5:  Interpreting the contract and terminating the contractual relationship

A mistake in law

A mistake is usually about

Misunderstanding that destroys consensus results in

For consensus to be destroyed the one-sided mistake must be

Mistake must go to

Mistake must be

Careless party responsible when mistake is

Fundamental shared mistake about subject matter

Let the buyer beware – CAVEAT EMPTOR

When seller makes an obvious mistake selling something in 25 when it was 2500

mistake is not an

Failure to read the document before signing, can defeat the defence of

The defence of non-est factum (“it is not my act”) is not available for

Express terms are

Implied terms are

There are two main approaches used for interpreting terms:

Reasonable person test applies when there is

Courts apply literal meaning to

Ambiguous wording interpreted

The parol evidence rule

A misrepresentation is

Misrepresentation is a

A misrepresentation is made during

An opinion is not usually a misrepresentation, unless

When an expert in the area covered by the contract gives an opinion and the other party relies on that opinion, the opinion is considered a

A misrepresentation can occur through omission if

contracts of utmost good faith

The two main types of contracts of utmost good faith are

An innocent misrepresentation is

A fraudulent misrepresentation is

A negligent misrepresentation or misstatement occurs

Misrepresentation must be

Silence or non-disclosure is not

Partial disclosure may be

A victim of misrepresentation must show that

. For innocent misrepresentation, the only remedy available is

Rescission amounts to

Rescission not available in certain circumstances:

Rescission and/or damages for torts for

Failure to correct an innocent misrepresentation without delay turns into

Damages for negligence may be available in cases of

Duress occurs when

Duress involves threats of violence or imprisionment – Contract is

With undue influence, the victim feels

The court may find undue influence in the following situations:

Where an unfair contract has been entered into and there was an inequality of bargaining power between the parties, the courts may set the contract aside as

only the parties to the contract can sue under the contract; third parties cannot sue on the contract. This is the principle behind

Insurance policies are an exception to the rule of

Some of the most common exceptions are

Novation occurs when

A trust is

Land law is not covered by the concept of

An assignment is a

The parties who transfer their rights are

the third parties to whom rights are transferred are

The scope of the rights acquired by the assignee against the promisor cannot be any broader than

To qualify as a statutory assignment, all of the following requirements must be met:

Often, contractual obligations are performed by someone else, but this is not an assignment. In vicarious performance, the first party’s obligations to the second party are performed by

Negotiable instruments are another exception to the general rules regarding

When a contract is discharged, it has come to an end. There are five ways a contract can be discharged:

Discharge by performance occurs when

Tender of performance is

Contracts usually consist of major terms (called conditions) and minor terms

Where warranty breached, contract is

Contract discharged when contract substantially performed Example

Tender of performance ends

When a party has substantially fulfilled the requirements of a contract

Discharge by agreement occurs when

The parties may replace one of the parties to the contract with a new party and discharge the former party from its obligations under the contract. This is called

Accord and satisfaction occurs where

Accord refers to the agreement to

A condition precedent or “subject to” clause is

. If a condition precedent is not satisfied, there is

A condition subsequent occurs where

Conditions precedent determine when obligations to perform contract

Conditions subsequent determine when contractual obligations

Sometimes the contract anticipates some catastrophic event, such as a riot, invasion, earthquake, or flood that will interfere with the performance of the contract. This is referred to as a

A frustrating event is an

The frustrating event must take place after the making of the contract and

. A self-induced frustration is

In a few situations, a contract may be discharged by

If a frustrating event occurs, the Frustrated Contracts Act in most provinces allows for

Breach of contract occurs when

A breach of a condition is a

A warranty is a

An exemption clause is a

When a breach of condition in a contract has been accepted by the other party, it is

For an exemption clause to be effective, the promisor must

Repudiation occurs when

An anticipatory breach occurs where

Rescission

Rectification

Damages

Damages are awarded for

Parties who have suffered a loss as a result of another party’s breach of contract are under a

Damages are not generally awarded to compensate an injured party for some unusual or unexpected consequence of a breach, as such consequences would be considered

Parties may also predetermine what damages will need to be paid if there is a breach; these are called

Liquidated damages may be prepaid in the form of a

Where an award of damages is not sufficient for a breach of contract, the court may award an equitable remedy, such as

When the equitable remedy of an injunction is ordered, it is

Courts may order breaching conduct to stop
But not

Interlocutory injunction is

Quantum meruit when