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Examples of Fact Situations - Requirements of Form and Writing-.doc

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Administrative Studies
ADMS 2610
Jack Furman

CHAPTER 9 - LEGAL CAPACITY A: MINORS: Learn generally about contracts for necessaries and contract for non- necessaries. B: Drunken and Insane Persons: Same as for Minors C: Corporations, Labour Unions, Bankrupt persons: Learn generally D: Illegal Agreements: disregard E. Licenced persons: Learn. F. Contracts void for public policy: See my posting on Void, Voidable and unenforceable contracts. CHAPTER 10 – THE REQUIREMENTS OF FORM AND WRITING ETC… For your purposes there is no distinction between a formal contract and a simple contract. For exam purposes simply consider that a contract can be oral, written or implied. A: The Statute of Frauds: Note: This statute imposes a stringent requirement that the contract be in writing for certain types of contracts. If the contract is not in writing, although a contract exists, it will not be enforceable by the courts unless an exception to the written requirement can be found. For your purposes, please learn the sections on the Guarantee and Contracts Concerning Land. Review generally the other sections. 2 B: Requirements for a written agreement: Generally speaking the important requirements of any written agreement are: (a) a description of the parties (they must be identified); (b) the subject matter of the contract or agreement (which should also be set out with clarity); and (c) the consideration or price to be paid by one or both parties, whether it be money or an act to be performed. (d) that it be signed by each of the parties. C: The Parole Evidence Rule: This is a rule that is usually applicable to a written agreement which is said to contain all of the terms of the contract. The rule states that parol evidence (evidence outside of, but relating to the agreement) will not be admitted to add to, vary or contradict the terms of a written agreement. However, the rule will not apply and parole evidence will be allowed: (i) if there is an alleged problem with the formation of the contract, for example, where one party alleges fraud or asserts that there has been a mistake; (see under Mistake and Misrepresentation) (ii) if the contract is intended to be partly oral and partly in writing; Example 1: A, a person, was negotiating to rent a flat in B's house. During their negotiations A told B that if he took the flat, he was to have use of two basement rooms for the storage of his surplus furniture and also use of the garden. Subsequently, a written agreement was drawn up for the lease of the flat which made no reference to either the storage rooms or the garden. The court held that the oral agreement (negotiations) should be read with the written contract so as to form one comprehensive contract. Example 2: The plaintiffs were growers of oranges in Spain and 3 the defendants were shipowners. The Plaintiffs wished to export their oranges to England and shipped them to the defendants' vessel relying on the oral promise by the defendants' agent that the vessel would sail straight to London. In fact the vessel went first to Antwerp, so that the oranges arrived late in London and the plaintiff's lost a favourable market. When the plaintiff's claimed damages for breach of contract, the defendant owners relied on the bill of lading which expressly allowed them to proceed "by any route and whether directly or indirectly" to London. The court held that while the bill of lading was evidence of the contract between shipper and shipowner, was not exclusive evidence. The oral promise by the defendants' agent on behalf of the defendants was equally part of the contract and was binding on them. (iii) Evidence may be admitted to prove previous dealings between the parties, or a custom or trade usage and thus to "add" terms which do not appear on the face of the document and which alone give it the meaning that the parties wished it to have. Example 1: A and B enter into an agreement whereby A is to supply steel ingots to B. Unfortunately the quality of the steel is not set out in the contract. However, A has been selling steel ingots to B for 10 years now. Based on previous dealing between the parties the court would imply a term as to the quality of the steel that A normally supplies to B and Is acceptable to B. Example 2: Same example as Example 1, but this time the price is not set out in the contract. The court may imply a price based on custom or trade usage. (iv) Evidence of a Condition Precedent is admissible to show that there is a requirement before the cont
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