December 3rd, 2015
Business Law 1
Overlapping questions on practice quizzes to exam.
The exam is back heavy buddy. There will be some multi choice on chapters 1-6 but
apparently the written questions will mostly be on back half of course. Prof said if time
is scares avoid chapters 1,2,3 & 4. He started the review from chapter 6 on.
Law of contract and law of tort is the meat of the course.
Exam review:
25% multiple choice
Short answer questions – example: explain different between implied and
express terms
Scenario questions – likely on torts
Contract law
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A contract consists of an offer, acceptance, and mutual consideration
The test the courts will apply is called the objective standard test
o Would an objective person deduce that a deal was made
Contracts are the corner stone of business, vitally important for business
Freedom of contract is fundamental in contract law and courts will not
examine mutual consideration on the grounds that it was an unfair deal
What is an offer?
An offer is not a contract; an offer is a part of a contact. This is a promise to enter
into a contract, upon acceptance, without any variation of the terms.
Essential terms of a contract are: price, delivery date, quantity, and method of
payment.
Invitation to treat (an expression of desire to do business) is not an offer.
 Advertisements are not classified as offers, generally speaking.
 Products displays are not offers.
 This is not an offer because there’s an indeterminate amount of customers,
which would invoke breach of contract… LOOK UP BETTER ANWSER.
Termination of offer:
 Revocation, can be revoked anytime prior to acceptance
 Lapse, if offer was open for reasonable amount of time and not accepted
 Rejection
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Counter-offer, will terminate original or previous offer
Death or insanity
Even a firm offer is revocable any time before acceptance, except, in light of option
agreements; A collateral contract that exchanges a sum of money in consideration
for an agreement to hold the offer open, for that buyer, for the agreed period of time,
at the agreed price.
Review difference of contracts for tender, questions on tender are uncommon on
exam though it is good to know difference.
Acceptance:
To be legally effective an acceptance must, demonstrate an unqualified and
complete willingness to enter into the contract on the precise terms contained in the
offer (otherwise it is a counteroffer); and be communicated- by words or conductto the offeror.
Rule- acceptance is effective only when communicated
Exceptions- unilateral contracts, postal rule cases
Variation of contract: a pre existing duty is consideration in N.B, not anywhere
else. This refers to the case with the Fredericton airport and how there was no
consideration for additional money given to contractor, though the court ruled this
was fine.
Rule: A gratuitous promise unsupported by consideration in unenforceable
Exceptions to rule:
 Promise under seal
 Promistoral estopal- only can be used as defense against having to pay a debt
when the person money was owed to agree to forgive debt.
Seal & contracts of guarantee: seal substitutes for lack of consideration.
Difference between expressed and implied terms.
Rules of interpretation:
 Plain meaning rule
 Parties intent rule
Grounds that justify implying terms:
 Business efficacy
 Trade customs
 Prior dealings
 Statutory requirements
Parole evidence rule: evidence cannot be admitted to add to, vary, or contradict a
written instrument.
Collateral agreements to a contract? A collateral oral agreement, if proven, with
consideration, can be enforced.
Using contractual terms to manage risk.
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Exceptions to the enforcement of contracts
Unequal relationship
Misrepresentation: can be fraudulent, negligent, or innocent
Legal mistake
Defective contract
Written contracts (quasi-exception)- statute of frauds & sale of goods act
o Exception to direct above- doctrine of part-performance
A owner is required to disclose only hidden defects.
Misrepresentation is a material, unambiguous, false statement of fact.
Study page 183. Requirements for a restrictive covenant to be enforceable;
 Two step process in non-compete clause:
o Is the restrictive covenant reasonable, as between the parties?
o ….
Difference between contractual rights and obligations.
Enforcing a contract, plaintiff must prove balance of probabilities:
 privacy of contract
 breach of contract- conditions vs. warranties
Almost certainly there will be a question on the tort of negligence
Answer whether it is product liability or negligent misstatement.
Haven’t been tested on chapter 12, its important
Tort of defamation protects the reputation of individuals against unfounded and
unjustified attacks.
Plaintiff must prove that the defendant made a statement about the plaintiff:
 to at least one other person
 which presents the plaintiff in an uncomplimentary light, and
 would in the mind of a reasonable person lower the plaintiff’s reputation.
A question dealing with false imprisonment, in connection with retailors, may
appear
Study 11 & 12 carefully.
Focus on tort of defamation for chapter 12, but don’t overlook other either.