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Department
Law and Business
Course
LAW 122
Professor
Asher Alkoby
Semester
Fall

Description
CHAPTER 7: CREATION AND NATURE OF CONTRACTS ELEMENTS OF A CONTRACT: ACCEPTANCE (P.171)  Meeting of minds (shared decision to enter on legal terms) 1. By Promise (P.171)  Exchange of Value (both gave up something)  Bilateral –Promise for promise  Offer & Acceptance  Cross offer –“I will sell” “I will buy” (only OFFERS)  Intention to create (assume none for family and friends)  Silence (P.172) –Alone cannot be acceptance  Consideration  At a distance General Rule –Instant comm. Effective when and where received by offeror NOT CONTRACTS:  POSTAL RULE:  Finding abandoned property or received gift(s) a) Non-Instantaneous: Contract FORMED when dropped letter in mailbox NOT when OFFER (P.166) received b) Instantaneous: Contract FORMED when  Invitation to Treat (willingness to receive offers)  ONLY INVITATION: Display on store shelf, price tag, acceptance heard NOT when spoken Newspaper ads, Catalogue, Pre-approved! 2. By Performance (P.176)  YES OFFERS: Ad w/ ltd qty., Signing credit app, ordering food, sitting down @ barber shop  Unilateral –Offeree promises pay for when an act is FULLY performed with INTENTION of accepting offer LIFE OF AN OFFER (P.167) 1. Revocation (P.167-168) –withdrawal from party who  Offeror is entitled to revoke his offer any time made offer (anytime) before acceptance  Cannot revoke offer if in process of accepting  Firm Offers –offeror promises to hold offer open for acceptance for x time period (not enforceable by law) DETERMINING IF CONTRACT EXISTS:  Intentions using “Reasonable Persons Test” –Doesn’t matter  Revoke any time (exception: seal or paid)  Option –paid for binding promise to hold open what the parties are thinking  Tenders –offer to take on project on terms  Ie. Reasonable person wouldn’t know x was secretly ... i. Cannot withdraw 2. Lapse of Time (P.169) –open for reasonable time period  Subject matter  Nature of the agreement (ie. Mail? Email?)  Instability of the market  Usual practice in the industry. *Put time limit and say which method to accept by* 3. Death or Insanity (P.169) –Dies with person unless he/she not needed to perform personally 4. Rejection (P.169) –offeree rejects offer made by offeror 5. Counter Offer (P.170) –any attempt to modify terms  If counter offered and offeror rejected, cannot go back to original  Exception: battle of the forms –enter on own standard form document i. Usual practices ii.Past Dealings iii.Forms actually signed CHAPTER 8: CONSIDERATION AND PRIVITY CONSIDERATION (P.184) PRIVITY (P.194)  Gratuitous Promise –promise to give something which Exceptions: is nothing of legal value 1. Assignment (P.195) –transfers rights to 3 party o “I’ll give you a computer” but can’t force me to  Equitable –done orally or written, no consent  Consideration –Party gives/promises to give benefit to form debtor needed someone (doesn’t have to be to the signing party) or  Subject to the equities –debtor uses same suffers/promises to suffer themselves defences against assignee as with assignor i. ALWAYS can rely on same contract 1. Sufficient Consideration (P. 184) –almost anything of ii. ONLY rely other if transactions with value (ie. Give up smoking, drinking, swearing assignor took place BEFORE notice o Exceptions: love, kind, caring affections received from assignee 2. Adequate Consideration –same value as other  Statutory (P.198)–conforms to rights of statute consideration i. Must be written o Forbearance to Sue –promise not to start ii. Written notice to debtor of change lawsuit iii.Must be absolute; assign assignee with 3. Past Consideration (P. 187) –something party did SAME amount of debt before creation of contract = no consideration at all  By Law –Death or bankruptcy o Mutuality of Consideration –each party must  Vicarious Performance –arranges stranger to provide consideration in return for other’s c. perform obligations 4. Pre-existing Consideration (P.188) –Obligation existed 2. Trusts (P.199) –One person holds property on behalf of but wasn’t performed yet another party a. Public Duty –CANNOT be used  Used to avoid privity doctrine b. Owed to 3 Party –CAN be used for 2C’s 3. Statute –exceptions created to allow strangers to enforce c. Owed to same party –CANNOT be used promises i. Nothing new given  ie. Life and auto insurance ii.Novation –fuck old one, create new 4. Employment –employees can rely upon exclusion clause reflecting unexpected change despite lack of privity  Promise to Forgive an Existing Debt (P.191) 5. Himalaya Clause –special term protecting 3 party o Enforceable if: beneficiary from liability  Paid by cheque not cash  Leads to new contract to benefit handlers  Accept lower amount sum if under  Extends liability to handlers  Carrier = agent connecting owner to handlers seal and if debtor gives something new in exchange (ie. Plus a car) o Using statute requires:  Part performance (part of debt must have been paid)  Cannot be unconscionable -bitch, had enough money but didn’t pay PROMISES ENFORCABLE WITHOUT CONSIDERATION (P.192) 1. Seals –bound by terms even if other party gave no consideration  Ie. Guarantees  Any form BUT has to be put @ time parties sign 2. Promissory Estoppel –prevents part from taking back promise that other has relied upon  Requirements:  Representor making promise cannot enforce legal rights against representee  Tee must have relied upon statement  Tee can’t be guilty of pressuring Tor  Must have legal relationship; if not, grat. Promise cannot be enforced even if relied CHAPTER 9: REPRESENTATION AND TERMS PRE-CONTRACTUAL VS. CONTRACTUAL STATEMENTS TYPES OF MISPRESENTATION (P.215) Pre-contractual Rep [MISREP]: words/conduct to LURE other 1. Innocent into contract; about existing fact  Carefully made w/o knowing it was false Contractual Term [BOC]: legally enforceable obligation  Remedy: Recission (only if there was a big diff. b/w (promissory); promising about future performance what they bargained for vs. what they actually got) 2. Negligent (P.216) MISREPRESENTATION  False statement made carelessly just to get into c Misrepresentation: false statement of existing fact  Remedy: Recission or damages (past/present) causing other to enter contract 3. Fraudulent  Knew it was false, had no reason to believe it was NON Factual Statements FACTUAL Statements true, made it w/o regards to truth  Remedy: Recission or damages  Opinion  Expert opinion  Describing future  Describing present (punitive/compensatory) intentions intentions  Statements of law  Stating consequences of CONTRACTUAL TERMS (P.217) law 1. EXPRESS TERMS  Reasonable person would believe party intended to  Silence as Misrepresentation (P.211) 1. Duty to disclose changes if it affects accuracy of create enforceable obligation(s) previous statements  Proof: o Oral Contracts 2. Telling ½ Truth 3. Duty of Utmost good faith (ie. Insurance contracts)  Courts decide who to believe  Binding even if: (1) NOT in writing 4. Special relationship (ie. Accountant, lawyer) and (2) ALL conditions of contract 5. Disclosure required by statutory provision o Insurance contracts met o Written Contracts (P.217) o Domestic contracts  Terms cannot be changed using oral o Security Laws 6. Facts hidden purposely (ie. Structural damage) evidence (Parol Evidence Rule)  Exceptions: o Fix/correct mistake  Proving that false statement induced contract: o Been 1 factor that misled party into contract o Proving existence o Solving things don’t make (doesn’t have to be the only factor)  NOT actionable as a misrepresentation if: sense o Didn’t affect party’s decision o Agreement wasn’t complete o Party had independent inquiry work done  Collateral Contracts –separate contract made in exchange to get LEGAL CONSEQUENCES OF MISREPRESENTATION (P.213) other party into main contract 1. RECISSION (P.213)  Interpretation (P. 218-219):  CANCELLING contract and putting parties back into a. Literally b. Contextually –beyond 4 corners pre-contractual state  ONLY CONTRACTUAL CONSEQUENCE OF MISREP! c. Golden Rule –plan, ordinary meaning  To judge’s discretion d. Contra Proferentem Rule: least favourable writer  Order of Restitution (P.214)–giving my shit back and you can take your crap back! 2. IMPLIED TERMS  NOT available if (P.214-215):  Put by law (ie. Common law/statute) o Affirmation –misled party wants to carry  Implied by Court (P. 220) only if: on with contract/acts as if they were o Obvious consequence of contract bound by it still (you do nothing about it) o Effectiveness of business usefulness o It’s friggin impossible! –Already used the o Standard practice in area shit o NOT FOR: improving contract sake o Unavailable –3 Party involved (ie.  Implied by Statute (P. 220-221) –automatically put in Tenants) unless party stated expressively to exclude it (default rule) 2. DAMAGES  Giving money for loss suffered from relying on misrepresentation  Claiming in TORT not CONTRACT STANDARD FORM AGREEMENTS (P. 221) BOILERPLATE CLAUSES (P. 226)  Mass produced docs for repeatedly done transactions  Exclusion (P.226)  Exclusion Clauses/Limitation Clause/Waiver OK if: o Enforced using true meaning only if fair a. Clear, unambiguous language (not literally,  Force Majeure (P.228) won’t be given meaning least favourable) o Protect parties when part of contract can’t be b. Reasonable notice of term and effect performed due to uncontrollable event c. Party agreed (ie. Signature) o Broadly defined to include various possibilities  Ticket Contracts  Confidentiality (P.228) o Must be brought to customer’s notice before o Prevents disclosure of information to 3 party or when contract is made o Defined narrowly as specific as possible o Reasonable person must have known its there  Arbitration (P.229) but it doesn’t matter if they read it or not o Who solves a dispute and using what method?  Signed Forms o Clear Manner, Split of expenses, number and o Bound by signature (doesn’t matter if party qualifications, procedure, confidentiality read it or not) unless other party is a snake! (e.Jurisdiction (P.229) Puts terms in small as writing in the bottom o Place of court and whose law applies corner) o Ie. Ecommerce, single jurisdiction cases o Use plain language... don’t be extra! (P.225)  Entire Agreement (P.330) o Ensures none of exceptions of parol evidence rule can be used to defeat written contract CHAPTER 10: CONTRACTUAL DEFECTS INCAPACITY TO CONTRACT (PG. 237) ABSENCE OF WRITING (P.242)  Capacity: legal power to give consent  MUST be in writing (P.243):  Guarantees 1. PERSONAL INCAPACITY  Sale of Land (ie. LT lease of land)  Minors (P.237-238)  Not to be performed within 1 year o Choices:  Agreements made by minors upon reach AOM  Elect to avoid liability if voidable  Promises by admins to be liability for debts of a  Give back benefits testator/intestate  Within reasonable time  Upon consideration of marriage  Assignment of express trusts  Carry out c = binding obligations o Unavoidable contracts:  Creation of trusts of land  Food, clothing, education, medical,  LT leases (3+ years)  Health, fitness, diet, modelling, talent, martial arts, legal advice (all to their benefit)  Employment contracts to their benefit sports, dance (or else cannot accept/give payment) o Voidable contracts:  NOT have to be in writing:  Made with friends or family  Indemnity –unconditional promise to assume  Made with another minor another’s debt completely  Even if other party didn’t know age o Cannot demand money unless in writing  Mental Incapacity (P.238-239)  Repair building o All voidable/unenforceable if declared by court  Room and board or if they lack mental capacity at time contract was formed MISTAKES (P.246) o Voidable only if other party recognized mental 1. PREVENTING CREATION OF CONTRACTS (P.246-247) problem  Mistaken Identity  Intoxication (P.239) o Only rendered if: o Voidable if:  Mistake known to other party  So drunk; didn’t know OR appreciate  Material mistake –matters to party in an
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