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39 Cards in this Set
- Front
- Back
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What is the plan of action in all estoppel cases? |
*** first attack in all estoppel cases is to say that there was consideration, there was a legal contract. Only when this falls through do we go for estoppel. Why? because estoppel is won in equity, and consideration in a binding contract so it is stronger. Estoppel doesnt get your client the terms of the contract if you win, it gets you equity, but the court doesnt help you get contractual rights- all you do is prevent the other person from benefiting from the ‘promise' they went back on. If you win by saying its a contract, your client gets what is his contractual right. Tort opperates on a closed list of torts recognized by the courts At the time there was no tort of misrepresentation that could have allowed for compensation. However, this option would have been good today, worse than a consideration argument, but better than an estoppel. |
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Estoppel and condsideration |
Estoppel is inconsistent with consideration (and thats normal) In estoppel, a promise acted on is binding regardless, whereas with contract law a promise acted on is not biding if no consideration) |
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Can you get multiple measures- expectancy, restitution, reliance? |
NO just one (Pitcher, Bollenback) from the moment you are given restitution or expectation measure, any tort like or any unjust enrichment restitution claim you could make disappears |
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Ugly fountain |
It doesnt matter if the market value will get you less than the cost of performance (if you want an ugly fountain built even tho it will lower market value, you get it) (Groves) |
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Economic waste doctrine |
Courts will conclude that repairs result in “economic waste” when they either result in “unreasonable destruction of the work done” or the cost of the repairs is “materially disproportionate to the value of the corrections.” If reconstruction and completion in accordance with the contract involves unreasonable economic waste, then the damages measure as to those defects is “diminished value” – “the difference between the value the building would have had if properly constructed and the value that the building does have as constructed.” In short, the rule is the following: “[g]ive priority to the cost of repair rule when those items are repairable without economic waste and to the diminished value rule as a secondary rule to cover those defects, the correction of which would involve economic waste. |
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Significance of second hand things |
- second hand things as cheaper, but also dont come with the same reasonable guarantees - they cant be expected to be relied on as much as new products |
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What is Speculation profit? |
- ok so if you ask me to pay for the profit lost bc the price went down for ex., then you also have to pay me if i breach the contract and it causes you to make more money bc the price goes up the next day - if you enforce only once side of this (speculation profit) and not the other (speculation loss) then it is punitive to the breaching party, which is not the goal here. - either you should enforce both or neither… which is why speculaiton profit is kind of weird. |
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Is the Law on intangible injuries consistent with Wertheim? |
YES When can you get damages for intangible injuries then? —> When it is barganed for! When it plays a role in the original contract |
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Summarize what the remoteness cases have told us.... |
1) Victoria laundry Scyrup, Koufos, Purolator—> whether or not the breaching party could see the loss occurring as a matter of fact 2) Horne, munroe, achilleas —> what has to be foreseeable is not so much the loss itself, but the liabilities of the loss. —>Notice of liability must be given in such a way that an actual contract is formed about liability. Where the breaching party can reasonably be taken to have assumed liability for the loss. Doesn’t matter what they foresaw, it matters what they agreed (implicitly/explicitly) to cover- Second line of cases (liability line) seems to be more in line with partys’ reasonable expectations. It also seems to account for the law of remoteness in a way that makes it consistent with the Wertheim principle. It isnt a limitation of it, but rather a natural implication. -Achilleas determined that the correct interpretation of Hadley was this liability test. It also reasserted that rules of remedy are rules of construction of contract rather than rules of law. If you deal with liability in making the contract, you dont have to worry about all this. If it isnt said explicitly, the court reconstructs the contract to determine their implicit liability- always go on the latest, most recent iteration |
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Mitigation rule; How is this justified with Wertheim? |
what a prudent person ought reasonable to do in order to mitigate his loss arising from a breach must be done; Wertheim principle can be read as including mitigation --> in the car ex with good market, the seller can just turn around and sell to someone else. this is mitigation of loss and it would also put them in the position they would have been in if the contract had been performed. if they hadnt done so, the court can say they get nothing |
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Obligation to mitigate |
- risk of value fluctuation switches to the non repudiating party from the moment they accept the repudiation - you don’t have to accept repudiation, you can just go along with performance (if possible) - if you accept repudiation, or there is a breach, you have an obligation to mitigate - if you have an obligation to mitigate, then you don’t have a claim for specific performance- precisely bc it would be unreasonable for the court to ask you to mitigate if you had a special interest in the thing or the performance |
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commercial deals and adequacy of damages |
When a unique thing is bought for commercial purposes then you can argue that it is not really unique to the buyer even if it is unique |
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Does it matter if one has a real interest in a replaceable object to the point it is irreplaceable to them? |
Hadley v Baxandale says no, subjective interest is not the consideration. Even in cases where there is a special subjective interest it must emerge objectively from the parties agreement |
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Cheaper cost avoider rule |
->bargain would have implicitly placed that risk of stuff like market fluctuation etc on the buyers shoulders (reasonable people would have expected this) — poilcy standpint—> encourages people to make efficient contracts — justice standpoint—>default rule of contractual interpretation (people can enter inefficient contracts) —> very difficult to apply ( supposes that the parties have that kind of info when they enter the contract) —> courts dpnt actually do that (Payzu)- courts dont actually do comparative reasoning, they focus on the non breaching party and as if its reasonable in the circumstances |
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When is SP available? Not available (5) |
Available: where damages are inadequate because the special interest bargained for by non breaching party has no market substitiute (cohen, falcke, sky) Unavailable: - forcing people to work together (personal service and some commercial ones) - 3rd party rights are involved (for ex, item had already been purchased by third party) - supervision by courts would be required - Fiduciary duty to other party (like agents in page one record) - reciprocity objection- SP not available to both parties (Page One) |
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When Sp is necessary but not available, what may the court do? |
- give the financial equivalent! 1. damages assessed at time of JMT (Wroth) 2. cost performance > Δ mkt value (Groves dissent) 3. special losses flowing from breach = recoverable if (objectively) bargained for (Wroth) 4. non-breaching pty has no duty to mitigate upon breach/accepted repudiation (Wroth) |
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Expectation damages recap |
- “value of lost bargain” based on time of breach or accepted repudiation - this is the principle remedy! 1. where return bargained for = unknown, total expenditures (pre- & post-Kual) ≈ proxy for expectation value or else ≈ implicit liquidated dam. clause (Anglia TV) 2. where cost performance < Δ mkt value; where cost performance > Δ mkt value (Groves dissent) 3. ≈ only losses as would normally flow from breach = ‘bargained for’ thus = recoverable (Hadley; Horne; Kinghorne; Munroe; The Achilleas, Cohen; ≠ Koufos) 4. … whether tangible or intangible (Jarvis; Heywood; Fidler) 5. ≈ non-breaching pty has duty to mitigate upon breach (Payzu, Wroth) or accepted repudiation (Roth, White & Carter, Finelli) |
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What is the ceiling for restitution? |
- prof thinks its expectation damages ? (Bowlay Logging) - * remember, this is market value of the unjust enrichment, not contractual damages |
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When do you get punitive or aggravated damages in addition to contract or unjust enrichment? |
where there is an actionable wrong! (Addis dicta, Whiten, Blake) |
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Fiduciary relationship and damages |
in a fiduciary contract, one party is supposed to pursue the interests of the other. So even if no loss occurs, any “money” gained by the one party should be given to the other. ( we talked about this in Blake, it didn’t fit perfectly there though ) |
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what is a trust relationship? |
A trust is a relationship whereby property is held by one party for the benefit of another. An owner of property that places property into trust turns over part of his or her rights to the trustee, separating the property's legal ownership and control from its equitable ownership and benefits |
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What does it mean to say there is privity of contract ? |
a contract cannot confer rights or impose obligations on any person other than the parties to it (there are exceptions to this- Midland, London Drugs, etc) |
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In those carrier, stevedore cases why does performing the actual service = consideration? |
If they already have an obligation to unload the ship how can this serve as consideration? Because, even tho they are only unloading the ship “once” they commit to A to unload the ship and they commit to B to unload! They become obligated to B via unilateral contract- their performance= acceptance. |
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What is an “identity of interest” ? |
Identity of interest means any relationship (generally based on familyties or financial interests) between (a) the seller and purchaser(prospective owner), (b) the owner and/or general contractor and thesubcontractor, material supplier or equipment lessor, or (c) the ownerand the lender, which would reasonably give rise to a presumption thatthe parties to the transaction may operate in collusion An example is the employee-employer relationship in London Drugs |
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What is the Third Party Problem and what are the solutions to it? (3) |
Problem: : X has no contractual rights to enforce Possible solutions: 1) In fact, X is not a third party, (there is actually consideration from X to B) —> Agency argument: As As principle, X= collateral contract with B (Midland) —> Representation argument (Better than above): X= suing as A not as X (Beswick) - remedy issue: whether nominal damages = inadequate; whether expectation damages are nominal only (Jackson) 2) Trust Argument: A is suig B (trustee) as beneficiary of trust set up by A 3) X= party to contract for purpose of liability limitation (only) once “inchoate right” has been relied upon (London Drugs v Kuehne; Fraser river?) *Whenever there is a third party situation, if it involves a benefit to X, the only way to argue is that X isnt X. if it is a negative benefit (defending agains a suit) then you can use the other arguments |
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You make a deal with someone who shows you false credit records. Then later you find out they were faked. Did the contract form? |
yes! Like identity, credit worthiness is generally irrelevant to contract formation. It may be voidable and you have tort actions, but the contract DID form! “i meant to contract with someone with good credit and reputation” is not an argument |
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Third Parties Recap |
- under the objective test, offer presumed directed at person physically present - remember offers can be transmitted through an agent of someone else. - acceptance can be communicated to the offerees agent - Committing to a pre-existing dut but to a new party= valid consideration (NZ shipping) - third party cant sue on contract - where a third party is defending against a suit rather than trying to get a benefit, they can raise an estoppel (Fraser River) |
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third party cases + estoppel argument |
In cases involving a third party when A aims to recover the thing from X but is at greater fault then X, A will be estopped from recovering from X |
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What is Non est Factum and when is it available? |
--> defence that a written agreement is invalid because the defendant was mistaken about its character when he signed it. -Non est factum is available where content/ nature of written contract is misrepresented to some non-careless oferee unable to read contract |
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Oral vs written unsigned documents (tickets) |
The presence of a written doc may make a dif for whether it would be reasonable to assume intention to be bound |
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Can the customer be reasonably be take to have been aware of terms in an unsigned contract like a ticket? |
Can the customer be reasonably be take to have been aware of terms in an unsigned contract? #1 If a reasonable customer would have expected that there was writing on the ticket and that this writing contained conditions, then he was aware #2 if reasonable customer would not realize it contained writing= unaware #3 if a reasonable person would have known that it contained writing but not known that it contained conditions = aware IF there was reasonable notice |
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How do you tell the difference between a collateral agreement that is a warranty and a condition precedent? |
* A collateral agreement (warranty) has to be a contract to qualify as a collateral agreement (must have consideration- the consideration is the entering into another contract). - It is necessary for the foundation of the agreement, without it you can show that they would not have contracted. (you can help show this if it is clear that the responsibility of whatever was being promised rests upon the vendor) - You must look at the conduct and intentions of two parties to determine if statement was a fundamental part of why they contracted *A condition precedent doesnt have to be a contract itself (a condition which provides that the whole contract or parts of it will only come into force if the condition is met) |
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What difference would it make for damages if a statement was a warranty vs a misrepresentation? |
- a warranty is a promise to bear about a product or a representation as to the existence of a fact (it is something you are taking contractual liability for). You need Consideration!! - a warranty gives rise to damages, a misrepresentation does not - the distinction is not about if the person acted on the representation (detrimental reliance), but rather whether it became part of the contractual relationship (this makes it a warranty) - high threshold |
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Once it is established that an oral representation is a warranty the... (4) |
*The oral evidence is admissible *Oral warranty and doc must be interpreted together *If no contradiction then the fact that it may be inconsistent with the written doc doesnt matter *If there is contradiction then just a strong presumption in favour of the written doc – the rule is not absolute |
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What are some of the exceptions to the general rule that, when parties have apparently set out all of the terms, extrinsic evidence is not admissible to add to or contradict those terms? |
- to show fraud - to support a claim of rectification - to dispel ambiguities - to establish a term by custom - to show the doc wasnt supposed to be the whole agreement - in support of equitable remedy - supporting a claim of misrepresentation - supporting a claim that the oral statement was in breach of duty of care (tort claim) |
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Hawrish rule |
- a collateral agreement cannot be established when it is inconcistent with the written agreement —> but this principle is not absolute —> and it doesnt apply to adding to or varying or subtracting from the written agreement, only contradicting. It also doesnt necessarily apply to a standard form contract (not fully completed). Harder to accept as well when it clashes with a general clause rather than a specific clause —> if the contract is induced by an oral misrepresentation that is inconsistent with the written contract, the written contract wont stand |
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Is it okay to focus on/ single out specific clauses of contracts like liability clause? |
* it is bad to focus on specific clauses in contracts and give them specific meaning/ special treatment without looking at the rest * contracts are like packages * also hard to label the clause as a damage, liability, etc. clause * but insofar as the courts actually do this, they do it equitabily- they treat suspiciously clause that are below expectation for damages and those that are above. |
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Summarize Written documents |
Tickets (docs not calling for signature) - offeror must show offoree can reasonably be seen as having assented to waiver= awareness test, given extent of the notice (more onerous waiver, more notice) (Parker, Spurling, Thornton) Docs Calling for signature - contract only where signature (McCutcheon) Signed Doc plus Oral Representation - offeror cant rely on onerous written terms, even if its signed (estoppel argument) (Tiden) - Offeror in breach of oral term (contractual damages, gives them a contractual right to the content of the representation) (Gallen) - Offeror in breach of (rectified) written term (contractual damages) (Sylvan Lake) Signed Doc Plus NO Oral Representation - offeror cant rely on unconscionable penalty clause (estoppel) (Shatilla) - Restitution possible despite forfeiture clause where clause is a penalty AND its unconcionable (Stockloser) - No contract damages where barred by exclusion clause unless unconscionability or policy (estoppel) (Hunter engineering, Fraser jewellery, Tercon) |
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How do you analyze if a misrepresentation will lead to a voided contract? |
a) there was Fraudulent misrepresentation = can recover damages in tort b) Innocent misrepresentation = rescission of contract / void --> If innocent misrepresentation can be shown to be collateral contract (warranty- must show that it was bargained for) then damages are recoverable, is not, the contract is not void and no damages - courts will be more lenient with what qualifies as a warranty for consumer contracts than for commercial contracts --> if innocent misrep not a warranty can still get remedy at equity= rescission and restitution (assumed to have induced contract) |
