Contracts

A contract is an agreement
between 2 or more parties that is
enforceable at law.
Key Elements of a Contract
Offer and acceptance

Parties intend to be legally bound

Consideration

Parties must have legal capacity

Compliance with appropriate legal
formalities
Offer and Acceptance
One party makes an offer to another party,
which, when, accepted, becomes a
contract.
Offer = willingness to contract + terms
There must be:
Intention to have binding contract if
accepted
Can be express or implied
To a particular group or world at large
Invitation to Treat
A request for offers
E.g: advertisement; display
of merchandise for sale

The actual offer happens when
customer brings item to the
cash register. Acceptance is
when item is rung in.
Acceptance
The unconditional ratification of
all of the terms of the offer.
Must be unconditional
Made in manner required in
offer or, if unspecified, in a
reasonable manner
Must be communicated to
offeror (except unilateral offer)
Acceptance is accepted upon
communication
MacNeil v. Dana Canada Corporation
MacNeil v. Dana Canada Corporation
Warm Up Question
What was the original purpose for the
statutory holiday celebrated yesterday?
a. May Two-Four as a toast to a summer
beverage
b. A Civic Holiday
c. The wedding date of Prince Charles and his
first wife
d. The birthday of Queen Victoria
e. The naming of Kitcheners inter-city park
Question 1
What was the Plaintiffs action for?
a. Breach of an employment related contract
b. Breach of fiduciary duty by the employer
c. Damages for the Defendants negligence
d. Damages for the Defendants untruthfulness
e. Damages for the Defendants carelessness

Question 1
What was the Plaintiffs action for?
a. Breach of an employment related contract*
b. Breach of fiduciary duty by the employer
c. Damages for the Defendants negligence
d. Damages for the Defendants untruthfulness
e. Damages for the Defendants carelessness
Question 2
What did the Defendant contend?
a. The Defendant was in no way negligent
b. The Defendant did not owe any fiduciary duty
c. There was no contract since no offer was
made to the Plaintiff
d. The Defendant was in no way untruthful
e. The Plaintiff was completely responsible for
his situation

Question 2
What did the Defendant contend?
a. The Defendant was in no way negligent
b. The Defendant did not owe any fiduciary duty
c. There was no contract since no offer was
made to the Plaintiff*
d. The Defendant was in no way untruthful
e. The Plaintiff was completely responsible for
his situation

Question 3
What did the trial judge conclude constituted the
offer in this situation?
a. The Plaintiffs communication of his offer to take
early retirement
b. The Defendants communication of its offer of early
retirement based on the Plaintiffs invitation to treat,
which was not forthcoming in the this situation
c. The Plaintiffs communication of his offer to take
early retirement by not showing up at work?
d. The Defendants communication of its offer to
employees for early retirement
e. There was offer by either the Defendant or the
Plaintiff and no contract as a result

Question 3
What did the trial judge conclude constituted the
offer in this situation?
a. The Plaintiffs communication of his offer to take
early retirement
b. The Defendants communication of its offer of early
retirement based on the Plaintiffs invitation to treat,
which was not forthcoming in the this situation
c. The Plaintiffs communication of his offer to take
early retirement by not showing up at work?
d. The Defendants communication of its offer to
employees for early retirement*
e. There was offer by either the Defendant or the
Plaintiff and no contract as a result

Question 4
What is the legal standard for determining if a contract offer
was made absent an explicit offer?
a. It is an objective standard looking solely at how the offeror
viewed his or her actions
b. It is a subjective standard looking solely at how the offeror
viewed his or her actions
c. It is a subjective standard looking solely at how the specific
offerees viewed the offerors actions
d. It is an objective standard looking solely at how the specific
offeroree viewed the offerors actions
e. It is an objective standard looking at how a reasonable person
would view the offerors actions although the offerees views
are not irrelevant*

Question 4
What is the legal standard for determining if a
contract offer was made absent an explicit offer?
a. It is an objective standard looking solely at how the
offeror viewed his or her actions
b. It is a subjective standard looking solely at how the
offeror viewed his or her actions
c. It is a subjective standard looking solely at how the
specific offerees viewed the offerors actions
d. It is an objective standard looking solely at how the
specific offeroree viewed the offerors actions
e. It is an objective standard looking at how a
reasonable person would view the offerors actions
although the offerees views are not irrelevant*

Question 5
Approximately what was the amount of total
damages awarded to the Plaintiff?
a. $0-$49,999
b. $50,000-$99,999
c. $100,000-$149,999
d. $150,000-$199,999
e. $200,000-$249,999

Question 5
Approximately what was the amount of total
damages awarded to the Plaintiff?
a. $0-$49,999
b. $50,000-$99,999
c. $100,000-$149,999
d. $150,000-$199,999
e. $200,000-$249,999*

Postbox Rule
(Postal Acceptance Rule)
If acceptance is by
mail, effective when
posted in the mail,
even if:
Offeror is unaware
Acceptance mailing
is delayed, lost or
destroyed
Termination of Offer
An offer is legally withdrawn and will no longer
become a binding agreement if, or when, offeree
purports to accept it.
Offeree makes a counter-offer
Offeree rejects the offer
By revocation, ie; offeror withdraws the offer
before acceptance
Lapse- if offer open for fixed time which expires
At death of offeror (with exceptions)
Parties Intend to be Legally bound
Depends on the context.
For example:
Exaggerated advertising
as mere puffery
A joke
Promises made within
family relationship
to offer a friend a meal is
not to invite litigation
Consideration
Contract is an exchange with value given
by each party. Courts will not evaluate
whether or not there is value in the
consideration
Past consideration is not enough
Performance of existing duty is not
valid
Courts will relieve promise made
under duress
Consideration can be symbolic
Exceptions
Contract under seal
Past payment of debt
To a charity where others have pledged
money or charity makes legal commitment
because of pledge
Promissory estoppel
Promise not to enforce legal right
Party relies on promise acting in good faith
Inequitable not to enforce promise
Legal Capacity
Mentally impaired persons (disability, drugs
or alcohol) where person:
Is incapable of understanding the
transaction
Other party aware of incapacity
Contract is voidable and person must:
Repudiate
Return all benefits received.

Legal Capacity
Minors ie: person
under the age of 18
Contract is voidable
(minor can enforce but
adult party to contract
cannot)
Exception:
Contracts for necessities.
Contracts
Oral, written, with or
without a seal

Simple Contract = written
without a seal
Deed = written and under
seal
Formalities
Some agreements must be in writing to be
enforceable:
Promise of an executor to pay debts of
estate personally
Guarantees
Contracts relating to land
Under Legislation
Sale of Goods Act, contract over value of $40
Consumer Protection Act, over value of $50
Family Law Act domestic agreements
Guiding principles
Establish a business
practice or policy which
explains clearly terms
for delivery of goods or
services
Put it in writing
Keep it simple
Make sure every
customer gets a copy
Key Terms
Price or fee
Guarantees or
warranties
Timing
Customers
responsibilities