Foundations of Contracts

KNOWLEDGE EXPECTED OF: CFP® Professionals

Highest Knowledge Level: Understanding

Knowledge Levels and Associated Verbs


Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define
To state exactly the meaning of
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
Compare
To note the similarities and differences between two or more things
Estimate
To determine an approximate value for
Calculate
To find the value using mathematics
Convert
To change from one form or purpose to another
Evaluate
To reach a conclusion or make a through careful study
Interpret
To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.


Additional Knowledge Expected of CFP Professionals
  • Define parties to a contract.
    • The offeror
    • The acceptor
  • Define elements required for a contract to be valid and enforceable.
    • A valid offer
    • A valid acceptance
    • The intention to create a legal contract
    • Mutual consideration
    • Capacity to contract
  • Explain when a verbal and/or written contract is in place between an offeror and an acceptor.
  • Explain circumstances that may cause an offer to be terminated.
    • Revocation by offeror
    • Lapse
    • Rejection by the acceptor
    • Counteroffer by acceptor
    • Death or incapacitation of offeror or acceptor
  • Define a minor for the purposes of law.
  • Identify the age of majority for the different jurisdictions in Canada. 
  • Explain circumstances when a contract may be voidable, such as:
    • Contracts involving a minor
    • Contracts entered into under duress (including economic duress)
    • Contracts entered into under undue influence (actual or presumed pressure)
    • Contracts containing a misrepresentation 
  • Explain circumstances when a contract may be void, such as:
    • Contract that is contrary to a specific statute (illegal)
    • Contract that violates a public policy
  • Explain benefits and risks of the approaches to drafting a contract.
    • Self-drafting
    • Drafting by a competent legal professional
  • Explain how a contract may be terminated.
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