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Contracts February 2020

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Contracts February 2020 PLEASE NOTE: As an enhancement to the materials we have created, where possible, external web links to those cases and legislation that were available on the CanLII website. Please note, however, that not all links are reliable. The incorrect links appear to be especially problematic for the statutes, especially if the complete citation for the statute is not present at that exact spot in the materials. If you use the web links, please always double-check to ensure that you are being directed to the correct place. ------ The Nova Scotia Barristers’ Society has prepared these Bar Review Materials for the sole purpose of assisting applicants to prepare for the Nova Scotia Bar Examination. These materials are reviewed and updated annually, and published May 1 each year as study materials for the upcoming July and January exams. These current materials are the study outlines for the July 2020 and January 2021 Bar Examinations and may be relied upon for that sole purpose. The materials are not intended to provide legal advice, and should not be relied upon by articled clerks, transfer applicants, lawyers or members of the public as a current statement of the law. Members of the public who access these materials are urged to seek legal advice and are specifically warned against reliance on them in any legal matter or for pursuit of any legal remedy. The Society will not be liable for any use you made of these materials, beyond their intended purpose. CONTRACTS FEBRUARY 2020 CONTENTS: I. WHAT IS A CONTRACT? .............................................................................................................................. 1 II. ESSENTIAL ELEMENTS OF CONTRACTS ............................................................................................... 1 III. MEETING OF THE MINDS ......................................................................................................................... 1 IV. GOOD FAITH AND HONESTY .................................................................................................................. 2 V. OFFER ............................................................................................................................................................. 4 1. ELEMENTS OF AN OFFER ................................................................................................................................ 4 2. INTENTION TO BE LEGALLY BOUND ................................................................................................................ 4 3. INVITATIONS FOR OFFERS OR “INVITATIONS TO TREAT” ................................................................................. 5 4. CERTAINTY .................................................................................................................................................. 7 5. AMBIGUITY AND IMPLIED TERMS ................................................................................................................... 8 6. MEANINGLESS TERMS ................................................................................................................................. 10 7. SUBJECT TO CONTRACT ............................................................................................................................... 11 VI. ACCEPTANCE ............................................................................................................................................ 11 1. GENERAL ................................................................................................................................................... 11 2. METHOD OF ACCEPTANCE ........................................................................................................................... 12 3. TIME OF ACCEPTANCE ................................................................................................................................. 13 4. PROBLEMS CONCERNING ACCEPTANCE ........................................................................................................ 14 5. TERMINATION ............................................................................................................................................ 15 6. CROSS OFFERS ............................................................................................................................................ 16 7. THE BATTLE OF THE FORMS ......................................................................................................................... 16 VII. CONSIDERATION .................................................................................................................................... 17 1. GENERAL ................................................................................................................................................... 17 2. THE PERFORMANCE OF EXISTING DUTIES ..................................................................................................... 18 3. PART PERFORMANCE................................................................................................................................... 19 4. PAST CONSIDERATION AND MORAL OBLIGATION .......................................................................................... 20 5. ESTOPPEL: INTENTION AND RELIANCE ......................................................................................................... 21 VIII. THIRD PARTY BENEFICIARIES AND THE DOCTRINE OF PRIVITY ........................................... 23 1. GENERAL ................................................................................................................................................... 23 2. AGENCY ..................................................................................................................................................... 26 3. ASSIGNMENT .............................................................................................................................................. 27 IX. MISTAKE .................................................................................................................................................... 28 1. UNILATERAL MISTAKE ................................................................................................................................ 28 2. MUTUAL MISTAKE ...................................................................................................................................... 29 3. COMMON MISTAKE ..................................................................................................................................... 29 4. MISTAKEN IDENTITY ................................................................................................................................... 31 5. NON EST FACTUM ....................................................................................................................................... 32 © Nova Scotia Barristers’ Society CONTRACT LAW 6. RECTIFICATION .......................................................................................................................................... 34 X. CAPACITY .................................................................................................................................................... 35 XI. ILLEGALITY .............................................................................................................................................. 36 1. GENERAL ................................................................................................................................................... 36 2. RESTRICTIVE COVENANTS ........................................................................................................................... 37 XII. CONTRACTUAL RIGHTS AND OBLIGATIONS: IS THE CONTRACT ENFORCEABLE? CONDITIONS, WARRANTIES AND MISREPRESENTATION ................................................................... 38 1. GENERAL ................................................................................................................................................... 38 2. DISCHARGE BY BREACH .............................................................................................................................. 42 3. EXCLUSION CLAUSES OR EXEMPTION ........................................................................................................... 45 4. FUNDAMENTAL BREACH ............................................................................................................................. 46 5. UNCONSCIONABILITY ................................................................................................................................. 47 6. LEGISLATION.............................................................................................................................................. 48 XIII. FRUSTRATION OR IMPOSSIBILITY OF PERFORMANCE .............................................................. 48 XIV. INTERPRETATION OF THE TERMS OF THE CONTRACT – INTENTION AND THE SO- CALLED PAROL EVIDENCE RULE .............................................................................................................. 50 1. OVERVIEW ................................................................................................................................................. 50 2. STANDARD FORM AND NON-STANDARD FORM CONTRACTS ........................................................................... 52 3. EXCEPTIONS ..............................................................................................................................................
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