s.2: contracts rules

Question 1

Redgrave v Hurd (misrep, rescission, & bars)

Answer 1

innocent misrep.: (1) statement of fact; (2) statement = false; (3) statement = intended to induce into contract

Question 2

Smith v Land and House Property Corp. (misrep)

Answer 2

Opinions are not facts & future oriented-facts cannot be facts unless they are representative of the speaker’s current state of mind

Question 3

Bank of BC v Wren Developments Ltd (Misrep)

Answer 3

Silence or omission can never be a misrepresentation, but active concealment can (putting a big mirror over a crack in a real estate transaction.)
If I misrepresent something innocently then later learn the truth, there is a positive duty to correct the misinformation

Question 4

Kupchak v Dayson Holdings Ltd. (misrep)

Answer 4

there are 3 bars to rescission: (1) restitutio in integrum; (2) affirmation; (3) delay (latches). And affirmation but be clear and unambiguous for it to count.

Question 5

Heilbut, Symons & Co v Buckleton (representations and terms)

Answer 5

if you have a written contract & this term isn’t in the contract, then it is likely not intended to be a term of the contract

Question 6

Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd. (rep and terms)

Answer 6

verbal comments can be terms in situations where 1) they are stated twice, 2) it is an important material aspect, and 3) there is a knowledge imbalance between the parties

Question 7

Leaf v International Galleries (rep and terms)

Answer 7

if something is reduced into writing in the written contract, it’s basically impossible to claim a term is a representation (b/c why else would you write it down). Also, once it’s a term (determined by courts), it’s a term, you can’t manipulate it away from being a term to get the remedy that you want.

Question 8

BG Checo International Ltd. v BC Hydro & Power Authority (concurrent liability in contract & tort)

Answer 8

you can sue concurrently in tort & contract on the same facts, unless the contract excludes tort liability (if you win both, the remedy = offset)

Question 9

Hawrish v Bank of Montreal (Parol)

Answer 9

the parol evidence rule: (1) written contract; (2) oral statements made prior to or contemporaneous w/ that contract; (3) if the oral statements are contradictory to that form, they are inadmissible. Also misrep = exception to PER

Question 10

Bauer v Bank of Montreal (parol)

Answer 10

another illustration of parol evidence rule: inadmissible if contradictory

Question 11

Gallen v Allstate Grain Co. (parol)

Answer 11

parol evidence can be used to colour any ambiguity in the written contract up to the point of contradiction.
Additionally, oral statements which add to the written contract & do not contradict are admissible

Question 12

Business Practice and Consumer Protection Act (parol)

Answer 12

In a consumer transaction (one party in the transaction is a consumer for their own use) you can always admit non-contradictory oral statements to help clarify the parties understanding of the contract

Question 13

Hong Kong Fir Shipping Co. Ltd v Kawasaki Kisen Kaisha Ltd (classification of terms)

Answer 13

invents the 3rd category: innominate terms which retroactively become either warranties or conditions depending on the extent of the breach

Question 14

Wickman Machine Tool Sales Ltd. v L. Schuler A.G. (classification of terms)

Answer 14

if the result would be absurd, they cannot have possibly intended it (if absurd, not a condition). Also, if the word condition is used, very strong indication that it is one

Question 15

Sumpter v Hedges (Discharge by performance of breach)

Answer 15

old law: if you don’t do the entire job, the other party doesn’t have to pay anything at all –> if you agree for a lump sum to build something & then the contract is repudiated, then you do not have to pay anything at all

Question 16

Fairbanks Soap Co v Sheppard (Discharge by performance of breach)

Answer 16

doctrine of substantial completion: (a) substantially complete in an empirical sense (if incompleteness prevents it from working, then not substantially complete), and (b) incompleteness cannot be due to quitting/abandoning

Question 17

Howe v Smith (discharge by performance of breach)

Answer 17

deposit = to secure performance & if don’t go through with it = forfeited. Down payment = partial payment & should get it back b/c going towards full payment

Question 18

Stevenson v Colonial Homes (discharge by performance of breach)

Answer 18

if the contract uses both deposit & downpayment, look to the intentions of the parties & read contra proferendum against the drafter. If still unclear, treat as deposit.

Question 19

Bhasin v Hrynew (Good faith performance)

Answer 19

obligation of good faith in the performance in all contractual obligations (not required to make it in good faith but must perform it so)

Question 20

Thornton v Shoe Lane Parking Ltd. (Standard form & exclusion clauses - unsigned)

Answer 20

company must bring it to your attention explicitly (depends on the magnitude of the exclusion) & it must be brought to the attention of the customer BEFORE they enter into the contract

Question 21

McCutcheon v David MacBrayene Ltd. (standard form & exclusion clauses - unsigned)

Answer 21

in theory, you could have an implied exclusion clause based on consistent past practice (didn’t work in this case)

Question 22

Karoll v Silver Star Resorts Ltd. (standard form & exclusion clauses - signed)

Answer 22

if you want to displace the signature have to show other party should have known that the person who signed it was unaware of the nature & extent of the clause, then it will not be incorporated unless the other party did what was reasonable to bring it to their attn. (explicitly)

Question 23

Tilden Rent A Car v Clendenning (standard form & exclusion clauses - signed)

Answer 23

if the exclusion clause is unexpected & was not brought to the attention of the person signing the waiver, then it does not count

Question 24

Hunter Engineering Co v Syncrude Canada (striking out)

Answer 24

ultimately couldn’t decide between the doctrine of fundamental breach or unconscionability

Question 25

Tercon Contractors Ltd. v British Columbia (transportation and highways) (striking out)

Answer 25

to assess enforceability of exclusion clauses: (1) matter of interpretation, does the clause apply to the circumstances established? (2) was it unconscionability at the time the contract was made? (3) should the court refuse enforcement based on public policy (onus w/ party seeking to avoid enforcement)

Question 26

Loychuk v Cougar Mountain Adventures Ltd. (striking out)

Answer 26

waivers of liability are generally enforceable unless they are unconscionable, obtained through misrep, or are contrary to public policy (case applies Tercon)

Question 27

Niedermeyer v Charlton (striking out)

Answer 27

the enforceability of waivers is subject to public policy considerations. A waiver cannot override statutory protections or public policy principles

Question 28

Smith v Hughes (unilateral mistake)

Answer 28

for unilateral mistake: (1) one party must be mistaken as to the terms of the contract (must be TERMS), (2) & the other side knew that & snapped up the deal

Question 29

Hartog v Colin & Shields (unilateral mistake)

Answer 29

when it is obvious that someone has made a mistake in the terms of an offer, one may not simply "snap up" the offer & be able to enforce the agreement (basically the test reiterated)

Question 30

McMaster University v Wilchair Construction Ltd (unilateral mistake)

Answer 30

endorses Hartog decision; unilateral mistake no longer works w/ tenders contract A situation

Question 31

Bell v Lever Brothers Ltd. (common mistake)

Answer 31

CL common mistake: (1) mistake must be of both parties & (2) it has to be as to the existence of some quality which makes the thing w/o the quality ESSENTIALLY different from what it was believed to be

Question 32

McRae v Commonwealth Disposals Commission (common mistake)

Answer 32

if the risk is allocated, then there can be no mistake (and if a party makes a positive assertion about the subject matter in a contract, they hold the risk of its nonexistence)

Question 33

Solle v Butcher (common mistake)

Answer 33

equitable common mistake: (1) both parties are mistaken; (2) fundamentally different test (broader than essentially different)

Question 34

Great Peace Shipping v Tsavliris Salvage (common mistake)

Answer 34

for a CL common mistake to render a contract void, the mistake must make the performance of the contract impossible (gets rids of equitable mistake in UK)

Question 35

Miller Paving ltd. v B. Gottardo Construction Ltd. (common mistake)

Answer 35

keeps both common law and equitable mistakes in Canada; and neither are available if either the risk or fault has been allocated

Question 36

Lee v 1435375 Ontario Ltd. (common mistake)

Answer 36

caveat emptor: if it's important to you, should have stipulated in contract, failure to do so = absorb risk of being disappointed; fault: if it's important to you, should have investigated truth & failure to do that = your fault

Question 37

Shogun Finance Ltd v Hudson (Mistakes as to identity)

Answer 37

test: (1) A intended to contract w/ specific B; (2) bad guy knew that A was mistake as to his ID; (3) innocent party, A, has to show ID of B was on crucial importance (can be combined w/ st.1); (4) for that mistake to be actionable & rendered void, A has to show some reasonable diligence in verifying ID of B

Question 38

Saunders v Anglia Building Society (non est factum)

Answer 38

test: (1) must show doc is of a different character from what they thought and (2) that you were not careless in signing the doc

Question 39

Marvco Colour Research Ltd. v Harris (non est factum)

Answer 39

reaffirms test for non est factum & emphasizes that not reading = careless

Question 40

Sylvan Lake Golf and Tennis Club Ltd v Performance Industries Ltd (rectification of mistake)

Answer 40

test: (1) existence of prior oral agreement; (2) written agreement doesn't reflect the oral; (3) proof of fraud or mistake (knew or ought to have known at the time of signing that there was this discrepancy); (4) specific/precise how you want it rectified (not a chance to renegotiate)

Question 41

Canada (Attorney General) v Fairmont Hotels Inc (rectification of mistake)

Answer 41

rectification means everything said in Sylvan Lake, not equity's version of a mulligan (which is what they tried to do here)

Question 42

Paradine v Jane (frustration)

Answer 42

old law: have to perform contract as agreed regardless

Question 43

Taylor v Caldwell (Frustration)

Answer 43

old law: theory of implied terms

Question 44

Davis Contractors Ltd v Fareham UDC (frustration)

Answer 44

frustration = (1) contract interpreted at time of formation, (2) supervening act, (3) is performing in these circumstances radically diff than the circumstances you thought you'd be performing in/nature of obligation = radically changed. subject to limits via fault & risk

Question 45

Capital Quality Homes Ltd v Colwyn Construction Ltd. (frustration)

Answer 45

act must be unforeseeable to truly be a supervening act. Emphasizes "radically different" from the 3rd step of the test

Question 46

Edwinton Commercial Corporation v TSavliris Russ (Worldwide Salvage and Towage) Ltd. "The Sea Angel" (frustration)

Answer 46

the risk will be allocated between the parties (expressly or impliedly) in circumstances where the supervening event is foreseeable (real possibility that is likely to occur). Frustration will not be invoked if performance is still possible, but merely more onerous, time consuming or expensive

Question 47

Maritime National Fish Ltd v Ocean Trawlers Ltd. (frustration)

Answer 47

the essence of frustration is that it should not be due to the act or election of the party asking for it to be used (fault)

Question 48

Geffen v Goodman Estate (undue influence)

Answer 48

test: (1) party's will or consent is overborne; (2) deal was manifestly disadvantageous

Question 49

Royal Bank of Scotland Plc v Etridge (undue influence)

Answer 49

retaining the manifest disadvantage requirement for type 2 undue influence

Question 50

Morrison v Coast Finance Ltd (unconscionability)

Answer 50

(background case) elements: overwhelming inequality between the parties, gross abuse of that inequality, and have to show some sort of abuse of exploitation

Question 51

Marshall v Can. Permanent trust Co (unconscionability)

Answer 51

(background case) unconscionability = (1) incapable of protecting own interests; (2) grossly unfair deal

Question 52

Lloyds Bank v Bundy (unconscionability)

Answer 52

(background case) subjective preferences can be brought in to assess whether the deal is actually unfair independent of market standards

Question 53

Harry v Kreutiziger (unconscionability)

Answer 53

(background cases) A contract may be rescinded if there is inequality of bargaining power and substantial unfairness in the agreement. The stronger party must prove the bargain was fair

Question 54

Uber Technologies Inc. v Heller (unconscionability)

Answer 54

unconscionability = unfairness; needs (1) procedural unfairness part (inequality of the parties) and (2) substantive process part (improvident bargain, much milder than gross abuse of unfairness)

Question 55

Business Practices and Consumer Protection Act

Answer 55

s.4-6: Prohibits deceptive advertising or actions that mislead consumers. s.7-8: Addresses unconscionable practices exploiting consumer vulnerability or undue pressure. s.9: Suppliers must prove actions aren't deceptive or unconscionable. s.10: Consumers can cancel agreements or seek compensation for harm

Question 56

McRae v Commonwealth Disposal Comm. (Remedies)

Answer 56

reliance measure example: (1) incurred a loss; (2) expenses were reasonable & rationally connected to the contract; (3) wouldn't otherwise spent it but for the contract (if you would've spent the money anyway, cannot claim it under reliance measures)

Question 57

Bowlay Logging Ltd v Domtar (remedies)

Answer 57

you cannot be in a better position after suing for breach of contract than if they just performed the deal --> reliance damages can never exceed the $$ of expectation damages; capped at hypothetical expectation

Question 58

Sunshine Vacation Villas Ltd v Governor & Company of Adventures of England Trading into Hudson's Bay (Remedies)

Answer 58

reliance damages are alternatives to expectation damages, you cannot have both

Question 59

Attorney General v Blake

Answer 59

example of gain-based relief; only available in exceptional cases (where other remedies would be inadequate) & innocent party = legitimate & continuing interest in stopping all the profit of the wrongdoer from profit making acitivities

Question 60

Atlantic Lottery v Babstock (not read but mentioned in class) (remedies)

Answer 60

unanimously endorsed what was said in Blake restitutionary damages (gain-based) = (1) exceptional circumstances, (2) where all other remedies = inadequate; and (3) the innocent party has a continuing interest in stopping all the profit making of the wrongdoer

Question 61

Chaplin v Hicks (remedies - quantification)

Answer 61

the fact that damages cannot be assessed w/ certainty does not relieve the wrongdoer from the obligation to pay them

Question 62

Groves v John Wunder Co. (remedies - cost of completion)

Answer 62

Cost of completion is disproportionate, but courts will overlook this in situations of bad faith

Question 63

Nu-west Homes Ltd v Thunderbird Petroleum Ltd (remedies - cost of completion)

Answer 63

as long as the way you've calculated the cost of completion is reasonable & not trying to be crazy, then it's going to be ordinary measure

Question 64

Jarvis v Swan Tours (remedies - loss of enjoyment)

Answer 64

damages for being sad = narrow space, tends to be for holiday disasters

Question 65

Whiten v Pilot Insurance Co. (remedies - punitive damages)

Answer 65

punitive damages are available if in addition to breach of contract, (1) had an independent wrong, and (2) need to show that the behaviour that led to the breach is worthy of punishment

Question 66

Shatilla v Feinstein (remedies - penalty clauses)

Answer 66

if you want a stipulated sum to be enforceable it has to be a genuine pre-estimate of damages for a breach of contract

Question 67

Super Save Disposal Ltd v Blazin Auto Ltd (remedies - penalty clauses)

Answer 67

starting presumption is liquidated damages and therefore enforceable, onus is on defendant to prove penalty clause

Question 68

Hodgkinson v Simms (boundaries to recovery)

Answer 68

After a breach is proven with evidence, reverse-onus on defendant Intervening events don’t bar recovery if the breach caused the plaintiff’s vulnerability

Question 69

Hadley v Baxendale (boundaries to recovery)

Answer 69

for damages to be recoverable (1) they have to be foreseeable in the sense of the probable result arising in the usual course of things, (2) have to consider any special circumstances between the parties that would make something that would otherwise be remote/unforeseeable, not remote/unforeseeable

Question 70

Victoria Laundry (Windsor) Ltd v Newman Indust Ltd (boundaries to recovery)

Answer 70

slightly diff language on prev. rule → imputed knowledge (objective knowledge) → would reasonable parties in that situation have foreseen it on (1) element; (2) = more subjective

Question 71

Scyrup v Economy Tractor Parts Ltd (boundaries to recovery)

Answer 71

more about 2nd limb of special knowledge --> will make foreseeable that which may otherwise not be

Question 72

Koufos v Czarnikow (C) The Heron II

Answer 72

Narrows foreseeability: “arising in the ordinary course of things means that the loss that occurred is one that would arise in the majority of cases.” must be likely & foreseeable