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Why is it important that contracts are enforceable by law?
Otherwise, the value of contracts would be lost.
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In what situations might a court assist a party to cancel a contract?
- Where there is a relationship between the parties.
- Where one party has misrepresented an important fact.
- Where an important mistake has been made.
- Where there is a defect within the contract itself.
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What is a Voidable Contract?
A contract that in certain circumstances an aggrieved party can choose to keep in force or bring to an end.
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What is a Void Contract?
A contract involving a defect so substantial that it is of no force or effect.
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Who is deemed to lack the capacity or contract?
Children and those with mental incapacities. They are given special legal protection.
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Minors are obligate by contracts for essentials know as...?
Necessaries - Food, shelter
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If you are drunk when you enter into a contract, is it Void, or Voidable.
Voidable - you may sober up and choose to continue with the contract
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Define Duress.
The threat of physical or economic harm that results in a contract.
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Define Undue Influence.
- Unfair manipulation that compromises someone's free will - the contract is voidable at the option of the victim
- EX: a contract between an elderly person and her caregiver
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What is an Unconscionable Contract?
- Unfair contract formed when one party takes advantage of the weakness of another.
- 2 step process to prove:
- proof of inequality between the two parties
- improvident bargain or proof of exploitation
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What is Misrepresentation?
- A false statement of fact that causes someone to enter into a contract.
- May allow one party to cancel the contract.
- Parties involved in negotiating a contract are usually not obligated to volunteer information.
- The basic rule is that both parties are to look out for their own interests, and if they want information, they should ask.
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For a plaintiff to claim Misrepresentation, they must prove that the statement is:
- False
- Clear and unambiguous
- Material to the contract -it must be significant to the decision of whether or not to enter into the contract
- One that actually induces the aggrieved party to enter into the contract
- Concerned with a fact and not an opinion
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What is Fraudulent Misrepresentation?
Speaker has a deliberate intent to mislead or make a statement recklessly without knowing or believing it is true.
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What is Negligent Misrepresentation?
Speaker makes a statement recklessly without knowing or believing that it is true.
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What is Innocent Misrepresentation?
Speaker has not been fraudulent or negligent but has misrepresented a fact.
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Define Rescission.
The remedy that results in the parties being returned to their pre-contractual positions.
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What is the remedy for the types of misrepresentation?
- Fraudulent - Rescission in contract & Damages in tort
- Negligent - Rescission in contract & Damages in tort
- Innocent - Rescission in contract
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In terms of contracts, define Mistake.
- An error made by one or both parties that seriously undermines a contact.
- Rarely accepted by the courts.
- The court is entitled to set the contract aside as a remedy.
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What is an Illegal Contract?
- Contract that cannot be enforced because it is contrary to legislation or public policy.
- Contravenes legislation - Criminal Code, Competition Act, Real Estate and Business Brokers Act
- Contrary to Public Policy - considered to injure public image
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What is Statute of Frauds?
Requires that certain contracts be in writing to be enforceable.
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What is a Gaurantee?
A promise to pay the debt of someone else.
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