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Contracts - Fall '16

Contracts Cases - Fall 2016

QuestionAnswer
CDN Dyers Association v Burton quotation does not equal offer but in this case the quotation was construed by the court to be an offer because of the conduct of the offeror (acceptance of a deposit) and the preparation of the deed
Pharmaceutical Society v Boots Display of meds is an invitation to treat Customers are to take the meds to cash, which is an offer to the store to purchase their invitation to treat. When cashier accepts their payment, this completes the offer.
Carlill v Carbolic Smoke 100£ reward to anyone who contracts and epidemic influenza after having used the smoke ball 3x daily for two weeks [unilateral contract] - advert in this case was an offer because of the language of the advert and conduct of the offeror (money in escrow)
Goldthorpe v Logan Issue over a guarantee in an advert Court ruled that although adverts are usually invitations this advert contained a specific promise that made it an offer to the world and using the service was acceptance (unilateral k) P won
Harvela Investments v Royal Trust Co of Canada Invitation for tender was sent outlining to send highest bid. Harvela sent $2,175.00 and a competitor sent $2,100.00 + additional $101.00 as fixed. Only this case identifies a tender as an invitation to treat. Considered as an offer hereafter. Holding 4H
Tenders - Key Points A/B Analysis - An owner indicates desire to accept tenders with tender package/offer. All offers that comply with terms set out are Contract A. Implied that lowest bid must be accepted without terms in tender that say otherwise
R v Ron Engineering The main thing coming from this case was the A/B analysis for tendering. On the facts, the main ratio was tender bids are final and irrevocable upon closing of process unless tender instructions say otherwise
MJB v Defense Contracting A p. clause is only binding when accepting compliant bids In the absence of a p. clause you likely have to accept the lowest tender bid Contract A is automatic upon submission MJB won because S had a competitive adv. from non-compliant bid
Double N Earthmovers v City of Edmonton Court found city was fine to accept a different B with Sorochan because the A terms were same for everyone. City did not know about S lying. Contract B can be made with varied terms from the Contract A (for economic purposes – reason for the ratio).
True Construction v Kamloops (City) Tender bids that to not conform to the terms and conditions set out by the owner do not have to be accepted even if they are the lowest
Rules of Communication of Offer
Blair v Western Mutual Benefit Association Basically, there needs to be intent to make an offer and in this case there was no evidence to support intent to offer AND in alternate, if there was intent the offer was not communicated properly.
Williams v Cardwine Motivation for acceptance is irrelevant, what is important is knowledge of offer. That allows for meeting of minds
R v Clarke Party claimed not to know about offer when discharging performance - court found one must know of offer to accept an offer
Rules of Revocation
Dickinson v Dodds Train acceptance case Can an offer before revoked before it is accepted? Communication of revocation is needed – can be express or oral. Can also be communicated by a third party (if that party is reliable)
Byrne v Van Tienhoven Can you revoke an offer after acceptance? No In this case the issue was the revocation letter (posted before acceptance) was not delivered until after acceptance. Postal rule does NOT apply to revocations of offers
Errington v Errington Woods Father bought house for son and daughter-in-law then died with it in his name. State trying to kick them out unilateral contract cannot be revoked once performance starts but the promise is only due once performance discharged
Dawson v Helicopter Exploration App and R agreed that he would show them where he stalked his minerals. R then went w/o A. Bilateral – cannot revoke because his promise = acceptance. Helicopter argued that they revoked by making a promise with other party, but offer already accepted.
Livingstone v Evans 1650 countered at 1600 (killed 1650 offer). then offeror said 1650 is my lowest price. Revived 1650. Does a counter-offer extinguish an offer? A counter offer extinguishes an original offer but the party who made the original offer can revive it.
Barrick v Clark Hunting trip offer dispute. Contracts have an implied lapse based on reasonable time in conditions (ie land more time than stocks). If an offer does not contain specific deadline for acceptance court implies reasonable time to accept or offer will lapse
Battle of Forms Quick Points
Butler Machine Tool v Ex-cell-o Corp. Sellers were selling a machine, buyers replied by placing an order that was subject to a number of terms and conditions that differed from the ones put forth by the seller. A contract was concluded between both parties, but on whose terms? Sellers asked a question, buyers accepted the offer and added different conditions. If the last set of term and conditions is not rejected it may be agreed to those new terms.
Tywood Industries v St Anne assholes adding arbitration clause The last modified contract included an arbitration clause in terms of dispute. When the arbitration clause was added, Pulp and Paper never accepted therefore, the contract with the two parties have not been agreed on
Shrink Wraps Are valid offers that can be accepted by clicking "I accept"
ProCD v Zeinberg and Silken Mountain Web Services Authority for Shrink-Wraps (click wrap)
Rules on silence
Felthouse v Bindley uncle-nephew horse dispute Even though the nephew agreed to this, because his acceptance was not communicated the contract between the two is not binding Ratio: Acceptance must be communicated
Saint John Tugboat v Irving Refinery There was an informal agreement to prolong tug usages, Saint John kept tugs on call, Irving kept using them, and was silent which implied acceptance (acquiescence) [silence can constitute acceptance when combined with conduct]
Offeror's Control - Elisason v Henshaw The offeror agreed to purchase flour and seller required acceptance in writing by wagon at a specific place. Seller decided to send acceptance by regular mail - rule: if offer specifies acceptance method - acceptance must be in that form
Rules on communication through mail and instantaneous communications Postal rule does not apply where the terms of the contact point to the necessity of actual communication In instantaneous communication contract is complete when offeror receives acceptance & contract made the place where acceptance is received.
Household Fire v Grant Post office is a common agent between the two parties. Once the letter of acceptance is delivered to the post office the contract is made as complete. posted in the mail was an acceptance therefore completing the contract and making it binding.
Holwell Securities v Hughes Holwell posted a letter of acceptance in regards to a house that was being sold to Hughes but the acceptance letter never reached him. Hughes wanted the acceptance to be a notice in writing - acceptance must be received
Brinkibon v Stahag Stahl Contract was formed through a number of telephone calls between London & Vienna. The rule here is that once the message has been delivered to the offeror’s via telex, it is not unreasonable to treat it as delivered to the offeror.
Rules on Certainty of Terms
R v CAE Industries CAE won because the language used and the conduct exercised result in determining the intentions of the parties. Also indicated an offer capable of acceptance and R let them run base for years. Basically, government showed intent of offer plus got benefi
May v Butcher Issue – whether the terms of the contract were sufficiently defined to constitute a legal binding contract between both parties. contract law says that there is no contract when there are things left undetermined.
Hillas v Arcos Clear they intended a contract, installment contract (not everything can be delivered at once) – price, shipping and standard left open which court found was intentionally left open – so contract is enforceable. Acros must sell to Hillas.
Foley v Classique Coaches Foley said not binding because no price state, court applied reasonable price of oil & bound Classique Coaches to buy at price. Price was negotiated to be from time to time within the contract.
Rules on Certainty of Terms
Bhasin v Hrynew
Empress v Bank of Nova Scotia After back and forth Empress said they would allow their offer if they paid $15,000 (they were robbed $30,000, only $15,000 covered by insurance) Requirement to negotiate in good faith Empress (landlord) did not negotiate in good faith - good faith requirement because there is an objective measure to weigh conduct against (fair market rent price)
Mannpar v Canada Manpar got screwed but Canada did not have good faith duty because no std. to weigh against (see Empress) AND they had a fiduciary duty to the Indian Band and the Band would have needed to agree as well. There was no implied obligation to negotiate in good faith if there is no objective benchmark/standard
Wellington City Council v Body Corporate There was an agreement to negotiate over sale of leasehold, since it was not defined what good faith neither was nor was there any obligation for each party in this case, therefore there is no standard to apply – as a result there is no breach.
Misc. Rules Side note: if the mailing address is incorrect than the postal rule does not apply because of the mistake made by the person sending the acceptance.
Bawitko Investments v Kernels Popcorn Parties made oral agreement to agree in writing on key terms later Court said that is not enforceable due to uncertainty - k was not reached. Oral agreement to make a contract is not binding. Indication of future written agreement was stated by parties, essential terms not agreed upon yet, therefore oral agreement as not binding.
Intention to Create Legal Obligations
Balfour v Balfour Promises made between husband and wife (generally not enforceable) fails to have intention to create legal relations, they do not intend to be bound or able to sue one another.
Rose and Frank v JR Crompton contrary intention for businesses to assume intent to be bound legally They signed an agreement to not be legally bound, so when the defendants stopped their performance they cannot be sued because intentions not to be bound expressed. In commercial relationships its assumed the parties intended to be bound,
TD Bank v Leigh Investments • TD was given “comfort notes” to say Leigh’s loan will be paid back and they it will be managed, but wasn’t. TD tries to enforce the letter o Letters of comfort are not binding, serves as good faith
Canadian Taxpayers Federation v Ontario (Minister of Finance) campaign statement and did not follow through (this is not reasonable to do because it would upset political system) Election promises do not amount to an offer to contract and doesn’t create legally enforceable obligations
Rules of Seal and Formality
Rules of Seal and Formality #2
Royal Bank v Kiska There was no wafer seal on the document; rather the word “seal” was printed on the document. It can be argued that there was consideration, but Laskin said no, Seal has already been relaxed enough - you need more than just the word "Seal"
Dynamic Transport v OK Detailing Entered into an agreement for sale of land. Court constructed a contract including reference of conduct to the parties and that each party is under an obligation to do all that is necessary on their part to secure performance of the contract.
Deglman v Guaranty Trust An aunt told her nephew when he was taking care of her that if he did a good job with taking care of her by doing chores and entertaining her he would be given her house. she died Trust Co argued that he does not get the house because of part performanc
Rules of Consideration
Rules of Consideration #2
Rules of Consideration #3
Thomas v Thomas • Day before Thomas died; he orally made a wish to make provisions for his wife. Next morning with two witnesses said his wife is to have the house they live in and all that’s in it or a sum of 100£ instead. • Even though this was done orally and not wr
Governors of Dalhousie v Estate of Boutilier Consideration must flow between both parties. His promise was gratuitous, no consideration flowed from Dalhousie because he did not benefit from their building projects (no value in eyes of the law)
Wood v Lucy, Lady Duff Gordon • Court found consideration – that it is fair to say that there was an understood implication of consideration between the two parties. It is clear they intended for legal relations
Eastwood v Kenyon (Past Consideration)
Lampleigh v Brathwait
DCB v Arkin and Zellers (Forbearance to sue)
Created by: Michael.geib