CERTAINTY, CAUSATION, REMOTENESS Flashcards
Causation
Stockbroker who does not know how to tax plan – goes to tax sheltering specialist for advice – purchases multi-unit residential buildings as form of income tax-sheltered property – loses big on the investment when market for these buildings crashes – specialist had been acting for developers of these building at time of sale, was paid by both – conflict of interest – plaintiff sues for breach of contract, breach of fiduciary duty, negligence – what is proper calculation of damages? – Hodgkinson v Simms p.873
Remoteness
Mill stops working from break in crank shaft – mill operator contracts with defendant; defendant to deliver the crank shaft to its manufacturers who need to see the broken piece – tells defendant’s clerk it has to be shipped immediately, says defendant needs to make special entry if necessary to speed up delivery – delivery delayed by defendant’s neglect – breach of contract – consequences: no new shaft for several days more than expected, work at mill delayed and los of profits – plaintiff entitled to loss of profit for breach of contract?- 2-arm test for remoteness – Hadley v Baxendale p.883
Wants to expand laundry business, agrees to buy boiler belonging to defendant – defendant knew plaintiff was a launderer/dyer company – boiler damaged while being dismantled – repairs to boiler cause long delay, delivered several months later – plaintiff claims damages for loss of profits – entitled or not? – Victoria Laundry v Newman Industries p.885
Contractor has job requiring use of refitted tractor – requests tractor parts from defendant – explains the time sensitive nature, exactly what pieces they need to perform the job – equipment is sent, but very shoddy, requiring many repairs – does not work properly – delays to tractor cause contractor to lose job – sues for loss of profits resulting from termination of contract – Scyrup v Economy Tractor Parts p.889
Defendants charter plaintiff’s vessel to load cargo of sugar – estimated length of voyage at 20 days, but vessel makes several deviations, adds 9 days to journey creating breach of contract – defendants intended to sell sugar immediately upon arrival – had sugar arrived on time, would have made more money than the price they were forced to sell because of delay – defendants claim they are entitled to recover difference as damage for breach of contract – plaintiff concedes liability for 9 extra days but denies liability in the drop in market value – can plaintiff recover damages for breach of contract a loss of a kind the defendant should have realized when making contract was not unlikely to result from breach causing delay in delivery? – Koufos v Czarnikow (The Heron II) p.892
Mitigation
Agreement to have return of shares they had lent to defendant – shares had been sold, never returned – action by plaintiff for specific performance for return of shares and in damages – case in litigation for 20 years – price of shares fluctuate wildly from inflation – what should the quantum of damages be? – did plaintiff have to mitigate? – Asamera Oil Corp v Sea Oil & General Corp p.896
Time measurement of damages
Respondent agrees to buy house under construction from appellant vendor – closing date, price determined – respondent going to pay 75K in cash, raise 130K by mortgaging current home – secures 6 month open mortgage, but appellant reneges on contract – title to house taken from respondent – respondent stays in old house, worth 190K at time and then 300K by time of trial – respondent sues for specific performance or damages – market value at trial was 325K – respondent sought damages, not specific performance, given 120K = difference between purchase price he agreed to pay and value of property at time of trial – appellant appeals, says damages assessment was “windfall” because respondent benefitted from the increase in value of new house and gain in value from old house – Semelhago v Paramadevan p.905
Contract with school board for purchase and sale of property – contract subject to fulfilment of one condition by school board, which was never fulfilled – appellant offers to extend closing date, school board declines = transaction has come to an end – appellant sues for breach of contract, specific performance, admits no intention to mitigate and no attempt to ever do so – appellant was a single-purpose company, existing only for this land purchase from school board – should single-purpose company mitigate losses? – Southcott Estates v Toronto Catholic DSB p.911
Liquidated damages, deposits, forfeitures
Defendant sells business to plaintiff – contract has non-competition clause; in event of breach, to pay 10K for each and every breach as liquidated damages and not as penalty – defendant breaches clause one year later – plaintiff sues for liquidated damages – is the sum fixed by the covenant a penalty, or is it recoverable by liquidated damages? – Shatilla v Feinstein p.921
Non-competition covenant – did covenant contain liquidated damages or punitive clause/penalty? – was covenant punitive in nature and thereby not enforceable? – HF Clarke v Thermidaire p.925
Enforceability of a clause stating the defendant “in the event of their failing to observe or perform” the agreement would pay to the plaintiff “the sum of $1000 as and for liquidated damages”- what is the effect of the damages clause? – is it punitive? – can it be upheld as non-oppressive? – JG Collins Insurance Agencies v Elsley p.933
Contract of sale involving machinery – purchase price to be payable by installments – term of contract said defendant could remain owner of plant and machinery until entirety of price was paid – if plaintiff defaulted, defendant entitled to terminate contract and keep all payments that were made up to that point – plaintiff fails to make payment, few months later defendant cancels contract – plaintiff asks for money back – is plaintiff entitled to recover the paid installments? – can parties ask for money back when a forfeiture clause exists? – Stockloser v Johnson p.935
Should courts look to terms and consequences of each contract when assessing liquidated damages? – Super Save Disposals v Blazin Auto p.939
