Comm 393

Front 1

Charter of Rights and Freedoms:(entrenched in constitution)
S.1 – Reasonable Limits
S.2 – Fundamental Freedoms
S.7-14 – Legal Rights
S.15 – Equality Rights
S.33 – Override (5yr horizon)

*Only gov’t actions come under the charter’s codes

Back 1

Liebmann v. Canada

Front 2

Ultra Vires

Back 2

 Beyond the powers
 If a law imposes on the charter it may be struck down as ultra vires

Front 3

Alternate Dispute Resolution

Back 3

1. Negotiation
2. Mediation
3. Conciliation
4. Arbitration (binding & final)
a. Possibly cheaper, faster, arbitrator may have a certain area of expertise, non- public.
5. Adjudication

Front 4

Contract Law:

Back 4

1. Intent
a. law presumes intent in commerce generally and between strangers, but no intent between close friends and family
b. would a reasonable person looking at OUTWARD conduct of parties say they showed intent - objective test
2. Offer
a. should have clarity on all 3 terms, but courts will enforce an offer if there is clarity on 3 terms
i. parties
ii. price/exchange
iii. subject matter of K
3. Acceptance
4. Consideration
5. Capacity**
6. Legality**
**Courts Ordinarily presume existence of last 2

Front 5

Forum Selection Clause

Back 5

Rudder v. Microsoft Corporation (forum selection clause)

Front 6

Specific Performance

Back 6

awarded only if the subject matter is unique (eg. Buy an autographed hockey stick, but seller keeps stick  court orders stick to be exchanged for payment)(eg2. land)

Front 7

Termination of an Offer

Back 7

1. Rejection (Counteroffer)
2. Lapse – after a specified time, or if there is none, after a reasonable time. Or after either party dies or becomes insane prior to acceptance.
3. Revocation (Withdrawal) – Effective only if communicated to offeree.
(Montane Ventures Ltd. v. Schroeder (counter offer))

Front 8

Acceptance

Back 8

1. must be an UNEQUIVOCAL acceptance of ALL terms (w.o change)
2. must be mirror image of offer
3. if offeror doesn’t stipulate method of acceptance, then reply by same method used by offeror
4. Cannot be forced on buyer (eg. You get sent magazines & company says: send form if you want to discontinue. If you don’t send form you legally have neither accepted or rejected the offer.)
5. Law that applies is the law of the jurisdiction w/ the closest connection to the contract.  All else equal, it’s where the acceptance occurs. (In E-com, it’s where the defendant resides, otherwise closest connection)

Front 9

Acceptance Rules

Back 9

• Telephone
• complete when words are HEARD
• Email
• complete when capable of being retrieved by offeror (**can be modified in offer)
• Fax
• when received
• Postal Acceptance Rule – if it’s reasonable to accept by mail, acceptance is effective when sent (only applies if offer was sent by mail or seller specifies mail as an accepted payment method). Revocation must still be received to be effective. if crossing borders, K is made in place where letter is sent, and thus law from that jurisdiction applies (*need to stipulate “acceptance complete upon receipt” and/or add forum selection clause)

Front 10

Revocation Rules

Back 10

communicated upon “delivery” to offeree’s address (needn’t be read)

Front 11

Consideration

Back 11

What a party gives up or promises to give up in exchange for the promise of another party.
1. Bilateral
a. mutual promises
2. Unilateral
a. promise in exchange for act
3. under “seal” requires no further consideration
(Caliguiri v. Tumillo)

Front 12

Gratuitous Promise

Back 12

promise without any promise or act in exchange, and therefore unenforceable

If you promise to pay more for something the other party is already obligated to do, there’s no contract (b/c no consideration)(gratuitous promise).

Front 13

Promissory (equittable) Estoppel

Back 13

Gratuitous promises should sometimes be enforceable, if certain conditions are met:
1. Parties must have existing K
2. later, one party modifies the K with a gratuitous promise (CAN be implied by CONDUCT) that releases the other party from some obligations in K
3. other party RELIES on promise
4. AND alters CONDUCT so that it would be a HARDSHIP if promise not kept
5. Equity will enforce a gratuitous promise if the above conditions are met AND if argument is being used by PROMISSEE as a DEFENCE against a claim made by promisor.
(Duke’s Cookies v. AMS)
(Tulsa Heaters Inc. v. Syncrude Canada Ltd.)

Front 14

Quantum Meruit

Back 14

if goods/services are requested and provided in a business context and no price is set, there’s an implied promise to pay a reasonable price.
(Tulsa Heaters Inc. v. Syncrude Canada Ltd.)

Front 15

Interpretation

Back 15

1. Strict Approach – dictionary definitions
2. Liberal Approach – trade practice, negotiations process, past dealings, are used to find meaning.
• Court must decide in each case how far it should look beyond the words used.
• In general, courts construe words most strictly against the party that suggested them
• Goal of the courts: to give validity to contracts
(BKDK v. 692831 BC Ltd.
(Black Swan Gold Mines Ltd. v. Goldbelt Resources)

Front 16

Contra Proferentem

Back 16

if you have a contract drawn up by one party and it has ambiguity, the court tends to favour the other party’s definition. used in standard form contracts, and exemption clauses

Front 17

Implied Terms

Back 17

the court can introduce implied terms to give effect to the reasonable assumptions of a party (but won't if the contract is clear and unambiguous)
(Black Swan Gold Mines Ltd. v. Goldbelt Resources)

Front 18

SALE OF GOODS ACT

Back 18

• A set of implied terms deemed to exist in every K for the “sale of goods”
• 1. Money must be part of transaction
2. Provincial, but has common-law base
3. Reasonable expectations of purchaser
4. Applies to *goods only* i.e. chattels personal, not things in action and money, nothing else. (except consumer lease – cars etc)

Front 19

Condition

Back 19

major/essential term of the contract (relieves performance, damages or rescission)

Front 20

Warranty

Back 20

lesser/non-essential term of contract (must still perform, damages)

Front 21

SGA s. 16

Back 21

16 Implied term as to clear title:
1. Condition
a. seller has right to sell
2. Warranty
a. buyer will have quiet possession of goods
3. Warranty
a. Goods are free from any charge or encumbrance in favour of another party
b. eg. You buy a car w/ a lien, but aren’t told  you can sue the seller

*All sales new and used goods

Front 22

SGA s. 17

Back 22

Implied CONDITION as to correspondence w/ description
• not sufficient that bulk correspond with sample

Used goods also?

Front 23

SGA s. 18a

Back 23

Implied CONDITION as to fitness (suitability) for purpose if:
1. Seller is a dealer
2. Buyer makes purpose known
3. Shows reliance on seller
4. Not a sale under trade name

Front 24

SGA S. 18b

Back 24

Implied CONDITION as to merchantability where:
1. Sale by dealer by description
2. Defects are not obvious

Front 25

SGA S. 18c

Back 25

Implied CONDITION as to durability
(Porelle v. Eddie’s Auto Sales Ltd. (s. 18c durability & s. 20))

Front 26

SGA S. 19

Back 26

Implied CONDITION as to correspondence w/ sample & merchantability

Front 27

SGA S. 20

Back 27

A term that tries to override S.17,18,19 is void if:
1. Retail sale of new goods to an individual for non-business use
2. The seller has not done what is reasonable to bring terms to buyer’s attention
3. there is evidence of GROSS OR CRIMINAL NEGLIGENCE
4. there is evidence of FRAUDULENT MISREPRESENTATION
5. there is evidence of a FUNDAMENTAL BREACH OF CONTRACT - workable nature of good is destroyed
(Porelle v. Eddie’s Auto Sales Ltd. (s. 18c durability & s. 20))

Front 28

Ways Around Exemption Clauses

Back 28

1. S.20 of the Sales of Goods Act
2. No acceptance  seller must draw reasonable attention to exclusionary clauses. Infants act.
3. Fraud
4. Fundamental Breach  very, very serious breach that goes straight to the root
5. Contra Proferentum  if there’s ambiguity in terms (strict/liberal approach)
(Dawe v. Cypress Bowl Recreations (exclusion clause))
(Kobelt Manufacturing Co. v. Pacific Rim Engineered Products (clause on website, not good enough))

Front 29

Infants Act

Back 29

1. Applies to people up to 19 yrs of age.
2. Contracts w/ infants (0-18) are not enforceable against the infant (infant may enforce contract on seller)
a. Unless infant affirms contract after turning 19
b. Or partly performs the contract w/in 1 year after turning 19
c. Or does not repudiate the contract w/in 1 year of turning 19

Front 30

Mentally incapacitated persons

Back 30

• intoxicated
• disease of mind
• must pay a “reasonable” price for “necessaries”
• to get out of a K for a NON-necessary, must show:
• was so incapacitated, didn’t understand K
• AND the other party to the K was aware of the condition at time of K

Front 31

Indemnity Agreement

Back 31

Person of age takes responsibility for minor

Front 32

Discharge of Contracts

Back 32

1. Performance (all goes well)
2. Agreement (both parties mutually agree to abandon K)
3. Frustration  supervening event (after the contract) beyond the control of either party that renders performance impossible or fundamentally different. Not self-induced, not hardship. --> Saturley
4. Breach of condition --> Brealta/Westcoast/Blackcomb
5. Expiration  if neither party has recognized the contract for 6yrs or longer.
(Jedfro Investments Ltd. v. Jacyk (discharge/breach of contract))
(Brealta Energy Inc. v. First Capital Management (Anticipatory breach))

Front 33

Transfer of Title of Goods for Unconditional contract for the sale of specific goods in a deliverable state

Back 33

title passes when the contract is made (delivery & payment irrelevant)

Front 34

Transfer of Title of Goods for Sale of specific goods where seller is bound to do something to put them in a deliverable state

Back 34

title passes when the thing is done and the buyer receives notice

Front 35

Transfer of title of goods for Sale of specific goods in a deliverable state but the seller is bound to weigh, measure, test, etc to set the price

Back 35

title passes when the buyer signifies approval or after a specified or reasonable length of time.

Front 36

Transfer of title of goods for Sale of goods on approval

Back 36

title passes when the buyer signifies approval or after a specified or reasonable length of time.

Front 37

Transfer of title of goods for Sale of unascertained or future goods by description

Back 37

title passes when the goods are unconditionally appropriated to the contract by the seller w/ the assent of the buyer. Or the seller delivers the goods to a carrier pursuant to a contract and doesn’t reserve a right of disposal.

Front 38

Breach of Condition

Back 38

Contract is discharged
remedy is rescission or damages

Front 39

Express breach of condition

Back 39

performance is due on a certain date, and on that date one party fails to perform

Front 40

Anticipatory breach of condition

Back 40

Seller has 3 options:
1)treat contract as over now and sue for damages
duty to mitigate losses immediately
2)wait and see if contract will be breached
no duty to mitigate arises
3)provide an extension (gratuitous promise, buyer needs to provide new consideration)
(Blackcomb)

Front 41

Hadley v. Baxendale rules

Back 41

a)Damages recoverable for breach are those that are reasonably foreseeable to the parties and the time of the contract (or damages have to flow naturally and directly from the breach)
b)If the parties are aware of special circumstances of the plaintiff at time of K, then those damages are also recoverable.
***Any unforeseeable damages are CONSEQUENTIAL DAMAGES, AND THEREFORE UNRECOVERABLE

Front 42

Reasons for Denying a Remedy

Back 42

1)Plaintiff must be found not to have acted unethically
2)If the plaintiff delays unreasonably in bringing an action the court will deny an equitable remedy.
3)Court will refuse to intervene on ethical principles when to do so would affect an innocent purchaser.
4)A court will not award a remedy in equity when the plaintiff hasn’t paid substantial consideration for the defendant’s promise (nominal damages)
5)Plaintiff must ordinarily be a party against whom the remedy would be awarded were he the defendant instead (infant won’t get remedy in his favour b/c if he were defendant no equitable remedy would be granted).

Front 43

Material Alteration of Terms

Back 43

Alteration that goes to the root of the contract. Original contract is discharged and replaced w/ new one (novation)

Front 44

Misrepresentation

Back 44

-If it is material, court may set contract aside at request of aggrieved party.
-If innocent misrepresentation, aggrieved party only has right to rescind, as long as subject matter can be restored.
-Sometimes if a party has suffered substantially, the court may find that the misrepresentation has become a term of the contract and may be awarded damages.
-Also, if innocent representation, indemnity (less than damages) may be awarded.
-W/ land right to rescission after misrep is generally lost after title passes.
-A false assertion is only a misrep if it is made as a statement of fact.
-Expert opinion is a statement of fact.
-Misrep by omission if consumer has to sign hurriedly and seller has good reason to suspect consumer doesn’t fully understand the implications of the terms.
-Utmost good faith – eg insurance.
-Prospectus – statement issued to inform public about new issue of shares/bonds.

Front 45

Undue Influence (definition)

Back 45

The domination of one party over the mind of another to such a degree as to deprive the weaker party of the will to make an independent decision

Front 46

Undue Influence

Back 46

-Contract is voidable at the option of the victim. The victim must act promptly to void.
-Sometimes will occur when victim is in dire straits.
-Often involves a special relationship (ex. Doctor-patient)
-2 main deciding factors are: degree of domination and extent of advantage received.

Front 47

Unconscionability

Back 47

A contract may be considered unconscionable if a person, w/out independent advice, enters into a contract that is extremely unfair when he is impaired by his own needs/desires, or by his own ignorance, coupled w/ undue influences for the benefit of others

Front 48

Duress

Back 48

Actual or threatened violence or imprisonment as a means of coercing a party to enter into a contract

Front 49

Legality

Back 49

If a contract is shown not to be legal, it is simply void. The courts will do their best to restore both parties to their respective positions before the contract was attempted.
(Maksymetz V. Kostyk)
When a contract is not only void, but also illegal, the court will refuse to aid a party who knowingly agreed to the illegal arrangement. When both parties are tainted w/ knowledge of the illegal object, the plaintiff will be left w/out remedy, thereby assisting the defendant.
A court will not allow a part of the contract (which otherwise may be legal) to be severed and enforced.

Front 50

If a term of the contract is void

Back 50

If the term can be severed w/out doing injustice to the parties, the court will uphold the remainder of the contract

Front 51

Agreements Illegal by Statute

Back 51

Common law holds that when the object of a contract is illegal by statue, then the contract itself is illegal

Front 52

Restrictive Covenant

Back 52

-If the covenant encompasses too wide a scope, the courts will not narrow it. The courts will find the restriction void.
-A restrictive covenant may be enforced if it can be shown to be reasonable between the parties and not injurious to the public.
-To enforce a R.C. an injunction may be obtained from the courts.

Front 53

Privity of Contract

Back 53

The relationship that exists between parties to a contract