Semester 1 Flashcards

Question

What is Instantaneous Methods of Communication

Answer 1

The contract (if any) was made when and where the acceptance was received. You could argue that a similar form of communication is the same as the stated form asked for.

Answer 2

F: Brinkibon wants the contract to have been formed in Britain (brink would win) instead of Vienna (Stahag would win). Acceptance was sent via a telex machine. I: Where is the contract formed? When was it formed? A: Brinkibon argues that if acceptance by postal rule, acceptance is communicated upon “posting.” This means that the contract is made in England and buyers will get there order. If acceptance by instantaneous communication rule, acceptance occurs when received in Vienna. This means that the contract is made in Vienna and the buyer will NOT get their order. The Telex is more like a phone call. This instantaneous communication rule will apply. It is reasonable to treat the telex offer as delivered to the principal offeror because it his responsibility to arrange for prompt handling of messages within his own office. C: Brinkibon loses. Stahag not liable. R: Instantaneous communication rule, the contract (if any) was made when and where the acceptance was received. Exception: the general instantaneous communications rule will normally apply unless the failure of the offeror to receive the communication of acceptance sent by the offeree results from the fault of the offeror or from a defect in the communication with respect to which the offeror should be deemed to have assumed the risk. (There is scope for argument)

Answer 3

F: Rudder claims Microsoft breached MSN service agreement by taking unauthorized payments from subscribers. Plaintiff sues in Ontario. MSN says a click wrap agreement states contracts are governed by law of Washington and all disputes would be heard in that state’s courts. I: Is the form selection clause part of the contract and therefore enforceable? A: Contract was formed by clicking on the “I agree” icon. You cannot hold MSN to their agreement, and then not follow the agreement yourself. There was no fine print. The fact that Rudder did not read the contract all himself is his fault, all of the terms still apply. C: Microsoft wins. R: moral rules of contract formation are applicable to agreements in writing and in an electronic format. Acceptance can occur through touching or clicking an icon.

Answer 4

An offer is terminated by withdrawal/revocation. It can be revoked at any time before it is accepted (Byrne) As another general rule, revocation has to be communicated to offeree. Communication of revocation doesn’t have to come from the offeror (Dickinson)

Answer 5

F: Dickinson wanted to purchase Dodd’s property. June 10 Dodd makes written offer to sell property to Dickinson. Offer to stay open till 9 am June 12. June 11 Dickinson hears from Berry that Dodd’s had been offering/agreeing to sell the property to Allan. Later that night Dickinson delivers written acceptance to Mrs. Burgess (Dodd’s mother in law). This acceptance in never received as she forgot to give Dodds the acceptance. Friday at 7 am: Berry finds Dodds at the railway station and hands him a duplicate of Dickinson’s acceptance. Dickinson finds Dodds and hands him the same acceptance. Dodds responds: “You are too late. I have sold the property.” I: Was Dodd’s required to hold the offer open? Has Dodd’s offer been revoked prior to acceptance? A: The law says that although it is said that the offer is to be left open until Friday morning at 9 that did not bind Dodd’s. This PROMISE was not backed up by any consideration. You would need an option contract (You purchase the consideration that makes them hold it open for a certain period) to ensure the offer is held open. Dickinson did know about the contract made with Allan, revocation was known. C: Dodd’s is not liable. R: There cannot be a meeting of the minds if one party changes their mind prior. Therefore, he cannot be binded by an acceptance. Communication should be through a direct means, but learning of the revocation indirectly can still count as effective revocation (if it is a reliable source).

Answer 6

F: Oct 1 Van mail an offer to sell tin plates to Byrne. Oct 8 Van mail a revocation of this offer. Oct 11 Byrne receive the offer and immediately accept by telegram. They then contract to sell the tin plates to a third party. October 20 Van receive the letter of revocation from Oct 8. Van says fail to deliver. I: Does a withdrawals have any effect before it’s communicated? Is posting a letter of withdrawal a communication to the person? A: Revocation only took place when it is actually communicated to Byrne. The letter wasn’t accepted th until Oct 20 . Byrne had already accepted the offer before that. Therefore the withdrawal was inoperative. If they allowed Van to win the case then in the future, everyone who accepts an offer through the mail would have to wait for a long period after to see if anything comes in the mail revoking it (too much uncertainty for the buyer). C: Van is liable.

Answer 7

F: A father bought a house for 750 pounds. He allowed his son/daughter in law to live there. The couple would make the mortgage payments and when the mortgage was paid off, the father would transfer the house to them. The father dies. I: Can the deceased father’s estate renege on this arrangement? C: The agreement the father made must continue. R/A: The fathers promise was a unilateral contract- a promise of the house in return for their act of paying the instalments. It can’t be revoked once they perform the act, but it would cease to be binding it was not fully completed/performed (which they have not done). This is still the case after death. Flagpole Problem: In theory it would be possible to withdrawal the offer at the last minute, which would cause hardship. A bilateral contract could help resolve this (but not in this case) OR find an implicit collateral arrangement relating to the firmness of the offer (this puts an obligation on the father).

Answer 8

An offer is terminated via lapse. An offer which states that it will expire at a certain time cannot be validly accepted after that time. An offer which does not expressly provide for how long it is open it is said to automatically lapse after a reasonable time (implied term that looks at the offeror) When an offer is not accepted within a reasonable time, it has impliedly been rejected by offeror (this test looks at the offeree)

Answer 9

F: Oct 30 Clark offers to buy the land for 14,500 with possession at any time between Jan 1 and Mar 1, asks for reply by telegram. Nov 15 Barrick replied by post, counters with 15,000 with transfer of clear title Jan 1. Nov. 20: Letter is delivered but Clark is absent. Mrs. Clark responds, asking Barrick to keep the offer open. No reply from Barrick. November 30: Hohmann (third party) enquires about land. December 3: Barrick and Hohmann enter into contract. Dec. 10: Clark returns and tries to accept Barrick’s offer. Dec. 11: Clark telegrams Barrick because he had heard of a third party purchase. Dec. 12: Barrick writes back that he had waited until Dec. 6 and when he didn’t hear from Clark he sold to someone else. I: Has Barrick’s offer lapsed prior to acceptance? Was the acceptance within a reasonable time? A: There is no rush to sell because the land cannot be used till spring anyways. So a longer time might be reasonable. But the wording uses “close the deal immediately” and “as soon as possible” which indicates a shorter time frame. They also contemplated a closing date of Jan 1, this means that the wait for acceptance as late as Dec 10 is not reasonable. The request to extend the date is not relevant since Barrick did not accept the request. Barrick can accept Hohmann’s offer if and only if a reasonable time has elapsed on an existing offer. C: Barrick wins as he waited a reasonable time. R: What will constitute a reasonable time depends on the nature and character and the normal or usual course of business in negotiations leading to a sale, as well as the circumstances of the offer including the conduct of the parties in the course of negotiations.

Answer 10

Contracts must be sufficiently certain if they are to be binding. An agreement is not a binding contract if it lacks certainty, either because it is too vague or because it is obviously incomplete Parties must actually reach a meeting of the minds: so we must be able to determine their obligations with certainty. Determination of parties’ intentions regarding their obligations is approached objectively.

Answer 11

Courts should not impose an agreement on the parties AND If something can be made certain, it should be interpreted so that it is

Answer 12

Where the courts cannot determine on what terms the parties have purportedly contracted, due to vagueness, the agreement is unenforceable. That said, “courts do not expect commercial documents to be drafted with strict precision, and will, particularly if the parties have acted on an agreement, do their best to avoid striking it down on the ground that it is too vague.”

Answer 13

Where some term is left unspecified and the agreement is thus incomplete. However, parties may have good reason to leave terms open: they may be reluctant to commit themselves to a rigid long-term arrangement, particularly when prices and other factors affecting performance are likely to fluctuate. They therefore attempt sometimes to introduce an element of flexibility into the agreement.... (Treitel)

Answer 14

F: To incentivize CAE to purchase the aircraft maintenance base, they sent a letter to CAE Mar 26. The letter stated it agreed to provide a minimum amount of man-hours each year. CAE then purchased the base but within two years, maintenance base workload fell. CAE sued for breach of contract. I: Is the contract vague and uncertain or incomplete? A: There was an intention to create legal relations. Court says it is not incomplete as to be unenforceable. The need for further contract to be made subsequent to this one doesn’t make it incomplete. “It is in itself an entire contract capable of standing on its own feet.” There is a certain looseness of language. “Assurances”/”Guarantee”: they clearly view this as a binding commitment as stated elsewhere in the document. It is a binding commitment to “set-aside work.” “Set-Aside”: This was found to be work to be directed to the respondent without competition. “Best Efforts” ’: Government argues that it is “so lacking in precision as to render it incapable of creating legal rights and obligations”. Judge says it must be interpreted “in light of the contract itself, the parties to it and its overall purpose as reflected in the language it contains.” C: The contract is not too vague or incomplete. R: The court should make every effort to find a meaning in the words actually used by the parties in deciding whether an enforceable contract exists. If parties have expressed themselves in language sufficiently clear so as to have created rights and obligations, the court will enforce the contract especially where the contract has been partly performed. Courts will strive to find certainty in a contract to ensure it is complete.

Answer 15

This is “shifting legal stands” May & Butcher puts forward a very general principle: “agreement to agree where some critical part of the bargain remains undetermined is not contract.” If there are criteria or a mechanism to determine the price, this can prevent the agreement from failing for incompleteness.

Answer 16

F: Agreement by letter for May to buy surplus tentage from the defendant in Dec 1921. Jan 1922 the agreement renewed to Mar 1923, on same terms. Later in the month, there was a dispute as to price. I: Is the agreement void for uncertainty? A: May says the parties have agreed that a reasonable price would be paid per the Sale of Goods Act and/or that the arbitration clause can be used to fix the price. The Court says an agreement to agree in the future is not a contract. The price of something is key to the contract, so since it was not fixed, it is not a contract. They did discuss price though so the Sale of Goods Act does not apply. The arbitration clause does not apply because there was no contract. C: The agreement was uncertain. R: an agreement between 2 parties to enter into an agreement in which some critical part of the contract matter is left undetermined is not contract at all.

Answer 17

F: Arcos enters a contract with Central Softwood Buying Corp to sell all of its timber for the 1931 season to them (not Hilas). Hilas tried to exercise the option from Clause 9 which allow them to purchase the timber on conditions and at reduced prices. Acros says this was cancelled and refused to deliver. I: Is clause 9 enforceable or is it void for uncertainty? A: Drafting here is inartistic but the parties intended to contract and thought they had done so. The contract here is not too uncertain. The parties did intent to enter a complete and binding agreement, not dependent on any future agreements. The Price has terms and a price list. Quality of Timber, “of fair specification” is not too vague as it was used in previous agreements and was understood obviously, “100,000 standards” must be looked at in the context. Timing for shipping/delivery, the nature of the contract is that some things need to be determined later. Option contracts can exist. C: Hilas wins. There is a contract.

Answer 18

F: Foley was selling the land and Classique was buying. Agreement: Classique coaches had to buy all of their gas from Foley if they buy the land. The price of gas was unspecified, to be agreed by the parties from time to time. Classique started buying cheaper gas elsewhere. Foley sues and seeks an injunction. I: Does the agreement fail for uncertainty? A: Classique says the arbitration clause can operate to remove uncertainty and the parties intended that a reasonable price be paid for the gas. The judge agrees and says that Classique wants to keep the land but get out of the part of the contract that they don’t like. But the gas was factored in the price they got for the land. Since they both acted like they had a certain contract for years, there is not uncertainty. C: Contract is certain, Foley wins. R: If you follow the contract for years without uncertainty, the contract is not uncertain.

Answer 19

Agreements to agree in the future on essential aspects of a bargain are not contracts But parties might expect that even if they aren’t bound to sell or buy at an established price, they are committed to seriously engaging in negotiation with the aim of reaching agreement. Distinguish- agreement to preform where some terms unspecified vs agreement to negotiate with aim of establishing terms. Agreements to negotiate is a “process.” Agreement as oppose to “substantive”.

Answer 20

A broad organizing principle that underpins contract law. Good faith has multiple more specific manifestations, such as reasonableness and honesty. It’s a relatively new development in the law, so there are differing interpretations of its role. GF operates to make some agreements to negotiate enforceable. It is certain enough to give content to some agreements

Answer 21

F: Scotiabank rented from Empress Towers. There was a lease renewal clause. May 25, bank wants to use renewal clause to renew lease for 5 more years. June 23, bank proposed a rental rate of $5400/month (increased from $3097). July 26 & Aug 23, bank follows up and Empress says they are still thinking. Aug 31, deadline for the old term to expire, empress replies proposing month-to-month tenancy, at $5400 plus $15,000. I: Is the renewal clause void for uncertainty? A: The parties set market value and mutual agreement as the formula. This gives the landlord a lot of power over something parties seemed to treat as objective. The courts say there is an implied term here that the landlord has an obligation to negotiate in good faith with the aim of reaching agreement; and an implied term that agreement will not be unreasonably withheld. (Implied on the officious bystander and business efficacy principles). This prevents the clause from being uncertain. Requirements to negotiate in good faith and not withhold agreement unreasonable “carry the same degree of diligence as “best efforts””. C: The clause is not uncertain. Landlord did not negotiate in good faith. R: Courts should try to give effect to the agreement, as long as they are not constructing a contract. But if it’s just an agreement to enter a lease at a rate to be agreed, that is not contract. It may be an agreement to negotiate. Brown recognizes three options: (1) where rent is “to be agreed”, clause is normally not enforceable. (2) Where rent is to be established by a formula (ex, market value) but no machinery for application of the formula is provided, courts will often supply the machinery. (3) Where formula set out but defective and machinery is provided for application of the formula, machinery may be used to cure defect in formula.

Answer 22

F: Mannpar had been granted a permit by the Crown to remove/sell sand/gravel on the Skway Reserve. Mannpar wants to exercise a renewal clause 7: Mannpar has the right to renew for 5 more years subject to satisfactory performance and renegotiation of the rates that will not be lower than the previous year. The Department and the Skway representatives were unwilling to renew. Mannpar argues that the Department has breached contract by refusing to negotiate the renewal. Department has a fiduciary obligation to the Skway. I: Is clause 7 uncertain? Should there be an implied term requiring the Department to negotiate in good faith for the renewal? A: The terminology of the permit should not lead to the conclusion that a term or terms ought to be implied. Where a renewal clause is too broadly worded, it fails because there is no objective measure. All we have is an agreement to agree which is void. So: no implied term here. Renewal clause is too uncertain. In Empress there was a benchmark of a market rental. This case does not have that. Continuing leases are different from an “anticipation” that an arrangement may continue for a certain period. We should be attentive to the context- here there is a fiduciary obligation that affects how the government conducts itself. It can only renew if that is what the Skway people want. C: Canada did not breach the contract. R: There is not a duty to negotiate in good faith if: (1) There is a contract between the parties, (2) a duty to negotiate in good faith is consistent the with parties intent, AND (3) there is an objective benchmark against which the court can assess whether the party in question is in breach or not.

Answer 23

F: Bhasin was an enrollment director (ED) for Can-Am. Hrynew is another successful ED who merged with some other ED’s. He wanted to merge with or take over Bhasin’s business. Bhasin was not interested in the merger. Hrynew asked Can-Am to make it happen and Can-Am appointed Hrynew to leadership role which allowed him to look at Bhasins confidential business records. Bhasin objected. Can-Am told Bhasin (falsely) that Hrynew’s work would be subject to a duty of confidentiality. Bhasin objected again and Can-Am exercised its right not to renew Bhasins Agreement. I: Is there an implied duty of good faith? A: Can-Am breached the duty of honesty. Had Can-Am been honest in contractual performance, Bhasin would have sought to sell or otherwise monetize his agency before Can-Am triggered its decision not to renew. C: Breach of contract occurred. R: The good faith principal is a standard which underpins contract law. Parties must generally preform there contracts honestly and reasonably and not capriciously or arbitrarily. Parties must have appropriate regard to the legitimate contractual interests of the contracting partner.

Answer 24

F: Bawitko/Passander approached Kernels wanting to become a franchisee. Kernels gave them an information package including the “draft” or “standard” franchise agreement. Passander met with Kernels and reached agreement on alternations to the draft agreement. Meeting ends with Kernels rep saying “You’ve got a deal.” I: What is the legal effect of the oral contract? Does it constitute an enforceable contract? st A: The parties are not bound by virtue of the 1 meeting. There are two complex and related issues. First, were the terms settled yet or not (certainty)? Second, even if the terms were certain, were their legal obligations deferred until the creation of the written contract (anticipation of formalization)? Franchise agreement governs a long-term relationship and is highly complex. Terms of this relationship have to be certain but in this case all the essential terms are not settled. Some terms were settled but others remained open for negotiation. Parties’ conduct after the meeting suggests no agreement: comments on the draft were requested. So, even if Paasnader/Bawitko succeeded in proving that a certain and complete agreement had been entered, we might still argue that it was not expected to be treated as complete and binding until reduced to writing. In some cases, the oral contract is found to be complete and to take effect immediately. But here, the uncertainty of some of the terms implies that we cannot think it was complete enough to take immediate effect. Due to uncertainty and to no formalization In writing there is no contract. C: Not binding. R: A contract can be incomplete “because essential provisions intended to govern the contractual relationship have not been settled or agreed upon; or the contract is too general or uncertain to be valid in itself and is dependent on the making of a formal contract; or the understanding or intention of the parties, even if there is no uncertainty as to the terms of their agreement, is that their legal obligations are to be deferred until a formal contract has been approved and executed”.

Answer 25

Offer - Dyers Invitation to Treat- Pharmaceutical

Answer 26

Unilateral- Carlil and Goldthorpe Bilateral- Ron Engineering and MJB

Answer 27

Revive offer/counter offer is rejection- Livingstone o Battle of Forms/Mirror Image Rule- Butler No Party Surprised- Tywood Master makes Rules/Cant manipulate them- ProCD o Subsidiary Obligations to follow through- Dawson

Answer 28

Silence is not Acceptance- Felthouse Silence Exception- Saint John Change of Conditions = No Acceptance/Master of own offer- Eliason o Mailed Acceptance

Answer 29

Postal Acceptance Rule good acceptance when delivered- Household Postal Exception/unless contract states otherwise- Holwell

Answer 30

Instantaneous communication rule good acceptance when received- Brinkibon Clicking is Agreeing- Rudder

Answer 31

Revocation: Indirect communication can revoke/need to pay to keep offer open- Dickinson Communication Must Occur to Revoke- Byrne Collateral Arrangement extend obligations to offeror- Errington Lapse: Reasonable time to keep offer open- Barrick

Answer 32

Vagueness: Courts Strive for Certainty - CAE Incomplete Terms: Agreement to Agree is not a Contract - May & Butcher Interpret Clause as a Whole but don’t make up things that aren’t in the contract- Hilas Implied Reasonableness or following contract means its certain- Foley

Answer 33

Good Faith: Good Faith is an Underlying Principal- Empress (certainty-$ talked about), Mannpar (test for not needing good faith) and Bhasin (GF underpins contract law) o Anticipation of Formalization Formal Contract is needed with Uncertainty, sometime even with certainty- Bawitko

Answer 34

Formal Contract is needed with Uncertainty, sometime even with certainty- Bawitko

Answer 35

We need consideration for a contract to be binding Something has to be given from the promisee “in consideration of” the promise for it to be legally enforceable. AN AGREEMENT IS NOT ENFORCEABLE ABSENT CONSIDERATION Consideration must have value The principal does NOT require that consideration be of a certain value or be adequate Courts generally do not inquire into the adequacy of consideration However, if there is a huge discrepancy/shock the conscience, a red flag might arise and the judge may inquire Example: If I promise to mow your lawn when you go on vacation and you promise nothing in return, I am not legally bound to mow the lawn

Answer 36

No they are not.

Answer 37

F: In 1920, Boutilier pledged $5,000 to Dalhousie College. He then fell on hard times and wasn’t able to pay it. He died on October 29th, 1928. Dalhousie then tried to sue his estate to get the $ A: 1) Consideration must flow from the promise, the idea is that it must come from the promisee: it can’t come from a third party. 2) Mutual Promises: Boutilier stated the purpose of the money, so consideration was Dalhousie accepting this request. Judges says you cannot get consideration from an implied promise. 3) Dalhousie made increased expenditures on the strength of the promise. Judge: reliance on a promise can’t turn a gratuitous promise into a binding one. C: No contract because no consideration. R: Consideration must flow from the promisee. Third party consideration is no consideration. No consideration from an implied promise. Reliance by the promise can’t turn a gratuitous promise into a binding one.

Answer 38

F: Helmi and her late husband Jack donated money to the hospital and a Cardiac Unit was named after Jack. In 1998, Helmi made a pledge of 1 million to the hospital. There were talks of the new wing being named after her. She gave them 1/5 of the money and in her will she left more but not the full million. C: No contract because no consideration. R/A: The hospital argues there consideration was commitment to naming the new unit after Helmi and Jack. Helmi did not ask for or desire her name on the building. The court relies on Dalhousie, Helmi did intend to donate but it is not a binding contract.

Answer 39

F: Lady Lucy promises Wood that he shall have exclusive rights to place her product endorsements, subject to her approval. These exclusive right was to last a year and then to run year-to-year with the possibility of termination. In return, Lady Lucy gets half of all of the profits and revenues. Lady Lucy placed an endorsement on some products without his knowledge. Wood sues for breach of contract. C: Lady Lucy breached contract. R/A: The implied promise is to “use reasonable efforts to place the D’s endorsements and market her designs.” A promise may be lacking, and yet the whole writing may be instinct with an obligation. Woods promise to pay half of the revenues can be turned into a promise. His exclusive right means Lucy would be at his mercy, so it has to be implied that he has an obligation. 50% of the profits means he must put in effort. It’s a binding promise.

Answer 40

1- The act must be done at the promisors request 2- The parties must have had an understanding that payment or some other benefit in exchange was expected 3. Payment must have been legally enforceable if it had been promised in advance. If the three-pronged test is met, the court will find an implied obligation to pay a reasonable amount for the work done (quantum meriut). o Issue: it cannot account for situations where there is no request but there is still unjust enrichment ● EX, A took care of your cat at your request. Later you promise to make a cake in return. You don’t make the cake. Here you are not bound.

Answer 41

F: Lampleigh is the lawyer suing for payment for his services. Brathwait killed Patrick and wants a pardon from the king. He ask Lampleigh to ride to Roiston and seek a pardon for him. Lampleigh rides and tries to get the pardon. Upon Lampleigh’s return, Brathwait agreed to pay Lampleigh 100 pounds but now refuses to pay. A: Brathwait requested Lampleigh to do it. There is consideration. C: Brathwait must pay. R: Past consideration is not good consideration. If the act was done in the past and the promise comes later, then it is not really part of a bargain or exchange (when the act is done there is no exchange. The subsequent promise is more of a gratuitous promise). Exception: the past consideration principal does not apply if the initial benefit had been requested by the promisor. Even though the promise comes later, it is not a bare promise because it attaches to the earlier act done at the promisor’s request.

Answer 42

One legal issue is whether giving up a claim counts as good consideration. General legal principal: the forbearance to sue does count as consideration You are giving up something of value (your right to sue)

Answer 43

F: After the shoplifting incident, stolen items were returned to the store. Zellers threatens to sue his mom for $224 as compensation for damages. Mom responds to letter and pays. The alleged consideration is that Zellers will not sue her in exchange for payment. Mom then asks for money back. A: Zellers is the party forbearing in this case. They knew that their claim was not valid and they did not seriously intend to pursue it to court if it was not paid. If it’s not known to be invalid, then it could also be that the claims were wrongly believed to be valid. C: Mom is entitled to a refund. R: Promise to release a valid claim (to sue) is good consideration. Exception: Claims known to be invalid- a promise is not binding if the sole consideration for it is a forbearance to enforce a claim which is invalid and which is either known to be invalid or not believed by him to be valid. Doubtful claims are good consideration- a promise to abandon it involves the possibility of detriment to the potential claimant and of benefit to the other party. Claims wrongly believed to be valid- it is good consideration even if the claim is clearly invalid in law but there is a genuine belief that it will have potential of success. 1- You cannot deliberately hide facts that would allow the other party to defeat the claim. AND 2- must show serious intention to pursue the claim.

Answer 44

Fulfilling of a pre-existing public duty by the promisee at the request of the promisor is generally not good consideration since the promisee is only doing what she is already required to do Exception: Where promisee obligates herself to do more than what is already required, there can be consideration. EX, you can’t hurt a child. The additional duty is to care for it if the infant was left on your door step. Even if there was no obligation above and beyond the legal duty, there could be consideration (Denning so be very cautious). Duty owed to Third Party (anomaly Shadwell): Fulfillment by the promisee of a pre-existing legal duty to a third party at the request of the promisor is good consideration for the promisor’s promise. That is, consideration must flow from the promisee but it need not flow to the promisor.

Answer 45

F: Nephew was engaged. He had a legal obligation to marry the fiancé. Uncle promised $150 per year upon the marriage. Court found that the promise was enforceable even though he already had a legal obligation to the fiancée. A: There is a suggestion that the uncle gains a benefit because he now has a direct obligation. However it makes no sense why this reasoning couldn’t be applied to public duty

Answer 46

There are situations in which a post-contractual variation is made to an already legally binding contract

Answer 47

F: When two of the crew deserted at port, the captain promised the wages of the deserters to the remaining crew members. Crew member Stilk, wants to be paid by Myrick the captain. A: As the mariners had contractually committed to do all that they could under all the emergencies of the voyage, they were not entitled to enforce the captains promise to pay more. They still continued the duties they originally had done. There is also a public policy argument raised: agreements struck in circumstances where the crew might take advantage of the vulnerability of the captain ought not to be enforced. C: Captain Myrick is not liable for the extra promised amount. R: Performance of or a promise to perform a pre-existing contractual obligation is not consideration for a new promise made by the other party (the promisor). (you cannot enforce a new promise if you are doing the same job as previously agreed to because you have not given new consideration for the new promise)

Answer 48

F: Sept 4: Gilbert was to supply steel to D for 3 projects. Gilbert provides steel to 2 of the projects at the agreed contract price. Oct 22: price of steel increased, Gilbert asked D for more money. A new contract was entered into. March 1: Another price increase for steel and then Gilbert seeks additional money from D. The parties discuss and Gilbert argues there is a binding oral agreement to alter the price. Gilbert wrote up a new contract but it was never signed. Gilbert billed the D according to the new price agreement. D continued to accept deliveries of steel but did not pay the higher price. A: Gilberta argues there consideration is: 1, gilbert promise to give the defendants a good price on steel in the future. 2, the mutual abandonment of the first contract and a new agreement being put in its place. 3, the increased access to credit which the defendant receives as a result of the price hike. Therefore: gilbert does not succeed. The agreement was a variation on the contract and there was no fresh consideration for the variation. A good price is too vague, the contract was not abandoned just altered, increased credit is not a real and substantial benefit. C: No fresh consideration. Gilbert cannot get hiked up price. R: Further promises must have fresh consideration.

Answer 49

Traditional view is that if one is to accept less for more in a way that is legally binding one will need Accord and Satisfaction Accord and satisfaction is the purchase of a release from an obligation by means of any valuable consideration, NOT being the actual performance of the obligation itself. (Tablot) The accord is the agreement by which the obligation is discharged. The satisfaction is the consideration which makes the agreement operative.

Answer 50

F: Beer secured judgement against Foakes in the amount of 2, 090 pounds plus. Foakes asks for time to pay and they enter into a written agreement whereby Mrs. Beer agreed forgive interest on the judgment. She agreed not to take any further proceedings to collect on the judgment in consideration of an immediate down payment plus a series of installments until the amount of the debt was reached. Foakes paid the down payment and made ALL the installments. Beer then claims 300 pounds for the interest and says there was no consideration. A: Foakes argued that the agreement was an accord and the payment constituted satisfaction. The court did not accept this argument because the doctrine of accord and satisfaction does not create an exception to the normal requirement of consideration.” The ‘satisfaction’ has to come in a different form, because less money cannot be exchanged for more money. Foakes loses. Even though the doctrine has been criticized it has never been over turned so it must be applied. C: Beer can claim the interest R: Less for more agreements are NOT enforceable: Payment of a lesser sum on the day is satisfaction of a greater, cannot by any satisfaction for the whole, because a lesser sum cannot satisfy a greater sum.

Answer 51

F: Rawlings (creditor) said he would lower the existing interest rate if the debtor made regular payments. Foot (debtor) substantially complied with these new terms but the creditor changed his mind and sued for what is owed under the first agreement. Rawlings says the agreement is unenforceable for want of consideration. A: The agreement is enforceable. Giving the postdated cheques was consideration for the promise of release of the debt at a lower interest rate. So long as the appellant continued to perform his obligations under the agreement the respondent’s right to sue on the notes was suspended, consequently his action brought on Dec 7 was premature and should have been dismissed on that ground. C: Foot is not liable for higher interest rate. R: Cheques are a different thing than money and so they can exchange for a lesser sum, even if cash could not.

Answer 52

F: Robichaud owed money to Caisse Populaire. Caisse secured judgment against Robichaud for $3,787 and registers it. Robichaud decides to consolidate his debts with Avco. Avco negotiates with Robichaud’s creditors and commits to lend money to Robichaud to pay his judgment creditors. Subsequently, as part of an Avco debt consolidation plan, Caisse agrees to remove its judgment against Robichaud from the registry in return for a $1,000 payment by Robichaud in full satisfaction. Caisse received its cheque from Avco but the Board refused to approve the compromise agreement. The cheque was not cashed and the judgment was not removed. C: The agreement is enforceable. Caisse is liable. R/A: A financial institution, of its own accord, and knowing all the consequences of its actions entered into an agreement in which it accepted to forego the ranking of its judgment for part payment of the debt owing. The financial institute gain some benefit from the new contract so there is a practical benefit. The consideration is the result of saving time, effort and expense. Practical benefit= more than just getting some money back, look to other things like not chasing someone down, paying lawyers/investigators, etc R/A: A financial institution, of its own accord, and knowing all the consequences of its actions entered into an agreement in which it accepted to forego the ranking of its judgment for part payment of the debt owing. The financial institute gain some benefit from the new contract so there is a practical benefit. The consideration is the result of saving time, effort and expense. Practical benefit= more than just getting some money back, look to other things like not chasing someone down, paying lawyers/investigators, etc

Answer 53

Only applies to debt forgiveness Part performance (applies where you promise to pay $100 out of $200) 13(1) Part performance of an obligation either before or after a breach thereof shall be held to extinguish the obligation (a) when expressly accepted by a creditor in satisfaction, or (b) when rendered pursuant to an agreement for that purpose though without any new consideration. Issues Per McCamus Provision would have problems with agreements where creditor forgives a debt completely. (only applies to part performance) Not totally clear if the provision would treat an agreement to accept less as binding if it has been partially performed. I.E. If you only have paid $50 so far out of the $100/$200 you promised, this act might not apply

Answer 54

F: NAV Canada was responsible for air navigation services and equipment at Canadian airports, pursuant to ASF. The airport asked NAV to relocate an instrument landing system. NAV suggested instead buying a new distance measuring equipment that cost $223,000. Under the ASF, NAV was responsible for the cost. However, NAV refused to pay and said they wouldn’t relocate the landing system. The airport signed letter “under protest” agreeing to pay for the equipment. NAV installed new system and now the airport now refuses to pay. A: NAV was required to provide navigational services. So that duty was pre-existing, and the Authority’s promise to pay more looks to be in return for nothing. The promise was obtained under economic duress and this makes it unenforceable. So, the court concludes that post-contractual variations unsupported by consideration can be enforceable if not procured under economic duress. C: The contract is unenforceable. R: As long as the promise wasn’t made under duress, and if the contractor obtains some practical benefit, it can be enforceable. R: Consideration must move from the promisee (NAV) to the promisor (Authority). If there isn’t fresh consideration it may be enforceable provided that it was NOT procured under economic duress.

Answer 55

F: Contractor hired a carpenter that was too slow in part because the agreed price was too low. The contractor was worried about getting a penalty if the job was finished late. So they offered a price increase to the carpenter in return for the carpenter completing the job already agreed to (no fresh consideration from carpenter). A: The court held that as long as the promise wasn’t made under duress, and if the contractor obtains some practical benefit, it can be enforceable. The benefit was avoiding the late penalty (which has to do with their relationship with a third party, not the carpenter). C: Must pay the additional money. R: As long as the promise wasn’t made under duress, and if the contractor obtains some practical benefit, it can be enforceable.

Answer 56

F: Rosas won the lottery and lent $600,000 to Toca to buy a home. The loan was to be repaid in one year but the P granted numerous extensions at the Ds request. Eventually, the P sued on the debt but lost at the trial due to the Ds successful limitations defense. According to the trial judge, the plaintiff’s extensions for repayment did not move the due date. A: The modifications are enforceable. Therefore the limitation period runs from the last extension. This means Ms. Rosas can collect on the debt. We could keep searching for consideration, and we could probably find it: in the help provided by Toca to Rosas (driving her, helping her shop) or in the benefit to their ongoing friendship. But the court says why bother. Circumstances change and contractual modifications may be desirable and beneficial to both parties. C: Toca must pay the debt. R: Consideration is a signal of intention to be bound, it does not need to be a central concern beyond that evidentiary role. “When parties to a contract agree to vary its terms, that variations should be enforceable without fresh consideration, absent duress, unconstitutionality or other public policy concerns, which would render an otherwise valid term unenforceable.” In cases where there have been reforms, two issues have been central: 1) Seriousness of the party’s intentions. 2) Legitimate expectations of business parties.

Answer 57

Are applied in a discretionary fashion (unlike ordinary legal claims which apply as a matter of right) Require the person claiming them to come with “clean hands”

Answer 58

A person is estopped or prevented from doing or claiming a certain thing, because of their own prior actions

Answer 59

It depends on a person having made a representation, which they are estopped from going back on a promise was made which was intended to create legal relation, and which, to the knowledge of the person making the promise, was going to and was acted on by the promisee. In such cases the courts have said that the promise must be honored.”

Answer 60

1) There is a legal relationship between the parties (pre-exiting relationship) 2) There is a clear promise, assurance or representation by the representor. We need to establish that there was a promise made (through conduct or words) which was intended to affect the legal relationship or the parties, and intended to be acted on. 3) The representee acts on/relies on the promise, assurance or representation of intention by the representor So, the person needs to actually act or rely on the promise 4) Promissory estoppel is an equitable doctrine such that: a) the representee must have acted equitably in order to raise the defense of Promissory Estoppel AND b) it must be inequitable to allow the representor to resile/change. (not inequitable going forward/might be going backward) 5) Shield not Sword: MacDougall: The greatest constraint of promissory estoppel is that it cannot be used to found a cause of action. If the other party has a claim against you though, you can use this to block it

Answer 61

Should be considered in a broad and flexible manner (McDougall) Look at factors such as prejudice, wasted expenditure (not just a loss of the benefit they gained) It’s complicated as to whether that reliance has to be detrimental (some yes, some no) Gilbert/Nav Canada/Post Chaser/Ryan- detriment is required WJ Alan/Maracle- detriment is not required

Answer 62

F: under its lease, the railway company had an obligation to repair the property within six months of the landlord’s written notice. Oct 22 the landlord serves the notice to repair. Nov 28 the tenant offers to sell leasehold back to landlord and purposes to defer repairs pending the landlord’s decision. Landlord never responded to T’s proposal to defer repairs. Parties negotiate until end of Dec at which point negotiations break down. April 19, three days before notice to repair would expire, tenant said it was now undertaking repairs. April 28, landlord serves tenant with writ of ejection. June the tenant completes repairs. Landlord wants the eviction to be enforced. C: Landlord cannot evict the railway company. R/A: “If parties who have entered into a definite contract and afterwards by their own act or with their own consent enter into a course of negotiations which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.” Essentially, the negotiation of the parties led the tenant to believe that the landlord was not going to enforce the time limit. The landlord has waived his right to insist on strict performance of the agreement and could not now insist on doing so.

Answer 63

F: Sept 24, Landlord and Tenant entered into a 99 year lease at 2,500 pounds a year. Jan 3, L volunteers to reduce rent to 1,250 pounds in response to war time conditions. Jan flats were fully let. Sept 1945 the receiver discovered this and demanded full rent from T going forward plus arrears of 7,916 pounds. A: Denning decides in favour of the P for the amount claimed for the final 2 quarters when the flats were full. There will be no pay back for the period before that. The classic position does allow the P to recover the full rent due to no consideration being given. He discusses estoppel by representation, but says it will not apply because the doctrine refers to representations as to a present of past fact. Representations about the future are different: they are promises and need to be in the proper form of contracts. But there have been developments beyond thus traditional position (Ratio). C: D must pay the difference to the P R: A promise intended to be binding, intended to be acted on and is acted on, is binding so far as its terms properly apply. Denning widened the scope of waiver and essentially create the doctrine of promissory estoppel.

Answer 64

F: D purchased Ps business for 127000. There was a promissory note whereby the D promised to make regular monthly payments to the P. The acceleration clause permitted the P to claim the entire balance at once if there was a default of more than 10 day on any given monthly payment. Over 18 months, D was always more than 10 days late with each payment but the P never complained nor invoked the acceleration clause. Then the parties had a falling out and when the D was late again the P invoked his acceleration clause and sued for the whole amount. C: D must pay P. R/A: This type of equitable defense cannot be invoked unless one of the parties entered into a course of negations which had the effect of leading the other to suppose that the strict right under the contract would not be enforced. Here burrows had just granted friendly indulgences while retaining his right to insist on the letter of the obligation. Promissory estoppel cannot be used to prevent Burrows from insisting on his legal rights. He can sue for the entire amount

Answer 65

F: Rees, employed D&C to do work on his house. D&C did the work. Part of the amount was paid, and no dispute about the quality of the work was made, 482 was still owing. D & C started to press for payment, and only then did Rees start to complain about the equity of the work. Mrs. Rees offered 300 pounds on a 480 pound account. In her view: “300 pounds is better than nothing.” D&C accepted because the needed the money immediately. Nov 14 Mrs. Rees gave Casey a cheque and insisted on a receipt stating that the tendered sum was “in completion of the account.” Casey felt he had no choice and Rees knew that. Nov 23, D&C saw a lawyer and the lawyer wrote to Rees saying the whole amount was owed. A: There is no reason in law or equity why the creditor should not enforce the full amount of the debt due to him. Accord and satisfaction require an accord (the agreement) and satisfaction (something that is not monetary) in satisfaction of accepting less money. There is no accord and satisfaction. Rees says there is accord in agreeing to accept 300 and satisfaction in the accepting of a cheque instead of cash (Foot). The judge says a cheque is not consideration of the smaller amount. No true accord because Rees held the credit to ransom. Promissory estoppel will not apply here as it is not inequitable for the P to go back on promise. C: Rees must pay the remainder of the bill. R: Foot is widely critiqued. Creditor is not bound by a promise to accept less under intimidation.

Answer 66

F: under its lease, the railway company had an obligation to repair the property within six months of the landlord’s written notice. Oct 22 the landlord serves the notice to repair. Nov 28 the tenant offers to sell leasehold back to landlord and purposes to defer repairs pending the landlord’s decision. Landlord never responded to T’s proposal to defer repairs. Parties negotiate until end of Dec at which point negotiations break down. April 19, three days before notice to repair would expire, tenant said it was now undertaking repairs. April 28, landlord serves tenant with writ of ejection. June the tenant completes repairs. Landlord wants the eviction to be enforced. C: Landlord cannot evict the railway company. R/A: “If parties who have entered into a definite contract and afterwards by their own act or with their own consent enter into a course of negotiations which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.” Essentially, the negotiation of the parties led the tenant to believe that the landlord was not going to enforce the time limit. The landlord has waived his right to insist on strict performance of the agreement and could not now insist on doing so.

Answer 67

F: Sept 24, Landlord and Tenant entered into a 99 year lease at 2,500 pounds a year. Jan 3, L volunteers to reduce rent to 1,250 pounds in response to war time conditions. Jan flats were fully let. Sept 1945 the receiver discovered this and demanded full rent from T going forward plus arrears of 7,916 pounds. A: Denning decides in favour of the P for the amount claimed for the final 2 quarters when the flats were full. There will be no pay back for the period before that. The classic position does allow the P to recover the full rent due to no consideration being given. He discusses estoppel by representation, Central London Property Trust Ltd v High Trees House Ltd (sometimes promises are enforceable without consideration- Introduces promissory estoppel) C: D must pay the difference to the P R: A promise intended to be binding, intended to be acted on and is acted on, is binding so far as its terms properly apply. Denning widened the scope of waiver and essentially create the doctrine of promissory estoppel. F: Sept 24, Landlord and Tenant entered into a 99 year lease at 2,500 pounds a year. Jan 3, L volunteers to reduce rent to 1,250 pounds in response to war time conditions. Jan flats were fully let. Sept 1945 the receiver discovered this and demanded full rent from T going forward plus arrears of 7,916 pounds.

Answer 68

F: D purchased Ps business for 127000. There was a promissory note whereby the D promised to make regular monthly payments to the P. The acceleration clause permitted the P to claim the entire balance at once if there was a default of more than 10 day on any given monthly payment. Over 18 months, D was always more than 10 days late with each payment but the P never complained nor invoked the acceleration clause. Then the parties had a falling out and when the D was late again the P invoked his acceleration clause and sued for the whole amount. C: D must pay P. R/A: This type of equitable defense cannot be invoked unless one of the parties entered into a course of negations which had the effect of leading the other to suppose that the strict right under the contract would not be enforced. Here burrows had just granted friendly indulgences while retaining his right to insist on the letter of the obligation. Promissory estoppel cannot be used to prevent Burrows from insisting on his legal rights. He can sue for the entire amount

Answer 69

F: Rees, employed D&C to do work on his house. D&C did the work. Part of the amount was paid, and no dispute about the quality of the work was made, 482 was still owing. D & C started to press for payment, and only then did Rees start to complain about the equity of the work. Mrs. Rees offered 300 pounds on a 480 pound account. In her view: “300 pounds is better than nothing.” D&C accepted because the needed the money immediately. Nov 14 Mrs. Rees gave Casey a cheque and insisted on a receipt stating that the tendered sum was “in completion of the account.” Casey felt he had no choice and Rees knew that. Nov 23, D&C saw a lawyer and the lawyer wrote to Rees saying the whole amount was owed. A: There is no reason in law or equity why the creditor should not enforce the full amount of the debt due to him. Accord and satisfaction require an accord (the agreement) and satisfaction (something that is not monetary) in satisfaction of accepting less money. There is no accord and satisfaction. Rees says there is accord in agreeing to accept 300 and satisfaction in the accepting of a cheque instead of cash (Foot). The judge says a cheque is not consideration of the smaller amount. No true accord because Rees held the credit to ransom. Promissory estoppel will not apply here as it is not inequitable for the P to go back on promise. C: Rees must pay the remainder of the bill. R: Foot is widely critiqued. Creditor is not bound by a promise to accept less under intimidation.

Answer 70

F: Contracts calls for Kenyan shillings but the letter of credit was opened in British sterling. Sellers did not object as the two currencies were largely on par. After 2 shipments paid in sterling, the value of sterling dropped. The sellers then demanded an extra 165,000 Kenyan shillings to offset the devaluation. Buyers refuse to pay extra. C: The pounds were accepted R/A: the contract has been varied. The parties may agree to vary their contract in a way that can benefit either party which normally generates its own consideration. If there is a variation to the currency in which payment is to be made, it would make no difference that the currency was later devalued in relation to the old currency as it could not be expected (either party could benefit). Denning: you don’t need detriment. You need reliance. Stephenson: there is detriment and the contract was varied for good consideration. R/A: the contract has been varied. The parties may agree to vary their contract in a way that can benefit either party which normally generates its own consideration. If there is a variation to the currency in which payment is to be made, it would make no difference that the currency was later devalued in relation to the old currency as it could not be expected (either party could benefit). Denning: you don’t need detriment. You need reliance. Stephenson: there is detriment and the contract was varied for good consideration.

Answer 71

Promissory Estoppel does not create a new cause of action It simply prevents parties from relying on their strict legal rights when to do so would be unjust in light of the party’s previous interaction

Answer 72

F: There was an agreement that husband pay wife 100 pounds a year as permanent maintenance. Aug 26 the now ex-wife wrote to the husband for the first instalment but the ex-husband never paid. The ex-wife pressed for payment privately but never instituted an action. July 28 ex-wife brought an action for arrears, A: High trees should not be stretched too far. The wife cannot sue on the husbands promise as a separate and independent cause of action by itself, where there is no consideration. C: No consideration. Wife doesn’t get money. R: Promissory estoppel prevents parties from relying on strict legal rights when it would end in unjust results.

Answer 73

F: Robichaud owed money to Caisse. Caisse secured judgment against Robichaud for $3,787 and registers it. Robichaud decides to consolidate his debts with Avco. Avco negotiates with Robichaud’s creditors and commits to lend money to Robichaud to pay his judgment creditors. Subsequently, as part of an Avco debt consolidation plan, Caisse agrees to remove its judgment against Robichaud from the registry in return for a $1,000 payment by Robichaud in full satisfaction. Caisse received its cheque from Avco but the Board refused to approve the compromise agreement. The cheque was not cashed and the judgment was not removed. A: Caisse must cancel its judgment against Robichaud. Practical benefits can be good consideration: the bank saves time effort and expense in not having to pursue debtor. Perhaps consideration is less important than recognizing that Caisse was a sophisticated financial actor and willingly entered into the agreement with full knowledge. Robichaud relied on the promises of Caisse. Then, in order to resolve is financial difficulties, he undertook to hire lawyers and to mortgage his home. He suffered the detriment referred to in the doctrine of promissory estoppel. A right of action cannot be founded on the principal of estoppel (since it is a shield only). It’s irrational to make enforceability based on chance. C: Robichaud wins R: Even if we don’t find consideration, we have to ask about promissory estoppel. Application of promissory estoppel does not need to be determined on who sues who (then one party would have to just wait until the other sues him).

Answer 74

The law will not enforce contracts made as a result of one party being threatened with physical harm or actually harmed (coercion). Duress includes economic duress: o Economic duress often take the form of one party placing financial pressure on the other. o Ordinarily commercial pressure is acceptable but going beyond ordinary commercial pressure is not Test: o 1) Pressure amounting to compulsion of will of the victim (no practical alternative) AND o 2) The illegitimacy of the pressure exerted. ▪ The presence, or absence, of protest, may be of some relevance when considering whether the threat had coercive effect. But, even the total absence of protest does not mean that the payment was voluntary. (Attila Dogan) Indica of Duress o 1) Whether the party protested at the time of the arrangement was entered into o 2) Whether the party had a realistic alternative to entering into the agreement o 3) Whether the party had the opportunity to speak with independent legal counsel o 4) Whether, after entering into the agreement, the party took steps to avoid it within a reasonable period of time; and o 5) Whether the pressure exerted was illegitimate.

Answer 75

F: Mr. and Mrs. B married in 1900; lived in Ceylon until 1915. Husband returned to England. Mrs. B stayed behind, on doctor’s advice. Prior to leaving Mr. B orally promised to pay her 30 pounds a month. A few months later, Mr. B wanted to separate. They divorced, with Mrs. B securing an order for alimony. For 14 months, Mrs. B was without any financial support. A: While the courts had previously refused to enforce agreements where the parties had deliberately excluded legal sanction, this was the first time they had denied liability simply because the plaintiff could not prove that legal sanctions were intended. Judge made a new obstacle for P’s. 1) Draws an analogy between the agreement in this case and an agreement to take a walk. 2) Treating agreements of this sort as contractual would lead to disastrous outcomes/would set a bad precedent. 3) Holding these agreements to be enforceable would result in so much litigation that the courts would be overwhelmed. 4) There was no real intention to be bound here. 5) The consideration that really obtains for them is that natural love and affection which counts for so little in these cold Courts. C: Mr. doesn’t owe Mrs. Alimony. R: the presumption is that in the domestic sphere legal relation are not intended.

Answer 76

● This element is expressly to protect the autonomy of parties and their voluntary will ● The Presumption o In commercial contexts, where there is offer, acceptance, and consideration, there is a presumption that the parties intended to create legal relations ▪ It falls to the person disputing intention to dislodge the presumption and show that no intention to create legal relations o In the domestic sphere there is a presumption that the parties did not intend to create legal relations ▪ It falls to the person alleging contract to prove that such an intent exists o Moral promises ▪ Not intended to be a legally binding promise (offer to drive friend to the airport)

Answer 77

● Promises made under seal are enforceable. ● It is common for a sticker to be affixed to the document to symbolize the seal. ● The seal plays evidentiary role: it is evidence that the parties intended to legally bind themselves ● What constitutes a valid seal is a question of law, and it is a question of fact whether a document is effectively sealed.

Answer 78

F: Kiskas brother borrowed bank money. Kiska was guarantor. At Kiska’s signing, no seal was attached. The word “seal” was written on the document next to the signature. Bank is now calling on the guarantor C: There was consideration so Kiska must pay R/A: The document was not under seal. Printing the word seal does not constitute a seal. It is rather an instruction to affix a seal. Formality serves a purpose here and some semblance of it should be preserved. So since it’s not under seal, if there was no consideration then kiska wouldn’t need to pay.

Answer 79

● Affixing a seal can be sufficient condition of enforceability (sufficient = it’s enough) ● This formality is a necessary condition of enforceability in some cases (necessary= required but not sufficient) ● Some kinds of agreement must be in writing to be enforceable. ● What counts as writing: o It must adduce the existence of the contract and not fail for uncertainty. Needs the 3 essential P's: parties, property, and price. o It is sufficient if the memo comes into existence any time before the action is commenced. o It can be constituted by several pieces of paper. o It must be signed by the party against whom the contract is being alleged. (McCamus) ▪ mere initialing is sufficient ▪ hand-printed name is sufficient ▪ printed name of the contracting party on top of a standard form is sufficient Electronic Contracts: ● A memorandum in an email (or a series of emails) can satisfy this writing requirement.” ● Main aim of the requirement is accessibility, so electronic record is acceptable as long as it is enduring and assessable ● Signatures can be in electronic form

Answer 80

F: Petridis carried on a restaurant business in premises leased from Shabinsky for a term due to expire on June 30, 1981. During the lease he had spent considerable sums on renovation. The lease contained an option to renew for two terms of five years, the first of such renewals to be granted upon notice in writing by Petridis on or before December 31, 1980. He wrote a letter to Shabinsky on February 11, 1981, which might have been construed as an exercise of the option "for another 10 years". Shabinsky made two offers of a five-year term at an increased rent, one on January 28, 1981, and another on February 24, 1981, the latter offer being repeated on April 15th. Although the parties' main dispute centred on the new rent for the premises, neither invoked an arbitration clause in the original lease. When the impasse continued, Shabinsky wrote to Petridis on June 2, 1981, revoking all previous offers and demanding vacant possession as of July 1, 1981. Shabinsky accepted an offer by a third party to lease the premises on June 4th. Petridis sought a declaration that the lease had been renewed according to its terms or through the application of the doctrines of waiver or promissory estoppel. I: Does promissory estoppel apply here, or is it being used as a "sword"? D: Judgment for the plaintiff, lease renewed for five years. Reasons: Grange held that Petridis could not rely on the doctrine of promissory estoppel because the representation giving rise to the estoppel must be made at a time when a legal relationship exists, and here the option ceased to exist after December 31, 1980. However, Petridis could succeed on the basis of the doctrine of waiver. This is still not available as a cause of action, but as the landlord had given a notice to evict and then Petridis pursued the action in response to the eviction notice, it is essentially still being used as a defence. Shabinsky had recognized the continuance of the right of the tenant to renew and chose not to insist on the expiry of the option because he wanted to persuade Petridis to stay at an increased rent. As a result, it would be inequitable to permit him to terminate the negotiations without some reasonable notice to Petridis. Shabinsky should have reverted to his strict rights of enforcing it in accordance with an extended time limit, perhaps one of only a few days in the circumstances. Consideration was not necessary because the landlord could always reassert its strict right provided it was not inequitable to do so. The extension of time here was not a variation of the written contract but a waiver of a right under that contract. Ratio: Waiver exists where: A party has the right to rescind or repudiate upon the other party’s failure to do something; he may by word or deed waive or suspend that right; and if he does then equity will sometimes not permit him or will control him in the strict enforcement of those suspended or waived rights.

Answer 81

Facts: Mr. M made a promise to Ms. A to pay the balance outstanding on the mortgage of her home in England if she moved to Canada to live with him with a view of marrying him. She moved to Canada, but he refused to pay her mortgage and the relationship became stormy. He loaned her 100,000 on a promissory note. She applied those funds to her mortgage. He kicked her out of his house. She sued him, claiming estoppel as a cause of action because she relied, and acted upon his promise. She was unsuccessful at trial, which she appealed. Issue: Is estoppel a cause of action in Canada where there is no pre-existing legal relationship? Decision: Appeal dismissed. Reasons: Counsel for Ms. A tries to claim that estoppel should be recognized as a cause of action in Canada as it has been in other countries. However, Huddart, writing for the court, denies this and says that it is only a defence. Further, there were no intentions for this to be a legal relationship, so there was never a binding agreement. Ratio: Estoppel is not a cause of action in Canada where there is no pre-existing legal relationship.

Answer 82

Facts: Mr. Balfour and his wife went to England for a vacation, and his wife became ill and needed medical attention. They made an agreement that Mrs. Balfour was to remain behind in England when the husband returned to Ceylon (Sri Lanka) and that Mr. Balfour would pay her £30 a month until he returned. This understanding was made while their relationship was fine; however the relationship later soured. The lower court found that there was sufficient consideration in the consent of Mrs. Balfour and thus found the contract binding, which Mr. Balfour appealed. Issue: 1. Was Mr. Balfour's offer intended to be legally binding? 2. Does the fact that they were husband and wife matter? Decision: Mr. Balfour's appeal was allowed. Promises in spousal (or for that matter, family) roles aren't legally binding. Reasons: Atkin held that the law of contracts is not made for personal family relationships. As there was no intent to be legally bound when the agreement was agreed upon, there can be no legally binding contract. Atkin holds that if the courts were to allow all wives to come to court when agreements had been broken with their husbands then the courts would be overrun with frivolous cases. Warrington, concurring in the result, agreed substantially with Atkin, but added that there was no bargain of any kind made by Mrs. Balfour sufficient for a binding contract. Ratio: Arrangements made between husbands and wives are not generally contracts as the parties do not intend to be legally bound by the agreements.

Answer 83

Facts: Rose and Frank Co. were the exclusive American distributor for J.R. Crompton's new paper product. In their agreement there was a clause included stating that the arrangement was not intended to be a formal legal agreement and would not be subject to legal jurisdiction of either the US or the UK. J.R Crompton cancelled the agreement because they were unhappy with Rose and Frank Co.'s proceedings and Rose and Frank Co. sued for breach. They were successful at trial, which J.R. Crompton appealed. Issue: Can a clause be put in a contract saying that it is not legally binding, or is there a contract anyway? Decision: Reversed the judgment of the Court of Appeal Ratio: It is generally assumed that parties in business relationships intend to be bound. If parties expressly state in an agreement that they do not wish to be bound, the courts must respect their actual intentions.

Answer 84

Facts: Leigh relied on Plessey to confirm their reputability to Toronto Dominion (TD), ‘comfort letters’ were provided to TD to assure them loans would be repaid; as a result TD gave Leigh a line of credit; debt was not paid Issue: Are comfort letters binding? Analysis: Wording shows that it is not a binding contract. “Be managed” does not suggest that Plessey would manage the affairs of Leigh. It was carefully crafted to avoid any suggestion that plessey had any legal responsibilities. Objective test - “No one would believe it was a guarantee”. Conclusion: Court finds in favour of Leigh Instruments Ltd. No binding contract. Ratio: Letters of comfort are not legally binding.

Answer 85

F: Aunt promised nephew she would leave him her house if he would do various acts she might request from time to time. This agreement was never recorded in writing. C: Gets compensation ($3,000) for his errands. R/A: As per Maddison v Alderson, the acts of performance by themselves give no reason to believe that he would inherit the house. It could have merely been him helping his aunt due to expectation. He can get payment for services rendered by quantum meruit. The services weren’t given gratuitous.

Answer 86

F: Aunt promised nephew she would leave him her house if he would do various acts she might request from time to time. This agreement was never recorded in writing. C: Gets compensation ($3,000) for his errands. R/A: As per Maddison v Alderson, the acts of performance by themselves give no reason to believe that he would inherit the house. It could have merely been him helping his aunt due to expectation. He can get payment for services rendered by quantum meruit. The services weren’t given gratuitous.

Answer 87

F: Gus worked on Dick’s farm for 48 years. Gus alleges that this work was done as consideration for Dicks promise to devise and bequeath his land to Gus. Gus tool a somewhat marginal farming operation and made it successful. No will was found but it seemed very clear that Dick’s intention was to bequeath the farm to Gus. C: Part performance occurred. Gus gets specific performance. R/A: Distinguished from Deglman. Practically every act of part performance was unequivocally referable to a contract in reference to the very land in question. He did many acts that were fundamentally connected to the running of the farm in question. Duration may also be considered.

Answer 88

Issue: Do the acts prove the precise terms of the alleged contract or only that there is a contract? Reason: the acts need not unequivocally refer to the contract in question but must prove the existence of some contract and be consistent with the one alleged if the acts relied upon are unequivocally referable in their own nature to some dealing with the land the requisite test is met Ratio: 2 Theoretical bases for the doctrine of part performance: Also known as “alternative evidence”, acts of part performance are viewed as evidence sufficiently cogent to allow a court of equity to enforce a contract even though it could not be enforced at common law because of non compliance with statute. It is necessary that the acts of part performance be adduced as a pre-condition to the introduction of parol evidence to prove the contract the acts of part performance not so much in their evidentiary value but as raising equities in the plaintiff’s favour which render it unjust not to enforce the contract

Answer 89

F: Dunlop has a contract with Dew (Contract 1). Dew has a contract with Selfridge (Contract 2). Selfridge has a contract with customer (Contract 3). Contract 1: tires won’t be sold for less than Dunlop’s price and others that buy from Dew can’t sell them at a lower price either. Contract 2: Selfridge promised Dew that it would not sell below list price. If they breach they have to pay Dunlop. Contract 3: Selfridge sold below the list price to their customer. So contract 2 has been breached. Dunlop wants to sue Selfridge. A: Dunlop is a third party beneficiary here. Dunlop is not a party to the contract and consideration flows directly from Dew and not directly or indirectly from the appellants. Therefore Dunlop cannot sue. Agency argument: Dunlop tried to argue that Dew was actually only an agent. If Dew was the agent and Dunlop is the principal then that will give Dunlop a right to sue. But if that’s the case, then consideration from Selfridge promise not to sell under the set price would have to flow from Dunlop to Selfridge. There is no consideration of that sort, so no enforceable contract. C: Dunlop loses.

Answer 90

There are a number of situation in which the Privity rule does not apply. Exceptions: 1- Statutes - Insurance contracts, because when someone purchases life insurance, the benefit is assigned to a third party. 2- Specific Performance - Beswick v Beswick 3- Trust - One way to get around a lack of relationship between the third party and the party, is to show that there is a legal relationship (trust. Settlor transfer property or rights to the trustee (who hold or manages the property for the benefit of the third party). The third party is the beneficiary. Once a trust is created, the beneficiary is entitles to enforce the trust obligation directly. 4- Agency - Where a principal authorizes an agent to enter into contracts on the principals behalf with third parties, the result of the agents doing so is that the principal has a direct contractual relationship with the third party. EX) Promissor (A) promises B to confer a benefit on C. If promisee B was acting as an agent on behalf of C, C would have a direct contractual relationship with A and the third party beneficiary rule would be avoided. o 5- Employment o 6- Principled Exception

Answer 91

A contract cannot, as a general rule, confer rights or impose obligation arising under it on any person except the parties to it. As a general proposition, someone who stands to benefit from a contract between two parties cannot sue on the contract.

Answer 92

Beswick v Beswick (in certain cases you must actually perform the act (discretionary order) R/A: She is liable to sue as the administrator of the estate. However if suing in that capacity, it would seem that she has suffered no damages, so the court may award only nominal damages. To get around this, the court held that she was entitle to the remedy of specific performance. Specific performance enable the court to force the nephew to continue to pay the widow on an ongoing basis. Denning: went far to say that Privity is just procedural but does not affect the underlying right (this is not followed). Reid: she cannot sue in a personal capacity but she can as the administrator. F: Peter was the previous business owner. John was peters nephew and purchaser of the business. Mrs. Bewsick was peters widow. Peter sells the business to John on these terms: Peter to stay on as a consultant at 6 pounds a week. On peters death, John must pay the widow 5 pounds a week until her death. John paid once but refuses to continue. Mrs. B sues for specific performance and in her personal capacity. C: She is not barred due to Privity of contract. R/A: She is liable to sue as the administrator of the estate. However if suing in that capacity, it would seem that she has suffered no damages, so the court may award only nominal damages. To get around this, the court held that she was entitle to the remedy of specific performance. Specific performance enable the court to force the nephew to continue to pay the widow on an ongoing basis. Denning: went far to say that Privity is just procedural but does not affect the underlying right (this is not followed). Reid: she cannot sue in a personal capacity but she can as the administrator.

Answer 93

F: Ajax makes the drill and wants to ship it to Satterthwaite. They contract federal steam to be the carrier (Contract 1). Contract 2: Fed steam and NZ shipping, NZ is contracted to unload the drill. NZ drops the drill and damages it. Satterthwaite wants to sue NZ shipping for the drill dropping due to their negligence. (Bill of lading= contract between Fed steam and Satterthwaite) A: Satterthwaite argues that NZ could not rely, as third party beneficiaries, on the provision of the bill of lading that appeared to be designed to protect them. Case law relied on: 1. the bill of lading makes it clear that the protection is intended to extend to NZ. 2. The bill of lading makes it clear that Fed Steam is contracting and an agent for the NZ. 3. Fed Steam has authority from NZ to act as agent. 4. Any issues about consideration moving from NZ are overcome. The contract satisfied this criteria. Consideration is questionable but the contract is commercial in character and not gratuitous, and Ajax agreed to exempt Fed Steam and its independent contractor NZ Shipping in the performance of the contract of carriage. This covered the act more than the parties. They look at it as a unilateral contract: by calling NZs performance the consideration, the consideration problem is overcome. That means Privity is displaced and NZ can take advantage of the exemption clause. C: NZ shipping cannot get sued by Satterthwaite. R: To give the appellant the benefit of the exemptions and limitation contained in the bill of lading is to give effect to the clear intentions of a commercial document, and can be given within existing principals. Intention is the test for an agency relationship.

Answer 94

F: London Drugs wanted to store a transformer at a Kuehne & Nagel warehouse. The storage contract included a limitation of liability clause limiting the liability of warehouse workers to $40 per package unless a special valuation has been declared. London Drugs did not opt for the extra coverage. Dennis and Hank negligently tried to move the transformer and it sustained $33,955.41 of damages. A: Dennis and Hank can take advantage of the limitation clause, even though they are not parties to the contract. Commercial reality and common sense require the reconsideration of the rule of privity. Applying the Doctrine of Privity so as to prevent a third party from relying on a limitation of liability clause which was intended to benefit him/her frustrates sound commercial practice and justice. It is inconsistent with party’s expectation as it places all the burden on the third party beneficiary. There are no good reasons not to make this exception. C: Dennis and Hank are only liable for $40 R: Employer preforms its contractual obligation through its employees. There is an identity of interest between them. There must be: 1) LL clause expressly or impliedly extends the benefit to the employees. 2) Employees were acting in the course of their employment and preforming the services provided for in the contract. Exception: depends on the parties intentions. It is similar to the agency exception but here consideration is not needed.

Answer 95

F: Fraser owned a barge. It was under charter to Can-Dive and it sank (allegedly due to Can-Dives negligence). Subrogation: insurance companies generally have the right to step into the shoes of the party whom they compensate and sue any party whom the compensated party could have sued. Fraser’s insurer normally could have sued Can-Dive. However in the contract the subrogation clause was waived. Insurer paid Fraser for its loss of the barge. Insurer secured Frasers agreement to waiver the insurers waiver of subrogation, freeing the insurer to sue Can-Dive by way of subrogated claim. A: Can-Dive can rely on the waiver of subrogation clause as a defense, even though it is a third party. The court extends the justification relied on in London Drugs. 1) They did intend to protect their charters (Can-Dive) and they can’t change things after the removal of the subrogation clause was crystallized. 2) They were chartering the barge so this part is met. C: Fraser’s insurance company cannot sue Can-Dive R: The Principled Approach: Depends on the intention of the contracting parties. Requires 2 factors to be present: 1) Did the parties of the contract intend to extend the benefit in question to the third party seeking to rely on the contractual provision? 2) Are the activities performed by the third party seeking to rely on the contractual provision the very activities contemplated as coming within the scope of the contract in general or the provision in particular

Semester 1 Flashcards

(119 cards)