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33 Cards in this Set
- Front
- Back
What is a contractual term? How does it differ from a pre-contractual representation? |
A contractual term is a provision in an agreement that creates a legally enforceable obligation A pre-contractual representation is a statement made by a party in words or conduct with intent to induce another party into entering a contract |
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If a contractual term is false, what can you sue for? If a pre-contractual representation is false, what can you sue for? |
Breach of contract Tort of misrepresentation |
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Misrepresentation is defined as: and is actionable if: |
A statement of an existing fact that is false when made (May be) actionable if induced a contract |
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Misrepresentation must be a statement of fact, and not: |
Personal opinion Prediction of future Statement of law |
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Silence can only be interpreted as misrepresentation if: |
It distorts a previous statement - an earlier statement is no longer accurate due to circumstances A statement is a half-truth The contract requires a duty of utmost good faith - legal obligation to disclose all necessary information A special relationship exists between parties When a statutory provision requires disclosure Facts are actively concealed |
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What are some remedies for/legal consequences of misrepresentation? |
Rescission Restitution Damages Affirmation |
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How does rescission work? What kinds of misrepresentation is it available for? |
Rescission terminates a contract 'ab initio' (as if it never existed), restoring parties to pre-contractual status Often accompanied by order for restitution Available for all types of misrepresentation: innocent, negligent, fraudulent |
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How does restitution work? What kinds of misrepresentation is it available for? |
Restitution is the act of restoring money, land or goods Available for all types of misrepresentation: innocent, negligent, fraudulent |
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How does affirmation work? |
Occurs when the misled party declares an intention to carry out the contract or otherwise act as if bound by it Rescission will not be available as a remedy afterwards |
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How do damages work? What kinds of misrepresentation are they available for? |
Damages are monetary awards to repair wrongful loss Available for fraud and negligence only (innocent misrepresentation = damages not available) |
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What tort are damages in misrepresentation covered under? |
The tort of deceit |
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What are the types of misrepresentation? Describe them |
Innocent - a carefully made statement without knowledge that it is wrong Negligent - a false, inducing statement made in a unreasonable or careless fashion Fraudulent - a statement or misleading silence, known to be false or made with no belief in its truth, made recklessly |
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What are the limitations to claiming fraudulent misrepresentation? |
If a party cannot prove the allegation, they may face costs against them |
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What types of contractual terms are there? |
Express terms Implied terms |
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What are express terms? What types are there, and how do they differ in proving them? |
Terms expressly included by parties; conditions Oral agreement: primarily a question of evidence, must prove what words were spoken Written agreement: easier to prove since evidence is written somewhere, subject to parol evidence rule |
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What is the parol evidence rule? |
When contracts are reduced to written terms, there cannot be additional terms/side evidence added elsewhere (e.g. email); you are stuck with whatever was in writing - Peter Pocklington selling the Oilers on the back of a napkin |
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What are some exceptions to the parol evidence rule? |
Rectifying or fixing a mistake in a contractual document Proving the contract was never fully formed/was defective Resolving ambiguities in the original document Demonstrating the document does not contain the complete agreement Collateral contracts |
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What is a collateral contract? |
A separate agreement one party makes in exchange for the other party's entry into the main contract - party A will only buy a TV from B if B buys a bike from A, so two different contracts but innately connected |
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In contractual interpretation, what different approaches are there? Describe them What rules determine the correct method of interpretation? |
Literal approach - assigns words their ordinary meanings Contextual approach - examines the parties' presumed intentions and circumstances Golden rule - words are given their ordinary meanings unless to do so would result in absurdity Contra proferentem rule - the meaning least favourable to the author of the contract will prevail |
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When are implied terms examined? |
Arises by operation of law, either through common law or under statute Most important consideration for a court to imply a term is whether it is clearly justified with regard to the parties' intentions when they contracted |
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In what situations would courts determine there are implied terms? |
The business efficacy test - a contract is advertised as being accepted by email, but the offeror accepts a contract by phone instead; the contract terms are still implied to be applicable Usage and custom - terms in clauses cannot be seen as vague if they are common to the area of business e.g. 'fixtures' in real estate Previous dealings between parties - because of precedent, terms become implied |
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The Sale of Goods Act is an example of implied terms by statute, what is it? |
A good being sold is new and unused unless otherwise described - consumer protection |
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What are standard form agreements, and what is their disadvantage? What form do they often take? |
Mass-produced documents usually drafted by a party who is in an economic position to offer certain terms on a 'take it or leave it' basis A valid means of reducing transaction costs They have the potential for abuse Often take the form of 'ticket' contracts |
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What are the requirements for enforceability of exclusion clauses? |
Terms must be clear and unambiguous There must be reasonable notice to affected party Assent by affected party - signature is best evidence of acceptance of clause |
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How do signed forms work? What are some exceptional cases? |
Signature is usually proof of assent to terms Signer bound even if document not read Signer bound even if terms not understood Possible exception if no chance to read Possible exception of unexpected terms |
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What is a boilerplate clause? |
A boilerplate clause is a standard provision that can be reused in various contractual settings in a virtually unchanged form |
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What are some examples of boilerplate clauses? |
Exclusion clauses Force majeure clauses Confidentiality clauses Arbitration clauses Justification clauses Entire agreement clause |
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What does a force majeure clause do? |
It aims to protect the parties when part of the contract cannot be performed because of events outside of their control |
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What does a confidentiality clause do? |
It prevents the disclosure of certain information (about the agreement) to third parties |
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What does an arbitration clause do? |
It outlines who should act to resolve a dispute and what method of arbitration should be used |
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What does a justification clause do? |
It predetermines the locale of the court and whose law will apply in the event of a legal dispute between the parties |
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What does an entire agreement clause do? |
It states that the entire agreement between parties is contained within the four corners of the contract |
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What is the purpose of having plain language in contracts? |
Plain language protects consumers from having to deal with 'legalese', i.e. the formal and technical language of traditional legal documents
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