Podcast
Questions and Answers
In the context of modern contract law, which statement best reflects the instrumentalist view's impact?
In the context of modern contract law, which statement best reflects the instrumentalist view's impact?
- The judiciary adheres strictly to precedents set during the steamship era, ensuring consistent application of contract law.
- Courts prioritize the interests of large corporations, recognizing their significant role in modern commerce.
- Courts rigidly enforce contracts as written, emphasizing freedom of contract above all else.
- The judiciary increasingly acknowledges the economic and psychological factors influencing contracts, moving away from strict enforcement. (correct)
What is a key challenge facing current contract principles given the evolution of the market?
What is a key challenge facing current contract principles given the evolution of the market?
- The relevance of rules developed in earlier eras, such as the steamship era, to today's digital age. (correct)
- The over-reliance on good faith negotiations.
- The strict adherence to the principle of freedom of contract.
- The limited recognition of psychological factors in contract formation.
Which of the following is a primary concern regarding the relevance of traditional contract principles in contemporary business practices?
Which of the following is a primary concern regarding the relevance of traditional contract principles in contemporary business practices?
- The lack of emphasis on good faith performance in contracts.
- The balance of power between individual consumers and large corporations.
- The extent to which these principles account for privacy interests in modern transactions. (correct)
- The complexity of modern legal language used in contracts.
How does modern contract law grapple with power imbalances between contracting parties?
How does modern contract law grapple with power imbalances between contracting parties?
In Bhasin v Hrynew, what specific obligation regarding contract performance was imposed by the Supreme Court of Canada?
In Bhasin v Hrynew, what specific obligation regarding contract performance was imposed by the Supreme Court of Canada?
Under what circumstance(s) does the parol evidence rule have the least strength?
Under what circumstance(s) does the parol evidence rule have the least strength?
A company enters into a detailed written contract with a supplier, including a limitation of liability clause. Prior to signing, the supplier's representative orally assures the company that this clause will not apply under certain circumstances. If those circumstances arise and the company sues, what is the most likely outcome regarding the oral assurance?
A company enters into a detailed written contract with a supplier, including a limitation of liability clause. Prior to signing, the supplier's representative orally assures the company that this clause will not apply under certain circumstances. If those circumstances arise and the company sues, what is the most likely outcome regarding the oral assurance?
Which statement best describes the relationship between the parol evidence rule and proving misrepresentation or warranty claims?
Which statement best describes the relationship between the parol evidence rule and proving misrepresentation or warranty claims?
A contract for the sale of goods includes a clause stating 'This agreement constitutes the entire agreement between the parties.' Prior to signing, the seller orally promised expedited delivery. The written contract does not mention delivery speed. If the seller does not provide expedited delivery, can the buyer enforce the oral promise?
A contract for the sale of goods includes a clause stating 'This agreement constitutes the entire agreement between the parties.' Prior to signing, the seller orally promised expedited delivery. The written contract does not mention delivery speed. If the seller does not provide expedited delivery, can the buyer enforce the oral promise?
In a dispute over a written construction contract, one party seeks to introduce email correspondence from before the contract was signed. The email contains details about specific materials to be used, which are not explicitly mentioned in the final written contract but also do not contradict it. Under the parol evidence rule, is this email admissible as evidence?
In a dispute over a written construction contract, one party seeks to introduce email correspondence from before the contract was signed. The email contains details about specific materials to be used, which are not explicitly mentioned in the final written contract but also do not contradict it. Under the parol evidence rule, is this email admissible as evidence?
Which of the following scenarios best exemplifies the general principle that a court will not compel specific performance of a contract?
Which of the following scenarios best exemplifies the general principle that a court will not compel specific performance of a contract?
A software company, 'Code Gurus,' contracts with 'Startup X' to develop a mobile application. Halfway through the project, Code Gurus demands a 50% increase in price due to underestimation of the project's complexity. Startup X refuses to pay the increased fee, and Code Gurus stops working. Which of the following is true regarding Startup X's options?
A software company, 'Code Gurus,' contracts with 'Startup X' to develop a mobile application. Halfway through the project, Code Gurus demands a 50% increase in price due to underestimation of the project's complexity. Startup X refuses to pay the increased fee, and Code Gurus stops working. Which of the following is true regarding Startup X's options?
Sarah hires a caterer, 'Gourmet Grub,' for her wedding. The contract stipulates a specific menu and service style. Two weeks before the wedding, Gourmet Grub informs Sarah that they can no longer provide the agreed-upon menu due to a supplier issue, but offer a cheaper, less desirable alternative. If Sarah refuses the alternative and hires another caterer at a higher cost, what damages can she likely recover from Gourmet Grub?
Sarah hires a caterer, 'Gourmet Grub,' for her wedding. The contract stipulates a specific menu and service style. Two weeks before the wedding, Gourmet Grub informs Sarah that they can no longer provide the agreed-upon menu due to a supplier issue, but offer a cheaper, less desirable alternative. If Sarah refuses the alternative and hires another caterer at a higher cost, what damages can she likely recover from Gourmet Grub?
A construction company, 'Build It Right,' enters into a contract to build an office building for 'Develop Now.' Due to unforeseen economic downturn, Develop Now realizes they will not be able to afford the building. They inform Build It Right that they are backing out of the contract. Which statement accurately reflects Build It Right's legal position?
A construction company, 'Build It Right,' enters into a contract to build an office building for 'Develop Now.' Due to unforeseen economic downturn, Develop Now realizes they will not be able to afford the building. They inform Build It Right that they are backing out of the contract. Which statement accurately reflects Build It Right's legal position?
John agrees to sell his car to Mary for $5,000, with delivery and payment scheduled for next week. Before the agreed-upon date, John informs Mary that he has decided not to sell the car. Mary finds an identical car elsewhere, but it costs her $5,500. What accurately describes Mary's entitlement?
John agrees to sell his car to Mary for $5,000, with delivery and payment scheduled for next week. Before the agreed-upon date, John informs Mary that he has decided not to sell the car. Mary finds an identical car elsewhere, but it costs her $5,500. What accurately describes Mary's entitlement?
What distinguishes a contractual warranty from a representation?
What distinguishes a contractual warranty from a representation?
In contract law, what is the primary impact of a breach of condition on the innocent party?
In contract law, what is the primary impact of a breach of condition on the innocent party?
What is the key difference in the consequences of breaching a warranty versus breaching a condition in a contract?
What is the key difference in the consequences of breaching a warranty versus breaching a condition in a contract?
What does it mean for an innocent party to 'affirm' a contract after a breach?
What does it mean for an innocent party to 'affirm' a contract after a breach?
What is the significance of a 'repudiatory breach' in contract law?
What is the significance of a 'repudiatory breach' in contract law?
In the context of contract law, what does 'disaffirming' a contract entail for the innocent party?
In the context of contract law, what does 'disaffirming' a contract entail for the innocent party?
According to the case 968703 Ontario Ltd v Vernon (2003), which factor is considered when determining if a breach deprives a party of substantially the whole benefit of the contract?
According to the case 968703 Ontario Ltd v Vernon (2003), which factor is considered when determining if a breach deprives a party of substantially the whole benefit of the contract?
Which of the following best describes an 'innominate term'?
Which of the following best describes an 'innominate term'?
If a contract is affirmed after a breach, what actions can the innocent party take?
If a contract is affirmed after a breach, what actions can the innocent party take?
Which scenario best illustrates a situation where a party might choose to disaffirm a contract?
Which scenario best illustrates a situation where a party might choose to disaffirm a contract?
Which of the following statements accurately distinguishes between rescission and damages for breach of contract?
Which of the following statements accurately distinguishes between rescission and damages for breach of contract?
In the context of contract law, what is the primary consideration that mitigates against awarding damages for innocent misrepresentation?
In the context of contract law, what is the primary consideration that mitigates against awarding damages for innocent misrepresentation?
A party claims an oral warranty exists alongside the written terms of a contract. What legal principle presents a hurdle to demonstrating this warranty?
A party claims an oral warranty exists alongside the written terms of a contract. What legal principle presents a hurdle to demonstrating this warranty?
What defines 'parol evidence' in the context of contract law?
What defines 'parol evidence' in the context of contract law?
Under what circumstances does the Parol Evidence Rule most logically apply?
Under what circumstances does the Parol Evidence Rule most logically apply?
In what scenario might parties agree to a mix of written and oral contract terms, despite having a written estimate?
In what scenario might parties agree to a mix of written and oral contract terms, despite having a written estimate?
Why might a general contractor's estimate, though written, often be supplemented by oral agreements?
Why might a general contractor's estimate, though written, often be supplemented by oral agreements?
A homeowner and a contractor negotiate an estimate detailing the scope and price for a kitchen renovation. After agreeing to the written estimate, they verbally agree on a specific timeline and the type of tile to be used, which isn't in the estimate. If a dispute arises over the timeline, can the homeowner introduce evidence of the verbal agreement in court? Assume that the written estimate does not contain a clause stating that it is the complete and final agreement.
A homeowner and a contractor negotiate an estimate detailing the scope and price for a kitchen renovation. After agreeing to the written estimate, they verbally agree on a specific timeline and the type of tile to be used, which isn't in the estimate. If a dispute arises over the timeline, can the homeowner introduce evidence of the verbal agreement in court? Assume that the written estimate does not contain a clause stating that it is the complete and final agreement.
John hired Jane to walk his dog every Wednesday. Jane breached the contract by not showing up. According to the expectancy principle, what is the primary goal of awarding damages to John?
John hired Jane to walk his dog every Wednesday. Jane breached the contract by not showing up. According to the expectancy principle, what is the primary goal of awarding damages to John?
Which of the following is NOT a limitation to the expectancy principle when determining contract damages?
Which of the following is NOT a limitation to the expectancy principle when determining contract damages?
John contracted with a local farmer to purchase 100 bushels of apples for his pie shop. The farmer breached the contract and John had to buy the apples from a more expensive supplier. Under the expectancy principle, which of the following would be considered a direct damage?
John contracted with a local farmer to purchase 100 bushels of apples for his pie shop. The farmer breached the contract and John had to buy the apples from a more expensive supplier. Under the expectancy principle, which of the following would be considered a direct damage?
A construction company breaches its contract with a client, causing significant delays in the completion of a project. Which of the following losses would likely be recoverable as damages, assuming they meet the requirements of causation and foreseeability?
A construction company breaches its contract with a client, causing significant delays in the completion of a project. Which of the following losses would likely be recoverable as damages, assuming they meet the requirements of causation and foreseeability?
A software company contracts to provide a customized program to a business, but it delivers the software late. As a result, the business misses a critical deadline and loses a major client. Which principle will a court consider when determining damages?
A software company contracts to provide a customized program to a business, but it delivers the software late. As a result, the business misses a critical deadline and loses a major client. Which principle will a court consider when determining damages?
A bakery contracts with a supplier for a special type of flour, but the supplier breaches the contract. To mitigate its losses, the bakery purchases a similar flour from a local store at a higher price. Which statement aligns with the principle of mitigation?
A bakery contracts with a supplier for a special type of flour, but the supplier breaches the contract. To mitigate its losses, the bakery purchases a similar flour from a local store at a higher price. Which statement aligns with the principle of mitigation?
A landscaping company breaches its contract with a homeowner, failing to plant agreed-upon trees. The homeowner hires another company at a higher cost but also adds additional landscaping features. What damages can the homeowner claim?
A landscaping company breaches its contract with a homeowner, failing to plant agreed-upon trees. The homeowner hires another company at a higher cost but also adds additional landscaping features. What damages can the homeowner claim?
An author signs a contract with a publisher, who then fails to publish the book. Which potential loss could the author claim as damages if they can prove causation and foreseeability?
An author signs a contract with a publisher, who then fails to publish the book. Which potential loss could the author claim as damages if they can prove causation and foreseeability?
Flashcards
Breach of Contract
Breach of Contract
Failure of a party to fulfill their contractual obligations.
Monetary Damages
Monetary Damages
Compensation awarded to the aggrieved party for losses from a breach.
Specific Performance
Specific Performance
A legal remedy that forces a party to fulfill their contract obligations.
Aggrieved Party
Aggrieved Party
The party that suffers due to the breach of contract.
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Contract Obligations
Contract Obligations
The duties each party must perform under the contract.
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Contract Damages
Contract Damages
Monetary compensation for losses due to a breach of contract.
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Expectancy Principle
Expectancy Principle
Contract damages aim to place the injured party in the position they would have been if fulfilled.
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Causation in Breach
Causation in Breach
Loss must directly result from the breach to claim damages.
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Foreseeability
Foreseeability
Loss must have been a foreseeable result of the breach to be compensable.
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Mitigation
Mitigation
Obligation to minimize losses after a breach occurs.
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Types of Losses
Types of Losses
Includes lost profits, delivery expenses, and replacement costs from a breach.
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Sally Wertheim Case
Sally Wertheim Case
Legal precedent emphasizing placing parties in the position they would have been without breach.
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Recission
Recission
An equitable remedy where the court can undo a contract.
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Damages for Breach
Damages for Breach
Compensation owed when a contract is breached, mandatory if proven.
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Innocent Misrepresentation
Innocent Misrepresentation
A false statement made without knowledge of its inaccuracy, not guaranteed.
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Parol Evidence Rule
Parol Evidence Rule
Prevents admission of external evidence to alter a written contract.
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Oral Terms
Oral Terms
Spoken agreements that may accompany written contracts, but are often inadmissible.
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Equitable Doctrines
Equitable Doctrines
Legal principles involving fairness, like recission.
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Claimant’s Burden
Claimant’s Burden
The obligation of the claimant to prove the existence of terms or damage.
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Negotiated Agreement
Negotiated Agreement
A contract formed through discussions and mutual consent of the parties.
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Good Faith Performance
Good Faith Performance
The obligation to perform contractual duties honestly and fairly.
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Bhasin v Hrynew
Bhasin v Hrynew
A case that established obligations of good faith in contract performance.
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Instrumentalist View
Instrumentalist View
The perspective that contracts should reflect economic and psychological realities.
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Challenges of Contract Principles
Challenges of Contract Principles
Concerns whether existing contracts meet modern market needs.
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Power Imbalances in Contracts
Power Imbalances in Contracts
The effect of the law on negotiations between individuals and corporations.
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Weak Parol Evidence
Weak Parol Evidence
Occurs when oral terms merely add to, without contradicting, the written contract.
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Strong Parol Evidence
Strong Parol Evidence
When oral evidence strongly contradicts the written terms, creating a presumption against it.
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Limitations of Liability Clause
Limitations of Liability Clause
A contract section that limits the damages one party can claim against another.
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Misrepresentation
Misrepresentation
A false statement that induces one party to enter a contract, which can make the contract voidable.
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Affirm or Disaffirm
Affirm or Disaffirm
A choice made by the innocent party after a breach to continue or end the contract.
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Condition vs. Warranty
Condition vs. Warranty
Conditions allow for repudiation upon breach; warranties do not.
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Repudiatory Breach
Repudiatory Breach
Serious breach allowing the innocent party to terminate the contract.
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Breach Impact Factors
Breach Impact Factors
Criteria used to assess if a breach caused substantial loss.
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Innocent Party's Rights
Innocent Party's Rights
Options available to the innocent party after a breach: affirm or disaffirm.
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Breach of Innominate Condition
Breach of Innominate Condition
Breach that may be treated as repudiatory, depending on consequences.
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Seriousness of Consequences
Seriousness of Consequences
A key factor in determining the impact of a breach on benefits.
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Benefits of Contract
Benefits of Contract
The positive outcomes expected from fulfilling a contract.
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Ratio of Obligations
Ratio of Obligations
Comparison of performed versus unperformed obligations in a contract.
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Electing Remedies
Electing Remedies
The process of choosing how to respond to a breach: affirming or disaffirming.
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Remedies for Breach of Contract
- General principle: A contract cannot compel someone to perform.
- Subject to exceptions, like specific performance.
- Monetary damages are the typical remedy, representing losses incurred due to the breach.
General Principles
- If one party breaches, the other party cannot simply walk away.
- Both breaching and aggrieved parties must continue their obligations.
- Damages (losses from breach) are the only recourse.
Example
- John and Jane have a contract for Jane to walk John's dog weekly.
- Jane fails to walk the dog on a Wednesday.
- John cannot automatically void the remainder of the contract.
- Instead, John's recourse is a claim for damages for the specific loss incurred due to the breach.
Expectancy Principle
- Contract damages compensate for lost expectations, not to punish a party.
- The aggrieved party should be placed in the same position as if the contract had been fulfilled.
Contract Damages
- Not a punishment, but replacement for the loss resulting from the breach.
Limitations to Expectancy Principle
- Causation: If lost directly results from the breach.
- Foreseeability: Losses must be predictable consequences of the breach.
- Mitigation: The aggrieved party must take reasonable steps to minimize their losses.
Contract Terms and Oral Statements
- Oral statements during contract negotiations may or may not become part of the contract. Courts differentiates between warranties and other representations.
- A statement of past or present fact must be material to the transaction, must be untrue at the time it was made, and must be pre-contractual
Parol Evidence Rule
- Oral statements are not admissible to contradict a written contract (unless the contract is incomplete or ambiguous).
- It deals with a written contract and the terms that were agreed upon during negotiations.
- It creates a presumption that the written document represents the complete/only terms of agreement.
Week 3: Classification of Terms
- Classifying terms (conditions vs. warranties) determines the innocent party's rights upon breach.
- Conditions: A breach allows immediate termination.
- Warranties: A breach only gives a right to damages, not termination.
Week 4: Duty of Honest Contractual Performance
- A general duty of honest performance exists in many contracts. The good faith standard requires parties to act in ways that can prevent undue, unjustifiable exploitation of the other party.
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