Breach of Contract and Fraud
by Jack W. Hope
Contracts are promises or agreements that will be enforced
by a court. Not all promises are considered to be contracts
because certain basic requirements of the law of contracts
have to be met. Many personal and business arrangements,
however, will qualify as an enforceable contract even if
they are not in writing. While some contracts, such
as those for the sale of land, have to have a written component,
the vast majority of contracts can be enforced in court even
if they are verbal or only partially written. The
law of contracts is quite complex but will generally hold
people to their deals once they have come to an agreement. It
is sometimes possible to avoid the burden of a contract if
you are a minor, that is under eighteen years of age, but
this exception does not apply if the contract is one for
necessities of life. It is also sometimes possible
to avoid the burden of contracts if there has been some form
of misrepresentation or fraud by the other party. Sometimes,
however, you will not be able to rely upon the exaggerated
statements or representations of a sales person once you
have signed a contract, so it is important that you include
as conditions or terms of the contract any representations
or claims made by the salesman that you are especially relying
upon.
There is generally no grace period in which you can change
your mind about a contract once it has been signed, although
there are special provisions for two particular types of
contracts. If you purchase a brand new condominium
it is sometimes possible to change your mind within ten days
of purchase. This does not apply to any other type
of real estate, however. Similarly, if a door to door
salesman approaches you at your home you may be permitted
up to forty-eight hours to change your mind after having
signed a contract with such a person. In both these
examples, it is important that your choice to cancel be made
in writing and communicated properly and in accordance with
the terms of the contract. In virtually all other situations,
you are bound by your signature immediately.
If you break a contract, you are generally responsible to
the other party for the profit they would have made had you
honoured the contract. If you agree to buy an item
at a certain price and fail to follow through, the other
party may have to sell it at a considerably lower price and
can sue you for the shortfall, or deficiency. Generally,
you are responsible for any reasonably foreseeable consequences
of your breach of contract. The aggrieved party, however,
also has a legal duty to take all reasonable efforts to minimize
his damages and his failure to do so can form part of a defence.
The commission of fraud in relation to contracts is particularly
serious. Not only can it lead to criminal charges as
well as civil liability, it can certainly provide the other
party to the contract with a reason to end the deal or to both
end the deal and sue for all damages or losses arising out
of the contract. Questions of contract law can be complex
and the advice of a lawyer should generally be sought before
entering into a contract or before taking any step which may
affect your rights or obligations under a contract if you are
unsure as to the consequences.
To contact the author, please email jhope@smhilaw.com
The information contained in this message is general
and should not substitute for the advice and counsel of
a licensed lawyer. |
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