Class Notes (837,427)
Canada (510,272)
MGSC30H3 (54)
J.Rybak (11)

Law Notes Overview.doc

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Management (MGS)

Law Notes Overview Elements of a Valid Contract: - Consensus Ad Idem o Meeting of the minds – all of the parties must have the same understanding of the object or subject of the contract o Key problem when there is a misrepresentation or a mistake - Certainty of Terms o Specification of the terms to ensure understanding of the object or subject of the contract - Intention o There is the presumption that there is always the intention to form a binding legal relationship; if there was no intention, it must be proven otherwise o Ads and family promises are not included - Offer o Must consider if it is an actual offer to a contract or an offer to do business o Offer must have been communicated to the offeree before it can be accepted o Offers can be made to the public but the party who accepts it must have been aware o Revocation of an offer must also be communicated to the party accepting the offer  Does not need to be in any special way, as long as they are aware  Reliability of the source is questionable o Holding an offer open means nothing unless there is consideration  Ex. Promise to hold the offer open means nothing unless there is consideration o Lapse of an Offer by: bankruptcy, death, insanity, departing from negotiation, or any explicit revocation - Acceptance o Acceptance can only happen as a “yes, I accept;” anything else is considered to be a counter offer and the original offer will become non existent o Acceptance may be communicated in any way that is mutually acceptance o But if a method if communication is defined specifically, no other means is acceptable o Unilateral contracts: when acceptance and performance are the same act - Consideration o Consideration must flow in every party in the contract o Essentially it means the benefit that is received from the contract – can pretty much be anything o Court will not question the value of the consideration as long as there is some present  Ex. $1 for a Car – Okay; $1 for $1000 – Not okay; Different value o Some contracts may not require considerations:  Gratuitous services  Exchange of Debt  Donations • Limited enforceability  Contract under Seal • A contract under seal is free from the analysis of consideration • It is automatically binding, and this the consideration aspect must have been met • The seal itself isn’t the consideration but it secures it o Past Consideration: considerations that was already exchanged prior to a contract is not consideration for the purposes of the current contract o Quantum Meruit  Where a service was performed with expectation of payment, but payment was not explicitly discussed, two outcomes: • The court will enforce the payment for the amount discussed after the service was provided • Court will enforce the payment that is equal to fair market value o Promissory Estoppel  Once promised the consideration in value or in material, can’t go back to change it even if under gratuitous promise or under good faith  Consideration was impaired due to own detriment at first  Can be used as a shield and not a sword but must: be gratuitous, the party relied on the promise, promising party cannot sue to enforce the original right - Capacity o An issue when one or both party entering into the contract does not have the requisite capacity at law to do so o If it is possible for this person to fain full capacity at a future point, the contract is considered voidable at the party’s discretion o Window to escape the contract closes after the person regains capacity and does nothing about the contract o People who will never regain capacity may not enter into binding agreements o Minors:  Valid contracts for necessities of life – food, shelter, education  Other contracts are voidable at the minor’s discretion o Drunks:  No exception for immediate performance and necessities  Window to repudiate is quire short, once the capacity is regained - Legality o Void: Not a valid contract and will not assist in the undoing o Voidable: A valid contract, but can be void under one or both party’s discretion o Illegal: Courts will not assist in any way  Courts will redraw the contract through the blue pencil rule – only strike out clauses and not redraft the contract - Restraint from Trade: o Non compete agreements from sale of business o Non compete agreements from prior employment Contracts cannot have or be: - A mistake o Refers to essential misunderstanding of the nature of the contract, or about the law, or the errors in drafting o Mistakes in Drafting:  Drafting in this sense refers to any way the contract was expressed – verbally or written formally or informally  If terms are interpreted as reasonable: the court will enforce the contract  If the terms are unreasonable: the court will either correct it or void the contract o Mistakes of Law or Facts  Treated the same  Ex. The object of the contract no longer exist  Ex. One party may not be who they claim to be when writing the contract o Non Est Factum:  A defence for those who have been misled regarding the nature of the document they are signing  Must have tried alternatives to try and under the contract before this defence may be implemented o Unilateral Mistake:  Mistake made by either one or both party where only one party is mistaken and the other party is aware of this  Courts will usually not enforce the contract o Mutual Mistake:  Mistake where both parties are mistaken, or one party is mistaken and the other is unaware of this  Usually not enforceable  Obvious errors may lead to the contract to be rectified o Remedies to Mistakes:  Rectification is possible if the contract does not affect the true and actual meaning of the agreement o Mistake in Assumption  EXPLAIN o Mistakes and Third Parties:  Essentially comes down to who was in a better position to identify or defend against the fraudulent act - Misrepresentation o Parties of the contract must have equal bargaining power o A statement made that isn`t true o Innocent – the party making the statement believes it is true o Negligent – the party making the statement is careless of making the statement o Fraudulent – the party making the statement knows it is untrue and is trying to deceive o A material misrepresentation under innocent would lead to possible
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