Contracts

Contract

A promissory agreement between two or more parties that creates, modifies, or destroys a legal relationship

Party

An entity capable of entering into a binding/enforceable contract

Invitation to Treat

invitation to discuss the potential terms of a contract (not an offer, therefore not capable of being accepted)

Offer

Willingness to enter into a contract; can be accepted

Elements of a contract

Offer, acceptance, consideration, consensus ad idem, legality, competent parties

Consensus ad idem

Meeting of the minds

Are oral contracts binding?

Yes

Why are written contracts better? (4)

Volume of terms, passage of time, parties' understanding, evidentiary issues

Express terms

Appear in the contract itself

Implied terms

Part of the contract via other laws/codes/standards

Examples of implied terms

'- Standard of work or services

- Reasonable time

- Site access and space

- Warranties

- Duty of good faith/fairness

What is the Canadian criminal interest rate and %?

The legal maximum interest lenders can charge to prevent predatory lending; 35%

Are mistakes due to negligence?

No, they are generally innocent

Examples of lack of capacity (2)

Legal disability, age (seniority)

Give an example where a Two-Contract Model is used in engineering

The formal tender/bid process (Contract A and Contract B)

What is Contract A in Tendering?

'- Tender contract

- Agreeing to take part in the tender process (the invitiation to tender)

- It includes terms of the contract (if awarded), detail drawings, project documents

What is Contract B in Tendering?

'- Construction contract

- For the construction/work itself after a bidder is awarded (Form of Agreement)

Define breach of contract and give examples (3)

One party fails to meet agreed upon term(s);

- Failure to perform work in accordance with specifications

- Failure to complete work on time

- Failure to pay

Remedies (forms of compensation) for a breach of contract (5)

'- Termination (Notice of Breach)

- Specific performance

- Liquidated damages

- Damages

Examples of damages (6)

'- Unpaid invoice(s)

- Cost of remediation work

- Losses caused by delays

- Loss of sale price

- Loss of opportunity

- Diminution in property value

Duty to mitigate

Innocent party's responsibility to limit their losses from contract breach

Important contractual provisions for engineers (6)

'- Scope of work

- Contract price

- Schedule/timeline

- Limitation of liability

- Exclusion clauses

- Intellectual property