- Information
- AI Chat
LAW 122 Final Sheet
Bussiness Law (LAW 122)
Toronto Metropolitan University
Recommended for you
Preview text
LAW 122 FINAL EXAM SHEET
Innocent misrepresentation Statement made carefully No knowledge that fact is false
Negligent misrepresentation carelessly/ unreasonably making an inaccurate statement causing creation of contract
Party does not have to know fact was false to be liable
Fraudulent misrepresentation Statement known to be false
Or no reason to believe it's true
Or statement made recklessly w/o regards to truth
Boilerplate clause: A standard provision that can be reused in various contractual setting in a virtually unchanged form
- Exclusion clause
- Force majeure clause
- Confidentiality clause
- Arbitration clause
- Jurisdiction clause
- Entire agreement clause
Jurisdiction clause : predetermines the locale of the court and whose law will apply in the event of a legal dispute between the parties
Force majeure clause : aims to protect the parties when a part of the contract cannot be performed b/c of some event that is outside of their control & could not have been prevented by their exercise of due care
Confidentiality clause → prevents discourse of certain info about the agreement to 3rd parties
Contractual defect: 1. Misrepresentation 2. Incapacity to contract 3. Unfairness during bargaining 4. illegality
capacity→ the legal power to give consent
Incapacity to contract/limitation 1. Minors 2. Mentally incapacitated person 3. Intoxicated person
misrepresentation → a false statement of an existing fact that causes a recipient to enter into a contract
Innocent misrepresentation 1. Statement is made carefully 2. No knowledge that fact is false - Not available to
The remedy of rescission
The right to damages
A statement of an existing fact
This is false when made
May be actionable if it induced a contract
damages, no tort Negligent misrepresentation
- carelessly/ unreasonably making an inaccurate statement causing creation of contract
- Party does not have to know fact was false to be liable Fraudulent misrepresentation
- Statement known to be false
- Or no reason to believe it's true Or statement made recklessly w/o regards to truth
- Must be supported by evidence
- Arrive under tort of deceit
rescission→ the cancellation of a contract, by the parties or the court, with the aim of restoring the parties, to the greatest extent possible, to their precontractual state - Awarded on basis of courts judgement - Often accompanied by restitution
restitution→ involves a giving back and talking back and taking back on both sides, restoring parties to original position
Minors - Age of majority→ the age at which a person is held fully accountable in law - minors→ those who have not reached the age of majority ● Lack capacity ● Can get out if not a necessity
- A contract is voidable→ if a minor is entitled to avoid the legal obligations that the contract would have otherwise created
- voidable - minor is entitled to avoid the obligations that the contract created
- Minors who avoid contracts must give back any benefits they received under them
- A minor's contract is voidable even if the other party was unaware of the age issue
Infants act = states that a contract with a minor is unenforceable unless certain prescribed circumstances are met - Can only be enforced if it is; ● Affirmed ● Has not been rejected within a year of minor attaining year of majority ● If you accept contract is binding
Mental incapacity 2 situations exist: 1. Court has declared a person to be lacking in mental capacity ( committed= institutionalized, go through process; go through court)
- Contract are void and cannot be enforced at all
- Total incapacity to contract: contracts are void
- No court declaration but may still be considered mentally incompetent if they lack capacity to contract at the time of contract formation ( non committal= no declaration of mental incapcity)
- Contracts are voidable, cana void contract within a reasonable time of becoming competent
- Have to be able to prove
The contract of a person with a mental capacity is voidable only if the other party should have recognized the problem
Intoxicated persons - Voidable contract must be
Show weaker party received independent legal advice
transaction ● Show fairness during bargaining process
- Risk management ● Refrain from bullying, recommended ILA
Unconscionable transaction→ is an agreement that no right minded person would ever make, and no fair minded person would ever accept
- Exception to pepperson-horse theory from chapter 7 consideration
Weaker part must prove 1. There was an important bargain= one that was made without proper regard to future 2. Inequality of bargaining power of the parties
presumption= if both conditions are proved the transaction was unconscionable
Presumption rebutted by proof that: - Bargaining process was fair - Other party received independent legal advice
illegality→ are expressly or implicitly prohibited by statute and therefore are void
Agreements prohibited by statute - The purpose of a regulatory statue is not to punish but to regulate conduct through an administrative regime ● Illegal to transact contrary to regulatory statute
Common law - Common law is unwilling to recognize agreements that are contrary to public policy - Illegal to contract to commit crime or tort
Doctrine of public policy - Covenants in restraint of trade= is a contractual term that unreasonably restricts one's party liberty to carry on a trade, business, or profession in a particular way
● This clause is only enforceable if it is reasonable - Reasonable in terms of time - Reasonable geographically
presumption= it is unreasonable
Discharge
Four ways to get discharged: 1. Performance 2. Agreement
General rule: parties must perform exactly as the contract says
- Breach
- Operation of law ( frustration)
Discharge by performance
- performance= when the parties fulfill all of the obligations under the contract ● If you dont perform fully= breach
Time of performance - Not usually grounds for discharge - Time is usually not of the essence= default rule ( damages for lateness) How do you fix the default rule? - State time is of the essence- in contract; this way you could refuse late delivery
General rule= you have to perform everything - exception ● Substantial performance → generally satisfies the contract but it is defective or incomplete in some minor way - Exception to the exception ● Entire agreement clause: no payment due unless all work is performed= have to specify on contract
Discharge of agreement → parties can agree to end their contractual agreement
2 possible solutions: 1. Find new consideration - “Accord and satisfaction” both accept something else 2. Put the promise under seal - Release ; replaces consideration
Discharge by breach
Is it condition or warranty
Two conditions 1. If the breach substantially deprives the innocent party of the expected benefit 2. Depends on type of term breached - Condition (substantial) - Warranty ( lesser)
condition → relatively more important contractual term
A term is a condition if innocent party would be substantially deprived of expected benefit of contract due to its breach
- Innocent party generally has options:
● Affirm contract and claim damages or ● Discharge contract and claim damages
warranty → relatively less important
A term is warranty if innocent party would not be substantially deprived of expected benefit of contract due to its breach
- Innocent party has no significant option ● Must affirm contract, no option to discharge agreement ● May claim damages ●
out the quantum of damages
- A genuine pre estimate of possible losses that may occur as a breach of contract
- If the contract is in fact broken, the innocent party is entitled to recover the liquidated amount, even if it turns out to be more than the loss that they actually suffered
clause= no genuine attempt to estimate possible losses; exorbitant amount unenforceable
Punitive damages → are intended to punish the defendant and discourage other people from behaving badly
Requirements for punitive damages; - Acting in harsh, vindictive, reprehensible or malicious manner - The defendant must have also committed another independently actionable wrong, such as a tort
Equitable remedies - Specific performance→ court order to perform contractual action - injunction→ court order to obey contractual prohibition ● Don't do
Specific performance - Damages are inadequate ( cannot buy substitute) - No judicial supervision - No personal services - Do what you promised to do - Large restriction on defendants freedom
Injunction - Poses a smaller restriction on defendants freedom - You can do anything other than the prohibited act
Exclusion clause → excludes or limits liability for breach of contract - Allow business to limit their liability
Exclusion clauses allowed by freedom of contract - Clause should be unambiguous, read narrowly against drafter - Must be reasonably drawn to consumers attention - Must prve other party agreed to exclusion clause - Exclusion clause cannot apply to fundamental breach
LAW 122 Final Sheet
Course: Bussiness Law (LAW 122)
University: Toronto Metropolitan University
This is a preview
Access to all documents
Get Unlimited Downloads
Improve your grades
