CHECKLIST: CONTRACT LAW  (Common law)
Note 1:  This checklist is an aide memoire.  
Note 2:  The checklist is nested;
Note 3: Lawyers' libraries of contracts will often have separate checklist for each kind of contract or
transaction


Contract

Offer and acceptance “meeting of minds”  Latin “ad idem”;
  • complex contracts may result from exchange of emails and documents and question when
    “crystalized”
  • contracts manager may either recite entire exchange of emails or may merge emails into “clean
    contract” setting out terms
  • note following terms:
offer “A promise to perform specified acts on certain terms”;
“Offeror is the person who makes an offer”
“Offeree is the person to whom the offer is made”
offer ranges from simple transaction to specifications 3 metres long;  some common terms are:  
pricing, services, goods, time dimension,;
“pricing” may be an area of expertise such  FIDIC quantity surveyor pricing terms;  money is the usual
consideration
“essential terms” will vary with the transaction;
“invitation to treat” “An expression of willingness to do business” does not give rise to contract duties e.
g. applies to university advertising a job.  Qualified applicant has no claim for breach of contract if NOT
HIRED; Roback v. U.B.C., 2007 BCSC 334 (CanLII) — 2007-03-09  
invitation to tender” or “request for proposal” may give rise to contract duties Supreme Court of
British Columbia — British Columbia advertisement — tender — contractual relations — hiring —
invitation
“Revocation” offers may be withdrawn
“Option agreements” mean offeror must keep offer open to offeree for agreed period of time;
“Lapse” means the offer has run out;
“Rejection” of an offer;
“Counteroffer” cancels the first offer;
“Acceptance” is acceptance of the offer without qualification or counteroffer;
termination of an offer may occur by:
  • Revocation – termination of offer;
offeror can revoke an offer at any time before acceptance upon notifying the offeree of withdrawal;
upon revocation offer ceases to exist;
option agreement is an agreement to keep the offer open.  It is a separate agreement.
  • lapse – expiration of time after offer made either defined or reasonable:
offer may expire on specified date;
offer ends and can no longer be accepted;
if no expiry date is specified then it remains open for a reasonable time;
      reasonable time depends upon the circumstances of the case
  • rejection of the offer;
counteroffer:
counteroffer is a form of rejection;
it is the rejection of the original offer and the proposal of a new offer;
      original offer can be accepted only if the offeror revives it;
death or insanity;

Acceptance may have formal requirements;
  • acceptance is an unqualified willingness to enter into an agreement/contract on the terms of the
    offer;
communication is unconditional assent to the offer in its entirety
offer may specify only certain means of communication;
      examples of communication means are: personally, in writing, via fax, email, telephone,
electronically and even conduct
              electronic acceptance of offer may be covered by statute e.g. Electronics Transaction Act

complete contract required at common law INCOMPLETE ok at civil law;
standard, technical, or "know how" contracts are designed in advance to be complete

deliberate (intention to create contract to escape 'family' promises);
  • intention is presumed between businesses;
  • family promises may not be binding BUT see KOCH V KOCH
  • voluntary (no coercion) e.g Ellison v Friedland ;
  • competent persons at law (get's complicated under agency e.g. Lawyer can bind client and then
    client attacks settlement);

consideration:  classical statement that peppercorns enough to found a binding contract i.e.
“consideration”  is very low requirement; usual consideration is money, goods, or services;
  • the price to be paid paid for a promise of goods or services etc.
  • Each party must give something of value but peppercorn rule  i.e. search PEPPERCORN RULE
    ON CANLII - see LINKS
  • gratuitous promises “free” may not give rise to contracts at common law BUT may give rise to
    contracts under the Civil Code;
  • legal duty may not amount to consideration BUT
      debtor who pays lesser amount to settle greater amount may be binding;
      variation of contracts usually requires fresh consideration at common law e.g. Gilbert Steel Ltd. v.
University Construction [1976] 12 O.R. (2d) 19 (C.A.) BUT Civil Code may sympathize and support
supplier whose costs increase or circumstances change  (E.g. Dubai);
      if an agreement is made to alter an existing contract to benefit one party only this agreement may
be unenforceable since all variations must be supported by fresh consideration;
promise made under seal usually binding e.g. Guarantor where lawyer has notarized the guarantee e.
g. Contracts of Guarantee BUT Krywolt series of cases   (Hongkong Bank of Canada v. Krywolt, 2002
ABQB 694 (CanLII) — 2002-07-24 Court of Queen's Bench — Alberta         guarantee — securities —
receiver — undersigned — offer;  
  • promissory estoppel may be used where the courts want to enforce a promise made without
    consideration ;
      someone who innocently relies upon a gratuitous promise may be able to enforce it as a defence
to a lawsuit where the claimant broke their promise

writing may or may not be required;
writing is required by Statute of Frauds in Alberta respecting land (Alberta, the Statute of Frauds: An Act
for the prevention of frauds and perjuries, 29 Charles
II, c.3 (1677, U.K.), imposes requirements for agreements involving land to be in writing and
signed by the party to be sued. The statute dates back to the English civil war and the original
intent, as the name implies, was to eliminate the widespread fraud that resulted from the use of
false witnesses to prove claims to disputed property. Most common law jurisdictions have
adopted the provisions of the Statute of Frauds in some form which generally requires contracts
for the sale of land to be in writing and signed by the party to be charged. In Alberta, it is the
original English statute that is in force


Contracts establish the law between the parties
Freedom of Contract:  this is a general principle and is supported by an well functioning market
Sale of Goods Act  IS ONLY ONE EXAMPLE AND THE GENERAL RULE IS:

  • vast body of legislation, codes, and treaties address hiatus or injustice in common law and
    expert knowledge may be needed for students in Real World
  • majority of contracts in business world will be impacted by legislation, codes and treaties
scope of contracts is everything in the air, on the ground, and below the ground range from purchase of
pens to building of Space Station etc.;
  • Expert knowledge often required;
  • most contracts students deal with in business world will be standardized from “boilerplate” to
    “know how” contracts e.g. FIDIC e.g. O'BRIENS
  • good encyclopedia of contracts available at Law Library or from publisher $1,000 to $2,000
  • FIDIC encyclopedia of contracts may be 100 Euros http://www.fidic.org/
  • object standard test is general rule;  at common law “What does the written contract say without
    the benefit of parol evidence?”  at civil code different approach
  • “touting”, exaggeration is given wide deference at common law and consumer fraud legislation
    and other legislation addresses reasonably dumb consumer;   common law no historical
    requirement of good faith BUT duty of good faith in civil code law;  
  • fraud not allowed at common law but difficult to prove and rarely used;
  • consumer fraud legislation is much easier to use;
  • Equal Bargaining Power IS NOT ASSUMED  by vast body of legislation, codes, and treaties
    address hiatus or injustice in common law and expert knowledge may be needed for students
    in Real World majority of contracts in business world will be impacted by legislation, codes and
    treaties
  • Consumer protection laws regulate many marketing activities. Federally, marketing activities are
    governed by the Competition Bureau and office of Consumer Affairs. Despite this, responsibility
    for consumer protection resides with provincial governments and marketers often face a myriad
    of rules and regulations across the country. This section includes links to provincial websites
    and their most recent activities.

CONTRACT REMEDIES/DAMAGES FOR BREACH
  • Accountant or expert report is often required to assess damages (money)  for breach of contract;
even “simple” divorce often requires expert assessment of damages;
  • remedies is a specialized area;
  • Heads of Damage can be part of a checklist;
  • Queen of Remedies is injunctive relief:  “Off with their heads” is classic remedy of the King or
    Queen or French Revolution or Parliament (Cromwell) NOWADAYS it is an indefinite jail term
  • Generally the court will try to place the innocent party in the same position as if the contract had
    been performed by an award of money (damages);
  • Sometimes the innocent party suffers unforeseeable damages and the court rules that they do
    not obtain the unforeseeable damages;
CHECKLIST
CONTRACTS