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Questions and Answers
What is one way a contract can be discharged?
What is one way a contract can be discharged?
What happens if the performance of a contract is not satisfactory?
What happens if the performance of a contract is not satisfactory?
What does a limitation of liability clause generally do?
What does a limitation of liability clause generally do?
Which clause ensures that one party compensates the other for post-contract losses?
Which clause ensures that one party compensates the other for post-contract losses?
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What is the significance of a survival clause in a contract?
What is the significance of a survival clause in a contract?
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Which of the following best describes a survival clause in a contract?
Which of the following best describes a survival clause in a contract?
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What is required for a waiver of contract to occur?
What is required for a waiver of contract to occur?
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What defines a substituted agreement?
What defines a substituted agreement?
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Which of the following best describes the Doctrine of Substantial Performance?
Which of the following best describes the Doctrine of Substantial Performance?
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What is a condition precedent in a contract?
What is a condition precedent in a contract?
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What type of damages compensates for lost profits and opportunity costs due to a breach of contract?
What type of damages compensates for lost profits and opportunity costs due to a breach of contract?
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Under which scenario is a contract discharged due to frustration?
Under which scenario is a contract discharged due to frustration?
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Under what condition can equitable remedies be awarded?
Under what condition can equitable remedies be awarded?
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What does the Frustrated Contracts Act address?
What does the Frustrated Contracts Act address?
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What is the primary purpose of damages in breach of contract cases?
What is the primary purpose of damages in breach of contract cases?
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Which of the following is a feature of an exemption clause?
Which of the following is a feature of an exemption clause?
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What is a key characteristic of liquidated damages?
What is a key characteristic of liquidated damages?
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Which concept requires an injured party to minimize their losses after a breach of contract?
Which concept requires an injured party to minimize their losses after a breach of contract?
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What differentiates a condition from a warranty in a contract?
What differentiates a condition from a warranty in a contract?
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In what situation can an express repudiation occur?
In what situation can an express repudiation occur?
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What is a primary distinction between economic loss and cost of performance?
What is a primary distinction between economic loss and cost of performance?
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Which of the following is NOT a type of equitable remedy?
Which of the following is NOT a type of equitable remedy?
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What typically happens after a major breach of contract?
What typically happens after a major breach of contract?
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What does the term 'self-induced frustration' imply in contract law?
What does the term 'self-induced frustration' imply in contract law?
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In the context of breach of contract, what are consequential losses?
In the context of breach of contract, what are consequential losses?
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What is a primary feature of reliance damages?
What is a primary feature of reliance damages?
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What is the role of the Limitations Act in contract law?
What is the role of the Limitations Act in contract law?
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What outcome results from a breach of warranty in a contract?
What outcome results from a breach of warranty in a contract?
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What is a chattel mortgage primarily concerned with?
What is a chattel mortgage primarily concerned with?
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What is the first step in the PPSA process?
What is the first step in the PPSA process?
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When does a creditor's security interest become protected under PPSA?
When does a creditor's security interest become protected under PPSA?
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What is a significant feature of the Purchase Money Security Interest (PMSI)?
What is a significant feature of the Purchase Money Security Interest (PMSI)?
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How does a floating charge differ from a traditional mortgage?
How does a floating charge differ from a traditional mortgage?
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What often happens with after-acquired property in the context of a chattel mortgage?
What often happens with after-acquired property in the context of a chattel mortgage?
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What does the attachment of a security interest signify in the PPSA process?
What does the attachment of a security interest signify in the PPSA process?
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What is the primary effect of registering a security interest?
What is the primary effect of registering a security interest?
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What does the term 'perfection' in the context of security interests refer to?
What does the term 'perfection' in the context of security interests refer to?
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What is one key reason why good faith purchasers of small value goods might be exempt in certain provinces?
What is one key reason why good faith purchasers of small value goods might be exempt in certain provinces?
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What is the primary responsibility of a judgment creditor?
What is the primary responsibility of a judgment creditor?
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What must occur before a sheriff can levy execution on a debtor's assets?
What must occur before a sheriff can levy execution on a debtor's assets?
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Which of the following describes a garnishee order?
Which of the following describes a garnishee order?
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What describes an agent's duty of care to the principal?
What describes an agent's duty of care to the principal?
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What is required for an agency relationship to be created through implied authority?
What is required for an agency relationship to be created through implied authority?
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Which of the following statements is true regarding ratification in agency law?
Which of the following statements is true regarding ratification in agency law?
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What must a principal do to be held liable for an agent's actions?
What must a principal do to be held liable for an agent's actions?
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What generally happens if an agent does not disclose their agency status?
What generally happens if an agent does not disclose their agency status?
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When can both the agent and the principal be held liable?
When can both the agent and the principal be held liable?
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Which of the following is a requirement for an agency agreement to be enforceable under the statute of frauds?
Which of the following is a requirement for an agency agreement to be enforceable under the statute of frauds?
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What typically characterizes the duty of good faith in an agency relationship?
What typically characterizes the duty of good faith in an agency relationship?
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Under what condition can an undisclosed principal enforce a contract against a third party?
Under what condition can an undisclosed principal enforce a contract against a third party?
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Who is liable for torts committed within the agent's real authority?
Who is liable for torts committed within the agent's real authority?
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What is an employer required to provide when terminating an employee without cause?
What is an employer required to provide when terminating an employee without cause?
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Under what circumstances is dismissal for cause permissible?
Under what circumstances is dismissal for cause permissible?
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Which factor is NOT considered when determining a reasonable notice period?
Which factor is NOT considered when determining a reasonable notice period?
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What is the potential consequence for an employer if they fail to follow proper dismissal procedures?
What is the potential consequence for an employer if they fail to follow proper dismissal procedures?
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What is 'constructive dismissal'?
What is 'constructive dismissal'?
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Which of the following is required when dismissing an employee for cause?
Which of the following is required when dismissing an employee for cause?
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Which type of damages can be claimed in a wrongful dismissal case?
Which type of damages can be claimed in a wrongful dismissal case?
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What does a plaintiff need to do in terms of mitigation following a wrongful dismissal?
What does a plaintiff need to do in terms of mitigation following a wrongful dismissal?
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Which statement best describes the duty of care for a bailee in a bailment situation?
Which statement best describes the duty of care for a bailee in a bailment situation?
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Which of the following is a secured transaction example?
Which of the following is a secured transaction example?
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What distinguishes a secured creditor from a general creditor?
What distinguishes a secured creditor from a general creditor?
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What action can a third party take against an agent who commits fraudulent misrepresentation?
What action can a third party take against an agent who commits fraudulent misrepresentation?
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What is an important factor in determining a reasonable notice period for an employee?
What is an important factor in determining a reasonable notice period for an employee?
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What occurs if an agent exceeds their authority innocently?
What occurs if an agent exceeds their authority innocently?
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When can punitive damages be awarded in a wrongful dismissal case?
When can punitive damages be awarded in a wrongful dismissal case?
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Which situation terminates an agency relationship?
Which situation terminates an agency relationship?
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Which of the following constitutes a breach of warranty of authority?
Which of the following constitutes a breach of warranty of authority?
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What is a key characteristic of the relationship between a franchisor and franchisee?
What is a key characteristic of the relationship between a franchisor and franchisee?
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What is vicarious liability in the context of employment law?
What is vicarious liability in the context of employment law?
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Which condition must be met for negligent hiring claims against an employer?
Which condition must be met for negligent hiring claims against an employer?
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What does breach of the duty of good faith and fidelity involve?
What does breach of the duty of good faith and fidelity involve?
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What must an employer do regarding wage payment during employment?
What must an employer do regarding wage payment during employment?
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In the context of employment, what is the duty to obey?
In the context of employment, what is the duty to obey?
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What is the result when a third party sues an agent for breach of warranty of authority?
What is the result when a third party sues an agent for breach of warranty of authority?
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What action must a franchisor take according to the Arthur Wishart Act?
What action must a franchisor take according to the Arthur Wishart Act?
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What constitutes wrongful referral?
What constitutes wrongful referral?
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Study Notes
Discharge of Contracts
- Discharge of contracts refers to the termination of contractual obligations, ending parties' responsibilities.
- Contracts can be discharged by: performance, agreement, frustration, and operation of law.
- Breach of contract leads to damages, not discharge at the court's discretion.
Discharge by Performance
- Satisfactory completion of all obligations by both parties discharges the contract.
- Unsatisfactory performance does not discharge the contract.
- Contracts can "survive completion," meaning they remain enforceable after the main obligations are fulfilled.
- Indemnification provisions protect parties against losses after the contract's conclusion (e.g., defective work discovered later).
- Limitation of liability clauses limit potential damages (e.g., capping liability for software bugs).
- Survival clauses ensure that specific contract terms (e.g., confidentiality, liability) remain enforceable after the contract ends.
Discharge by Agreement
- Both parties mutually agree to end the contract.
- Waiver of the contract occurs when parties agree not to proceed with performance of an existing contract, but only when neither has fully performed.
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Substituted agreement replaces the original contract with a new one (e.g., out-of-court settlement).
- Features include mutual consent, updated terms, and legal effect.
- Types include material change in terms, novation (party replacement), and settlement (accord and satisfaction).
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Contract provision for dissolution:
- Condition precedent: Neither party performs unless a future event occurs.
- Condition subsequent: An event that ends a promisor's obligations.
- Option to terminate: Allows termination with notice.
Discharge by Frustration
- Frustration excuses performance if an unforeseen external event makes performance radically different from initial expectations.
- Frustration discharges the contract at the time of the event.
- Frustrated Contracts Act governs consequences (e.g., recovering or retaining amounts paid).
Discharge by Operation of Law
- Bankruptcy and Insolvency Act stops collection actions and ensures fair creditor distribution when a party cannot repay debts.
- Limitations Act sets time limits for enforcing contractual rights; exceeding the period bars legal remedies.
Breach of Contract
- Breach occurs when one party fails to comply with contractual terms.
- Exemption clauses may limit liability but are not always enforceable.
- Defences to breach include inadequate notice, contra proferentem, misrepresentation, and non est factum.
- Conditions vs. warranties: Conditions are essential terms; breaches allow termination and damages; Warranties are non-essential, breach leads to damages but not contract termination.
- Use of time is of the essence clauses makes timely performance a crucial term, allowing termination for delays.
Effect of Breach
- Minor breach: Non-essential term breach; contract still exists.
- Major breach: Essential term breach; non-breaching party may terminate contract.
- Methods of breach include express repudiation, rendering performance impossible, and failure to perform.
- Doctrine of Substantial Performance allows for partial performance (without material breach) where a contract is still considered legally binding.
Remedies
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Damages: Monetary compensation; aim to put the injured party in the position they would have been in if the contract was performed. Includes:
- Expectation damages: Expected profits.
- Consequential losses: Foreseeable damages.
- Liquidated damages: Pre-agreed damages.
- Nominal damages: Negligible loss.
- Reliance damages: Damages for wasted effort.
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Equitable remedies are awarded when monetary compensation is insufficient:
- Specific performance: Court order to perform specific act (rare).
- Injunction: Court order to stop an action (rare).
- Quantum meruit: Compensation for services in the absence of contract.
- Mitigation: Injured party must reasonably minimize losses after a breach.
- Causation: Damages must be directly caused by the breach.
Enforcing a Judgment
- Judgement creditors can legally take action to enforce payment owed via court orders.
Agency & Franchising
- Agent: Acts on behalf of a principal to create contracts with a third party.
- Agency Agreement: Defines agent's authority to act for the principal.
- Creating an agency relationship: Implied (principal allows), ratification (agent acts, principal confirms), apparent authority (principal creates a belief in third party).
- Duties of Principal to Agent: Remuneration (payment), expenses
- Duties of Agent to Principal: Compliance, care, good faith.
- Liability of Principal/Agent to Third Parties.
- Undisclosed principal: Agent acts without revealing principal.
- Liability in torts – jointly & severally.
- Breach of warranty of authority occurs when an agent falsely claims authority.
- Terminating an agency relationship: Expiration of agreement, completion of task, notice, death, bankruptcy, impossibility of performance.
Franchise Law
- Franchise agreements are contractual relationships with duties of good faith.
- Franchisor/franchisee: Franchisor grants rights to a franchisee.
- Arthur Wishart Act: Governs franchise agreements; includes disclosure, fair dealing, and association rights.
Employment Law
- Employee vs. independent contractor: The level of control and risk are key factors.
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Employer torts: Vicarious liability (actions by employee within scope), negligent hiring, wrongful referral.
- Vicarious liability occurs when an employee commits a tort, and the employer is held liable.
- Negligent hiring is when an employer fails to adequately screen.
- Wrongful referral occurs when an employer unjustly refers.
- Employee Duties: Obedience, skill, good faith.
- Employer Duties: Wages, payment methods, deductions.
- Employee termination: Length of notice required varies, dismissal for cause possible, for specific reasons (misconduct, incompetence).
- Wrongful dismissal occurs when employers fail to uphold fair dismissal procedures or give proper notice.
- Constructive dismissal is when employer alters conditions to force resignation.
- Mitigation: Employee must try to minimize loss after dismissal; must seek comparable employment.
Secured Transactions
- Bailment: Possession of goods without ownership transfer.
- Secured transaction: A loan where the lender has priority over the borrower's asset in case of default.
- Personal property vs. real property.
- Creating a security interest: Agreement between parties, attachment (property subject to interest), and perfection (interests protected).
- Ways to perfect a security interest: Physical possession, registration under PPSA.
- Priority of competing interests: First to perfect a security interest usually has priority; including the priority granted by PMSI.
- Effect on third parties: Registration under PPSA gives notice to potential purchasers.
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Description
This quiz explores the discharge of contracts, focusing on how contractual obligations can be terminated. Learn about performance, agreement, frustration, and the legal implications of breaches. The quiz also delves into specific clauses that affect contract enforcement post-termination.
