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Lecture

MGSC30H3 Lecture Notes - Estoppel, Specific Performance, Condition Subsequent


Department
Management (MGS)
Course Code
MGSC30H3
Professor
J.Rybak

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Law Notes Overview
Elements of a Valid Contract:
- Consensus Ad Idem
oMeeting of the minds – all of the parties must have the same
understanding of the object or subject of the contract
oKey problem when there is a misrepresentation or a mistake
- Certainty of Terms
oSpecification of the terms to ensure understanding of the object or
subject of the contract
- Intention
oThere 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
oAds and family promises are not included
- Offer
oMust consider if it is an actual offer to a contract or an offer to do
business
oOffer must have been communicated to the offeree before it can be
accepted
oOffers can be made to the public but the party who accepts it must have
been aware
oRevocation 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
oHolding an offer open means nothing unless there is consideration
Ex. Promise to hold the offer open means nothing unless there is
consideration
oLapse of an Offer by: bankruptcy, death, insanity, departing from
negotiation, or any explicit revocation
- Acceptance
oAcceptance 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
oAcceptance may be communicated in any way that is mutually
acceptance
oBut if a method if communication is defined specifically, no other means
is acceptable
oUnilateral contracts: when acceptance and performance are the same
act
- Consideration
oConsideration must flow in every party in the contract
oEssentially it means the benefit that is received from the contract – can
pretty much be anything
oCourt 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
oSome contracts may not require considerations:
Gratuitous services

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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
oPast Consideration: considerations that was already exchanged prior to
a contract is not consideration for the purposes of the current contract
oQuantum 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
oPromissory 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
oAn issue when one or both party entering into the contract does not
have the requisite capacity at law to do so
oIf it is possible for this person to fain full capacity at a future point, the
contract is considered voidable at the party’s discretion
oWindow to escape the contract closes after the person regains capacity
and does nothing about the contract
oPeople who will never regain capacity may not enter into binding
agreements
oMinors:
Valid contracts for necessities of life – food, shelter, education
Other contracts are voidable at the minor’s discretion
oDrunks:
No exception for immediate performance and necessities
Window to repudiate is quire short, once the capacity is regained
- Legality
oVoid: Not a valid contract and will not assist in the undoing
oVoidable: A valid contract, but can be void under one or both party’s
discretion
oIllegal: 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
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