Business Law & Contracts Flashcards

Under the Ontario Business Corporations Act (OBCA), what is the minimum number of directors required for a private company?

Answer: One

Section 115 of the OBCA requires a corporation to have at least one director, though most private corporations have one or more for governance purposes.

Under Canadian contract law, what are the essential elements for a valid and enforceable contract?

Answer: Offer, acceptance, consideration, and intention to create legal relations

A binding contract requires offer, acceptance, consideration (mutual exchange of value), capacity, and intention to create legal relations.

What is the legal concept of 'privity of contract' in Ontario?

Answer: Only parties to a contract can sue or be sued under it

Privity of contract is the common law rule that only the parties to a contract have rights and obligations under it; third parties generally cannot enforce contract terms.

Under the Ontario Partnerships Act, what is the liability of a general partner for the debts of the partnership?

Answer: Joint and several liability for all partnership debts and obligations

General partners have unlimited joint and several liability for the debts and obligations of the partnership, meaning personal assets can be seized to satisfy partnership debts.

Under the OBCA, what is a 'unanimous shareholder agreement' (USA)?

Answer: An agreement among all shareholders that restricts or transfers directors' powers to shareholders

A USA under section 108 of the OBCA allows shareholders to restrict or assume directors' powers, giving shareholders direct control over management decisions.

In Ontario, what is the doctrine of 'unconscionability' in contract law?

Answer: A doctrine allowing courts to set aside contracts where there is inequality of bargaining power and exploitation of the weaker party

Unconscionability allows courts to refuse enforcement of a contract where one party exploited a significant power imbalance to impose grossly unfair terms on the other.