Doctrine of Part Performance Quiz
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Questions and Answers

Which of the following is NOT a requirement of the Doctrine of Part Performance?

  • The party has done or acquiesced to an act
  • The act indicates a contract was made
  • The act is not inconsistent with the alleged contract
  • The act must be recorded in writing (correct)

The common law version of part performance required acts to be 'unequivocally consistent' with the alleged contract.

True (A)

What did the BCCA clarify regarding the requirements of the Doctrine of Part Performance?

Proof of acts indicating a contract was made, acts must not be inconsistent with the alleged contract, and the party must have done or acquiesced to these acts.

The incorporation of written terms often depends on whether the terms are considered ___ or surprising.

<p>unfair</p> Signup and view all the answers

Match the following cases to their significance regarding the Doctrine of Part Performance:

<p>Schild v BC (1993) = Codified part performance, more liberal than common law Olsen v Gamache (1995) = Clarified test for acts indicating a contract Olsen test = Requires proof of acts and consistency with alleged contract Doctrine of Part Performance = Allows enforcement of land contracts without writing</p> Signup and view all the answers

What is the main intent behind submitting a bid in response to an invitation to tender?

<p>To indicate an intention to create contractual relations (C)</p> Signup and view all the answers

A comfort letter is legally binding on the parent company.

<p>False (B)</p> Signup and view all the answers

What is the significance of a substantial deposit provided by bidders in the tender process?

<p>It shows the seriousness of the bidders and their commitment to the bid.</p> Signup and view all the answers

Comfort letters are commonly used in _____ loans.

<p>business</p> Signup and view all the answers

Match the following terms to their descriptions:

<p>Bid = An offer made in response to an invitation to tender Comfort Letter = A non-binding assurance from a parent company Preliminary Agreement = An initial agreement that may or may not be binding Letter of Intent = A document indicating intention without legal obligation</p> Signup and view all the answers

In the case of Kleinwort Benson Ltd v Malaysia Mining Corp Bhd, what was the ruling regarding the parent company's letter?

<p>The letter was not legally binding (B)</p> Signup and view all the answers

Letters marked 'subject to contract' are usually binding agreements.

<p>False (B)</p> Signup and view all the answers

What must courts determine about preliminary agreements?

<p>Whether a future formal contract is a required condition or just a preferred documentation method for a binding deal.</p> Signup and view all the answers

What is one essential part of a contract?

<p>One party must make an offer and the other must accept it. (A)</p> Signup and view all the answers

A unilateral contract requires both parties to make promises.

<p>False (B)</p> Signup and view all the answers

What does 'consideration' mean in the context of a contract?

<p>something of value exchanged between parties</p> Signup and view all the answers

For a contract to be legally valid, the terms must be __________ enough to understand what everyone agreed to.

<p>clear</p> Signup and view all the answers

Match the following terms with their definitions:

<p>Offer = A willingness to enter into an agreement on certain terms Acceptance = Agreement to the terms of an offer Misrepresentation = Lying to get someone to sign a contract Duress = Threats or pressure to compel agreement</p> Signup and view all the answers

In which case is the 'objective theory of contract formation' applied?

<p>Smith v Hughes (D)</p> Signup and view all the answers

An illegal agreement can still form a valid contract.

<p>False (B)</p> Signup and view all the answers

What can courts do if someone breaks a contract?

<p>Order payment, force compliance, stop an action, or cancel the contract</p> Signup and view all the answers

A __________ contract involves both parties making promises to each other.

<p>bilateral</p> Signup and view all the answers

Which of the following is a common reason for a contract to be invalid?

<p>There was duress or pressure involved. (D)</p> Signup and view all the answers

What was the main issue in the case of Hawrish v Bank of Montreal?

<p>Disagreement over an oral promise versus a written guarantee (D)</p> Signup and view all the answers

In the Fung v Decca Homes Limited case, the written agreement could be contradicted by an oral agreement.

<p>False (B)</p> Signup and view all the answers

What was the amount overpaid by Fung to Decca Homes?

<p>$150,000</p> Signup and view all the answers

In Hawrish v Bank of Montreal, the guarantee included a term stating that no _______ were made by the bank.

<p>representations</p> Signup and view all the answers

Match the following cases to their main outcomes:

<p>Hawrish v Bank of Montreal = Written terms enforced over oral promises Fung v Decca Homes Limited = Written agreement could not be contradicted</p> Signup and view all the answers

What was the nature of the agreement signed by Fung and Decca Homes?

<p>A demand promissory note (B)</p> Signup and view all the answers

The court in Hawrish v Bank of Montreal ruled in favor of Hawrish.

<p>False (B)</p> Signup and view all the answers

What was the condition under which Decca's lawyers were instructed to pay Fung?

<p>Only if certain properties sold</p> Signup and view all the answers

Which case established that unsigned documents may be incorporated if the recipient knows the terms exist?

<p>Parker v South Eastern Railway Co. (D)</p> Signup and view all the answers

Signed documents are always binding, regardless of whether the signer has read them.

<p>True (A)</p> Signup and view all the answers

What is the Parol Evidence Rule (PER)?

<p>A legal rule that prevents parties from using evidence outside of a written contract to contradict or change the terms of that contract.</p> Signup and view all the answers

In the case of __________, it was determined that very small print designed to conceal terms does not provide sufficient notice.

<p>Spooner v Starkman</p> Signup and view all the answers

Match the following cases with their key findings:

<p>Parker = Opportunity to Read Mendelssohn v Normand = Timing of Signs Tilden Rent-A-Car Company v Clendenning = Onerous Terms without Adequate Notice McCutcheon v MacBrayne = Inconsistent History</p> Signup and view all the answers

Which of the following conditions allows unsigned documents to be incorporated?

<p>The recipient knows the document contains conditions (A)</p> Signup and view all the answers

Terms from a previous deal can be incorporated into a new contract only if both parties agree.

<p>False (B)</p> Signup and view all the answers

What must a party show to have terms incorporated from previous dealings?

<p>A regular history of using the same terms.</p> Signup and view all the answers

In the case of __________, the signed liability release for white water rafting was upheld despite the death of a participant.

<p>Delaney v Cascade River Holidays Ltd</p> Signup and view all the answers

Which of the following is not an exception to the general rule that signed documents are binding?

<p>Written agreement from both parties (B)</p> Signup and view all the answers

Which of the following statements may not be considered misrepresentation?

<p>Sales talk that exaggerates qualities (C), Statements of law (D)</p> Signup and view all the answers

Misrepresentation requires that the claimant relied solely on the misstatement to enter into a contract.

<p>False (B)</p> Signup and view all the answers

What is the traditional doctrine regarding non-disclosure in negotiations?

<p>A party is not required to disclose material facts.</p> Signup and view all the answers

A misstatement must be ______ to the decision of the claimant.

<p>material</p> Signup and view all the answers

Match the following cases with their significance regarding misrepresentation:

<p>Andrews v Hopkinson = Sales talk is generally not misrepresentation. Smith v Land and House Property Corp = Opinion statements are not misrepresentation without expertise. Edgington v Fitzmaurice = Future intention statements are not statements of fact. Redgrave v Hurd = Materiality must be relevant to the decision to contract.</p> Signup and view all the answers

What must happen for misrepresentation to induce the claimant to enter into an agreement?

<p>The misrepresentation must be of such a nature that it's presumed to induce. (D)</p> Signup and view all the answers

Statements made about the future are always considered as misrepresentations.

<p>False (B)</p> Signup and view all the answers

In which case did the courts specify that a party's own investigation may negate reliance on misrepresentation?

<p>Attwood v Small</p> Signup and view all the answers

Flashcards

Contract

A legally binding agreement between parties.

Offer

A communication indicating a willingness to enter into an agreement on specific terms.

Acceptance

An agreement to the terms of an offer.

Consideration

Something of value exchanged by parties, such as money, goods, or promises.

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Meeting of the minds (Consensus ad idem)

Both parties have the same understanding of the agreement's terms.

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Objective theory of Contract Formation

Courts determine if a contract exists based on observable actions, not hidden intentions.

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Invitation to treat

Communication that invites offers, but not legally binding.

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Invalid Contract

A contract that isn't enforceable by law.

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Misrepresentation

Lying to induce someone to enter a contract.

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Duress

Using threats to force someone to enter into a contract.

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Contractual Intention (Bidding)

The parties' intent to form a legally binding contract regarding a bid in response to a tender.

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Comfort Letter

A non-binding letter of assurance, typically used in loan agreements, from a parent company to support a subsidiary's loan.

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Binding Comfort Letter

A promise that acts as a legal agreement to support a loan request made by a subsidiary company.

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Preliminary Agreements

Initial agreements, often called 'letters of intent,' that may or may not be legally binding.

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Binding Preliminary Agreement

A preliminary agreement that creates a legally enforceable arrangement between parties, despite lacking a formal contract.

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Letter of Intent

An initial agreement that outlines the terms but is not a legally binding contract.

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Non-Binding Contract

An agreement that does not create legal obligations; it outlines expectations, but parties are not legally bound to perform.

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Formal Contract as Condition

In a preliminary agreement, if a formal contract is necessary for a binding arrangement, its absence indicates no binding agreement.

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Part Performance Doctrine

Allows enforcing land contracts without a written agreement if certain acts are performed.

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Part Performance Test

Party's actions must show a contract, align with the contract, and benefit the charged party.

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Incorporation of Written Terms

Determining when written documents become part of a contract.

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Unsigned Documents

One category of written terms that might be included in a contract even without being signed.

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Unequivocally Consistent Acts

Actions that clearly and unambiguously support the existence of an agreement in the common law context of part performance.

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Hidden Terms

Terms written in very small print designed to conceal them are unlikely to provide sufficient notice to be incorporated.

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Timing of Signs

Signs containing terms must be visible when the contract is made for them to be incorporated; signs posted later are ineffective.

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Opportunity to Read

If a party had the opportunity to read the terms and withdraw before signing, but did not, the terms may be incorporated.

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Regular History

If parties have regularly used the same terms in previous dealings, they may be incorporated even if not provided late or at all in a new contract.

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Inconsistent History

If previous dealings were inconsistent, the court might refuse to incorporate terms from earlier deals into a new contract.

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Industry Understanding

If a party reasonably understands terms would apply in the industry, they can be incorporated even if provided late.

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General Signed Document Rule

Signed documents are binding whether read or not.

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Signed Document Exceptions

Signed documents are not binding if there is fraud, misrepresentation, or unfair provisions without adequate notice.

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Parol Evidence Rule (PER)

This rule prevents parties from using evidence outside of a written contract to contradict or alter its terms.

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Parol Evidence Rule

A legal principle that prevents parties from using oral evidence to contradict, modify, or add to the terms of a written contract.

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Hawrish v. Bank of Montreal

A landmark case where the court enforced a written guarantee despite an alleged oral promise that contradicted it. This upheld the parol evidence rule.

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Fung v. Decca Homes

A case where the court ruled that a written promissory note couldn't be contradicted by an alleged oral agreement, further solidifying the Parol Evidence Rule.

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Standard Form Contracts

Pre-written contracts that are often used by businesses, usually with minimal room for negotiation.

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Oral agreement vs. written agreement

When there's a conflict between an oral agreement and a written contract, courts usually give more weight to the written terms.

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Continuing Guarantee

A guarantee that remains in effect until the guaranteed debt is fully paid, regardless of changes in the company or its management.

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Representations

Statements made by one party to another during contract negotiations, but not necessarily part of the final agreement.

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Enforceable Contract

A contract that a court will recognize and uphold, giving the parties the legal right to demand performance of the contract.

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Misrepresentation Requirements

To establish misrepresentation, the false statement must be material to the contract (would influence a reasonable person) and induce the claimant to enter the agreement.

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Sales Talk vs. Misrepresentation

General sales puffery, or exaggerated claims about a product, is not misrepresentation unless the seller has privileged information that makes the statement misleading.

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Opinion vs. Misrepresentation

Statements of opinion are not misrepresentation unless the person giving the opinion has expertise on the matter.

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Intention & Misrepresentation

Statements about future events are not misrepresentation unless the speaker had no intention of fulfilling it at the time of making the statement.

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Statements of Law & Misrepresentation

Traditionally, statements of law were not considered misrepresentation. However, there is a growing trend towards holding parties accountable for misrepresenting legal matters.

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Inducement & Investigation

If the claimant conducts their own investigation after the misrepresentation and relies on that new information instead, they cannot claim inducement.

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Presumption of Inducement

When a misrepresentation is likely to influence a reasonable person to enter the contract, it is presumed to have induced the claimant, shifting the burden of proof.

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Duty to Disclose?

Traditionally, parties were not obligated to disclose material facts to each other during negotiations. However, there are exceptions.

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Study Notes

Contracts CAN - Study Notes

  • A contract is a legally binding promise between parties (usually people or companies).

  • The main goal of contract law is to ensure everyone knows their legal obligations and can get help from courts if needed.

  • Four essential parts of a contract:

    • Both parties must intend to create a legal agreement.
    • One party must make an offer, and the other must accept it.
    • Both parties must give something of value (consideration).
    • The terms must be clear enough for everyone to understand what was agreed upon.

  • Types of contracts:

    • Spoken, written, or implied through actions.
    • Bilateral (both sides make promises) or unilateral (one side makes a promise for the other to act).

  • Things that can make a contract invalid:

    • Misrepresentation (lying to get someone to sign).
    • Honest mistakes by both parties.
    • Events that make it impossible to complete the contract.
    • Illegal agreements.
    • Threats or pressure (duress).
    • Taking advantage of someone's trust.
    • Unfair deals where one side has too much power.

  • What happens if someone breaks a contract?

    • Courts can order payment of money to compensate for losses, force someone to do what they promised, order someone to stop doing something, or cancel the contract completely.

  • Class 3: Offer and Acceptance I

    • For a contract to exist, one party must make an offer and the other must accept it.
    • Must have consensus ad idem (meeting of the minds).
    • Courts evaluate offers objectively.
    • Offers: "communication by the offeror to the offeree indicating a willingness to enter into an agreement with the offeree on certain terms".

  • Class 3: Preliminary negotiations vs offers

    • "Invitation to treat" is an invitation to bargain; not an offer.
    • Quotes are not offers.

  • Offers: Retail Sales

    • Display of goods is an invitation to treat, not an offer.

  • Offers: Unilateral Contracts

  • Offers: Can be made to the public at large. Members of the public must complete certain acts to receive a reward (like finding a lost dog).

  • Offers: Tenders and Auctions:

    • A call for tenders is an invitation to treat, not an offer unless it explicitly states the lowest bid will be accepted.
    • In an auction, the bid is the offer, and the auctioneer's acceptance forms the contract.

  • Class 4: Offer and Acceptance II

    • Acceptance occurs when conduct by A is an offer and B accepts that offer, indicating the contract's formation.
    • Usually silence is not enough to constitute acceptance unless parties intended it
    • There are exceptions where silence constitutes acceptance (e.g., when a party continues to use services).

  • Class 5: Offer and Acceptance III

    • Must tell someone if you accept their offer
    • Silence is usually not enough to amount to acceptance, however, there are exceptions (e.g, a contractual relationship that implicitly requires acceptance via a certain action).

  • Class 6: Certainty of Terms I

    • A contract is not valid if its terms are unclear or cannot be determined with reasonable certainty
    • Incomplete agreements may be enforceable if parts are clear or certain commercial contexts, and there is a mechanism laid out which can define the unclear parts later on.

  • Class 7: Certainty of Terms II

    • Sometimes parties may agree that specific terms (like prices) will be agreed upon later.
    • Courts look to see if there's a mechanism to handle the uncertainty of the terms or if it's obvious in that context that the terms can be filled in later.

  • Class 8: Intention to Create Legal Relations I

    • For a contract to be valid, parties usually must intend to be legally bound.
    • Commercial dealings are presumed to be legally binding.
    • Social arrangements are not presumed to be legally binding.

  • Class 8: Intention to Create Legal Relations II

    • Commercial agreements, parties stipulate if they are bound only in "honour".
    • Construction tender cases.

  • Class 9: Intention to Create Legal Relations III

    • Preliminary or "letter of intention" agreements are generally not binding unless the parties make it clear that they are intended to be binding.

  • Class 10: Bargaining in Good Faith I

    • Parties may have a duty to negotiate in good faith, depending on the circumstances surrounding the context of the negotiation.

  • Class 10: Bargaining in Good Faith II

    • Well established concept of "fair and equal treatment" in tendering.
    • Circumstances and relationship of parties, past promises.

  • Class 11: Misrepresentation I

    • When a false statement of fact is made and induces a party to enter a contract, the contract may be voidable.
    • Remedies include rescission (reversal of the agreement) or compensation for damages depending on the parties' conduct and the nature of the misrepresentation (deceit or negligence).

  • Class 12: Agreements in Writing I & II

    • The law requires certain agreements (like land transactions) to be in writing.
    • The "Parol Evidence Rule" prevents parties from introducing evidence outside of the written document, unless there was a complete misunderstanding that can be demonstrated.

  • Class 13: Agreements in Writing II

    • There are exceptions to the parol evidence rule (e.g., fraud, misrepresentation, and duress).

  • Class 14: Consideration and Form I

    • Consideration: something exchanged between parties to justify enforcing a promise.

  • Class 14: Consideration and Form II

    • Consideration: Pre-Existing Duty, can't use a pre-existing duty to avoid consideration.

  • Class 15: Waiver + Promissory Estoppel

    • Waiver: Voluntarily giving up a right.
    • Estoppel: Preventing someone from going back on a promise they made.

  • Class 16: Privity of Contract I & II -Only parties to a contract can sue or be sued under the contract, with exceptions.

  • Class 17: Misrepresentation II

  • Exceptions to the rule that misrepresentation doesn't exist: there are specific cases where reliance can be justified, like estoppel issues.

  • Class 18 & 19: Duress, Undue Influence + Unconscionability I,II & III

    • These relate to situations where one party improperly forces another to enter into or modify a contract, using threats, pressure, or undue influence.

  • Disputes as to the terms of a contract.

  • Unclear or vague terms.

  • Misrepresented or false statements.

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Description

Test your knowledge on the Doctrine of Part Performance with this quiz. Explore key aspects such as common law requirements, case significance, and the implications of comfort letters in tendering processes. Challenge yourself with matching terms and their descriptions.

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