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Unformatted text preview: C HAPTER 8 N ONENFORCEMENT OF C ONTRACTS Objectives After studying this chapter, you should have an understanding of: • why enforcement of contracts is the norm • the exceptional circumstances in which contracts are not enforced • which contracts must be in writing, and why Learning Outcomes • Understand the general rule on the enforcement of contracts (page 167) • Understand why the court makes exceptions to the general rule on enforceability (page 167) • Understand when the court will make exceptions to the rule on enforceability (page 167) • Understand the special situation of contracts made by minors (page 168) • Recognize an unconscionable transaction (page 172) • Understand the difference between an action for misrepresentation and breach of contract (page 175) • Understand when the court will not enforce a noncompetition clause (page 182) • Recognize which contracts must be in writing (page 183) Chapter Summary The general rule is that courts will enforce contracts. However, sometimes the court recognizes that it would be unfair to enforce certain contracts, either because of the nature of the contract itself, or because of the special situation of one of the contracting parties. The court will listen to the argument to set aside a contract based on an unequal relationship because of the age or mental capacity of the party, or because of duress or undue influence exerted by one party, or because it was an unconscionable transaction. Contracts made on the basis of a mistake or misrepresentation may also be set aside by the court. Illegal contracts or contracts that are contrary to public policy will not be enforced. Most oral contracts will be enforced. However, there are some exceptions to this rule. Contracts, such as for land, that fall within this exception will not be enforced unless they are in writing. The court will not cancel a contract merely because it favours one party or the other party finds that it is not as beneficial as first imagined. The court does not lightly set aside a contract that the parties had the freedom to negotiate. The party seeking to use one of the doctrines in this chapter must clearly prove his case. © 2008 BY N ELSON , A DIVISION OF T HOMSON C ANADA L TD . PART 2: CONTRACTS Study Outline Use this outline to prepare a complete set of notes for this chapter. The Importance of Enforcing Contracts – page 167 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Contracts Based on Unequal Relationships – page 168 Legal capacity ___________________________________________________________ _______________________________________________________________________ Minors ___________________________________________________________ Age of majority____________________________________________________...
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This note was uploaded on 06/04/2009 for the course BUSINESS LAW380 taught by Professor Davidmariofarmani during the Fall '08 term at Seneca.

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