Exam 10: The Requirements of Form,writing and Privacy

Ravi,an art collector,had been made a standing offer by a gallery to purchase one of his paintings for $150,000.At shows and luncheons of the art community he had previously rejected the entreaties,knowing the painting to be worth at least twice as much.On the latest occasion of a luncheon at which Ravi was deliver an art commentary to the guests,the gallery made its offer once more.To himself,Ravi considered the offer and concluded he could use the charitable tax relief that such a sale at a loss would generate.In the course of his speech,he acknowledged and accepted the offer.Two days later,Ravi's lawyer advised him that the purchasing gallery was NOT a charitable foundation,and no tax deduction for such a "donation" could be expected.Ravi then refused to sell the painting to the gallery.On the strength of the verbal agreement of purchase and sale made in the presence of witnesses,the gallery sued Ravi for breach of contract,and for a decree of specific performance to compel Ravi to sell it the painting.Ravi may successfully plead the Statute of Frauds as a defence.

X wished to purchase a motor vehicle from Y on credit,but X was unemployed,and Y was hesitant to sell to him for that reason.Z,who was quite wealthy,said to Y: "Sell X the automobile on credit,and if X does not pay you,I will." Z has made an offer to guarantee the payment of the debt of X.

Hrushka is the executor of her father's will.She does not want to liquidate any part of his stock portfolio at this time to pay off a large debt he owed Tom,because the market is very low right now and she would get a better price later in the year.Her verbal promise to Tom that she will repay him herself is unenforceable.

Mary verbally agrees to purchase Carrie's cottage for $75,000 and gives her a deposit cheque for $7,500.Carrie later sends her a letter thanking her for the cheque and confirming all the details of the contract.Mary later refuses to go through with the deal.

Lev and Drew have been negotiating verbally and in writing concerning the purchase by Lev of a number of items manufactured by Drew's company.Lev insists that they have only reached the stage of having an agreement in principle but Drew says they have a binding contract.If one of the terms they agreed upon verbally was that they would execute a written contract,the court will hold that a contract does exist.

Steve orally agrees,at a family reunion picnic,to buy Bob's farm for $250,000,and all the terms of the agreement are settled.Bob agrees to let Steve come onto the property before the closing date so that Steve can renovate the farmhouse kitchen and build a new barn before he takes over formally.By the time Bob tells Steve that he has changed his mind and that he will not be completing the transaction on the closing date,Steve has spent $40,000 on the property.

Cal has just co-signed a car loan for his friend,Peter.This action made Cal the guarantor of the loan.In the event that Peter defaults on payment,Cal has been made liable for payment.After a few months without incident,Cal receives a notice from the bank that Peter missed a payment,and that Cal is to pay.After writing a cheque,Cal confronts Peter who said he could not afford it this month because he bought a new stereo.Cal is annoyed with Peter's irresponsible actions and informs Peter that next month he will have to pay two installments,one to the bank and one to him to make up for this month.

Joyce's son,Al,borrowed money from Verity Finance.He lost his job last month and has not made the latest payment on the debt.When Verity's collections department telephones,Joyce answers the phone.She agrees to make the payments if Al does not because she is worried about his state of mind due to his job loss.Joyce's promise is called an indemnity.

Power of attorney is a legal document usually signed under seal in which a person appoints another to act as his or her attorney to carry out the contractual or legal acts specified in the document.

Martin enters into a verbal contract with Marlowe Ltd.to investigate their operations and their accounting systems,make recommendations as to how to improve them,and help implement the changes Marlowe Ltd.accepts.In the negotiations,Martin makes it clear that he cannot give Marlowe Ltd.a definite timetable and that it is clear that the whole process will take longer than a year.Part of their agreement is that either party may terminate the contract on 60 days' written notice to the other if the work is progressing unsatisfactorily.The agreement that the arrangement can be terminated is

X wished to purchase a motor vehicle from Y on credit,but X was unemployed,and Y was hesitant to sell to him for that reason.Z,who was quite wealthy,said to Y: "Sell X the automobile on credit,and if X does not pay you,I will." If Z made the guarantee in writing,and signed the document,the guarantee would not be enforceable until X defaulted on a demand for payment by.

Parties sometimes enter into verbal agreements but then only partly perform their obligations.For the claim of part performance to succeed,what needs to be established?

Travis verbally ordered a new $500 dinette set from Timpson's Furniture and the salesman accepted the order verbally.Taking his name and address,the salesman having run out of sales contracts,said he would send Travis a copy of the contract the following day,and asked Travis to sign and return it.When the copy of contract arrived,Travis did not sign it and he refused delivery of the dinette set when it arrived.Timpson's sued Travis for breach of contract.

Collateral agreement is defined as an agreement that has its own consideration and does not support another agreement.

The act of putting a contract under seal was born in the King's Courts of the 13^th century.It was used as an expression of the intent to be bound by the person making the contract to which the seal was affixed.Today in some provinces formal agreements such as power of attorney and a deed of land must bear a seal to be made enforceable.

Joyce's son,Al,borrowed money from Verity Finance.He lost his job last month and has not made the latest payment on the debt.When Verity's collections department telephones,Joyce answers the phone.She agrees to make the payments if Al does not because she is worried about his state of mind due to his job loss.Joyce's promise does not have to be in writing to be enforceable.

A subsequent agreement involves which of the following?

Joyce's son,Al,borrowed money from Verity Finance.He lost his job last month and has not made the latest payment on the debt.When Verity's collections department telephones,Joyce answers the phone.She agrees to make the payments if Al does not because she is worried about his state of mind due to his job loss.Verity must first try to get the money from Al before approaching Joyce.

A verbal contract concerning the sale of land to Jack by Jill will not be enforceable by either one of them unless it can be shown that the one who wishes to enforce it dealt with the land as if there was such a contract and no other interpretation could be put on their actions; that the non-enforcement would perpetrate a fraud and a hardship on the one who wishes to enforce it; and there is clear verbal evidence,such as witnesses to the transaction,to establish that there was such a valid verbal contract between them.

Randy,an avid hunter,wishes to build a hunting cabin for himself and his companion to use during hunting season.He travelled around the area and found a farm that had an ideal piece of land.Randy telephoned the farmer and asked to meet him over coffee.Bob,the farmer,decided to sell Randy the lot for $3,000.Randy agreed,handing Bob $500 in cash as a deposit.When Randy arrived for hunting season three months later,having erected a cabin in the summer,he offered Bob another $1 000 towards the purchase price.However,he found quite a surprise.Bob decided he no longer wishes to sell the land,and informs Randy he will have to tear down his building.Bob tells Randy that he may do this because they did not have a written agreement. Apply the four criteria of the "doctrine of part performance" to the circumstances and explain their relevance to both Randy's arguments and Bob's defence.