Textbook Notes (368,426)
Canada (161,877)
LAW 122 (625)
Chapter 7

Chapter 7 Notes

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Law and Business
LAW 122
Kernaghan Webb

Chapter 7: The Nature and Creation of Contracts Most ppl are unaware of the vast number of contracts they enter into every day. E.g. Buying a book from a friend. o Contract: is an agreement that creates rights and obligations that can be enforced in law. You were able to enter into that agreement bc you both experienced a meeting of the minds. o Meeting of the Minds: is a mutual agreement to enter into a legal transaction on a particular basis. o Exchange of Values: occurs when the parties each give up something. You both give up something as part of the deal, you = money & your friend = the book. A contractual relationship can continue even after there has been an exchange of value. Indeed, one reason for entering a contract may be to reserve some rights and obligations for the future. For e.g. If you purchased a book from a bookseller who offers a satisfaction or money back guarantee, you would enjoy the right to a refund. Contracts requires a number of distinct steps or elements: i. The parties must have an intention to create legal relations. ii. They must reach a mutual agreement through the process of offering and acceptances. iii. They must enter into a bargain by giving consideration. C OMPARING T ORTS AND C ONTRACTS Source of Obligations Privity Compensatory Risk Management Damages Torts Imposed by Law Enforceable regardlessPlace the plaintiff as i May take a person by of any agreement bt tort did not occur surprise the parties May require more than a person is able to give Contract Voluntarily created by Enforceable only by orPlace the plaintiff as i Always possible to s the parties against a party to thecontract perform know the obligations contract in advance Always possible to limit the obligations to promises that can be fulfilled For more info, refer to Chpt 3 Notes pg 1 INTENTION TO C REATE L EGAL R ELATIONS A contract will not arise wo an intention to create legal relations. o Intention to Create Legal Relations: arises if a reasonable person would believe that the parties intended to create legally enforceable agreement. The court is concerned with what a reasonable person would have thought, not necessarily with what the parties themselves actually thought. There are two reasons for this: i. A test of subjective intentions would be difficult to apply bc a person could easily lie at trail. ii. An important goal of the law is to protect reasonable expectation. 1 of 6 www.notesolution.com
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