Ratios

Question 1

Tweddle

Answer 1

Third parties cannot sue on contract due to lack of consideration (Tweddle).

Question 2

Dunlop

Answer 2

Stranger cannot sue to enforce contract (Dunlop).

Question 3

Woodar

Answer 3

Woodar overturns Jackson, reaffirms regular rule that recovery for or by a third party is not permitted.

Question 4

Beswick

Answer 4

Executor of estate can sue on behalf of estate (Beswick).

Question 5

McCannell

Answer 5

Can get around general privity rule because agent relationship (McCannell).

Question 6

N.Z. Shipping

Answer 6

Test for agency (Lord Reid test) (N.Z. Shipping):

1. If the party is meant to be covered by provisions.
2. If the promisor is clearly acting as agent for the party.
3. If the promisor has authority to do this.
4. Consideration moves from party through agent to promisee (intention to create legal relations).

Question 7

London Drugs

Answer 7

Two-step test for employees being party to a contract made by their employer (London Drugs):

1. The limitation of liability clause must (expressly or impliedly) extend the benefit to the employee(s).
2. The employee(s) must have been acting in the course of their employment performing the services provided for in the contract when the loss occurred.

Question 8

Fraser River

Answer 8

Subrogation uses same test as employment per Fraser River.

Question 9

Qualities that must exist for fraudulent misrepresentation:

Answer 9

1. Representation.
2. Representation of fact.
3. Fraudulent representation.
4. Intended to induce contract.
5. Is material.

Question 10

Smith

Answer 10

Statement of opinion from a knowledgeable party to one who is not is a representation (Smith).

Question 11

Redgrave

Answer 11

Statement made to induce another party into a contract is misrepresentation (Redgrave).

Question 12

Wren

Answer 12

Failures or omissions can qualify as misrepresentation if they are half-truths (Wren).

Question 13

Kupchak

Answer 13

Monetary compensation may be granted under rescission where it is impossible or inequitable to restore the original property and there is fraud (Kupchak).

Question 14

Ennis

Answer 14

Innocent misrepresentation leads to rescission, but plaintiff must initiate process for rescission in a reasonable amount of time (Ennis).

Question 15

Halleran

Answer 15

The minimization of damages does not preclude the remedy of rescission for misrepresentation (Halleran).

Question 16

Leaf

Answer 16

After a reasonable amount of time has passed in cases of a contractual warranty, contract can no longer be rescinded (Leaf).

Question 17

Heilbut

Answer 17

It is a high/strict standard to apply to find collateral warranty — innocent representations are only referred to as warranties if they have clearly been intended to be warranties by the parties (intention to create legal relations) (Heilbut).

Question 18

Dick Bentley

Answer 18

A representation made in the course of dealings for a contract for the very purpose of inducing another party to enter into the contract and there is unequal access to information, it is presumed prima facie to be a warranty of that contract and therefore, a breach of it will lead to a cause of action for damages even if it is innocently made — defendant can rebut by defendant showing the representation was actually innocent (Dick Bentley).

Question 19

Hong Kong Fir

Answer 19

An innominate term is a “wait and see” situation — examine the consequence of the particular breach in issue and determine whether, in light of those circumstances, the innocent party should be entitled to disaffirm the contract, or just get damages (Hong Kong Fir).

Question 20

Bhasin

Answer 20

Implied duty to perform in good faith/duty of honest performance (Bhasin).

Question 21

Goss

Answer 21

Parol evidence refers to evidence not contained in the written document (Goss).

Question 22

Hawrish

Answer 22

There must be clear intent that the parties are creating a separate, collateral agreement and a collateral agreement cannot be established where it is inconsistent with or contradicts the written agreement (Hawrish).

Question 23

Bauer

Answer 23

• Where a written agreement appears on its face to be a complete agreement, parol evidence could not be admitted that contradicts, varies, adds to, or subtracts from the terms of the written agreement (Bauer).
• Where there is sufficient evidence of oral misrepresentation which a) induced a party to a contract and b) was relied on by the party, then parole evidence can be included (Bauer).

Question 24

Gallen

Answer 24

The Canadian approach is to create presumption in favour of written agreement, and the presumption is:

1. Strongest when alleged oral misrepresentation contrary to written terms; less strong when merely adds to them.
2. Stronger where parties themselves negotiated and prepared written agreement; less strong where printed form used.
3. Less strong where contest was between specific oral representation and general exemption/exclusion clause, in which case can read specific representation as intended to be exception to more general stipulation.

Question 25

Hedley Byrne

Answer 25

If, but for the lack of consideration, a promise would have been a contract, this can create a relationship “equivalent to contract” where liability can attach to misrepresentation (Hedley Byrne).

Question 26

Esso

Answer 26

The Hedley Byrne principle applies to contract law as well — when two parties in a “special relationship” are parties to a contract, the party with special knowledge has a duty not to be negligent in the representations that they give to the other party (Esso).

Question 27

George Mitchell

Answer 27

One cannot opt out of all liability using an exclusion clause — needs to be fair and reasonable (George Mitchell).

Question 28

Parker

Answer 28

Distilling approach — condition binding if a) customer knew of condition existence or b) defendant gave sufficient notice of conditions on a standard of general public understanding (Parker).

Question 29

Thornton

Answer 29

The more onerous the exemption conditions, the greater the notice is that must be drawn to it (the public must be able to predict what the severity of the term is from the notice drawn to it) (Thornton).

Question 30

Interfoto

Answer 30

Proportionality is applicable to all clauses (not just exemption clauses) — the more onerous, the more notice required (Interfoto).

Question 31

McCutcheon

Answer 31

Knowledge of terms is tested subjectively, thus prior relations are therefore not enough unless there was actual subjective knowledge of the condition (McCutcheon).

Question 32

L’Estrange

Answer 32

A person who signs a contractual document is bound by all the terms even if the person chose not to read them (L’Estrange).

Question 33

Tilden

Answer 33

In the consumer context, if a standard form contract is involved that includes an exclusionary clause and is signed in haste, it will likely not form part of the contract (relaxing the traditional rule that signing a document makes you responsible for its terms) — applying Thornton v. Shoe Lane Parking Ltd. to the context of a signed document (Tilden).

Question 34

Delaney

Answer 34

If one signed a contract they are bound to the terms if they should expect these terms (Delaney).

Question 35

Hunter Engineering

Answer 35

Fundamental breach is where the foundation of the contract has been undermined, or where the very thing bargained for has not been provided (Hunter Engineering).

Question 36

Karsales

Answer 36

If a breach goes to the root of the contract (a fundamental breach), the exempting clause takes no effect (Karsales).

Question 37

Solway

Answer 37

Limitation clauses implied by statute can be overridden by unconscionability (Solway).

Question 38

Davidson

Answer 38

Court won’t lightly interfere with freedom of contract, but it will declare terms to be void if it would be unreasonable and unconscionable to bind the parties to their formal bargains (Davidson).

Question 39

Tercon

Answer 39

Three step test to determine whether exclusion clause is applicable (Tercon):

1. Does the exclusion clause apply?
2. If it applies, was it unconscionable at the time the contract was formed?
3. Public policy.

Question 40

Plas-Tex

Answer 40

A party to a contract will not be permitted to engage in unconscionable conduct secure in the knowledge that no liability can be imposed upon it because of an exclusionary clause (Plas-Tex).

Question 41

Fairbanks

Answer 41

In order to recover for the work that is “substantially” completed, the party in default who wants to recover must provide evidence from which a new contract to accept and pay for the work done could be inferred (did other party prevent completion, was the new contract entered into for part performance?) (Fairbanks).

Question 42

Markland

Answer 42

Where the work was completed, but completed poorly, and defects have been or can be fixed, courts tend to find substantial performance (more likely to find that contractor is owed something) (Markland).

Question 43

McRae

Answer 43

Expectation damages cannot be awarded where the profitability of the contract is in doubt and where reliance damages can compensate the plaintiff adequately (McRae).

Question 44

Bowlay

Answer 44

When a plaintiff is better off breaching the contract than continuing to perform and incurring losses, he cannot recover expectation damages for the breach (Bowlay).

Question 45

Blake

Answer 45

Disgorgement damages are available in circumstances where wrongdoer should not be profiting from breach — mere cynical and deliberate (efficient) breach on its own does not attract disgorgement damages (Blake).

Question 46

Jarvis

Answer 46

Damages would be awarded for intangible injuries only where the (single) object of the contract was a pleasurable experience — the “peace of mind” exception (Jarvis).

Question 47

Vorvis

Answer 47

Test for whether punitive damages can be awarded (Vorvis):

1. Defendant must not only commit breach of contract, but also act in a “harsh, vindictive, reprehensible, and malicious” manner; and
2. In committing that breach of contract, the defendant must have committed another independently actionable wrong.

Question 48

Whiten

Answer 48

Duty of good faith obligation can act as separate actionable wrong (separate actionable wrong is not just limited to tort) (Whiten).

Question 49

Fidler

Answer 49

Principle limited to cases where the two requirements for awarding damages for mental distress is met (Fidler):

1. Aggravated damages can be awarded when the object of the contract was to secure a psychological benefit that brings mental distress upon breach that is within the reasonable contemplation of the parties and the degree of suffering was sufficient so as to warrant compensation.
2. Punitive damages should only be awarded exceptionally and in cases of clear bad faith.

Question 50

Hadley

Answer 50

Rule for damages recoverable (Hadley):

1. In reasonable contemplation of the parties as probably result of the breach at formation as naturally occurring in the usual course of things (imputed knowledge acceptable).
2. Plus any special circumstances communicated (actual knowledge required).

Question 51

Victoria Laundry

Answer 51

Damages should be measured by what is reasonably foreseeable as liable to result from a breach; depends on the knowledge of both parties (reasonable foreseeability is test for both rules) (Victoria Laundry).

Question 52

Koufos

Answer 52

In order to be recoverable, the loss from the breach must have been foreseeable as a serious possibility at the time of contract formation (Koufos).

Question 53

Scyrup

Answer 53

In the first Hadley rule, the knowledge may be imputed while in the second, the knowledge must be actual and must express details and magnitude (to foresee extent of loss) (Scyrup).

Question 54

Asamera

Answer 54

An innocent party must take steps to mitigate their losses — this means that either steps must be taken to mitigate or steps must be taken to bring matters to a swift legal conclusion (Asamera).

Question 55

White and Carter

Answer 55

• Principle of election (to accept breach) trumps the principle of mitigation (White and Carter).
• The rule in this case is bad law because it encourages wasteful behaviour because the principle of election doesn’t require mitigation; as mentioned though, courts often don’t follow the principle in this case.