23 Questions
What are the three requirements to a valid contract?
Legality, capacity, voluntariness
What is the difference between a void contract and a voidable contract?
A void contract is regarded as never having existed, while a voidable contract allows one party to end it.
What determines if a contract is enforceable according to the text?
Legality, capacity, voluntariness
Which type of misrepresentation involves a false statement made deliberately about an important term in a contract?
Fraudulent Misrepresentation
In which type of misrepresentation can the innocent party void the contract and sue for damages under the tort of deceit?
Fraudulent Misrepresentation
When does the innocent party have the option to void or end the contract in cases of Innocent Misrepresentation?
If there is no other innocent third party affected
What is the duty of disclosure that arises out of a special relationship of trust between the parties called?
Utmost Good Faith
In which situation is Undue Influence presumed?
Family relationships with inequality
What type of coercion involves influencing a party into entering a contract through the threat or use of harm to their person, reputation, or finances?
Duress
In which type of relationship must there be a mental domination of one party over the other to the extent that the person is robbed of free will?
Teacher/student
What must a person under duress do once the threat is removed?
Act promptly and prove a reasonable apprehension of the threat
What happens to contracts with illegal purposes or against public policy?
They are unenforceable by courts and rendered void
How do non-disclosure clauses in employment contracts differ from non-competition agreements?
They relate to loyalty and breach of employment contract
What does public policy dictate regarding contracts with minors, mentally impaired, or intoxicated individuals?
Contracts may not be enforceable against them, protecting vulnerable parties
What is the purpose of capacity in contract law?
Protecting vulnerable parties and setting conditions for understanding and entering into contracts
Who may have restrictions on their contracting abilities based on their legal status or financial situation?
Corporations, labor unions, and bankrupt individuals
What does voluntariness in contract formation ensure?
All parties enter into contracts willingly and with full understanding
What must contracts have to be enforceable by the court?
A legal purpose and not be against public policy
What is the contractual capacity of minors?
Limited, with exceptions for beneficial contracts of service and provision of necessaries
What does diminished contractual capacity refer to?
Recognized conditions affecting a party's ability to understand the contract
Which entities have limited or no capacity for contracting?
Corporations, labor unions, Aboriginal peoples, and bankrupt debtors
What may mistakes in contracts lead to?
Remedies like rectification or voiding the contract
What may misrepresentation, undue influence, or duress during contract formation provide the option for?
Voiding the contract for the affected party
Study Notes
Understanding Contract Law
- Contracts with illegal purposes or against public policy are unenforceable by courts, rendering them void.
- Non-disclosure clauses in employment contracts differ from non-competition agreements, as they relate to loyalty and breach of employment contract.
- Public policy dictates that contracts with minors, mentally impaired, or intoxicated individuals may not be enforceable against them, protecting vulnerable parties.
- Capacity is crucial in contract law, protecting vulnerable parties and setting conditions for understanding and entering into contracts.
- Corporations, labor unions, and bankrupt individuals may have restrictions on their contracting abilities based on their legal status or financial situation.
- Voluntariness in contract formation ensures that all parties enter into contracts willingly and with full understanding, free from invalid actions by the other party.
- Contracts must have a legal purpose and not be against public policy to be enforceable by the court.
- Minors have limited contractual capacity, with exceptions for beneficial contracts of service and provision of necessaries.
- Diminished contractual capacity refers to recognized conditions affecting a party's ability to understand the contract, requiring immediate termination upon regaining capacity.
- Other entities with limited or no capacity include corporations, labor unions, Aboriginal peoples, and bankrupt debtors.
- Mistakes in contracts, such as mistaken assumptions or recording errors, may lead to remedies like rectification or voiding the contract.
- Misrepresentation, undue influence, or duress during contract formation may provide the option to void the contract for the affected party.
Test your knowledge of contract law with this quiz covering topics such as capacity, legality, voluntariness, and remedies for mistakes and misrepresentation. Explore the nuances of contract formation and the protection of vulnerable parties in legal agreements.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
