Principle of Contract Law: to put the plaintiff back in the position he would have been in, so far as money

can do it, had the contract been performed. (Wertheim v. Chicoutimi Pulp Company) Intention Was the offer intended? o An offer does not have to be intended to be binding; we are concerned with what the parties do, not with what they say. (Storer v. Manchester City Council) Offer What kind of offer is it? o An advertisement If so, it is an offer (Denton v. Northwest Railway Company) OVERRULED o A quote Not an offer; a statement of current cost (Johnston Brothers v. Rogers Brothers) Party giving quote must intend to sell for it to be an offer (Harvey v. Facey) Quotes often instead invite offers (Boyer and Co. v. D. & R. Duke) o A price list Doesnt indicate intent to sell; inventory not infinite (Grainger & Son v. Gough) o An item on display Items on display are an offer to treat; bringing to point of sale indicates offer to buy and cashier acceptance of money indicates acceptance of offer. (Pharmaceutical Society of Great Britain v. Boots Cash Chemists (Southern) Ltd.) Price tags are offers to treat, not outright offers to sell. (Fisher v. Bell) Is the offer closed? o Once accepted, an offeror can impose no new conditions (Lefkowitz v. Great Minneapolis Surplus Store) o Offers have reasonable time limits, depending on the circumstances of the parties (Shatford v. B.C. Wine Growers, Ltd.) Counter-Offers and Negotiation Is there a counter-offer? o Counter-offers kill original offers (Hyde v Wrench) But offers to negotiate do not (Re Cowan v. Boyd) o In The Battle of the Forms, where more than one contract appears to apply, the last one that is clearly offered and accepted by both parties governs (Butler Machine Tool Co. Ltd. v. Ex-Cell-O Corporation (England) Ltd.) Is there a cross-offer? o Cross-offers, despite being contemporaneous, do not constitute an offer and acceptance. (Tinn v. Hoffman and Co.) Is there an intermediate contract? o The tendering process implies a Contract A upon acceptance of a tender to run a fair bidding process, followed by a Contract B granted to the winning bidder. ( MJB Enterprises v. Defence Construction) Have all key elements been negotiated? o Ongoing negotiation of integral parts of the agreement indicate no contract (Bristol, Cardiff, and Swansea Arated Bread Company v. Maggs )

Ongoing negotiation of integral parts of the contract by the offeree indicates non-acceptance (Harvey v. Perry) But once it has been accepted, further negotiation of components are disputes arising from an existing contract (Bellamy v. Debenham) If a key component is being renegotiated in an existing contract, consideration must be given for any new benefit extracted ( Gilbert Steel, Ltd. v. University Construction, Ltd.) o A contract leaving open a key element, such as price or timelines determined case-by-case is no contract at all. You cannot have an agreement to agree. ( May and Butcher, Ltd. v. The King) BUT, if the parties act as though there is a contract despite there being a key component in question, the court can read in a reasonable compromise (on price, timelines, etc.) (Foley v. Classique Coaches, Ltd.) But a court will not create a contract or subcontract binding on the parties (Scammell (G.) and Nephew, Limited v. Ouston) Is there a question of formality? o Even if it implies a favourable disposition to terms, a request for a formal agreement is not an acceptance of offer. (Green v. Ainsmore Consolidated Mines, Ltd.) o Vague contracts must be read broadly and charitably to determine terms ( W.N. Hillas and Co. Ltd. v. Arcos, Limited) o A contract to enter a formal contract later is that contract just for future performance (W.N. Hillas and Co. Ltd. v. Arcos, Limited) Similarly, a contract to accept a third party (e.g. arbitrator)s ruling as a binding contract is a contract for that person to formalize (Calvan Consolidated Oil & Gas Ltd. v. Manning) A contract to negotiate in the future can be binding if consideration is given (W.N. Hillas and Co. Ltd. v. Arcos, Limited), even in good faith (Empress Towers v. Bank of Nova Scotia) o The House of Lords finds that a contract to negotiate is absurd, especially in good faith (Walford v. Miles) and EdperBrascan Corporation v. 117373 Canada, Ltd. suggests without power that Empress be read narrowly o An indecipherable contract is no contract (Scammell (G.) and Nephew, Limited v. Ouston) Acceptance Was the acceptance made in time? o All intervening circumstances can be considered in determining what a reasonable time frame for acceptance might be (Manchester Diocesan Council for Education v. Commercial & General Investments Ltd.) o Consider the language and time frames in the contracts themselves to determine a reasonable time. (Barrick v. Clark) o An offer can be revoked anytime before acceptance unless consideration is paid (Dickinson v. Dodds) Was the acceptance made in the correct way? o Offerors have the right to stipulate any form of acceptance they like (Eliason v Henshaw) But an acceptance delivered in a way that is no less convenient to the offeror is also acceptable (Manchester Diocesan Council for Education v. Commercial & General Investments Ltd.) Was the acceptance received in such a way as to lock the contract down?

An acceptance that is still in the offerees power to take back is not an acceptance (Larkin v. Gardiner) o An acceptance can be demonstrated by performing a requested act ( Dominion Building Corporation, Ltd. v. The King) o Acceptance by mail locks down a contract in the place and at the time the acceptance was posted (see directly below) Was the acceptance posted or otherwise indirectly delivered? o An acceptance posted in the mail completes a contract (Household Insurance Co. v. Grant) REFINED BELOW Still good law (Nunin Holdings Pty. Ltd. v. Tullamarine Estates Pty. Ltd. ) As long as it is in the contemplation of the parties that post may be a means of communicating acceptance (Henthorn v. Fraser) The contract is therefore executed in the place acceptance was posted (Eastern Power, Ltd. v. Azienda Comunale Energia & Ambiente ) o Because expediency is not compromised by instant message the same way it is by mail, contract formation follows the general rule and not the mail rule: the contract is executed in the place where the acceptance is received (Eastern Power, Ltd. v. Azienda Comunale Energia & Ambiente) Was the acceptance only implied? o When in an ongoing business relationship with another party, silent acceptance of that partys goods constitutes acceptance of an offer to sell ( Wheeler v. Klaholt) o UNILATERAL CONTRACT o Motive does not matter in acceptance of a unilateral contract (Williams v. Carwardine) But the performance must be contemporaneous with an intent to accept the offer (The Crown v. Clarke) o Unilateral contracts do not require the offeror to be notified of acceptance; performance is sufficient notification that a contract has been executed ( Cargill v. Carbolic Smoke Ball) o Offers to the public at large are binding upon performance, as long as that offer is to be taken seriously (Cargill v. Carbolic Smoke Ball) o An advertisement guaranteeing a certain result binds the offeror to provide those results to anyone accepting the terms and conditions of the offer (Goldthorpe v. Logan) o The public representation of the terms and conditions of a unilateral offer even if that representation is in the form of independent agents can be taken as binding (Dale v. Manitoba) o A public offer of a unilateral contract is binding after performance if a reasonable person would expect it to be (Grant v. Province of New Brunswick) o Wherever possible, courts prefer to read unilateral contracts as bilateral that way the offeror doesnt have the right to withdraw anytime before performance is complete (Dawson v. Helicopter Exploration Co. Ltd.) o A unilateral offer can only be revoked prior to performance. (Errington v. Errington) If performance is ongoing that is, provision of a state of affairs then continued performance warrants the promised benefit. (Errington v. Errington) Withdrawal When is an offer withdrawn? o When the offeree is aware that the offer is no longer open for him to accept, as long as the source of that information is reasonably reliable ( Dickinson v. Dodds) Postal withdrawal must be received by the offeree prior to his acceptance (Byrne & Co. v. Leon Van Tienhoven & Co.)

Mutual Consent Were the parties of one mind at the same time? o Parties must intend to be bound by the same contract at the same time for that contract to be valid (Dickinson v. Dodds) o Parties must communicate that intent. Though a silent meeting of the minds may seem to bind parties, it wont hold up in court (Felthouse v. Bindley) Silence is more persuasive as confirming contract if the parties are in regular commerce (Lucy v. Mouflet) Consideration What is consideration? o Some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other ( Currie v. Misa) With which the promise of the other is bought (Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge & Co.) No matter how adequate or inadequate (Westlake v. Adams) But its value must be clear and definite (Gilbert Steel, Ltd. v. University Construction, Ltd.) Pre-existing duties as consideration o Performance of a benefit already owed to the promisor is not a benefit and therefore not consideration (Stilk v. Myrick) QUALIFIED BELOW Performance of pre-existing duties is consideration, as long as the new promise for the same performance is not extracted through fraud or economic duress (Williams v. Roffey Bros. Ltd.) Economic duress is a coercion of will that vitiates consent (Pao On v. Lau Yiu Long). In order to determine whether or not a decision was made under economic duress, consider: o Did the coerced party protest? o Did the party have an alternative? o Was the party independently advised? o Did the party try to avoid performance after promising? But any benefit above that already owed is always consideration (Hartley v. Ponsonby), as is the taking on of an obligation of the promisor (New Zealand Shipping Co. Ltd. v. A.M. Satterthwaite & Co, Ltd. ) Consideration consisting of performance above and beyond that already owed (pre-existing duty): o Police constable giving B&E info to civilian, leading to conviction for reward (England v. Davidson) o Fireman risking life to retrieve civilians wife from burning building for reward (Rief v. Page) o The giving up of the option to breach and pay damages (in a pre-existing duty) is not consideration for a new promise; it would mean benefitting from on es own wrong (Smith v. Dawson) o Mutual termination and renegotiation of a contract does not engage pre-existing duty requirements. It is a new contract, and the law does not require consideration for the greater value subsequently obtained by one party (Raggow v. Scougall and Co.) Gratuitous promises

Consideration for gratuitous promises is found only when the promisor stands to benefit from or participate personally in the use of his funds (Dalhousie College v. Boutlier Estate) Subsequent Reliance Courts will often stretch to hold certain defendants liable for breach of gratuitous promise in the event of subsequent reliance Insurance agent held liable for failing to gratuitously inform other agents of clients request for additional insurance ( Baxter v. Jones) Newspaper held liable for free financial advice consideration found in publication rights (De La Bere v. Pearson, Limited) Bailment cases Bank found liable for gratuitous credit report relied upon ( Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd.) Once liability results from faith in a gratuitous promise, it is no longer voluntary (Skidmore v. Bradford) Estoppel Estoppel is available to counter the taking back of a present representation, not of a future intention (Re Hudson) o Because future representations are either contracts, or theyre not; present representations are not a promise per se (Maddison v. Alderson) Available to prevent one party luring another into default of promise with relaxed attitude towards rights, then suddenly imposing them strictly (Hughes v. Metropolitan Railway Company) Promises intended to be legally binding, even if gratuitous, should be enforceable in law and equity (Central London Property Trust Ltd. v. High Trees House Ltd.) RECONSIDERED BELOW o SCC considers this a restatement of Hughes, just above (Conwest Exploration Co. Ltd. et al. v. Letain) o But estoppel is a shield, not a sword; it can be brought to enforce a promise in a valid cause of action, not as its own cause of action. That is, you cant sue someone for being estopped from collecting full rent. You can only sue for breach of contract made with consideration, arguing that they are estopped from enforcing full rights (Combe v. Combe) Summary: Contracts require consideration to be enforced; equity prevents detriment due to unconscionable conduct (Waltons Stores (Interstate) Ltd. v. Maher) FINAL WORD: SCC says that for promissory estoppel to apply, there must be a clear intent on the promisors part to affect the legal relations between the parties for example, that the right to prompt payment was to be held in abeyance, and that notice would be given if payment were needed promptly. Without that intent, rights do not decay (John Burrows, Ltd. v. Subsurface Surveys Ltd.) NOT SO FAST: OCA claims that the intent can be read in by the actions of the promisor, and that estoppel is justified if the promisees reliance was reasonable (Owen Sound Public Library Board v. Miel Developments Ltd.)

BC CoA reiterates that it must be an existing legal relationship that is altered (N.M. v. A.T.A.) A cause of action cannot be founded in estoppel, but a cause of action that will fail without application of estoppel may go ahead (Amalgamated Investment & Property Ltd. v. Texas Commerce International Bank Ltd.) Proprietary estoppel is a cause of action in itself and allows equity to be applied in situations where the conduct of the promisor has encouraged the promisee to believe that he will not insist on his strict rights (Crabb v. Arun District Council) o Proprietary estoppel is available when a promise has been relied upon to the other partys full knowledge (Loranger v. Haines) Estoppel either promissory or proprietary is only available when there is an existing legal relationship between the parties that the promise may have been intended to affect (N.M. v. A.T.A.) Repudiation and Mitigation

Are non-mitigated damages recoverable? o Shit no! (Payzu Limited v. Saunders) Anticipatory repudiation o Damages for anticipatory repudiation are crystallized as the difference between the contract price and the market price at the time the repudiation was accepted. (Roth & Co. v. Taysen, Townsend & Co.) o Parties may choose not to accept the repudiation as breach and perform anyway (NOW DISALLOWED IN CANADA) (White and Carter (Councils), Ltd. v. McGregor) No, they cant; repudiation only excuses performance and allows damages (Finelli et al. v. Dee et al.) Damages Non-contractual protection: Unjust enrichment (Blake v. Attorney-General); Duty to pay for requested services (Deglman v. Guaranty Trust Co. and Constantineau); Estoppel protecting reliance interest (See Gratuitous Promises) What is the measure of damages? o The goal of remedy is to put the plaintiff in the position he would have been in had the contract been performed. (Wertheim v. Chicoutimi Pulp Company) That is, the difference between his present state and if the contract had been performed (Hawkins v. McGee) o The difficulty of determining damages is no deterrent in awarding them (Carson v. Willitts) o If substantial performance has been undertaken, the remedy is the difference in value between actual and required performance (Ruxley Electronics and Construction, Ltd. v. Forsyth) RESCISSION o Rescission is the taking back of a contract, available only after significant breach (Bollenback v. Continential Casualty Company) o Rescission is also available in the event of repudiation when co-operation on the plaintiffs part is required (Finelli et al. v. Dee et al.)

When some performance has taken place, restitution is not an option; whats to stop you rescinding the contract after enjoying performance a bit more, or a lot more? (Hunt v. Silk)

AMOUNTS RECOVERABLE Parties are entitled to the full amount of the bargain value of a breached contract (Pitcher v. Shoebottom) If the bargain value is negative, there are no damages to recover (Acme Mills and Elevator Co. v. Johnson) o Reliance Interest Parties may recover all reliance expenditures that both parties understood at the time of contract (Anglia Television v. Reed) o Expectation Interest Liability for breach is restricted to that which is fairly and reasonably considered by both parties at the time of contract, plus damages resulting directly from the breach (Hadley v. Baxendale) REFINED BELOW And which is explicitly assumed by the breaching party at the time of contract (Horne v. The Midland Railway Company) REFINED BELOW o Even further, that which could reasonably have been presumed to have been ones intention in accepting liability (Transfield Shipping Inc. v. Mercator Shipping Inc. ) The actions or inactions of a party in breach can be used to determine the liability they intended to undertake at time of contract ( Munroe Equipment Sales, Ltd. v. Canadian Forest Products, Ltd.) The extent of potential liability must be disclosed at the time of contract in order to recover expectation interest after breach ( Munroe Equipment Sales, Ltd. v. Canadian Forest Products, Ltd. ) Informing the defendant that profits may be lost in the event of breach is sufficient warning to recover at least some profits ( Scyrup v. Economy Tractor Parts, Ltd.) Unless explicitly declared at time of contract, only normal business profits are recoverable, not exceptional bargain profits (Victoria Laundry, Ltd. v. Newman Industries, Ltd.) The precise amount is unnecessary, as long as the nature of the expectation is explicitly disclosed (Cornwall Gravel Co., Ltd. v. Purolator Courier, Ltd.) o Inconvenience Costs Inconvenience damages are recoverable as long as they are foreseeable as consequences of breach (Hobbs v. London and Southwest Railway) o Aggravated Damages Aggravated damages are not available at contract law (Addis v. Gramophone Company Limited) BAD LAW Mental distress damages are recoverably only if they were in the contemplation of both parties at the time of contract (Kolan v. Solicitor) BAD LAW Emotional distress damages are not available at contract law (Herbert Clayton and Jack Waller, Ltd. v. Oliver) BAD LAW Mental distress damages are recoverable in contract law if the contract is specifically for peace of mind (Jarvis v. Swans Tours, Ltd.) Mental distress damages may be recovered in addition to full compensation for breach of contract and damages in tort (Heywood v. Wellers)

Aggravated damages are awarded to compensate for intangible losses and injuries, not to address independently actionable wrongs (Vorvis v. Insurance Corp. of British Columbia) Punitive Damages Punitive damages punish independently actionable wrongs beyond breach (though not necessarily damages in tort) (Vorvis v. Insurance Corp. of British Columbia) Bad faith is a prerequisite to recovering punitive damages ( Fidler v. Sun Life Assurance Co. of Canada) SUPREME COURT OF CANADA PUNITIVE DAMAGES RULES: They are the exception, not the rule. Only if high-handed, malicious, arbitrary or highly reprehensible misconduct that deviates from the standards of decency Assessed in an amount proportionate to harm caused, degree of misconduct, profit of the defendant and vulnerability of the defendant. Taken together with all other damages to determine proportionality Given only when other damages are insufficient for retribution, deterrence and denunciation Not to compensate plaintiff Set to accommodate retribution, deterrence and denunciation Only when compensatory damages are insufficient Smallest possible amount to accomplish purpose Plaintiff, not state, receives windfall Moderation is key (Whiten v. Pilot Insurance Co.)

SPECIFIC PERFORMANCE o Specific performance must meet three criteria before being granted as an equitable remedy: Genuine non-economic interest in specific performance Likely to have performance done over again if not correct Interest not unreasonable o Plaintiffs receive the full benefit of performance, regardless of its market value in cases of specific performance (Groves v. John Wunder Co. ) DEBATABLE o No specific performance for repudiation; the plaintiff could ride out the market and cash in his damages for far more than they were ever worth o Available when the market cannot provide a substitute (Falcke v. Gray) Sometimes even available in a commercial context: SP allowed when mitigation was impossible in (Sky Petroleum, Ltd. v. V.I.P. Petroleum, Ltd.) Also available in very rare, unique chattels, especially ships (Behnke v. Bede Shipping Co., Ltd.) Or even in stock if it is somehow irreplaceable, as in company control (Gilbert v. Barron) o Available in chattels always if: The chattel is of a value damages cannot compensate o Burden on the plaintiff (Cohen v. Roche) There is a fiduciary duty between the parties (Carter v. Long) o Available often in land, when land is unique o When construction is included in purchase price of land, specific performance is often allowed (Tanenbaum v. W. J. Bell Paper Co., Ltd.) o Never allowed for business too difficult to enforce (Co-operative Insurance Society, Ltd. v. Argyll Stores (Holdings) Ltd.)

Never allowed for personal services, even when it is a negative covenant that would essentially be a specific performance order for personal services (Warner Bros. Pictures Incorporated v. Nelson) Especially in fiduciary positions (Page One Records, Ltd. v. Britton)

RESTITUTION AND UNJUST ENRICHMENT o Non-gratuitous value performed implies obligation to reciprocate or refund (Deglman v. Guaranty Trust Co. and Constantineau) o Disgorgement relief is the return of value with profits when a defendant has breached a fiduciary duty to the plaintiff o When some performance has taken place, restitution is not an option (Hunt v. Silk) o Restitution is available when the plaintiff has a genuine interest in preventing the profit-making capacity of the defendant.