Question

Introduction to contracts

a) Describe the difference between a void and a voidable contract. If Mr. X enters into a contract to rent an apartment in Prince George to Johnny, who just turned 18, is the contract void or voidable? Why? Would it make a difference if the contract was for Johnny to sell illegal drugs for Mr. X? Why or why not?

b) Think of three examples of contracts you or someone you know has entered into. For each example, identify the key terms of the contract (remember parties, property, and price).

Answer 1

1.

a) Void contracts are not legally enforceable e.g. contract to commit murder for money is automatically void.

b) Voidable contracts are not automatically void; they can be declared to be void at the option of of the transacting parties. Voidable contracts are ones that are not automatically void, as performance of the obligations is still possible. Contracts brought about by coercion, undue influence, fraud and involvement of minors are voidable.

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2.

a) DODSON BY DODSON v. Shrader, 1992 - Joseph Dodson was 16 years old when he bought a pickup truck from a used-car dealership for $14,900 in cash. When the car engine blew up nine months later, Dodson disaffirmed the contract and proceeded to claim refund.

The contract was voidable because the used-car dealer had unknowingly sold to a minor, although Dodson had made no misrepresentation about his age. This is despite the dealer defending himself in saying that Dodson had looked 18 or 19.

Parites: Joseph Eugene Dodson (buyer),Burns SHRADER, Jr. (seller) and Mary Shrader (seller)

Price: $14,900

Property: Used pickup truck

b) Friend brought an apartment in my city.

Parties: Donald Ray (buyer) and Casey Trevor (seller)

Price: $30,000

Property: Apartment in Sherwood Estate

c) Friend got a home load from the bank to finance his housing purchase.

Parties: Donald Ray (borrower) and Standard Chartered (lending bank)

Price: 8% of the principal (or $2400) annually

Property: Money sum of $30,000