Business Law Midterm

The Peppercorn Theory

The Peppercorn Theory

The consideration being exchanged does not have to be adequate, that is, a fair or reasonable price. The Courts only look to ensure that there is some form of consideration, not whether the consideration is adequate

PROMISE UNDER SEAL

Once a seal is affixed, it is evidence of serious intent and acknowledgment that the contract is enforceable. No further consideration is necessary.

Estoppel

A promise that is intended to be relied upon and that is relied upon will be enforceable even without consideration

Common law rule

a creditor's promise to accept a lesser payment in full discharge of a debt is never enforceable unless there is some new form of consideration added or promise is under seal

Ontario - Mercantile Law Amendment

If a creditor agrees to accept a lesser sum in full discharge of a debt and the creditor actually receives the agreed settlement payment, then the promise to discharge the debt is legally enforceable even without consideration

Privity of contract

a doctrine that provides that only the parties to a contract can legally enforce the rights and obligations it contains

Party to a contract

someone who has provided consideration to support the creation of the contract

Privity of contract

generally means that third party beneficiaries cannot enforce the obligations in the contract

Contractual Defects exist when

The problem isn't meeting the three requirements for formation, BUT Some other issue existed at the creation of the contract and as a result, even though the contract exists, the courts will not enforce the contract

Capacity (Contractual Defect)

Rules about minors; people with diminished capacity &mental health/temporary insanity (drunkenness) issues

Voluntariness (Contractual Defect)

duress

Undue Influence (Contractual Defect)

fiduciary relationships

Unconscionability (Contractual Defect)

imbalance of power + improvident bargains

If there is a defect, the contract still exists, but it will be

void or voidable

void or voidable

the protected party can walk away from its future obligations under the contract. (That whole "locked in" thing goes away.) But there is still liability for benefits received under the contract

Unconscionability (Contractual Defect)

an equitable doctrine that is used to set aside unfair agreements that resulted from an in equality of bargaining power

improvident bargain

a bad deal - The contract unduly benefits the stronger party or unduly disadvantages the more vulnerable party

Misrepresentation

A false statement of fact that causes someone to enter into a contract, can't be an opinion

Partial information

if you offer info, it must be complete

Active concealment

cannot actively hide defects

Failure to update

if you provide information that was once correct but no longer is, you must update it

Fraudulent misrepresentation

Speaker has a deliberate intent to mislead or makes a statement recklessly without knowing or believing it is true

Negligent misrepresentation

Speaker makes the statement carelessly

Innocent misrepresentation

Speaker has not been fraudulent or negligent but has misrepresented a fact

Rescission

we return the parties as much as possible to their pre-contractual positions. Terminate the contract ab initio- treat it as though it never existed

Remedies in Tort

Damages in tort if plaintiff can establish negligent or fraudulent misrepresentation

Courts will not enforce contractual terms/entire contracts that are

contrary to public policy or illegal

Contrary to public policy

Anything that restrains free competition & trade in the market

Illegality examples

price fixing & illegal interest rate

Reasonableness

courts will look at the legitimacy of the interests being protected, the time frame, the geographic limitations, and scope: cannot ban a person from being able to earn a living

STATUTE OF FRAUDS

Requires that certain contracts be inwriting to be enforceable, including guarantees, contracts not performed within a year, contracts dealing w/ land

The Parole Evidence Rule

Parties cannot use "extrinsic" evidence (e.g., conversations or emails)to add to, subtract from, or contradict the terms of the contract.

Four ways to terminate a contract

agreement, frustration, performance, breach of contract

A contract is frustrated when

An unexpected event that is neither party's fault occurs that makes performance impossible, illegal, or not at all what the parties actually agreed to.

Contractual Duty of Good Faith

A party cannot lie about its intentions to perform/breach. But there is no proactive obligation to (a) tell the other party asap about the impending breach, or (b) to take all steps possible to perform

Economic breaches

Sometimes it is cheaper to breach a contract and pay damages than it would be to perform contractual obligations

UNJUST ENRICHMENT

Occurs when one party has undeservedly or unjustly secured a benefit at the other party's expense

RESTITUTIONARY QUANTUM MERUIT

An amount that is reasonable given the benefit the plaintiff has conferred

Strict liability tort

occurs when a person engages in an extraordinary and unusually dangerous activity. If a person engages in such activity and another person is injured, liability can be imposed even if the defendant was not negligent and even if the defendant did not intend to injure anyone.

Tort of battery

the defendant imposes offensive bodily contact on the plaintiff.

Rule of Law

Everyone has to follow the law, including the police, government, judges, and public officials

Rule of Law

a) Everyone has to follow the law, including the police, government, judges, and public officials;
b)The law must be publicly promulgated (it must be published), fairly applied, equally enforced & independently adjudicated
c) We settle our disputes on the basis of pre-determined principles through the courts (i.e., with law), not with force; and
d) Society governs itself through law (not arbitrary dictates).

Cause of action

the legal grounds for suing someone

Liability

legal responsibility

Common Law

Judge-made law; the body of judicially-made law.

Any law that is inconsistent with the constitution is

to the extent of the inconsistency, of no force or effect.

common law is created when

judges make decisions

Provincial Governments

Property/civil rights, matters of a merely local or private nature in province (industry/commerce purely within province) , education

Ultra vires

outside the jurisdiction of

Can businesses have Charter rights?

yes

Public Law

E.gs: criminal law, constitutional law, tax law, admin law, immigration law

The term "civil law" also means private law proceedings, as in

private law, not public law.

Who is involved in arbitration

Parties, their reps, arbitrator

Who is involved in litigation

Parties, lawyers, judge (jury)

When does negotiation end

If successful, with a settlement

Advantages of Mediation

Quicker, cheaper*, private, lots of room to customize, can preserve relationships

Advantages of Litigation

Can initiate w/o cooperation of other side. Get final decision (but after trial and appeals)

Contract

a legally enforceable agreement

A reason why contracts are important

If a dispute arises between the two parties, there are various options for dispute resolution, and parties can agree in advance about how they will address disputes

Implicit

agreement is voluntary & all parties to the contract are legally competent

Consideration & the Enforceability of Promises

Consideration must flow from both parties (though not necessarily to the other party) to form a contract.

Invitation to Treat (contract law)

Make me an offer

Moment of contract formation is important as terms are now

locked in and cannot be changed without a new contract.

Offer & Acceptance are determined using

an objective analysis. It does not matterwhat the parties are actually thinking.

A contract comes into existence as soon as the offeror

receives notification of acceptance

Ontario is about to pass several pieces of legislation. Which of the following pieces of legislation would likely be found to be intra vires the Province of Ontario? Select the best answer.

Legislation that prohibits the sale of marijuana within 250m of a high school

Puff

to convey an overstated belief about some good or service to a prospective buyer with the goal of making a sale of that good or service

On Monday, Olive offered to sell her car to Leslie. Olive told Leslie to let her know if she wants the car by Thursday. On Tuesday, Olive changed her mind and decided to keep the car for herself. If Olive wants to revoke her offer, what must she do? Select the best answer.

Olive must tell Leslie that the offer is revoked before Leslie accepts the offer.

Law

Rules enforced by courts/state institutions, principles, and a particular way of thinking about those rules and principles

Law "resides in the reasoning"

an exercise in justifying why we will prefer this person's interests over that person's interests in this particular dispute/scenario

Rule of Law

The law must be publicly promulgated (it must be published), fairly applied, equally enforced & independently adjudicated

Rule of Law

We settle our disputes on the basis of pre-determined principles through the courts (i.e., with law), not with force

Rule of Law

Society governs itself through law (not arbitrary dictates).

Action

litigation, a court case brought through the civil courts

Plaintiff

the person who the initiates a lawsuit

Defendant

person being sued

Jurisdiction

have the legal authority to do something

Constitution

s. 52: "supreme law of Canada"

Statutory Law

made by our legislation democratically-elected representatives

judges decisions become

precedents, and they are cumulatively referred to as the common law

Most of Ontario's tort and contract law are found in

common law

Doctrine of Precedent

a lower court must follow a relevant precedent created by a higher court within the same jurisdiction

Four broad approaches to dispute resolution

1.Negotiation
2.Mediation
3.Arbitration
4.Litigation

division of powers

tells you which level of government regulates what

Charter of Rights and Freedoms

Protects the rights and freedoms of individuals and, sometimes, corporations.

Canada has a federal system of governance

Power to make law is divided between provinces and the federal government

Federal Government

stuff listed (banking, currency, trade, etc.) trade and commerce, residual power (anything not covered by 91/92)

Intra vires

within the jurisdiction of

concurrent jurisdiction/double aspect doctrine

Since a subject matter can have more than one dimension/aspect, both the federal and the provincial governments can pass valid legislation over the same subject matter so long as they are each legislating with respect to an aspect or matter that falls within their own respective jurisdiction

Doctrine of Paramountcy

if there is a real conflict between two intra vires pieces of federal and provincial legislation, then the federal law prevails

the Charter does not

(a) protect economic rights, or (b) apply strictly to private persons (not Government)

Charter Rights

Freedom of religion, freedom of expression, mobility rights, equality rights

Protectee's under freedom of religion

"Persons" including corporations

Protectee's under freedom of expression

"Persons" including corporations

Protectee's under mobility rights

Citizens & Permanent Residents

Protectee's under equality rights

Individuals (not corporations)

Is there a prima facie Charter violation?

Is there a government act that violates a Charter right?

Charter two steps

1. Is there a prima facie Charter violation?
2. If so, can the legislation be "saved" undersection 1?

The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to

such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society

Freedom of Expression

freedom of thought, belief, opinion and expression, including freedom of the press and other media communication