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Contracts II Midterm

Midterm Flash Cards

Doctrine of Privity of Contract Only parties that are 'privy' to a contracts can sue on or defend with the terms of the contract.
Third party beneficiaries Persons expressly or impliedly referred to in contract whom the contract is intended to benefit, and may be entitled to rights under the contract.
Provender v Wood Father of the bride dowry action. 3PB can bring action if the benefit accrues to them.
Tweddle v Atkinson 2nd father of the bride dowry action. 3PB must provide consideration.
Dunlop Pneumatic Tyre Co Ltd. v Selfridge & Co Ltd l
How can a 3PB acquire the benefit of a contact (exceptions) Right to sue: statute; specific performance; trust; agency Defence: employment; subrogation
3PB Statute Exception Insurance Statutes: 3PB of a life insurance policy can sue an insurance company directly; a 3PB with a judgment against an insured can bring an action against ICBC; 3PB liability insurance
3PB Specific Performance Exception (Beswick v Beswick) The beneficiary of a will can sue in their right as an administrator/trix
3PB Trust Exception (Vandepitte) If an intention to create a trust relationship is shown, then a Trust beneficiary can sue a promisor who owes an obligation with regard to the chose en action held in trust.
3PB Agency Exception If an agency relationship arises, then the principal can sue on the agent's capacity as a promisee. "Agency need not be explicitly mentioned in a K to arise.
McCannell v Macabee Mclaren Agency found between Studebaker and its dealers; dealers can sue one another re Infringement of Territory Clause as 3PB even though the word agent was never used
New Zealand Shipping Co exclusion clause in a bill of lading could be used by a 3PB because of agency relationship. 1: it was intended. 2: clearly the shipper was contracting for the stevedore. 3: the carrier had this authority. 4: consideration.
London Drugs v Kuehne & Nagel An employee can take advantage of exclusion clauses in an employer's contract as long as it's intended to extend to the employees and they were acting in the course of business.
Fraser River Pile & Dredge there is a subrogation exception with the same rtequirements as the employment exception
Condition Precedent A condition which must occur before a K becomes binding, BoP on the party trying to prove the K.
Condition Subsequent A condition that ends a K upon occurrence, BoP on the party looking for relief.
Conditional Offer An offer to enter into a K if a specific thing occurs; can withdraw before occurrence:
Conditional Acceptance Acceptance of an offer provided that something occurs; can withdraw before occurrence;
Intention re: Conditions Precedent The wording of a contract goes toward determining whether the parties intended the condition precedent to precede formation or performance.
Certainty re: Conditions Precedent the condition must be sufficiently certain or it can be voided for uncertainty.
Consideration re: Conditions Precedent For a condition precedent to be binding, there must be consideration for it, very much like an option contract. Based on the relative subjectiveness or objectiveness of a CP
Wiebe v Bobsien The condition to sell another property before completing a K of purchase and sale was both subjective and objective, but ultimately it was considered too subjective.
Notification about Conditions Present Not required unless the even is particularly within the knowledge of one party. (eg subject to financing)
Reciprocal Subsidiary Obligation The obligation to bring about a condition precedent. Can include the requirement to reasonably try to satisfy the CP. In this case, there is a K but performance is suspended.
Dynamic Transport Ltd v OK Detailing The court can require a party to satisfy a reciprocal subsidiary obligation
Eastwalsh Homes v Anatal The more improbable a CP is to be satisfied, the less damages it's worth. There are four remedies possible for breach of a reciprocal subsidiary obligations
Four Remedies for Breach of Reciprocal Subsidiary Obligations Full loss of bargain damages (if can waive the CP); Damages for lost chance (reasonable probability that CP will be satisfied - 50%+ x full loss damages); Specific performance of primary obligation (only if CP can be waived); Specific subsid obl
Unilateral Waiver When the party benefitted by a CP waived the CP and requires performance of the K
Turney v Zhilka A true condition precedent cannot be waived without an express term. No longer applies because abolished by s 54 of the L&E Act
True Condition Precedent A condition precedent entirely dependent on a third party.
Misrepresentation A false representation
Rescission A contractual remedy for mere misrepresentation that places the parties in the same place they would have been before the contract
Redgrave / Reliance Rule Representee must have been induced to enter into the contract by the misrepresentation. If a misrepresentation is material, the presumption is that there was reliance.
Smith v Land and House / The fact/opinion rule To sue for rescission, the misrepresentation must be fact not opinion. But if the opinion is based on unreasonable facts that the representee doesn't know about that is actionable.
Bank of BC / Misrepresentation by omission/silence Misrepresentation by omission is not actionable or good as a defense, exept if there is a fiduciary relationship.
Kupchak v Dayson / Restitution, laches and affirmation defences Restitution: you can't go back so you can't have rescission Affirmation: the K was affirmed after the misrepresentation was exposed Laches: equitable limitation period on a claim
Redican v Nesbitt / execution rule/limitation If a K has been executed/completed you cannot have rescission unless it is so serious it changes the substance of the K.
Heilbut, Symons v Buckleton / Intention test To determine if a statement is a term you must look at the intention of the parties based on the totality of the evidence.
Dick Bentley v Harold Smith / Intention test May have to consider reliance with intention to have a term vs a contract.
Conditions Very important terms, the breach of which will allow an innocent party to repudiate a K.
Warranty A less serious term the breach of which will allow an innocent party to sue for damage.
Leaf v International Galleries Per the sale of goods act, you cannot reject good after an unreasonable time has elapsed
Concurrent Liability When a plaintiff has a claim for damages in contract and tort arising from the same incident
Sales talk mere puffery
Mere Misrepresentations re concurrent liability No 'true' concurrent liability because there's no breach of K
Post contractual misrepresentations re concurrent liability (BG Checo) There is concurrent liability, and you can choose unless there's an exclusion clause.
BG Checo You can choose between contract or tort unless there's an exclusion clause.
Parol Evidence Rule The express terms of a written contract 'intended' to be the whole contract cannot be modified by parol evidence. (Parol = extrinsic)
Built-In Exception The rule doesn't apply
PER: written K is not intended as the whole contract exception in this case there is usually a mixture of oral and written contracting
PER: collateral oral contract exception an oral contract K1 precedes the written K2 and as long as they don't contradict then they are both vaild Haurish
PER: Implied terms exception you can lead extrinsic evidence when there is no contradiction
PER: mere misrepresentation exception If you sue for rescission because the information misled you, then you can lead parol evidence
True Exception the rule applies but you disregard it.
PER: sham agreement exception Not including fraud or illegality; if the agreement is made with no intention then it's an exception to PER
PER: subsequent oral contract exception provided that a subsequent oral contract has consideration, you are able to lead parol evidence to establish a novation
PER: condition precedent exception Can be an exception, even if oral
PER: deed/mortgage exception NO IDEA, ask someone
Evans a poor application of the 'not intended to be whole' built-in exception
Gallen PER not absolute; oral misrepresentation exception is not only for excl clauses; PER more likely to be avoided when add v. contradict; PER is rebuttable presumption; original K are stronger; specific misreps + likely to succeed v gen. excl.
Hong Kong Fir A delay in shipping case that created "third category" or "innominate" or "intermediate" terms
Third Category Terms Terms whose breach could result in depriving the party not in default of substantially the whole benefit the K was intended to provide, but could also be minor and more characteristic of a warranty. Only found if can't determine term from intention.
Wickman Machine Tool Used the intention test to determine that a term was not a condition without reference to the Hong Kong Fir test
Enforcing a Contract warranty breach, K is enforceable; conditions breach K not enforceable;
Fairbanks Soap Co lump sum K must be substantially completed before can enforce; not substantially completed is not poorly completed
Time is of the essence A phrase that will change a time stipulation from a warranty to a condition.
Payment for Service Partially Rendered On quantum meruit basis, and requires a 2nd implied K to be proven
Sumpter v Hedges Real Property is an exception to payment for service partially rendered rule.
Recovery of Money Payments You can't get deposits back because they guarantee performance, but partial payments must be returned.
Created by: 21000704


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