Contracts Final Ratio Flashcards
Hart v O’Connor
A contract which is negotiated in good faith, with no knowledge (or reasonable) knowledge of incapacity on the part of the other party, is not voidable for unconscionability (for incapacity)
Smith v Land and House Property Corp
- A statement of opinion, from a knowledgeable party to one who is not, is a representation
- Innocent misrepresentation allows rescission
Redgrave v Hurd
Any statement made in an attempt to induce another party to enter a contract is relied upon as a condition if the contract is eventually formed. Rescind for misrepresentation
To rebutt:
- prove knowledge to the contrary of the statement, or
- express proof that the party did not rely on the statement.
Bank of British Columbia v Wren Developments
- Failures or omissions can qualify as misrepresentation
- Negligent misrepresentation permits rescission.
Kupchak v Dayson
• Monetary compensation may be granted under rescission where it is impossible or inequitable to restore the original property.
• Barriers to equitable remedies of compensation or rescission
1) Affirmation (innocent party affirmed the deal after discovering fraud)
2) Laches (innocent party waited too long to come to court)
3) Restitution in integrum (restoration of the original condition not possible)
4) Effect on third parties (rescission would adversely affect 3rd parties)
Hellibut Symons & Co v Buckleton
- Damages only awarded for fraudulent/reckless misrepresentations, or misrepresentations that refer to a material issue that fundamentally changes the contract
- Innocent representations only warranties if clearly intended to be by the parties
Dick Bently Productions Ltd v Harold Smith (Motors)
- Representation to induce a party to enter a contract is a warranty, therefore a breach of it would mean damages even if it was innocent
- Objective test for warranty: intended to be acted upon + was acted on= warranty
BG Checho International Ltd v British Columbia Hydro & Power Authority
- Plaintiff always allowed to sue in both tort and contract so long as relevant duty for tort is not expressly negated in the contract
- Goal of damages in contracts= put them in position they would be in if contract completed
Harwish v Bank of Montreal
A collateral agreement cannot be established where it is inconsistent with or contradicts the written agreement. There must be clear intent that the parties are creating a separate agreement (collateral agreement)
Bauer v Bank of Montreal
Where a written agreement appears on its face to be a complete agreement, extrinsic evidence could not be admitted that contradicts, varies, adds to, or subtracts from the terms of the written agreement. (Parole evidence rule)
J Evans & Son (Portsmouth) Ltd v Merzario (Andrea) Ltd
The promise to carry goods below deck was an enforceable collateral contract and the oral assurance was an express term which was partly oral, written and by conduct . The promise overrides any exemption clause.
Gallen v Allstate Grain Co
Parole Ev Rule does not extend to cases where documents may not embody all the terms of the agreement. Even where it seems to embody all terms there is exceptions to the rule:
- Defective formation of contract (ex: fraud/mistake in forming)
- Collateral contract (promise in collateral that is oral)
- Ambiguous language
Greater Fredericton Airport Authority Inc v Nav Canada
♣ To establish economic duress, two conditions must be met:
1) the promise but be made under pressure (demand/threat);
2) the pressured party must have no option but agreeing.
♣ If these conditions are met, three factors must be analyzed:
1) was the promise supported by consideration?
2) was the promise made “under protest”?
3) were reasonable steps taken to disaffirm the promise?
Geffen v Goodman Estate
For there to be a finding of undue influence:
-Nature of the relationship (must be dominance, manipulation, and coercive abuse of power)
-Nature of transaction
>Commercial (must be undue disadvantage or benefit)
>Gift (requires only evidence of a dominant relationship)
Morrison v Coast Finance
Unfair deal + unequal power between the parties= presumption of unconscionability
once raised the stronger party must rebut the presumption
Lloyds Bank v Bundy
A contract is void for unconscionability if:
1) Unfair terms or inadequate consideration
2) Bargaining power impaired by necessity, ignorance, or infirmity
3) Undue pressure/ influence used (not necessarily consciously); and
4) Absence of independent advice
KRG Insurance Brokers (Western) Inc v Shafron
- Restrictive covenant unenforceable unless reasonable with respect to the parties + reasonable with respect to interests of the public
- Ambiguous RC can only be enforced if the ambiguity can be resolved
Still v Minister of National Revenue
- Modern approach to doctrine of statutory illegality
- Where a contract is prohibited by statute, a court may refuse to grant relief to a party when, it would be contrary to public policy to do so.
Paradine v Jane
When a party, by his own contract, creates a duty upon himself he is bound to make it good notwithstanding any accident that he could have provided against in the contract
Taylor v Caldwell
When a situation arises, through no fault of either party to a contract, both parties are excused from performing their respective duties under the agreement
Atlantic Paper Stock Ltd v St Anne- Nackawic Pulp & Paper Co
- Cannot be a condition in an exemption clause frees a party from contractual obligations
- Force major claims generally operate to discharge contracting party when supernatural event, beyond parties control that makes performance impossible. Look for external, supervening, supernatural event, in order to frustrate a contract.
R v Ron Engineering
-A mistake by the tenderer renders the tender revocable so long as notice of mistake is given prior to selection
Great Peace Shipping v Tsavliris Salvage
Test to establish a common mistake at common law (to avoid contract):
1) Common assumption of existence of a state of affairs
2) No warranty by either party that the state of affairs exists
3) Non-existence of the state of affair not the fault of either party
4) Non-existence of state of affairs renders performance impossible
5) The state of affairs may be the existence, or vital attribute, of the consideration to be provided or circumstances which make performance possible
Miller Paving Ltd v B Gottardo Construction Ltd
- Common law and equitable doctrines of common mistake are in the fabric of Canadian law
- Before determining if contract vitiated by common mistake look to see if the parties have provided for who bears the risk of relevant mistake
