Business Law & Contracts Flashcards

Under Ontario law, what is the remedy of 'specific performance' in contract law?

Answer: A court order compelling a party to perform their contractual obligations as agreed

Specific performance is an equitable remedy ordering the defaulting party to perform the contract, most commonly granted in real estate transactions where the property is unique.

What is a 'condition precedent' in a contract?

Answer: An event that must occur before a party's obligations under the contract arise

A condition precedent is an event or fact that must occur before the contractual obligations of the parties are triggered; non-occurrence may relieve both parties from their obligations.

Under Ontario law, what is the principle of 'mitigation' of damages?

Answer: An innocent party must take reasonable steps to minimize their losses after a breach

A plaintiff who has suffered a breach of contract has a duty to mitigate by taking reasonable steps to reduce their loss; failure to mitigate reduces the damages recoverable.

Under the Ontario Employment Standards Act, 2000, what is the minimum notice or pay in lieu that an employer must give an employee with 5 years of service on termination without cause?

Answer: 5 weeks

Under section 57 of the ESA, 2000, an employee with 5 or more but less than 6 years of service is entitled to 5 weeks' notice or pay in lieu on termination without cause.

In Ontario commercial law, what is a 'letter of credit' used for in business transactions?

Answer: An undertaking by a bank to pay a specified amount to a beneficiary upon presentation of conforming documents

A letter of credit is an independent payment undertaking by a bank to pay the seller upon presentation of documents (such as shipping documents) that comply with the letter's terms.

Under Ontario law, what is the difference between a 'void' and a 'voidable' contract?

Answer: A void contract has no legal effect from inception; a voidable contract is valid until one party elects to rescind it

A void contract is a nullity from the outset (e.g., illegal contracts), while a voidable contract is valid and binding unless the innocent party elects to rescind it (e.g., contracts induced by misrepresentation).