1. Contract Law
An Introduction

2. What is a contract? What is a contract? Agreement
Imposes rights and responsibilities on parties involved
All contracts involve agreements, , but not all agreements are contracts (in that they are not all legally binding)

3. Elements of a valid contract
Offer and acceptance
Consideration=
Capacity
Consent
Lawful purpose

4. Offer and Acceptance Clear, precise offer is made by offeror
Offer is accepted by offerree
A meeting of the minds takes place; both parties clearly understand the terms of the contract
Must have serious intent (i.e. Not a joke)
Must have definite terms
Silence/inaction do not qualify as acceptance (i.e. Rogers Cablesystems)

5. Consideration Is the exchange of something of value
Present consideration=exchange at the time the contract is formed (i.e. You buy a snowboard and take it home)
Future consideration=promise to do something in the future (i.e. Begin constructing new home in the spring)
Past consideration=not legally binding!!
Something must be exchanged—the amount is irrelevant (gift is not a contract; $1 for a house)

6. Capacity Is the ability to enter into a contract
Sane and sober adults can form contracts
Contracts are generally not legally binding if they involve:
-minors
-persons with a developmental disability
-impaired judgement

7. MINORS AND CONTRACTS

8. MINORS AND CONTRACTS Minor = any person under the age of majority
In Ontario the age of majority = 18
At 18, a person gains full rights and responsibilities in legal matters (including contracts)

9. VALID CONTRACTS
Minors are obligated to fulfill contracts for necessaries
* Necessaries * = goods and services that everyone needs (food, clothing, shelter, education, medical services)
If this were not so, businesses would not enter into any contracts with minors

10. VOID CONTRACTS
Contracts that are not in a minor’s best interests are said to be void
* Void * = to have never existed
i.e. person takes unfair advantage of a minor to have the youth enter into a contract

11. VOIDABLE CONTRACTS
Voidable Contract = a contract in which one party has the right to make the contract binding or not binding
General Rule : a minor’s contract is voidable at the minor’s option
An adult who enters into a contract with a minor is bound by it if the minor wishes to fulfill its terms

12. MISREPRESENTATION OF AGE
If a minor lies about his/her age, it does not change the legal rights of the minor
Therefore, retailers deal with minors at their own risk

13. PARENTAL RESPONSIBILITY
For protection, many retailers require a parent/adult to cosign any contract involving a minor.
The adult is responsible for full payment if the minor does not pay

14. Consent
Each party must understand and freely agree to complete terms of contract
4 things that make invalid consent:
1) Misrepresentation: “Buyer beware” holds true, but you cannot lie about a material fact
2) Mistake: i.e. Clerical mistake
3) Undue influence: improper mental or emotional pressure (i.e. Husband/wife, parent/child, doctor/patient)
4) Duress: More extreme undue influence (i.e. Blackmail, violence)

15. Lawful Purpose
Contracts that amount to a crime/break laws are void