Contract Law

Contract Law

1. Formation of a contract

   • Offer
     • A tentative promise made by one party, subject to a condition or containing a request to the other party
     • Standard Form Contract
       • Take it or leave it
       • No room for negotiation
       • Fast and efficent
       • unexpected terms
         • must be pointed out
     • Counter offer
       • It is not accepted must re offer
   • Acceptance
     • Must be communicated to the offeror either by word or by conduct
     • Revocation
       • Can revoke offer anytime up to acceptance
     • Lapse
       • There is a deadline for the offer
     • Reasonable communication method
     • Jurisdiction
       • Determining where offer was accepted to know what laws to follow
   • Consideration
     • Price paid for contract, not always money
     • Gratuitous Promise
       • No consideration = no contract
     • Past Consideration = no contract
     • No new consideration = no new contract
     • Equitable Estoppel
     • Seals
       • Promise, no consideration needed
   • Intention
     • Reasonable bystander test
       • Did the outward conduct of the parties lack a serious intention to create legal obligations?
   • Capacity
     • Minors
       • Contracts are enforceable by them but not against them
       • Necessaries are enforceable
     • Mentally Incompetent
       • Treat like minors
     • Corporations
     • Labour Unions
     • Enemy Aliens
     • Aboriginal People
     • Bankrupts
   • Legalty
     • Object of contract must be legal
   • Certianity
     • Vague
     • Incomplete

2. Rescission

   • Mistake in terms
     • Typo
     • When reducing terms to writting
       • Rectification if:
         • No further negotation
         • complete agreement
         • No changes to written document
     • Ambiguity
   • Mistake in assumptions
     • Refers to subject matter of contract
   • Mistake in identity
     • involving fraud
     • Involvement of an innocent 3rd party
   • Non Est Factum
     • Not my deed
     • reliance on another persons word
   • Misrepersentation
     • A statement/representation made during negotiation of a contract, before formation of the contract, that turns out to be false
     • Elements
       • 1. statement made
       • 2. statement is false
       • 3. intent/Duty of care
       • 4. reliance on statement
       • 4. Caused harm
   • Omissions
     • duty of utmost good faith owed
       • Fiduciary
       • Insurance
       • Clients
       • Partnerrs
   • Undue influence
     • The domination of one party over the mind of another to a degree they cant make an independent decision
       • special relationships
       • Dire circumstances
       • Prosecution of family member
       • Unconscionable contracts
     • Burden of proof
       • 1. Domination over other party
       • 2. Contract is unfair to weaker party
   • Duress
     • Actual or threatened violence or imprisonment as a means of coercing a party to enter a contract

3. Requirement of writing

   • Statue of frauds
     • Promise by an Executor of an Estate to pay a debt of the estate
       • makes a promise to a creditor of the estate to pay the creditor personally
     • Guarantees
       • A conditional promise to pay the debt only if the debtor defaults
     • Payment by a third party for the Miscarriage of another
       • If a 3rd party agrees to pay ONLY if the other party defaults, then it is like a guarantee and must be in writing to be enforceable against the 3rd party
     • Agreements made in consideration of marriage
       • Today contracts relating to marriage are governed by Family Law Legislation
     • Ratification of Infant’s Contracts
     • Agreements not to be performed by either party within one year;
     • Contracts relating to Land
   • Memorandum
     • Names; subject matter; Consideration (with the exception of a guarantee); Payment details; and Signature of the paying party. NB Signature of the defendant must be present in order to be able to sue under the memorandum
   • Doctrine of Part Performance
     • Has to be a contract concerning land
     • Acts of performance have to clearly indicate the existence of a contract respecting the land in question

4. Privity of Contract

   • Novation
     • termination of one contract and the creation of a new contract with the same or similar terms to introduce the 3rd party to the contract
   • Vicarious Performance
     • Where a 3rd party performs on behalf of the promisor who remains responsible for proper performance
   • trusts
     • Where property has been transferred to a person who administers the property for the benefit of another
   • Exceptions
     • Insurance
     • Undisclosed
     • Contracts concerning land
     • Colleteral Contacts
     • Exemption Clauses
   • Assignment Of rights
     • A transfer by a party of its rights under a contract to a third party
     • Equitable Assignment
       • all 3 parties must be made party to the legal action
     • statutory assignment
       • The assignment was absolute (unconditional and complete); and It was in writing; and The promisor received notice of it in writing,
     • Notice to the promisor

5. Discharge of contract

   • Discharge by Performance
   • Discharge by Agreement
     • Substituted Agreement:
   • Contract Provides for its Own Dissolution
     • Condition Precedent:
     • Condition Precedent:
     • Option to Terminate
   • Discharge by Frustration
     • Self-induced Frustration

6. Breach of Contract

   • Minor Breach
   • Major Breach
   • How it occurs?
     • Express Repudiation
     • rendering performance impossible
     • failure to perform or tendering inadequate performance
   • Doctrine of Substantial Performance
     • Performance that does not comply in some minor way with the requirements of the contract
   • Exemption Clauses
     • 1.) Interpretation of Exemption Clauses; 2) Unconscionable Clauses; and 3) Public Policy and Public Interest