msitaken about a term(s) cuz diff facts; VOID; NEVER a meeting of minds 3. Unilateral: an error made by one party and they dont do anything to enlighten other party

Question 28

Rectification

Question 29

Illegality

Answer 29

1. common law: contrary to public policy 2. statuatory: contrary to statue

Question 30

what contracts need to be in writing

Answer 30

1. contracs dealing with land 2. contracts dealing with guarantees

Question 31

how to manage the risks of unenforceability

Question 32

4 reasons why contractual relationship may end

Answer 32

1. performance: completed contract 2. mutual agreement: b4 contract is formed the parties voluntarily end 3. breach: serious breach may release innocent party from contract 4. frustration: incapable of performance; prevention is force majora clause

Question 33

Performance

Answer 33

- all contractual obligations (express and implied) are carried out entirely - EXACTLY as in the contract - any failure to perform exactly and precisly: can result in damages for breach

Question 34

Mutual agreement

Answer 34

1. end all rights and obligations 2. assign rights/onligations to athird party (transfer of property, interest, or rights from one person to another, like a debtor)-> doesnt require consent of all parties 3. novate rights and obligations under contract (new contract is in place for an exisitng one)-> requires consent of all parties

Question 35

breach of contract: condition or warranty

Answer 35

condition: improtrant term, if breached, gives sinnocent party right to terminate contract and claim damages warranty: minor term, if breached gives innoecnt party right ot claim damages only

Question 36

how many damage types

Answer 36

6 tyoes

Question 37

boilerplate clauses

Answer 37

common clauses that are repeated a lot

Question 38

steps

Answer 38

1. title & intro 2. preamble/recital: explains what contract is about 3. definitions and interoreationsL defined terms 4. body of contract 5. price 6. conditions` 7. representations and warranties 8. boilerplate provisions

Question 39

quantum merit- equitable remdy WHEN NO CONSIDERATION

Answer 39

provide remedy whn no express or implied contract' where work has been preformed Paid reasonable amount

Question 40

offer acceptance and consideration: 3 hallmarks of contract

Answer 40

without this contract doesnt exist

Question 41

promissory estoppel

Answer 41

typically a gratuitious promise is NOT enforceable but... but if one of the parties does actions to their own detriment due to grat promise then a contract exists

Question 42

equitable princples

Answer 42

-quantum meriut -Promissory Estoppel

Question 43

privity of contract

Answer 43

only party to the contrat are bound by it basically 3rd parties like benficiaies cant sue on anothers behalf

Question 44

assignment

Answer 44

benefits in contract being transferred

Question 45

steps to contract law

Answer 45

1. was a contract formed? ->what was the offer, was there acceptance, were parties legal, legal requirements ( see the slide) for case study number 2, it's going to be even easier, because contracts are. Once you identify the issue, you just need to figure out the legal tests and analogy of facts is less relevant, more so. How you go about assessing what happened through the legal test is easier. So. whereas with negligence you were trying to find something more similar in terms of facts here it's even less important because the way the courts apply legal tests and contract principles. You'll see it's it's a bit easier. But identifying the issue. Once you've identified the issue, go to the CD go to contracts, click and view influence, and there it is magic.

Question 46

rules of construction & interpretations

Answer 46

society functions on promises made & promises kept! if contract has offer acceptance and consideration then courts iwll bend over backwards to enforce them There are many rules of construction

Question 47

RoC: Express Terms Implied Terms Ambiguity

Answer 47

-> plain contextual meaning of the words in terms of the contract -> words that arent written but implied by necessity and contract because it is common sense (business efficacy, established custom, previous dealings, stat requirements like sale of goods act) -> 2 ossible interpretations of the law; court allows for additional info (like parole evidence rule)considering full text

Question 48

anticipatory breach

Answer 48

type of breach occurs before