Law Final Exam Notes 24 Pages including most of the information for the final exam.

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Published on 16 Oct 2011
School
WLU
Department
Business
Course
BU231
Law Final Notes
Chapters 11, 12, 13, 14, 15, 17, 19, Bardal v. Globe & mail. Peoples vs. Wise
20, 26, 27, 28, 29, 33 & 34
Interpretation: What does the contract mean? Chapter 11
Ex. Burrito is not a sandwich
A contract stating no other renters that do what I do such as no Burritos in a mall. The court found that a
burrito shop is different from regular sandwich shops.
Relationship Between Formation and Interpretation of Contracts
When two sides disagree they can either realize that the original terms were too ambiguous for
acceptance, and thus void, or concede different meanings
In construing we are not dealing with fraud or deceit, each party believes their interpretation of
the contract is correct and the other party is wrong
Strict Approach- You need the plain dictionary definition in English
- Does it say bread with filling or two pieces of bread
Liberal Approach: subjective, what do the parties mean by a sandwich.
Trade usage: specific definitions for that industry.
Contra preferentum- against preference
New CPA in favour of consumer S.11
Business assumed to draft contract well, Judge goes with consumer who had nothing to do with it
If one side wrote the whole contract, then we should favorably rule towards the person with no
input,
Implied terms- reasonable & custom, Sale of Goods Act
Sale of Goods Act:
Sell fixed products
Caveat Emptor buyer beware: after sale of good- buyer cannot return for defects
Implied conditions & warranties
o Title s.13
o Description s.14 have to sell you what you ordered by description
o Quality s.15 -not used or defective
o Sample s.16 don’t have to only see the sample, you can look at the product
o Role of exemption clause s.53
If a party seeks to rely on one it should be brought to the attention of the other party
Likely to be upheld if it is industry practice
When dealing with the public sufficient notice needs to be given
Contra preferentum will apply
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Parol Evidence- prevents a party to a written contract from presenting oral evidence that contradicts or
adds to the written terms of the contract that appears to be whole.
Information about negotiations outside the written contract
Ex. Earlier drafts of the contract, previous offers, letters, emails, phone messages
According to this rule, a party cannot later add a term previously agreed upon between parties but
not included in the final form of the contract
This is often used to prove misrepresentation, duress, mistake...
Surrounding pieces of evidence- documents, phone calls... things that help judge pick 1 of the
stories
Exceptions:
Written contract is not the entire agreement
Outside term is a collateral
Condition precedent to the contract
Does not exclude evidence about the legality of the contract, the capacity of the parties, mistake,
duress, undue influence or fraud. Why? Because these involve only the circumstances, not the
written document itself
How does the parol evidence rule fit with the law allowing implied terms?
Exception clauses:
If a party seeks to reply on one it should be brought to the attention of the other party
Likely to be upheld if it is industry practice
When dealing with the public sufficient notice needs to be given
Contra preferentum will apply
Contra Preferentum is a rule of contractual interpretation which provides that an ambiguous term will
be construed against the party that imposed its inclusion in the contract or, more accurately, against
(the interests of) the party who imposed it. The interpretation will therefore favour the party that did not
insist on its inclusion.
Condition precedent is any set of circumstances or events that parties stipulate must be satisfied or
happen before their contract takes effect
Doesn’t need to be in writing, even if it falls within Statute of Frauds or Sale of Goods Act
If the party claiming that a condition precedent was agreed on and not met can produce evidence
to support the claim, a court will recognize it and declare the large written contract void
Implied Terms
Second approach is to consider whether the intention of the parties can be achieved only by
acknowledging the existence of an implied term
An implied term is a term not expressly included by both parties in the agreement, but would have
reasonably included had they thought of the potential for problems in the future
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Who Can I sue? Chapter 12
The people who made the promises
The parties of the contract
This relationship between parties to a contract is called Privity of contract
Limits on the Scope of Contractual Rights and Duties
o General rule is that a contract does not confer any benefits or impose any obligations on a
stranger to the contract
o To succeed in an action in contract, the plaintiff must prove privity of contract with the
defendant must show they are both parties to same contract
B cannot enforce C’s promise because there is no privity of contract between them… promise exists
between A and C.
If C doesn’t pay, then B can only sue A who consequently sues C for failure to carry out promise.
Argument against permitting a third person to sue on contract is that she has not given consideration for
the promise.
Liability of Sellers of Goods
If a mother buys a can of poisonous salmon that harms her and her family, only she can
successfully sue the merchant for breach of implied term (contract), rest of the family has no
privity of contract and cannot recover damages
Rest of the family as well as the mother could use tort law in a case of negligence against the
manufacturer, but not the merchant
Exceptions to the Privity Rule:
Tort- use tort whenever you do not have Privity to the contract
Vicarious performance- someone else does the work for you
o Promisor can’t escape liability to the promisee by imposing a substitute for himself without
consent of promise
o Need to undergo novation and assign liability with all in agreement
o You may pass on work vicariously only when personal performance is not the reason why
the promisee entered into contract originally
Novation- occurs when parties to a contract agree to terminate the original and substitute a new
contract
o Ends the contract - A tool around Privity rule to kill an old contract
o Replacing yourself out of the contract with a different party
A
B
C
Owed Debt
by A
C offers to
pay debt for
A
A owes B, offers
work to C in
exchange for
paying debts
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Document Summary

Chapters 11, 12, 13, 14, 15, 17, 19, bardal v. globe & mail. A contract stating no other renters that do what i do such as no burritos in a mall. The court found that a burrito shop is different from regular sandwich shops. When two sides disagree they can either realize that the original terms were too ambiguous for acceptance, and thus void, or concede different meanings. In construing we are not dealing with fraud or deceit, each party believes their interpretation of the contract is correct and the other party is wrong. Strict approach- you need the plain dictionary definition in english. Does it say bread with filling or two pieces of bread. Liberal approach: subjective, what do the parties mean by a sandwich. New cpa in favour of consumer s. 11. Business assumed to draft contract well, judge goes with consumer who had nothing to do with it.

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