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Difference between revisions of "Contract Defences"
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== Summary of the law== | == Summary of the law== | ||
Even with the basic elements of a contract present (see the Contracts Overview), common law and statute law provide a number of grounds for a party to avoid having a contract enforced against them. These '''defences to contract actions''' give the defending party a legal excuse to get out of the contract. Without such defences, the contract would be legally enforceable. Remedies to enforce contracts are discussed in the section on Contract Remedies. (See also the sections on Opting Out and Cooling-off Periods and | Even with the basic elements of a contract present (see the [[Contracts Overview]]), common law and statute law provide a number of grounds for a party to avoid having a contract enforced against them. These '''defences to contract actions''' give the defending party a legal excuse to get out of the contract. Without such defences, the contract would be legally enforceable. Remedies to enforce contracts are discussed in the section on [[Contract Remedies]]. (See also the sections on [[Opting Out and Cooling-off Periods]] and [[Unfair or Deceptive Practices]].) | ||
=== Defences versus causes of action=== | === Defences versus causes of action=== | ||
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In some instances, however, the issue is less clear. For example, in the case of debt, there may be disagreement over: | In some instances, however, the issue is less clear. For example, in the case of debt, there may be disagreement over: | ||
* Whether the debtor has been properly credited for all payments made.
| * Whether the debtor has been properly credited for all payments made.
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* Whether the amount of interest claimed by the creditor is correct. This is a particularly complicated area where courts often have to decide whether a full or only partial refund should be awarded.
| * Whether the amount of [[Interest and the Cost of Borrowing Money|interest]] claimed by the creditor is correct. This is a particularly complicated area where courts often have to decide whether a full or only partial refund should be awarded.
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=== The defence of making the other side prove its case === | === The defence of making the other side prove its case === | ||
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Courts generally do not enforce contracts that are for an '''illegal purpose''' or that contravene a statute. An obvious example of an unenforceable contract is one made with the intent of harming someone. Some interesting exceptions to the general rule include: | Courts generally do not enforce contracts that are for an '''illegal purpose''' or that contravene a statute. An obvious example of an unenforceable contract is one made with the intent of harming someone. Some interesting exceptions to the general rule include: | ||
* '''Gambling debts:''' Historically considered uncollectable and illegal, court decisions suggest they are now collectable.
| * '''Gambling debts:''' Historically considered uncollectable and illegal, court decisions suggest they are now collectable.
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* '''Illegally paid interest:''' Although it is illegal under the [http://canlii.ca/t/7vf2 ''Criminal Code''] to lend or collect interest at an annual rate above 60% (except as authorized under payday loan legislation), in at least some instances the courts have allowed the recovery of the illegally paid interest.
| * '''Illegally paid interest:''' Although it is illegal under the [http://canlii.ca/t/7vf2 ''Criminal Code''] to lend or collect interest at an annual rate above 60% (except as authorized under [[Payday Loans|payday loan]] legislation), in at least some instances the courts have allowed the recovery of the illegally paid interest.
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==== Misrepresentation==== | ==== Misrepresentation==== | ||