LAW 122 Lecture Notes - Lecture 6: Rebuttable Presumption, Contract, Kijiji
30 Apr 2018
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March 7, 2018 LAW122 – Lecture 6
1
CHAPTER 7 & 8: Contracts
Contacts: Essential Elements
• Intention to create legal relations
• Offer
• Acceptance
• Consideration
Contracts and Privity
• Who can sue and be sued under a contract?
Contract Much?
Examples: Buying coffee, taking the TTC, paying for parking → all contracts
What is a Contract?
• A contract is a legally enforceable agreement
Essential Elements of a Contract
1. Intention to create legal relations
2. Meeting of the minds (offer and acceptance) (consensus)
3. Exchange of value (consideration)
Can’t be a Little Bit
• A contract must have all the elements present
o Some will be implied
o Some have a rebuttable presumption
o But you need all three for a contract
• ALL THREE: Intention, Consideration, Consensus
Are oral agreements valid contracts? Or do all contracts have to be in writing?
• Generally, contract does NOT need to be in writing to be legally enforceable.
• NO – Rule
o Handshake, phone call, action, half-written
• YES – Exceptions
o Statute of Frauds (land), Sale of goods, Contracts lasting longer than a year,
Consumer Protection Legislation
Case Study: The Bike
• See this awesome bike? It’s a 2013 Specialized Dolce Elite. Suppose that YOU own this
bike. You’re planning to upgrade to the 2015 model, so you plan to sell this bike. We’re
going to work through some different scenarios about the bike.
find more resources at oneclass.com
find more resources at oneclass.com
March 7, 2018 LAW122 – Lecture 6
2
Case Study #1: Bike, Part 1
Suppose that an acquaintance has agreed to purchase your bike. The two of you have agreed to a
price ($800) and to a delivery date (next Wednesday). You have shaken on the deal. But you never
wrote it down. Does that matter? ANS: Yes, it is a contract.
INTENTION TO CREATE LEGAL RELATIONS
• Rule: Parties must intend to create legal relations
• Objective test: Would a Reasonable Person think that the parties intended to create a
legally binding agreement?
Some Presumptions in Law
• Families/Social: Presume that there is NO intent
• Commercial: Presume that there IS intent
Both presumptions are rebuttable (can be refuted/proved wrong)
Fobasco v. Cogan (1990)
• Facts, Issue, Legal Test, Application → Arguments for and against? Conclusion?
o ANS: Court said no contract here.
MEETING OF THE MINDS (CONSENSUS / OFFER & ACCEPTANCE)
• Must be a meeting of the minds: shared decision to enter into a legal agreement on
specific terms and conditions.
When do the Minds Meet?
• Offer → Acceptance
• Once there is an offer, and an acceptance for the offer, PRESTO! A contract now exists!
Some Terms
Offeror: Person who makes the offer (“Master of the Offer”)
Offeree: Person who receives the offer (Exercises the “power of acceptance”)
A: Offer
• Offer = willingness to contract on stated terms
• Offer must be communicated:
o written document
o oral statement
o conduct
Pro Tip: Risk Management Issue
• Once the offeror communicates the offer, a contract comes into existence as soon as
reasonable notification of acceptance is given to the offeror. Once the contract exists,
neither party can change it unilaterally.
find more resources at oneclass.com
find more resources at oneclass.com
March 7, 2018 LAW122 – Lecture 6
3
• So, making an offer carries risk. What if you change your mind, but the offeree already has
accepted? What if you make the offer to more than one person and they all accept at the same
time?!
B: Managing Risk
What would happen if things like shelf displays, advertisements, and catalogs were considered
OFFERS?
• Invitation to treat = willingness to receive offers:
o person responding to invitation makes an offer
▪ person making invitation may then accept the offer
• Examples: shelf display; advertisements; catalogues
Case Study #2: Bike, Part 2
• Suppose you post the following advertisement on Kijiji:
o For sale: “one sweet ride, 2013 specialized Dolce Elite. Excellent condition; well-
maintained. $800”
• Now suppose that three people texted you, at the exact same time. Do you have one
contract? Three contracts? How much trouble are you in?
• As it turns out, you are in the driver’s seat. Your Kijiji ad is an invitation to treat. And
those three messages to you are all offers. You are the offeree and you have the power
of acceptance.
C: The Life of an Offer
• Remember: Offer turns into contract by acceptance
• But Offer may be terminated before acceptance
Killing the Offer
• Five ways to kill an offer:
1. revocation
2. lapse of time
3. rejection
4. counter offer
5. death or insanity
• EFFECT: Offer is dead and cannot be accepted or revived.
Revocation of Offer
• Revocation = withdraw by offeror
o offeror normally free to revoke at any time with notice to the offeree
• But what if the offeror promised to “hold the offer open” for a set period of time?!
• Outcome depends on whether the Offeree received a firm offer or purchased an option.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Intention to create legal relations: offer, acceptance, consideration. Examples: buying coffee, taking the ttc, paying for parking all contracts. What is a contract: a contract is a legally enforceable agreement. Essential elements of a contract: intention to create legal relations, meeting of the minds (offer and acceptance) (consensus, exchange of value (consideration) Can"t be a little bit: a contract must have all the elements present, some will be implied, some have a rebuttable presumption, but you need all three for a contract, all three: intention, consideration, consensus. You"re planning to upgrade to the 2015 model, so you plan to sell this bike. We"re going to work through some different scenarios about the bike. Suppose that an acquaintance has agreed to purchase your bike. The two of you have agreed to a price () and to a delivery date (next wednesday). Some presumptions in law: families/social: presume that there is no intent, commercial: presume that there is intent.
