Chapter 10 : Law of Contract

contract

agreement between 2 or more ppl

contract of purchase and sale (CPS)

land contract between buyer and seller

void contract

contract with no legal power and is not enforceable

offer

promise made to SPECIFIC person/group

offeror

person who makes the offer

offeree

person who receives the offer

invitation to treat

ad that induces others to submit their own offers, ex. MLS listing

7 essentials of contract

1. offer

2. acceptance

3. consideration

4. legal object

5. legal intention

6. capacity

7. genuine consent

standing offer

open to anyone ex. open listing

offer exceptions

• standing offer

• invitation to treat

release/expiry of offer

1. time limit

2. reasonable time

3. offer rejected

4. counter offer

5. revoke before acceptance

6. insanity or death

7. changes to offer by seller

revocation

cancel offer, changing your mind

counter offer

cancels original offer and proposes new offer

consideration

• legal term of smth of value thats bargained for or received by each party

• could be a right, interest, profit, family seal

• does not have to be money, cash, deposit

• past consideration is not valid

quantum meruit

• law promises to pay reasonable amount for labour and materials used, even if there’s no formal contract

• “as much as he deserves”

caveat emptor

• “let the buyer beware”

• obligation of buyer to hire inspector

duress

• party robbed of free will to decide contract

• actual physical act, action, meant to force, threats of harm and imprisonment

• do not HAVE to be harmed

undue influence

someone forced to do smth by influence, manipulation or persuasion

latent defect

cannot be discovered upon reasonable inspection (later)

ex. mold in basement, ant infestation

patent defect

IS discoverable upon reasonable inspection (present), visible to eye

stigmas

effect on property value depends on ppl’s subjective opinion

ex. haunted home, some ppl care and others don’t

frustration

• legal concept where contract is no longer valid due to unforeseen event that makes it impossible, ilegal, etc

• happens AFTER contract is signed

mistake

• can make contract void or voidable

• happens BEFORE contract is signed

common mistake

both make same mistake about fundamental term of contract

unilateral mistake (deceit)

• party makes mistake and is aware but does nothing

• smth that’s planned, deceit or fraud

mutual (innocent) mistake

• both parties make a mistake but is different

• happened with no intention to harm

breach of contract

failure (without legal excuse) to perform any promise in contract

injunction

court order that restrains a party from doing smth

mandatory injunction

court order that makes a party do smth

common law remedies to contract breach

damages

equitable law remedies to contract breach

• specific performance

• injunction

• mandatory injunction

• quantum meruit

doctrine of privy

only parties of a contract have right to sue or be sued under it

assignment

• person can assign away benefits under contract to a 3rd party and 3rd party can enforce

• can’t assign liabilities

2 types of assignments

• statutory

• equitable