Exam 3: Formation of a Valid Contract

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop. -The "five-year,five-mile radius" restriction is probably reasonable,as it protects the goodwill purchased by Austin,and does not unnecessarily restrict Corbin's right to set up business elsewhere.

Jill has been negotiating the purchase of a speedboat with Sandi during the last two weeks.Two days ago,she wrote to Sandi,saying "I won't go any higher than $8,000.Take it or leave it,but that's my final offer." By coincidence,Sandi sent a letter the same day that said "I won't take less than $8,000,so if you can't accept that,I'll have to look elsewhere for a buyer." The letters have both arrived today at their destinations.There is a contract between Jill and Sandi.

Explain how the Personal Information Protection and Electronic Documents Act (PIPEDA)must be considered in the formation of business contracts.

Mabel,a young woman aged 17,went shopping.She purchased a new coat on credit at a clothing store.Later the same day,she took her expensive watch to a jewellery shop to have a new watch band installed.While in the shop,she purchased on credit an additional watch for herself,and a silver bracelet as a gift for a friend.When the merchants later requested payment,Mabel refused to pay. -Minors are not liable for non-necessary purchases,and Mabel would be required only to return a non-necessary coat to avoid the contract.

Save-A-Lot Food Stores Limited regularly purchased large quantities of raisins for its bulk food section from a Canadian food wholesaler.The purchase of raisins was carried out with a separate purchase order and invoice each time although a full,written contract had been executed between the parties governing the relationship in its entirety.One of the terms of the contract specified that for individual orders in excess of 100 kg,a quantity discount of 15 percent would be applied to the purchase price.Since these were very favourable terms,Save-a-Lot regularly ordered quantities ranging between 500 and 700 kg of raisins to adequately supply all of its stores.After it had been purchasing raisins for over a year,Save-A-Lot received a note attached to its most recent invoice informing it that the contract was in error.The wholesaler's policy was that only purchases in excess of 1,000 kg were entitled to the quantity discount of 15 percent.The invoice showed the full amount owing for the most recent purchase of 650 kg with no discount applied and also a cumulative amount equal to the 15 percent discount that had been granted to Save-A-Lot on all previous orders.Save-A-Lot refused to pay the extra amount. Discuss the arguments that may be raised by the parties,and render a decision.

On leave from the Navy,Bart and his buddies ventured into town for a night of partying.After a good many drinks,a friend suggested they all get tattoos.When Bart's turn came he,in his inebriated state,choose a large tattoo to cover his entire forearm.When they were done the sailors returned to their ship.When Bart woke the next morning he decided to contact his lawyer to see what he could do about this tattoo.Bart,

Gavin ordered a custom-made winter coat from a mail order catalogue.He is 17.Before the coat arrived,he contacted the seller and told the company he did not want it.He has no winter coat. -It is likely that he cannot be forced by the seller to take the coat and pay for it.

The Municipality of Minuscule has just hired you as its business manager and the mayor just asked you to draft a call for tenders for the construction of a new municipal recreation centre. A)What is the legal definition of a response to a call for tenders? B)What is the legal effect if the Municipality puts out such a call? C)What should you put into the draft of the call for tenders to try to ensure that i-the Municipality of Minuscule retains the greatest flexibility and range of choice in selecting the successful tender? ii-if the successful tender decides not to participate,the Municipality of Minuscule will be compensated for the time and money this costs it,without the necessity of going to court?

One afternoon you find a notebook filled with incomprehensible mathematical notations outside the Faculty of Business building and,realizing that it belongs to a professor in the Philosophy Department whose name is on the cover,you put it under the door of his office with a note telling him that you found it.That night,on the eleven o'clock news,you see an interview with the professor.He mentions that he has lost the notebook in which he had worked out the meaning of life,and you hear him offer $10,000 for its safe return.Discuss your legal position in relation to whether or not you can claim the reward if the professor refuses to pay you.

Victor has breakfast at the Kute Kafey.From the menu,he orders buttered muffins "homemade like your mother's," jam "made with loving care and fresh ingredients," and tea "fresh picked from the cool hillsides of an Indian plantation." The waiter has accepted his order.Actually,the muffins are nothing like Victor's mum's muffins and are baked in a factory;the jam is mass-produced from industrial-quality frozen fruit;and the tea is made with generic tea bags.Victor has a good case for breach of contract.

A contract is a legal relationship between parties.The existence or validity of the contract is measured by conditions outlined by law.An indication of the intention to create a contract is built on certain premises.These premises are

Karen offers to sell her antique rocking chair to her friend Julie for $350.Julie has always loved the rocker but,since she is currently short of money,she says to Karen "I will buy the rocker from you,and I'll pay half now and half next month." Don,who has been listening,says "I've always wanted that rocker,too,Karen.I'll pay you $400 cash right now for it."

Simple Simon is told by his lawyer that a particular document must be signed under seal.When Simple Simon questions whether that isn't cruelty to animals,his lawyer explains that this is simply a process by which a written document can be made binding even if there is no consideration present.

Rita and her mother visit the bank as Rita wants to borrow money for a car.Her mother will be her guarantor.The banker fills out the loan form and the guarantee form,but has only one gummed seal.Considering the most prudent place to put the seal,the banker affixes the seal on the guarantee to be signed by Rita's mother.One seal is enough,this was the correct choice of place to put it,and the bank is fully protected.

June,an underworld enforcer,beats up Jason under an agreement with Monty by which she is to be paid $5,000 for her work.Although each party has given consideration,June cannot use the courts to enforce the contract if Monty will not pay her.

A public utility corporation (PUC)was created under legislation that gave it the right to build and maintain power stations,and to raise money within the province to do so.If the PUC enters into a contract to supply power to a group of companies in another province,with the intent to use the money thus raised to build more power stations in the province,that contract is enforceable by the corporations if the PUC decides not to honour it.

Two weeks before Susan's 18 birthday,her father gave her $3,000 to purchase a car.She chose a used car from the local dealer for $2,700,paid cash,and drove the car home.After 200 miles the brakes needed considerable work.She felt that it might be more prudent to use her father's money to start saving for a new car.Accordingly,she returned the car and the keys to the dealer along with a letter that she was repudiating the contract.She had written the letter almost a week prior to her 18 birthday,but was unable to deliver the car and letter until three days after her 18 birthday.The dealer refused to refund her money,and Susan was forced to bring an action to recover her funds.Discuss the issue of capacity and repudiation that arise in this fact situation.

Green,a retailer,placed an advertisement in a local newspaper on May 5 that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10 at a sale price of $100 each.Regular Price $199.First come,first served!" Doe was the 10th customer in the store on May 10,but Green refused to sell him a TV set for $100. -The advertisement is not an offer because Green did not express the intention to be bound by the statements in the advertisement.

Your car breaks down and you are stranded on a highway.You call a tow truck that takes your car to its garage where the mechanic replaces a faulty part.You do not have enough cash to pay,so you give the owner your address to send the bill for towing and repairs,and venture on your way.When the bill arrives,you find the prices high.After consulting another garage,your suspicions are confirmed.The mechanic sends you a notice threatening legal action and you decide to defend it using certain legal principles.What principles will you use for your defence,and what will be the probable outcome?

Cyril owed Robert $12,000 but since he had lost his job,he could pay only $7,000.Reluctantly,Robert agreed,since they were old friends,to accept the lesser amount as full payment of the debt,and Cyril gave him the money.Now Robert has heard that Cyril has just won a huge amount in a lottery but Cyril will not pay him the rest of the debt."A deal's a deal," Cyril says.