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173 Cards in this Set
- Front
- Back
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Contracts are... |
greements to do or not do something in exchangefor somebody else agreeing to do or not do something.” |
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Contracts work on... |
The “expectancy principle”: forward looking; thecomplaint: “I was not furnished what I was promised”; the remedy: “put me inthe place I would have been if you did what you said you would do.” |
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Formation: Offer and Invitations to Treat: Dyers v Burton - FACTS |
- defendant, former director of company adjacent to house asked to "kindly state your lowest price"- def sends lowest price- deal begins: draft sent, down payment sent- later def. arg. no contract- post-contractual conduct indicated readiness to sell- contract allowed |
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Formation: Offer and Invitations to Treat: Dyers v Burton - RATIO |
1) hallmark of an offer = readiness to sell - determined by ORP 2) quotation of price usually invitation to treat 3) post-contractual conduct indicates readiness to sell |
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Formation: Offer and Invitations to Treat: Pharmaceutical Society GB v Boots - FACTS |
- Pharmacist stands near poisons section, in view of cash desks - pharm society arg. store not following rules in not supervising the sale |
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Formation: Offer and Invitations to Treat: Pharmaceutical Society GB v Boots - RATIO |
- on shelf: invitation to treat - at till: offer to purchase from customer - HOW TO FIND THIS? - ORP, Policy reasons (absurdity of placing in cart as contract) |
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Formation: Offer and Invitation to Treat: Carlill v Carbolic Smoke Ball Co - FACTS |
Plaintiff buys ball promising no sickness on strength of ad in paper, gets sick anyway |
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Formation: Offer and Invitation to Treat: Carlill v Carbolic Smoke Ball Co. - RATIO |
- unilateral vs bilateral contract (promise for act vs promise for promise) - "Puff" - sales talk - demonstration of seriousness: money in the bank - offer to whole world? stupid but ok - unilateral contract waives req. for notification of acceptance |
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Formation: Offer and Invitation to Treat: Goldthorpe v Logan - FACTS |
- Ad "guaranteeing" hair removal will work - procedure does not work - Goldthorpe gets money back + $100 damages |
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Formation: Offer and Invitation to Treat: Goldthorpe v Logan - RATIO |
- Puff? (this no puff) - is it a deal? ORP looks for indicia of seriousness (here: "guarantee") |
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Formation: Offer and Invitation to Treat: TENDERS: Harvela - note |
Formerly, under Harvela, call for tenders was invitation to treat |
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Formation: Offer and Invitation to Treat: TENDERS: R v Ron Engineering - FACTS |
- Contractor submits bid and deposit - 1hr after close of Tenders seeks to withdraw bid, return deposit |
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Formation: Offer and Invitation to Treat: TENDERS: R v Ron Engineering - RATIO |
- A-B relationship created to protect the integrity of the bidding process - CALL = offer of unilateral contract A - Submission = Simultaneous acceptance of Contract A and offer of Bilateral Contract B - Implied obligation to be held to what tender documents say |
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Formation: Offer and Invitation to Treat: TENDERS: MJB v Defence - FACTS |
- non compliant bid is accepted - privilege clause to not necessarily accept lowest or any bid - third party sues since his bid was not accepted |
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Formation: Offer and Invitation to Treat: TENDERS: MJB v Defence - RATIO |
- Privilege Clause can do ANYTHING subject only to its INTERPRETATION (court will read narrowly) - Implied Obligations: through Canada Pacific Hotels: via 1)Officious Bystander Test 2)Business Efficacy (obviousness, good business sense) - NO Implied Obligation to accept lowest bids to allow for Nuances Of Cost (timeline, reputation of company, etc.) |
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Formation: Offer and Invitation to Treat: TENDERS: Double N v City of Edmonton - FACTS |
- tender requires 1980 equip, 1979 provided |
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Formation: Offer and Invitation to Treat: TENDERS: Double N v City of Edmonton - RATIO |
- WPIED - right to Waive trivial non-compliance - implied obligation to accept compliant bids in their Promises only - no implied obligation to Investigate for compliance - Ensuing Contract B can be different from tender call - Martel case: implied obligation not to Discriminate |
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Formation: Communication of Offer: Blair v Western Mutual Benefits Assn - FACTS |
- Meeting, agree to pay Blair money at retirement - Blair, secretary, transcribes minutes, sees agreement - Blair retires, asks for money, told NO |
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Formation: Communication of Offer: Blair v Western Mutual Benefits Assn - RATIO |
- No Effective Communication - No INTENTION |
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Formation: Communication of Offer: Williams v Carwardine - FACTS |
- Handbill offer reward for info leading to arrest, conviction (unilateral contract) - Williams gives information, w/out/r/t handbill - Asks for money later, refused |
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Formation: Communication of Offer: Williams v Carwardine - RATIO |
- Presumption of valid communication - motives not scrutinized, action ONLY - valid communication to whole Class of People |
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Formation: Communication of Offer: R v Clarke - FACTS |
- Reward offered for information leading to arrest, conviction - Clarke provides information - Later asks for money, not given - Clarke admits to not having known about reward |
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Formation: Communication of Offer: R v Clarke - RATIO |
- Presumption of valid communication overturned by an admission of lack thereof (- Clarke and Carwardine are to be used in tandem to locate future cases) |
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Formation: Communication of Offer: Carlill v Carbolic Smoke Ball Co. - FACTS |
- buy a smoke ball - get sick anyway |
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Formation: Communication of Offer: Carlill v Carbolic Smoke Ball Co. - RATIO |
- offer made to whole world is VALID |
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Formation: Termination of Offer: Revocation: Dickinson v Dodds - FACTS |
- seller offers to Buyer #1, until Friday to accept - Seller sells to Buyer #2 on Thursday - Buyer #1 accepts offer on Friday morning |
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Formation: Termination of Offer: Revocation: Dickinson v Dodds - RATIO |
- promise to keep offer open not binding - Revocation must be communicated prior to acceptance to be effective: -->either EXPRESS or IMPLIED (including act inconsistent with maintenance of offer) + DIRECTLY or INDIRECTLY (information reaches, by whatever means) (- buyer's revocation is not necessarily communicated by his buying a different house) - ORP is finder of revocation |
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Formation: Termination of Offer: Revocation: Byrne v VanTienhoven - FACTS |
- NY - England plate sale - NY receives offer, sends acceptance - Before NY acceptance arrives, seller sends revocation of offer - revocation offer arrives in NY after acceptance sent |
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Formation: Termination of Offer: Revocation: Byrne v VanTienhoven - RATIO |
- revocation AFTER acceptance so INVALID - Based on upholding the reliance on value of contract |
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Formation: Termination of Offer: Revocation: Errington v Errington and Woods - FACTS |
- father gives house to son + d-in-law - IF they make payments - When paid off, he will give them Deed - unilateral contract: house for payment of mortgage |
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Formation: Termination of Offer: Revocation: Errington v Errington and Woods - RATIO |
- PARTIAL Performance - D v Dodds: revocation up to completion of act, here: Partial Performance - New Rule: once partial performance begun, cannot revoke w/out reasonable allowance for FULL completion - ORP looks for "reasonable allowance" of time |
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Formation: Termination of Offer: Revocation: Dawson v Helicopter Exploration - FACTS |
- unilateral contract BUT requires help from offeror to begin performance - contract to guide to his land claim in return for a portion of profits from mining it - Co. finds third party to guide them to it - guy sues for breach of contract |
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Formation: Termination of Offer: Revocation: Dawson v Helicopter Exploration - RATIO |
- Problem of Co-operation - Instinct with obligation - Malleability of unilateral vs bilateral -->finding uni or bi can change date of acceptance, and so also possible revocation |
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Formation: Termination of Offer: Rejection: Livingstone v Evans - FACTS |
- telegram offer to sell for 1800 - telegram reply for 1600, counter-offer - telegram reply "cannot reduce price" - money sent to purchase |
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Formation: Termination of Offer: Rejection: Livingstone v Evans - RATIO |
- Counter-offer = rejection - differentiating from mere inquiry: where an ESSENTIAL TERM is changed it is a NEW PROPOSAL which is hallmark of COUNTER OFFER - E.T. = e.g., price, subject, date |
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Formation: Termination of Offer: Lapse of Time: Barrick v Clark - FACTS |
- Telegram sent offer to purchase - Response to offer received by wife while husband is away - Wife asks to hold offer open - Sold to someone else - Husband returns, wants to complete deal |
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Formation: Termination of Offer: Lapse of Time: Barrick v Clark - RATIO |
IVIC - Implied lapse of time - Implied via ORP by looking to Offeror's Intent -->3 things: 1) volatility of thing 2) industry standards 3) conduct of parties -->Offeror's language was clearly urgent -->Offeror expressed intended close date which required a completion of contract date well before Offeree sought to complete deal - (offeree's request to keep open invalid: cannot unilaterally change terms) |
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Formation: Termination of Offer: Lapse of Time: Manchester Diocesan Council of Edmonton v Commercial and General Investments - RATIO |
- Why/When does an offer self-expire? - Cannot accept offer after lapse of time because offeror MUST have decided on a reasonable amount of time (Barrick v Clark) - Contrarily to Canadian law, casebook's author prefers an objective approach |
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Formation: Acceptance: Livingstone v Evans - FACTS |
As above...counter-offer = rejection; differentiate from mere inquiry |
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Formation: Acceptance: Battle of Forms: Butler Machine Tool v Ex-cell-o Corp. - FACTS |
- seller's offer includes price variation clause - buyer sends pro forma order form with terms, NOT INCLUDING Price Variation clause - Seller returns stub of order form, refers in LETTER to original terms of offer - Tool delivered, with Price Escalated |
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Formation: Acceptance: Battle of Forms: Butler Machine Tool v Ex-cell-o Corp. - RATIO |
- Total Record as a whole is analyzed - mutual intent must be explicit: a MAJOR TERM cannot be less than Explicit (- here the major term: Price was hidden in a letter referred back to but not quoted explicitly) |
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Formation: Acceptance: Battle of Forms: Tywood Industries v St Anne-Nackawic Pulp & Paper Co - FACTS
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- series of negotiation: a mess - Arbitration Clause in some forms |
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Formation: Acceptance: Battle of Forms: Tywood Industries v St Anne-Nackawic Pulp & Paper Co - RATIO
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- Arbitration clause found to be A SIGNIFICANT TERM - This term was not made EXPLICIT - Is not part of deal |
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Formation: Acceptance: Shrink Wraps: ProCD v Matthew Zeidennberg and Silken Mountain Web Services Inc - FACTS |
- software Co. sells 2 versions: Home and Commercial - Zeidennberg buys HOME, uses it for commercial purposes - Def arg: he did not agree to this contract - the Shrink Wrap hides the contract |
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Formation: Acceptance: Shrink Wraps: ProCD v Matthew Zeidennberg and Silken Mountain Web Services Inc - RATIO |
- contract found to be at time of removal of shrink wrap and further, clicking "I Agree" - Note: Most PROV have Consumer Protection Acts that regulate these things, return periods, etc. |
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Formation: Acceptance: Silence: Carlill v Carbolic Smoke Ball - FACTS/RATIO |
- As Above - in Unilateral situation: SILENCE is NO PROBLEM: acceptance comes with ACT not communication |
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Formation: Acceptance: Silence: Dawson v. Helicopter Exploration - FACTS/RATIO |
- As Above - same facts could be bilateral or unilateral |
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Formation: Acceptance: Silence: Felthouse v Bindley - FACTS |
- uncle buys horse (in care of auctioneer) from nephew - some confusion of pounds or guineas - Uncle offers to split difference, will assume acceptance unless hearing otherwise - uncle wants to sue auctioneer for conversion so case must find who is owner |
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Formation: Acceptance: Silence: Felthouse v Bindley - RATIO |
- SILENCE does NOT constitute acceptance - concerning policy issues if SILENCE could be valid acceptance |
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Formation: Acceptance: Silence: Saint John Tug Boat v Irving Refinery Ltd - FACTS |
- SJ Tug contracted to provide tug boat support to Irving - continues an On Call service - Irving, months later, claims service was not meant to be ongoing indefinately |
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Formation: Acceptance: Silence: Saint John Tug Boat v Irving Refinery Ltd - RATIO |
- ORP Looks for Contract - Acceptance can be: Positive Conduct OR in silence through DECEPTIVE ACQUIESCENCE - DA=where your doing nothing deceives me into believing there's acceptance - DA will be found where ORP finds it in offeror's actions |
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Formation: Acceptance: Offeror's Control: Eliason v Henshaw - FACTS |
- Buyer offers to buy flour, asks for reply next day - seller replies 9 days later 'accepting' - seller delivers flour weeks later - delivery refused |
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Formation: Acceptance: Offeror's Control: Eliason v Henshaw - RATIO |
- The acceptance needs to be communicated according to terms set: here: within one day - Here: no contract |
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Formation: Communication of Acceptance: Mail and Instantaneous Modes: Household Fire v Grant - FACTS |
- Defendant sends offer to purchase shares - Letter of allotment accepting offer is sent - Letter is not received - Plaintiff sues for recovery of money owed for shares allotted |
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Formation: Communication of Acceptance: Mail and Instantaneous Modes: Household Fire v Grant - RATIO |
- POST BOX RULE! - If offer by POST, then accept by POST (in accord w/ Eliason v Henshaw) - Acceptance then, is at time of deposit into POST |
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Formation: Communication of Acceptance: Mail and Instantaneous Modes: Holwell Securities v Hughes - FACTS |
- plaintiff sends option to purchase (=acceptance) house in mail - defendant did not receive it - term in deal: requiring "notice" |
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Formation: Communication of Acceptance: Mail and Instantaneous Modes: Holwell Securities v Hughes - RATIO |
- Was the contract completed? - Terms of sale considered: A Term requiring NOTICE - this NOTICE term requires receiving letter, not just letter's posting - POST BOX RULE! applies only where it is not excluded: here INTENT of offeror is considered by ORP: finds that NOTICE is desired |
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Formation: Communication of Acceptance: Mail and Instantaneous Modes: Brinkibon Ltd v Stahag Stahl - FACTS |
- Telex used to make deal |
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Formation: Communication of Acceptance: Mail and Instantaneous Modes: Brinkibon Ltd v Stahag Stahl - RATIO |
- HERE: deal is completed at place of receipt of TELEX - There is no universal rule that controls instantaneous modes, rather ORP views: 1) Intentions of parties (MAIN consid.) 2) Sound business practices 3) where judge rules the RISK should lie (overall fairness): this basically defers to sound business practices |
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Formation: Certainty of Terms: Vagueness: R v CAE Industries Ltd - FACTS |
- Sale of airplane maintenance base to CAE - Letter from gov't gives assurances: including BEST EFFORTS to provide work: -->700,000 work hours /yr for viability -->40,000 present --> gov't will apply best efforts to fill gap |
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Formation: Certainty of Terms: Vagueness: R v CAE Industries Ltd - RATIO |
- court is motivated to find a contract to Save The Deal - the more serious the parties are will motivate further - Find: Certainty: Need Definite Meaning: Did parties have in mind a Definite Meaning - HALLMARK of Not-Vague Term is Definite Meaning - "Best Efforts" Clause is enforceable - Court finds "Best Efforts" has a Definite Meaning |
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Formation: Certainty of Terms: Incompleteness and Agreements to Agree: May & Butcher v R - FACTS |
- Sale of old WWI tentage
- Price agreed on 'from time to time' = agreement to agree |
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Formation: Certainty of Terms: Incompleteness and Agreements to Agree: May & Butcher v R - RATIO |
- essential term missing: Price (other ET=subject, date)
- This is the Approach in BC (not Classique Coaches approach) |
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Formation: Certainty of Terms: Incompleteness and Agreements to Agree: Hillas v Arcos - FACTS |
- buying 100,000 standards of timber in 1930-31 season
- timber not provided - uncertainty in terms: What is "standard"? No Date of Delivery; No price listed (only ref. to 5% less than 1931 list price) |
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Formation: Certainty of Terms: Incompleteness and Agreements to Agree: Hillas v Arcos - RATIO |
- Meaning in uncertain terms is read in by court - ORP finds meaning intended (verba ita sunt intelligenda...words are to be understood that the subject matter may be preserved rather than destroyed)
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Formation: Certainty of Terms: Incompleteness and Agreements to Agree: Foley v Classique Coaches Ltd - FACTS |
- def buys property from plaintiff
- term included: to buy gas from plaintiff "at a price agreed by the parties...from time to time" - 3 yrs later def buys gas elsewhere |
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Formation: Certainty of Terms: Incompleteness and Agreements to Agree: Foley v Classique Coaches Ltd -RATIO |
- ORP looks to parties' actions, substance above form of contract - def. clearly acted as if there were an agreement to buy gas (did so for 3 years) - this low level court decision has become authoritative
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DISTINGUISH MAY and FOLEY? |
- two cases with agreements to agree "from time to time" decided differently
- in HILLAS and FOLEY the court is motivated to find a contract where the intentions of the parties are serious: imply a term of REASONABLE PRICE - Court finds in MAY that reading in terms would SURPRISE the parties, not so in HILLAS and FOLEY - in MAY the subject is sui generis: WWI tentage - in FOLEY a reasonable price of GAS is easily found |
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Formation: Certainty of Terms: Incompleteness and Agreements to Agree: Sale of Goods Act-Ascertainment of Price ss. 12, 13 |
- Agreements to agree on price is VALID (s. 12)
- price left to 3rd party arbitrator is VALID (s. 13): if arbitrator can't find price then contract is dead - APPLIES ONLY: in BC, for PRICE, for GOODS (Chattels, not land, services) |
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Formation: Certainty of Terms: Agreements to Negotiate: Empress v Bank of Nova Scotia - FACTS |
- Bank rents from Empress
- Option to renew Lease at prevailing market rate, as mutually agreed - Bank asks to negotiate deal to renew - Empress unresponsive, finally communicates some new terms: $15,000 up front, month to month lease (Shady) |
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Formation: Certainty of Terms: Agreements to Negotiate: Empress v Bank of Nova Scotia - RATIO |
- Terms implied by ORP: officious bystander, business efficacy (obviousness, business sense)
- implied term to negotiate in Good Faith - Objectivity in price is possible - agreement to agree fails but an implied term to negotiate in Good Faith - Good Faith = not bad faith; Bad Faith = rent to someone else at same price, $15,000 fee at last minute |
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Formation: Certainty of Terms: Agreements to Negotiate: Manpar Enterprises v Canada - FACTS |
- Manpar has contract with Crown for gravel removal subject to 5 yr renewal upon renegotiation of rates
- land is governed by Indian Act, is not private land |
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Formation: Certainty of Terms: Agreements to Negotiate: Manpar Enterprises v Canada - RATIO |
- implied term of GOOD FAITH - Restraining Empress: Good Faith read in only if: 1) Business Efficacy 2) Presence of Objective Benchmark (here: lacking) 3) Contextual Considerations (here: Fides)- Agreements to negotiate will likely fail even if there is (2) ONLY if there is (2) AND Intention by parties to do so |
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Formation: Certainty of Terms: Agreements to Negotiate: Wellington City Council v Body Corporate 51702 (Alirae) - FACTS |
- Council offers to negotiate in Good Faith and not for less than market value |
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Formation: Certainty of Terms: Agreements to Negotiate: Wellington City Council v Body Corporate 51702 (Alirae) - RATIO |
- Australian case that can question the LAW as in Empress
- HELD: a contract to negotiate in good faith is inherently subjective, so non-enforceable, so non-justiciable |
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Formation: Certainty of Terms: Agreements to Negotiate: Bhasin v Hrynew - FACTS |
- B sues H and C-Corp since H's actions toward B in having him audited by competitor C, which B refuses, leads to non-renewal
[Prof notes: H lied about intentions to renew, was dishonest - H set up B for failure by setting up C as auditor] |
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Formation: Certainty of Terms: Agreements to Negotiate: Bhasin v Hrynew - RATIO |
- A general obligation on all parties to Contract in Good Faith, which is the absence of Bad Faith (lower than Fiduciary), which is not to LIE in matters material to the performance of contract
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Formation: Certainty of Terms: Agreements to Negotiate: DISTINGUISH Bhasin from Empress, Manpar |
1) the SOURCE of the obligation a) in Empress implied thru ORP b) in Bhasin thru LAW; LAWful duty cannot be contracted out
2) the SCOPE of duty a) LARGER in Empress: not to withhold agreement unreasonably b) SMALLER in Bhasin: to not lie in material matters 3) CIRCUMSTANCES when duty would apply a) LAWful duty is in PERFORMANCE not formation b) Empress used to imply duty for a certain performance, but not Bhasin c) FORMATION can appeal to Empress only |
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Formation: Certainty of Terms: Anticipation of Formalization: Bawitko Investments v Kernels Popcorn - FACTS |
- oral contract to grant plaintiff a franchise to operate retail store
-->on modified terms of draft franchise agreement -->sealed with a handshake and "You've got a deal" |
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Formation: Certainty of Terms: Anticipation of Formalization: Bawitko Investments v Kernels Popcorn - RATIO |
- contract now to contract later is OK IF: -->material elements are agreed upon |
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Formation: Intention to Create Legal Obligation: Balfour v Balfour - FACTS |
- husband promises wife allowance on separation - wife sues for performance |
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Formation: Intention to Create Legal Obligation: Balfour v Balfour - RATIO |
- no contract where no intention for legal obligation - SOCIAL CONTEXT presumption against the intent to create legal obligation (overcome with evidence) - COMMERCIAL CONTEXT opposite - NEITHER CONTEXT: presumption-less |
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Formation: Intention to Create Legal Obligation: TD Bank v Leigh Instruments Ltd - FACTS |
- Leigh's parent company Plessey provides "letters of comfort" assuring creditors it is policy to govern subsidiaries in order to allow them to repay their loans" - Leigh fails to repay the loan - Bank sues Plessey |
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Formation: Intention to Create Legal Obligation: TD Bank v Leigh Instruments Ltd - RATIO |
- Letters of Comfort DO NOT create legal obligation unless explicitly stated so - ORP examines: officious bystander, business efficacy - Letters of Comfort are a PUFF, some commercial value without legal effect |
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Formation: Intention to Create Legal Obligation: Rose and Frank v JR Crompton Bros - FACTS |
- Rose is agent for distribution of JR products in US - an 'honourable pledge' drafted explicitly stating 'No Legal Intent' - JR does not provide products to Rose - Rose sues |
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Formation: Intention to Create Legal Obligation: Rose and Frank v JR Crompton Bros - RATIO |
- making of legal obligation can be abrogated if done so explicitly - here: clear intention NOT to create legal obligation - SOCIAL CONTEXT presumption against legal obligation - COMMERCIAL CONTEXT presumption FOR legal obligations - Presumption overcome with evidence |
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Formation: Intention to Create Legal Obligation: Canadian Taxpayers Federation v Ontario - FACTS |
- Leader of Liberal Party of ON makes election promises - is elected, does not enact promises |
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Formation: Intention to Create Legal Obligation: Canadian Taxpayers Federation v Ontario - RATIO |
- No legal obligation in election promises |
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Formation: Intention to Create Legal Obligation: Family Law Act SBC 2011 ss. 3, 92 |
- rebuts Balfour in context of spouses - Spouses can agree to divide property or debts if signed, written, witnessed |
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Formation: Formality: Contracts Under Seal and the Requirement of Writing: Percy et al 258-268 |
- Historical practice of SEALING WAX sufficient to prove CONSIDERATION - Historically necessary and sufficient, now just sufficient - Statute of Frauds still in force in most Canadian Prov in some form |
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Formation: Formality: Contracts Under Seal and the Requirement of Writing: Royal Bank v Kiska - FACTS |
- loan guarantee - plaintiff bank brings action - no seal, but the word "SEAL" printed on document - no other consideration EXCEPT for potential seal |
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Formation: Formality: Contracts Under Seal and the Requirement of Writing: Royal Bank v Kiska - RATIO |
- Contract found sufficient despite defective "Seal": requisites of contract are present 1) Seals do not have to be WAX 2) Seal could be a "Gummed Wafer" (sticker) affixed with the intent to SEAL 3) If gummed wafer already present before signature is not considered but probably sufficient |
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Formation: Formality: Contracts Under Seal and the Requirement of Writing: Dynamic Transport Ltd v OK Detailing Ltd - RATIO |
- Bleakly v SmithCase: “I’ll sell you the property on Cable St”; Found there to be enoughsince he only owned one property on that street - Turney v Zihilka: Intended to reserve some for himself but it was not clear whichacres were being sold; HELD: No contract - need sufficient certainty in order to read terms into agreement |
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Formation: Formality: Contracts Under Seal and the Requirement of Writing: Delgman v Guaranty Trust Co - FACTS |
- Nephew lives with aunt for 6 months - she promises him the house in her will if he is good, does chores - he performs - she dies - sue for house |
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Formation: Formality: Contracts Under Seal and the Requirement of Writing: Delgman v Guaranty Trust Co - RATIO |
- HELD: cannot get ownership of house without writing (Statute of Frauds) - a common law exception to requirement in writing: if purchaser did an act unequivocally indicating there was a deal - part payment of money does not count - Law and Equity Act RBC 59(3)(b) 59(4) does allow part payment of money |
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Formation: Formality: Contracts Under Seal and the Requirement of Writing: Law and Equity Act (BC) s. 59 |
- Contract for transfer of land [and guarantees] requires written agreement in BC - there can be part performance aspects that allow a contract, but this is rare |
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Enforcing Promises: Doctrine of Consideration |
- valid contract requires CONSIDERATION -->unless there is a seal (Kiska) -->unless there is promissory estoppel - Valid consideration must have VALUE in the eyes of the LAW (Thomas v Thomas) - VALUE = MUTUALITY -->consideration must flow FROM each party -->find mutuality by finding promises and linking them (Dalhousie): factually one in consideration for other - different from civil law where Consideration is not required; in common law consideration delineates contracts from mere gifts, which are not enforceable |
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Enforcing Promises: Doctrine of Consideration: Nature of Consideration: Thomas v Thomas - FACTS |
- on death bed husband orally asks executors to let his wife live in his house - they do so, rent it to her for £1/yr and upkeep - later, executor refuses to let her continue to stay |
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Enforcing Promises: Doctrine of Consideration: Nature of Consideration: Thomas v Thomas - RATIO |
1) consideration must be of value in eyes of the law 2) VALUE is in the EXCHANGE 3) court will not examine goodness of the deal 4) consideration must flow FROM each party |
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Enforcing Promises: Doctrine of Consideration: Nature of Consideration: Governors of Dalhousie College at Halifax v The Estate of Arthur Boutilier - FACTS |
- Boutilier makes subscription to give money to Dalhousie (promise) - Vague list of things Dalhousie intends to do with money - Fails to send money, later renews promise - Boutilier dies - Estate is sued |
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Enforcing Promises: Doctrine of Consideration: Nature of Consideration: Governors of Dalhousie College at Halifax v The Estate of Arthur Boutilier - RATIO |
- Consideration flows from Boutilier - Consideration does not flow from Dal. - no sufficient connection between building actually constructed and vague promises in subscription call |
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Enforcing Promises: Doctrine of Consideration: Nature of Consideration: Wood v Lucy, Lady Duff Gordon - FACTS |
- Lucy endorses things, makes money selling endorsements - Wood is employed to EXCLUSIVELY find new contracts to place endorsements - Lucy makes deals without Wood - Wood wants a piece |
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Enforcing Promises: Doctrine of Consideration: Nature of Consideration: Wood v Lucy, Lady Duff Gordon - RATIO |
- Lucy argues Wood had no consideration flowing from him - Court finds consideration by implying via ORP, business efficacy -->to use his reasonable best to market the wares |
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Enforcing Promises: Doctrine of Consideration: Past Consideration: Eastwood v Kenyon - FACTS |
- loan procured for infant of deceased
- promises to repay - infant grows up, gets married - husband promises to pay, then does not - plaintiff sues for breach |
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Enforcing Promises: Doctrine of Consideration: Past Consideration: Eastwood v Kenyon - RATIO |
- past consideration is no consideration: no mutuality, no exchange
- nudum pactum |
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Enforcing Promises: Doctrine of Consideration: Past Consideration: Lampleigh v Braithwait - FACTS |
- 1615, person seeking pardon
- other person rides around, obtaining pardon for him - then 1st person promises to pay - then decides not to pay |
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Enforcing Promises: Doctrine of Consideration: Past Consideration: Lampleigh v Braithwait |
- past consideration is no consideration
- except when it is (see Pao On) - it is if. ORP finds: - 1) past act done at request of other party - and - 2) parties understood it was to be rewarded |
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Enforcing Promises: Doctrine of Consideration: Forbearance of Suit: DCB (Plaintiff) and Harold J Arkin and Zellers Inc (Defendants) - FACTS |
- son shoplifts - Zellers offers deal: forbearance of suit for $225
- mother pays - later, mother sues |
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Enforcing Promises: Doctrine of Consideration: Forbearance of Suit: DCB (Plaintiff) and Harold J Arkin and Zellers Inc (Defendants) - RATIO |
- forbearance of suit can be consideration if: B. R. I.
1) person honestly believes in good faith a valid claim 2) a reasonable belief, even if mistaken 3) were intending to carry out that claim - mom's payment treated as gift, won on unjust enrichment |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Pao On v Lau Yiu Long - FACTS 1 |
- Shing. Fu Corp. Fu Shareholders.
- 1. Shing and Fu Corp: share swap; Shing will hold on to Fu shares for 1 year - 2. subsidiary agreement (replaced) - 3. Shing Corp and Fu Shareholders: scrap agreement 2, Fu Shareholders will indemnify Shing for any losses in value of Shares being held for 1 yr. |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Pao On v Lau Yiu Long - FACTS 2 |
- Market tanks, Fu shares decrease lots - Fu Share. argue no contract: old consideration is no consideration |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Pao On v Lau Yiu Long - RATIO |
- Promising to do what you already have to do is no consideration unless:
- the new promise is to a new party - x promises to y what x already promised to do for z, this is consideration - because it doubles the liability exposure |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Stilk v Myrick - FACTS |
- at sea captain promises to increase wages due to higher than expected workload - captain doesn't pay
- seamen sue |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Stilk v Myrick - RATIO |
- seamen were only promising to do what they already had to do (crew the ship)
- no consideration |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Gilbert Steel v University Construction Ltd - FACTS |
- steel supply contract
- price of steel goes up - oral agreement to raise price - deliveries, invoices - buyers refuse to pay higher price |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Gilbert Steel v University Construction Ltd - RATIO |
- oral agreement to pay higher rate fails for lack of consideration
- brings Stilk and Myrick into 20th century - argument: oral agreement impliedly rescinded failed since not supported by evidence |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Williams v Roffey Bros - FACTS |
- court of appeal, England - hiring group is under contract to complete quickly, progress is slow
- oral agreement to pay higher and add bonus for each completion is withheld |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Williams v Roffey Bros - RATIO |
- promising to do what you already promised to do is no consideration (Stilk v Myrick) unless: - 1) practical benefit flowing from both parties in new deal - 2) 2nd deal not made under duress - applying this test: analogize to practical benefit - consideration found here |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Greater Fredericton Airport Authority v Nav Canada - FACTS |
- NB case - Nav has responsibility for air navigation services at GFAA
- Nav refuses to pay for equipment - GFAA signs a letter of promise under protest to pay for it - GFAA refuses to pay - later Nav Canada promises to pay |
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Enforcing Promises: Doctrine of Consideration: Pre-Existing Duties: Greater Fredericton Airport Authority v Nav Canada - RATIO |
- pre-existing duties can count as consideration if there is no economic duress
- be mindful of mutual practical benefit, which is evidence that both parties intended to make a deal- second agreement does not necessarily rescind initial agreement: only if it is clear |
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Foakes v Beer - FACTS |
- 1884, house of lords - owes debt plus interest
- agreement to pay debt in installments, without interest - debt paid off - creditor sues for interest |
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Foakes v Beer - RATIO |
- Held: no contract - payment of a lesser sum of money cannot be satisfaction of a greater sum of money- lack of consideration
- does not apply when something else is substituted for money: e.g. repay loan with a peanut |
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Re Selectmove - FACTS |
- 1995, English court of Appeal case, not binding here
- company owes taxes - oral agreement with gov't to pay in installments - later gov't asks for all |
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Re Selectmove - RATIO |
- bound by foakes v beer
- but court agrees that Williams v Roffey should apply: mutual practical benefit + no duress - in future in similar cases could argue that GFAA or Williams v Roffey should be applied |
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Foot v Rawlings - FACTS |
- money owed
- detailed agreement for repayment - repayment made with post-dated cheques |
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Foot v Rawlings - RATIO |
- promise to do what already promised is no consideration
- unless something NEW: here: the cheques are NEW - how broad is this principle going forward? - it must be wide: if the change to Cheques count, what wouldn't |
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Law and Equity Act RSBC 1996, c 253, s 43 |
- EXPRESS agreement (not implied) for creditor to accept part performance of obligation as consideration to extinguish it
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Ways around Foakes v Beer? |
1) use Foot v Rawlings to argue small change is "something new" 2) use Williams v Roffey or GFAA 3) Law and Equity Act, s. 43 |
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Process Automation Inc v Norstream Intertec Inc & Arroyave - FACTS |
- ON Supreme court - agreement for supply of propane station at donut diner valid over previous agreement
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Enforcing Promises: Doctrine of Consideration: Promises to Accept Less: Process Automation Inc v Norstream Intertec Inc & Arroyave - RATIO |
- It is affirmed that Law and Equity Act has legislated around Foakes v Beer, however the new agreement must be free of duress
- duress is e.g., D&C Builders: take half or take nothing |
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Summarize: Accord and Satisfaction (that is, money owing, promising to do what you already have to do) |
1) Foakes v Beer: prom to do what already prom is no consideration 2) Foot v Rawlings: find something new (cheque from cash) 3) Law and Equity Act, s. 43: if EXPRESS agreement (not implied) 4) if duress: Process Automation applies 5) Promissory Estoppel 6) Williams v Roffey, for reasons in Selectmove |
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Promissory Estoppel: Summary |
- an equitable exception to the non-binding nature of gratuitous promises - High Trees identifies 4 requirements E.C.R.I.: - 1) Existing contractual relationship - 2) Clear promise or representation that party will be bound by promise (not to claim rights) - 3) Reliance on the gratuitous promise - 4) Inequitable to permit the promiser to go back on his promise |
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Enforcing Promises: Promissory Estoppel: General Principles: Hughes v Metropolitan Railway Company - FACTS |
- demand for tenant to complete repairs in 6 months
- negotiations begin instead for sale of land - tenant expects 6 month on hold, negotiations break down - tenant repairs, completes in June; > 6 months |
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Enforcing Promises: Promissory Estoppel: General Principles: Hughes v Metropolitan Railway Company - RATIO |
- by entering negotiations there is an implied promise to put 6 month clock on hold
- this is the C in E.C.R.I. - Metropolitan Railway did explicitly say 6 month term on hold, was merely not mentioned by Hughes - Reliance and Inequity present. |
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Enforcing Promises: Promissory Estoppel: General Principles: Central London Property v High Trees House - FACTS |
- property under lease
- later agreement to reduce lease rate during war - after war, landlord wants to go back to original deal |
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Enforcing Promises: Promissory Estoppel: General Principles: Central London Property v High Trees House - RATIO |
- held: def owed P rent at full rate from time appts. were fully let
- Promissory Estoppel Created: if he was asking for full rent during war years, he would be estopped from enforcing his right not to be held to this gratuitous promise - E. C. R. I. - Existing, Clear, Reliance, Inequitable |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: John Burrows v Subsurface Surveys - FACTS |
- C of E.C.R.I. Clear Promise
- agreement to repay in installments includes acceleration clause allowing seller to claim full amount if payment is late - seller frequently indulges late payments - seller refuses payment, insists on full payment |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: John Burrows v Subsurface Surveys - RATIO |
- no Clear Promise, neither Express or Implied (e.g. of implied promise is in Hughes)
- was friendly indulgence, a Puff - to find friendly indulgence, ORP looks to nature of rel'p of parties |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: D&C Builders v Rees - FACTS |
- 4th of ECRI: Inequity; by Denning
- building co owed £482, buyer asks to pay £300 - seller insists its payment on account, buyer forces to add payment in completion or threatens to not pay at all - seller is facing bankruptcy, needed money, and buyer knows this |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: D&C Builders v Rees - RATIO |
- Foakes v Beer; Hughes
- legal right to claim whole - Def wants to use EQUITY to hold seller to promise - Equity rise to Estoppel where there is true accord: here there is lack thereof - as well as undue pressure (similar to Duress, but less than) |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: Saskatchewan River Bungalows v Maritime Life Assurance Co - FACTS |
- insurance policy, premium payment missed, notices sent, lapse of policy notice
- Sask finally checks mail, sees overdue, waits 3 months, sends cheque |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: Saskatchewan River Bungalows v Maritime Life Assurance Co - RATIO |
- (Waiver is the same thing as estoppel for us)
- can retract promise IF - Give notice AND - Give notice before you rely on my promise |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: WJ Alan & Co v El Nasr Export and Import Co - FACTS |
- 3rd principle of ECRI: Reliance - payment for shipment of coffee - contract specifies Kenyan Shillings - Payment made in Sterling, without protest - Seller sue for discrepancy in devalued Shilling |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: WJ Alan & Co v El Nasr Export and Import Co - RATIO |
- 3rd principle of ECRI: Reliance - Does estoppel need Reliance Simplicitur or Detrimental Reliance to be made out?
- reliance simplicitur only - WJ waived right to be paid in Shilling when permitted payment in Sterling, this generated reliance and all that is needed is reliance simplicitur |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: The Post Chaser - FACTS |
- plaintiff sells palm oil to defendant who sells to sub-buyers Conti and others
- declaration of ship req at sailing from seller to buyer: sent one month late - no complaint of lateness made except by other sub-buyers - Conti requests declarations, sent, refused |
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Enforcing Promises: Promissory Estoppel: Elucidation of Principles: The Post Chaser - RATIO |
- in ECRI reliance simplicitur is enough
- DETRIMENT is not under R but under I - I Inequity: can go back on promise if it is not detrimental to other; estoppel refused since no worse off - denning: taking back serious promise is inherently inequitable; Goff: taking back promise is inequitable only if Prejudice - WJ Alan and Post Chaser are equally authoritative, BOTH must be canvassed on EXAM - DETRIMENT is considered in I not R |
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Enforcing Promises: Promissory Estoppel: Shield or Sword: Combe v Combe - FACTS |
- 1951 - husband agrees to pay money at divorce
- husband does not pay - wife sues using PE to hold him to his promise |
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Enforcing Promises: Promissory Estoppel: Shield or Sword: Combe v Combe - RATIO |
- shield not a sword
- PE cannot be cause of action - deal fails for lack of consideration |
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Enforcing Promises: Promissory Estoppel: Shield or Sword: Walton Stores (Interstate) v Maher - FACTS |
- Waltons leases land from Maher
- W wants building demolished, new building, and Quickly- Maher passes contract, Walton lawyer says he will inform client and get back soon - Maher doesn't hear back, begins work - Waltons later informs is backing out |
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Enforcing Promises: Promissory Estoppel: Shield or Sword: Walton Stores (Interstate) v Maher - RATIO |
- Australian High Court permits Estoppel as SWORD (not for CA, UK)
- if A inspires an assumption in B, and it would be unfair for A to ignore that, equity may help - Held for Maher |
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Enforcing Promises: Promissory Estoppel: Shield or Sword: M (N) v A (TA) - FACTS |
- M promises A he will pay off her mortgage in UK if she comes to live with him in Vancouver toward a marriage
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Enforcing Promises: Promissory Estoppel: Shield or Sword: M (N) v A (TA) - RATIO |
- BC Court of Appeal - plaintiff seeks to use promissory estoppel- estoppel a Shield, not a Sword (Combe v Combe affirmed)
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Basics: Tweddle v Atkinson - FACTS |
- 1861 contract between father and father-in-law to pay £100 and £200 resp. to the son[-in-law]
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Basics: Tweddle v Atkinson - RATIO |
- consideration flows from each party with benefit to third party
- son cannot sue: he is not in privity of contract
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Basics: Dunlop Pneumatic Tyre v Selfridge & Co Ltd - FACTS |
- HOL decision firmly establishes Privity
- Dunlop (manufacturer) sells to Dew (wholesaler) with term disallowing Dew from selling below Dunlop's set price - Dew sells to Selfridge (retailer) with same term - Dunlop sues Selfridge for selling below |
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Basics: Dunlop Pneumatic Tyre v Selfridge & Co Ltd - RATIO |
- Dunlop is third party to contract between Selfridge and Dew therefore cannot sue on it
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Basics: Beswick v Beswick - FACTS |
- Contract between nephew and uncle for uncle's business
- term to pay allowance to uncle and to aunt if uncle dies - uncle dies, payments to aunt cease - widow sues as third party and as administratrix |
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Basics: Beswick v Beswick - RATIO |
- Denning attempt to change Privity
- distinguishes by claiming Dunlop about economic policy and price-fixing - over-turned by HOL: only sue as administratrix - Exceptions to privity: 1) administrator of estate 2) trust 3) agency (2 and 3 not req.; trustee or agent) |
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Exception: London Drugs Ltd v Kuehne & Nagel International Ltd - FACTS |
- SCC 1992 case
- London stores expensive transformer at Kuehne - Kuehne employees damage it - London sues Kuehne - term limits liability to $40; London did not buy extra insurance - (vicarious liability in master-servant relationship) |
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Exception: London Drugs Ltd v Kuehne & Nagel International Ltd - RATIO |
- employees not in privity but limitation of liability can be extended to this third party where (sword not shield)
- 1) express or implied extension of benefit: ORP looks for a) commercial reality, b) identity of interest, c) fairness - And 2) employees acting in course of employment referred to in contract (not off on a frolic) |
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Exception: Edgeworth Construction Ltd v ND Lea & Associates Ltd - FACTS |
- SCC 1993 - Edgeworth and Ministry of Transport contract for highway construction
- Edgeworth sues Engineers (ND) for negligent misrepresentation - engineers seek defense in the Edge. + Min contract which contains non-reliance clause |
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Exception: Edgeworth Construction Ltd v ND Lea & Associates Ltd - RATIO |
- tort is made out (misrepresentation, relied on, damages follow)
- London test: 1) extension? express? no. implied? com reality? ID if interest? no. fairness? no. 2) acting in course of action? - ND cannot take benefit from non-reliance clause |
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Exception: Fraser River Pile & Dredge Ltd v Can-Dive Services - FACTS |
- 1999 SCC
- contract Fraser + Insurance - includes term waiving subrogation against 3rd including "charterers" - charterer Can-Dive sinks boat - Insurer pays Fraser, then with Fraser sues Can-Dive after Fraser waives waiver |
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Enforcing Promises: Promissory Estoppel: Privity of Contract: Exception: Fraser River Pile & Dredge Ltd v Can-Dive Services - RATIO |
- extends London beyond employee- 1) intention to extend? express or implied? (a) com, b) ID, c) fair), - 2) is 3rd performing activities contemplated? - 3) policy reasons? - 4) Crystallization? cannot waive the waiver (the extension of benefit to a 3rd)
- when crystallize? at actual defense = cause of action complete (here: at sinking, completing damage portion) |
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Conditions Precedent: Explain
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- Law and Equity Act governs this in BC now but:- Common Law distinguishes between:- condition precedent for my benefit only can be waived
- a True Condition Precedent cannot be waived- e.g., offer to purchase conditional on securing financing, selling house |
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Enforcing Promises: Promissory Estoppel: Conditions Precedent: Turney v Zahilka - FACTS |
- 1959 SCC
- sale of land conditional on rezoning from Village Council - Zoning not approved - Buyer wants to proceed anyway, wants to waive his condition precedent |
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Enforcing Promises: Promissory Estoppel: Conditions Precedent: Turney v Zahilka - RATIO |
- CP distinguished from TCP
- "future uncertain event entirely up to the will of a third party" (1) future 2) uncertain 3) entirely on will of third party)) - this is a TCP, cannot be waived |
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Enforcing Promises: Promissory Estoppel: Conditions Precedent: Beauchamp v Beauchamp - FACTS |
- 1973 ON Court of Appeal - deal for property with conditions
- to secure 2 loans, 10,000 and 2,500 - secures 1 loan for 12,000 - seeks to waive condition - seller wants deal to stop |
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Enforcing Promises: Promissory Estoppel: Conditions Precedent: Beauchamp v Beauchamp - RATIO |
- 1) argues that condition is satisfied: by focusing on substance rather than form: condition is to get financing for whole amount, which he did
- note that seller is trying to seize on a small issue for his own benefit - 2) waive a condition precedent where solely for own benefit + NOT a TCP since not ENTIRELY up to third party: he must participate to acquire it |
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Enforcing Promises: Promissory Estoppel: Conditions Precedent: Barnett v Harrison - FACTS |
- not important
- contract contains term that are explicit about contract being void if non-compliance with condition
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Enforcing Promises: Promissory Estoppel: Conditions Precedent: Barnett v Harrison - RATIO |
- not important:
- discussion of problems with TCP in dissent
- one note: that if it is entirely up to will of third party it may therefore be for mutual benefit |
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Enforcing Promises: Promissory Estoppel: Conditions Precedent: Law and Equity Act, BC, s 54 |
- as long as condition issolely for benefit of one party; that party can waive it
- eliminates need for distinction between CP and TCP- for EXAM argue 1) condition is met 2) my benefit so waive 3) law and equity act |
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Enforcing Promises: Promissory Estoppel: Conditions Precedent: |
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