Law Notes

Table of Contents
LAW NOTES.................................................................................................................................. 1
GENERAL LAW STUFF................................................................................................................. 2
LEGAL PROCESS.......................................................................................................................... 5
ALTERNATIVE DISPUTE RESOLUTION (ADR)...................................................................................6
TORTS............................................................................................................................................ 7
NEGLIGENCE................................................................................................................................ 8
OTHER TORTS.............................................................................................................................. 9
Deceit..................................................................................................................................... 9
Trespass................................................................................................................................ 9
Nuisance................................................................................................................................ 9
Assault and Battery................................................................................................................ 9
False Imprisonment............................................................................................................. 10
Malicious Prosecution.......................................................................................................... 10
Intentional Infliction of Mental Suffering...............................................................................10
Defamation.......................................................................................................................... 10
Intentional Interference of Contractual Obligations..............................................................10
CONTRACTS............................................................................................................................... 11
OFFER AND ACCEPTANCE............................................................................................................ 11
CONSIDERATION......................................................................................................................... 13
CAPACITY................................................................................................................................... 14
GROUNDS TO IMPEACH............................................................................................................... 17
Mistake................................................................................................................................ 17
Misrepresentation................................................................................................................ 18
Undue Influence................................................................................................................... 19
Duress................................................................................................................................. 20
REQUIREMENT OF WRITING......................................................................................................... 20
INTERPRETING CONTRACTS......................................................................................................... 21
PRIVITY AND ASSIGNMENT........................................................................................................... 22
Privity................................................................................................................................... 22
Assignment.......................................................................................................................... 22
DISCHARGE................................................................................................................................ 23
BREACH..................................................................................................................................... 24
CONSUMER PROTECTION ACT..................................................................................................... 26
SALE OF GOODS ACT................................................................................................................. 27
NEGOTIABLE INSTRUMENTS......................................................................................................... 29
DEBTOR-CREDITOR RELATIONS................................................................................................... 30
CREDITORS RIGHTS.................................................................................................................... 31
OTHER IMPORTANT STATUTES...................................................................................................... 32
LAND LAWS................................................................................................................................ 33
Estate in Time...................................................................................................................... 34
Interests less than Estate..................................................................................................... 35
Usual Conveyance of Land.................................................................................................. 35
REAL ESTATE MORTGAGE........................................................................................................... 36
LANDLORD AND TENNANT............................................................................................................ 37
SPECIFIC STATUTES.................................................................................................................. 39
EVIDENCE ACT........................................................................................................................... 39
INSURANCE ACT......................................................................................................................... 39

NEGLIGENCE ACT....................................................................................................................... 39
OCCUPIERS LIABILITY ACT.......................................................................................................... 39
MERCANTILE LAW AMENDMENT ACT............................................................................................39
STATUE OF FRAUDS.................................................................................................................... 39
SECURITIES ACT......................................................................................................................... 39
INSURANCE ACT......................................................................................................................... 40
CONVEYING AND LAW OF PROPERTY ACT....................................................................................40
FRUSTRATED CONTRACTS ACT.................................................................................................... 40
CONSUMER PROTECTION ACT..................................................................................................... 40
SALE OF GOODS ACT................................................................................................................. 40
BILL OF EXCHANGE ACT.............................................................................................................. 40
PERSONAL PROPERTY SECURITIES ACT.......................................................................................40
BANK ACT.................................................................................................................................. 40
BANKRUPTCY AND INSOLVENCY ACT............................................................................................41
BULK SALES ACT........................................................................................................................ 41
MECHANICS LIEN ACT................................................................................................................. 41
CONSTRUCTION LIEN ACT........................................................................................................... 41
STATUTE OF LIMITATIONS............................................................................................................ 41
EXECUTION ACT......................................................................................................................... 41
CREDITORS RELIEF ACT.............................................................................................................. 41
WAGES ACT............................................................................................................................... 41
PLANNING ACT........................................................................................................................... 41
SUCCESSION LAW REFORM ACT.................................................................................................. 41
FAMILY LAW ACT........................................................................................................................ 42
REGISTRY ACT........................................................................................................................... 42
LAND TITLES ACT....................................................................................................................... 42
MORTGAGES ACT....................................................................................................................... 42
TENNANT PROTECTION ACT........................................................................................................ 42
COMMERCIAL TENANCY ACT....................................................................................................... 42
ISSUES......................................................................................................................................... 42
NEGLIGENCE.............................................................................................................................. 42
CONTRIBUTORY NEGLIGENCE...................................................................................................... 42
REMEDY..................................................................................................................................... 42
RES IPSA LOQUITOR................................................................................................................... 42
CAUSATION................................................................................................................................ 43
DISCLAIMER............................................................................................................................... 43
VICARIOUS LIABILITY................................................................................................................... 43

General Law Stuff

Small claims < $25,000

3 components of law
o Regulateing of societs conduct
o Through the use of rles
o That court will enforce
2 sources of law
o statutes passed by government
federal or provincial (not municipal)
statutes can be changed
o Precedents (previous court decisions)
Also can evolve; source sensitive to societys changing needs
Eg you used to have to sue to get a divorce
Basic presumption
o Everyone is presumed to know every law
Reality is that no one knows the whole law
Free legal advice available to everyone for hour
o Implication law is based on false assumptions
And therefore to know answers first need to know questinos
o Easier to find answer than to discover the question
o Law is like medicine, easy to fix if caught early
Some verbal contracts are fine but put them in writing anyways (prevents
an argument later)
Problem is that there may not be any symptoms
Preventive medicine vaccination; preventive law steps taken to avoid legal difficulties
Law different from medicine doctor can do medical check-up, but a lawyer cannot do a
legal check-up
o Difference is that there is nobody to go to point out your legal problems too; no
pain until it has ballooned into something very expensive to solve

2 Areas of law
Procedural
o Rules of practice
i.e. what Court you o to, wjat papers need to be filled out etc.
Substantive
o Public Law (Involves Government as participant)
Criminal law
Constitutional Law
Divides power between federal and provincial government
Charter of Rights and Freedoms (i.e. charter of rights or
charter)
o Right to a trial in a reasonable time etc.
Administrative Law
Presided over by civil servants to administer government policy
Administrative Tribunals
o Labour relations board, liquor control board
o Set up to administer government policy
No judges, but they have civil servants
o Can be fired, unlike judges (judges cant be fired until
they are 75)
o Judges are appointed not hired

Private Law dispute between individual and corporation

Most commercial Law
Between 2 or more parties
o Status Law
Corporate Law Includes formation of Corporations
Corporation is a separate legal entity from the directors and
shareholders
Family Law
Marital status affects your duties, rights
Different based on single, common law, married, divorced etc.
Immigration Law
Can be in more than one are of law as a result of the same situation
o Have different outcomes for the same people and the same event i.e. OJ
Simpson
Common Law
o System using precedent as distinct from civil law
o Law evolved through the Queens Court for the common people as distinct from
the Court of Equity, administered through the Church
o Common Law Court now includes both the rules of the monarch (Queens Court)
and equity
Used in all provinces except Quebec
Uses Civil law, where everything is based on written law
Civil law also refers to private law cases
o System utilized in Quebec, all laws set out in Civil Code
o Still need to look to Court decisions to interpret the code
Opposite is criminal; when using civil in this class, talking about our
cases and not Quebec
o Court adjudicates
Prosecutors in criminal law
o Crown prosecutes
o Accused/Defendant
o Plaintiff prosecutor in civil cases
Initiates the case, defendant defends the case
o Appellant person who appeals
Has right of appeal, respondent responds to the appeal
o Smith vs. Jones et al
Smith vs jones and others; smith is suing jones
Cases
o Need to be able to identify either by case name or subject matter (memorizing
case name not necessary)
When looking at cases.
Need to be able to answer 5 questions
1. Who is suing whom? What kind of a person is suing what kind of a person? (Doctor - patient)
2. What is the cause of action? What is the basis of the lawsuit? (Negligence, breach of
contract)
3. What is being claimed? (what do they want, money, property, rights)
4. Who won? (Plaintiff or defendant)
5. Why did they win?
What are the important facts the led the court to the decision in this case? What was
the turning point?
What are the legal rules that the court applied in reaching its decision? The Ratio?
What does the case stand for? What is the precedent value in the case?
o

Use this format for an exam questions:

1. identify the issue
2. state the law that applies to that issue (spell out in full the laws that apply, the entire legal
principle)
3. relate that law to the facts that you are given.

Statutes
o Need to know the names if all of the statutes but no the sections numbers
o Must be followed by courts; must be applied by the Court as they reflect the will
of the people, but first need to be interpreted by the Court
o Passed for 2 reasons
Bring laws together into one place
Changing the law (usual case)
o May have ambiguous wording
Could be poorly written (a poor draft)
Deliberately left open
Hard to come up with strict rules for all situations
o i.e. rule in hockey says the ref must blow whistle when
he loses sight of the puck
Gives judges room to maneuver (accommodate flexibility)
o Eg Fines must be paid forthwith
What is Forthwith? Depends on situation
o Need to know purpose behind the rule when trying to interpret it

Machinery of Justice
Burden of Proof (Onus of Proof)
o Who has the burden?
o What is the degree of burden?
Criminal: crown has burden of proof beyond reasonable doubt
Civil: plaintiff has burden of proof Beyond balance of probability
Burden Applied by the Trier of Fact Judges or Jury
o Judges/juries are the triers of fact
Criminal jury is 12 people
Civil jury is 6 people
Cases decided within adversary system (system of competition)
Criticized rewarding party with most expensive lawyer
o Lawyers now entitles to charge on contingency basis
Still significant cost in preparation of presentation (e.g. hiring a accident Reconstructionist
in car accident case, paying for report, etc.

In a civil case, burden of proof issues arise typically with regard to two issues:
o Issue of Liability who wins the case
o Remedy/Damages how much compensation is owed
Burden of Proof (both liability and damages) must be decided in each case; based on a
balance of probabilities
Liability must be decided regardless of the decision on the other in case of nan appeal
Plaintiffs must prove his/her case on the scope of probabilities for both liabilities and
damages
Adversarial system two people competing

Decisions made based on evidence submitted by each part subject to several concerning
evidence:
Evidence
o Factors that can be taken into account
o Rules against hearsay
Because of lying, mistake
Unable to cross-examine
o Opinion evidence must be given by a qualified expert such as a doctor, accident,
reconstructionist
o Privilege any communication between lawyer and client
Evidence Act
o Exceptions to hearsay rules
o Business records are evidence despite being hearsay
Assumed right unless proved otherwise
Must be kept over normal course of business
Stare decisis
o Precedent
o Courts required to follow decisions of equal or higher courts
o Importance
Prediction of outcomes
Less likely to have dispute in first place
Public respect
Hallmark of legal system
Public needs to respect the legal system
o Problems
Bad precedent is carried forward
o Distinguishing a case
Focus on differences between precedent and current case
Does the difference make a difference?
o Decisions from other provinces, commonwealth contries
Persuasive but not binding
o Decisions from the US
Not binding
Many are based on jury decisions
Judges are elected (politics is important)
Different laws in different states
Anyone can sue anyone
o Courts are open and accessible but not free
o 90% of people will go to court sometime during life

Legal Process

statement of claims
o not under oath
o just what the claim is
Statement of Defense
o What the defense is
Statement of Claims + Defense = The Pleadings
Examination for Discovery
o Very important
o Only in case of $50,000+

Each party questions the other under oath

Involves court reporter, lawyers, the parties
Avoids surprises and trial by ambush
If you dont go, you lose your case
In you dont answer the questions, you lose
If you lie = perjury
Leads to settlements without trial
90% of cases get settled in discoveries
3 stages of a trial
o Plaintiffs Case
o Defendants Case
Not always needed
o Reply evidence
Witnesses
o Prove you case based on credibility of your witnesses
o Examination in Chief (friendly lawyer)
o Cross-Examination (opposition lawyer)
o Redirect (friendly)
Legal Costs
o Lawyers fees, judges, administration
o Taxpayer or user fees?
Combination (there is some use to society as a whole)
o Average length of court case 3 days
o Average cost almost 100,000
o Recovery
No costs, each covers own expenses
Rare
Substantial Recovery (recover most of you costs)
Rare
Partial Indemnity (some fees recovered)
Most often the case
Usually 50-60% of costs
Reasons
o Encourage settlements
o Discourage fights over principle
o Encourage preventive law
o
o
o
o
o
o
o

Alternative Dispute Resolution (ADR)

Resolves disputes without the court

Motivated by costs
Average cost 19,000 (vs. 100,000 for court)
2 forms
o Mediaton
o Arbitration
Binding
Non-binding
Must be agreed upon by both parties
o A few exceptions
o Could have ADR clause in contract
Can choose who the judge is
o Doesnt have to have specific credentials

Can choose time and place

No rights to appeal
Less confrontational
o Good if you want to continue business with them
47% of Arbitration is for $100,000 cases

Torts

the righting of wrongs (torts)

2 issues
o liability
o damages
o both have to be decided in each case
Criteria for shifting loses
o Based on fault (if you did something wrong)
Opposed to strict liability (if you cause harm)
o Exceptions
Car insurance
No fault system
Insurance Act
Vicarious Liability
Liability of employer for faults of employees
Does not eliminate employees liability
o No double recovery
o Jointly and severally
Employer-Employee issues
Depends on contracts
Preventive law
o May hurt opportunities
Need to show defendants actions cause injury
o Violation of Duty of Care
Res ipsa loquitur
o the act speaks for itself
o presumes fault
pressure on defendant to prove case
plaintiff needs to show probable fault
defendant has the facts
What does causing injury mean?
o Causations practical need to draw reasonable liability limits
Palsgraf Vs Railroad
o Sued railway for explosive box
Lost the case
No breach of duty to her
Conductor owed duty to runner
Chain of causation was broken
1 action did not cause the other
No duty to rescue someone (eg Good Samaritan law)
o If you attempt to rescue someone and cause more damage you could be
responsible
Contributory Negligence
o Both parities at fault at the same time
Negligence Act

Apportion fault
Apportion damages in same ratio
Party
A
Fault
90%
Damages
200,000
Amount to Pay
90
Intervening Negligence
o Negligence happening after the fact
Car runs red light
Person gets out, car rolls away
Leg injured trying to stop it
Is the first driver responsible?
o
o

B
10%
100
20,000

Negligence

Most frequently alleged tort

Accidental harm (not intentional)
Standard of care
o Reasonable person
Not liable if you were acting reasonably
If you foresaw harm, have to be careful
Your duty is to be careful, not prevent injury
Hazardous Activity
Reasonable people will be VERY careful
Relevance to Business
o Product Liability
Used to have duty of care to consumer
No contract between manufacturer and consumer
MWRC
Manufacturer is in preferred position of inspection
Has to be very careful!!
o Negligent Statements
Hedley Byrne case (p. 7)
Defendant negligently passed info to 3rd party

info 3rd Party info

$ Plaintiff
Defendant

Lawsuit

defendant was liable
o Occupiers Liability
Duty of occupier of land towards guests
Invited someone there on your invitation
o Dinner guest, customer
o Guard against hazards known of, or should have known
of
Licensee someone there with permission
o Guard against hazards known of
Trespasser someone you dont want there
o Dont recklessly disregard against well-being
Occupiers Liability Act

Other Torts

Only negligence has to be accidental

Rest are either intentional or it can be either

Deceit

Deliberate lie with intent they will rely on information

Usually in context of fraudulent contracts

Trespass

Intention doesnt matter

Preservation of Land laws

Nuisance

2 types
o Public
Interfere with public use of public land
Lawsuits, regulation, class action
o Private
E.g. smelly, noisy neighbor
Intent not important
Could issue and injunction as well as damages
Damages could take into account future nuisance

Assault and Battery

Distinction is becoming watered down

o Need to show two things
Contact was intentional
Contact must be harmful
o Does it have to be intentionally harmful?
o Defense of person is valid excuse
o Defense of property is not

False Imprisonment

Restraint of mobility with no reasonable means of escape

o Police
Reasonable case of crime
Reasonable case that you did it
o Citizens Arrest
Crime HAS occurred
Reasonable case that you did it
Relevant in shoplifting cases

Malicious Prosecution

Only in criminal cases

E.g. police harassment

Intentional Infliction of Mental Suffering

Only pay damages as it would affect a normal person

o Only for this tort
o Others: Take you victim as you find them

10

Defamation

Libel and Slander Act

Libel written
Slander spoken
Defamation occurs if unjustifiable damage to reputation
Plaintiff must show
o Reputation lost (Balance of Probability)
o Person who heard it must have believed it
Defendant must show
o Truth
wholly true
o Privilege
Law gives complete immunity to
Parliamentary debate
Testemony
o Qualified Privilege
E.g. letter of reference
o Fair Comment
Editorials (public interest)

Intentional Interference of Contractual Obligations

Eg
o Plaintiff has contract with singer
o Defender lured the singer away
Plaintiff could sue either defendant or singer
o Cant double collect
o Amounts dont have to be the same
o Legal principles differ for torts and contract law
o Must be intentional
I.e. defendant must know of first contract

Contracts

Different approach than torts

Contract is an agreement, the foundation of business
Does not have to be in writing
Few grey areas not part contracts

Offer and Acceptance

2 parts of contract
o offer
o acceptance
if contract is broken, damages can be awarded
o sometimes cheaper to break contract than uphold them
Offer
o Tentative promise subject to/containing request
o Advertised price is not a offer
Its an invitation to make an offer
o Intent
Are you meaning to make an offer, or inviting an offer

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Must be communicated
Cant accept offer you dont know about
Eg the unknown reward
Crossed offers
Standard Form Contract
o Removes ability to negotiate (law doesnt like that)
o Government regulation
o Strict interpretation (technical)
o Disclaimer
Parker case
Customer needs to know about disclaimer
Or had reasonable notice of
Wilson vs. Blue Mountain
Judge says he didnt read the disclaimer
Wording had not been brought to plaintiffs attention
For test:
o Early case: based on knowing
o Newer case: read and/or meaning of wording
Expiring Offers
o Once expired it is dead
o 2 ways
Lapse
If either party dies or becomes insane
If not accepted in stipulated time
After a reasonable length of time
o Barrick vs Clark
o Conduct of parties
o Industry norm
Revoke of offer
Can be done anytime prior to acceptance
o Unless
Under seal
Option (ie contract to leave offer open)
Rejection
Counter-Offer
Kills original offer
Is an offer itself
Conditional acceptance is a counter offer
Acceptance
o Must take positive form
Eg no negative billing
Unless separate contract stating silence is acceptance
o If by words, language must be clear
Eg that sounds good
Is that an acceptance or a comment?
o If by conduct, it must refer to subject matter of offer
o Must be communicated
o If there is a method of communication between parties, when is the contract
formed?
Acceptance should be in way suggested by contract
Doesnt have to be
o

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Mail Rules
Acceptance is complete when it is dropped in the box
o If offer states you may reply by mail
o If offer itself was by mail
Acceptance is when received
o Delivered to the place of business or residence
o Not when open, seen, read, etc
o Exception:
When contract forbids acceptance by mail
Revoking an offer is effective when received
Disputes:
o Whichever group initiates the use of mail ends up the
loser if mail gets lost
o Always sign contracts face to face
Applicable jurisdiction
o If contract states law of another jurisdiction it is valid
o If not specified, law of jurisdiction where contract is
formed
If you mail an offer to Montreal, Quebec law will
apply
What happens if you drive from Hamilton to
Buffalo to mail you acceptance?
Miscellaneous stuff
o 2 types of contracts
unilateral
one party has to perform before the other
o eg reward contract
bilateral
both parties have to perform
o eg buy and sell agreements
o Agreement to make an agreement
Not a deal until the agreement is actually made

Consideration

The price you pay for what you get

o Must be 2 considerations in a contract
Contract without consideration is not enforcble
Eg Gratuitous promise
Past consideration is not relevant
Not consideration to agree to do something you legally have to do
anyways
Folks vs Beer
o Debtor owed money to a creditor
o Deal: if principle was paid, didnt owe interest
Later sued for interest as there was no consideration in the deal, so
therefore it wasnt a contract
o New Statute: Mercantile Law Amendment Act
If you take part as payment for the whole, you are stuck with the part
Issues
What does it mean to accept part performance?
o When you accept the offer or when you receive the part
payment

13

What does expressly mean

o Opposite is impliedly
o Eg send a cheque for partial amount, with Payment in
Full written on it
o Writing on cheque does not count as contract

Injurious Reliance
o You rely on a promise and suffer lose when not done
o Ontario does not follow Injurious Reliance
Consistent with law of consideration
Quantum Meroit
o Pay what it merits
o You have to pay for the stuff you asked for
o Only applies if no price agreed upon
o Eg. Ask plumber to fix sink, dont negotiate price before work done
Use of a seal
o Little red stickers
o If seal on offer, must leave it open for time stated
o Consideration is irrelevant if offer under seal
Intention to Create legal Relationship
o Not a consideration issue
o Id give up everything for
o usually presume that you mean what you say
a rebuttable presumption
burden on you to prove you didnt speak literally

Capacity

the legal capacity to enter a binding contract

void never happened
voidable can be terminated
o valid until repudiated
People can enter contracts except
Minors/infants
o People under 18 (or other age depending on jurisdiction)
o Contracts with infants are voidable by the infant without reason, except
Beneficial Service Contract
Eg Apprenticeship
Contracts of necessaries
Exceptions
o Price
Only has to pay reasonable price
Burden of proof on infant
Necessaries include food, clothing, transportation, medical
o Ryder Case
Infant purchased some luxuries
Court ruled they werent necessaries despite his high wealth
o Johnston vs Marks
Infant bough clothing
Rules they werent necessary since he already had some
o Dickson Bros. vs. Woo
Rental of car by infant (woo)
Infant repudiated contract after major accident

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2 courses of action
breach of contract
o Was the car rental a necessary?
o It was not since it was for joyriding
Therefore contract was voidable
Thomas case
Car was for honeymoon, therefore a
necessary
Negligence
o Woo was negligent
o Not liable
o It was covered by the contract
Purpose of contract transportation
o Cant use torts to get at infant if they have contract
defense
o What if infant lies about age
Jule vs Broad
Infant was father of illegitimate child
Mother could enter contract to cover exp or launch a lawsuit
Infant lied about age, entered contract, then broke it a year later
o Paternity suits must be launched within a year
Infant cant lie their way into capacity
o Lending money to infant
No recoverable unless it is spent on necessaries
o Infant may repudiate contract for necessaries not yet delivered
o If contract is repudiated
Must return goods in their possession
May be charged with fraud if happens often
o When age of majority reached
Once they turn 18 no longer voidable
Must be repudiated promptly upon turning 18
Is junior hockey an apprenticeship?
one-shot deals
must be ratified in writing
o Statute of Frauds
o Preventive Law
Dont deal with infants
Get adult to be part of contract
Put it under seal
Lunatics
o Someone with a mental disorder is not capable of making rational decision
Drunkard
o Someone who is under the influence of drugs or alcohol
Law is same for drunkards and lunatics as for infants
o Have to prove you had the condition
o Have to prove other party knew about it
Aboriginals under the Indian Act
o Capacity issues
Not allowed to get property back from person on a reserve
If car used as collateral, not enforceable
Indians cant waive the protection

15

What if you refuse to lend money to them?

Is it unlawful discrimination when it is the law that discriminates?

Illegal Contracts
Contract which calls for commission of a crime void
Illegal means contrary to public policy
o Anything criminal is deemed to be against public policy
o Anything contrary to social policy
Eg contract to commit adultery
If contract is void, courts try to put both parties back to square one
If contract is void and illegal you get nothing!
Mills vs Gills
o Restriction that doctor couldnt practice in city if he left the clinic
o Clinic asked for injunction and damages
o Contracts in restraint of trade are void
Unless
Reasonable between the parties
o Ability to earn living for doctor
o Where does clinic draw patients from
Not contrary to public interest
o Is service still available
o Effect on price
o Clinic won the case
o Non-competition clauses
Employment contracts
Sale of practices
o What if terms of were cant practice in Canada for life instead of City for 5 years
If contract contains just one bad clause
o Can sever that clause if contract is essentially the same afterwards
Grounds to Impeach
Mistake

If you enter into contract by mistake, then perhaps you should be able to get out
o Depends on type of mistake
Mistake of fact is an excuse
Mistake of law isnt
o Assumed to know the law
Mistake doesnt mean something you regret doing
o Must be a factual mistake which induced you to enter contract
Categories of Mistake
o Common Mistake
Both parties share a common mistake
Contract is not binding
Contract void if
Mistake about existence of subject matter
o Eg overheating corn case
Contract voidable
All other cases
Exception
o Mistake in writing of the contract
Courts enforce agreement as it was met

16

Hard to prove
Burden of proof on plaintiff

Mutual Mistake
Both parties mistaken, but about different things
Eastern Cafeteria of Canada case
Parties made mistake about which company they were talking
about
Side with most reasonable interpretation usually wins
Unilateral Mistake
Just one party is mistaken
Most complicated
4 types
mistake about important aspect
o selling a textbook, knowing that it will be different next
year
o contract is binding
o if it wasnt important enough to put in the contract, its
not important enough to bring to court
Mistake about identity of other party
o Fake vs non-existent name
Fake means you know the name being used void
Non-existent means the name means nothing to
you voidable
You have valid contract with them
Mistake about nature of signed document
o Not about what it says
o Mistake about the kind of document it is
o No est factum not my doing
Contract is void
Only in case of signed document
Relevant: lack of care
Only applied if you are not careless
Mistake about wording of an offer
o McMaster vs. Wilchar
Law of tender
Is the tender an offer or invitation to
make an offer
o Conflicting court decisions
If tender was an offer
Wage escalation clause left out
If McMaster knew there was a mistake
in wording, they cant accept
University said they didnt think it was a mistake
Witnesses from construction company were
more reliable
o Is contact void or voidable?
Effect on 3rd party (not applicable in McMaster
case)
If voidable, it has to be repudiated
If voidable there would be a choice whether to
fulfill contract or not

17

Misrepresentation

Contract is voidable
Misstatement of fact
o Reason you made the agreement
2 types
o innocent (not deliberate)
contract is voidable
must act quickly upon realization of misrepresentation
compensation for any expenses incurred
must be out of pocket expenses
o fraudulent (deliberate)
same as about plus
damages
better than compensation
o includes lost profits
must have intention to mislead
tort of deceit
Misc. Points
o Negligent misrepresentation is innocent by default
Negligence is unintentional
o Special rule for land contracts
Two dates for land contracts
Contract date (when signed)
Closing date (when takes effect)
In between is time for lawyers to work
After closing, not voidable for innocent misrepresentation
o Opinions vs. Fact
Not misleading if you are stating your opinion
Has to be your true opinion
If you misstate your opinion, you are misstating fact
o Closed mouth Doctrine
cant misstate something if you keep your mouth shut
exceptions
Insurance Act
o Must disclose certain facts
Securities Act
o Public corporations must file prospectus
o Must disclose good as well as bad

Undue Influence

Mental domination
o Weaker person is deprived of rational choice
Voidable by the weaker party
Usually in case of special relationship
Burden of proof
o Party alleging undue influence must prove domination
o If special relationship, court assumes domination
Then proof on dominate one to prove not undue influence
Factors
o Degree of domination
o Extent of the advantage

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o If either of these are high, contract is voidable

Preventive Law
o Independent legal advice
Not foolproof, but the best available

Duress

Physical coercion
Use or threat of violence
May also be a crime
Voidable until violence dissipates

Requirement of Writing

No contract has to be in writing

Reasons for using writing
o Easier to win court case
o Less chance of having a dispute
Certain contracts must being in writing according to statute
o Statute of Frauds
Nothing to do with fraud
Distinction between form and substance
Substance: rights and obligations
Form: the paper it is written on
Deals only with form
Contracts requiring written form if you want to enforce them in court
o Promise to pay anothers debt
Guarantee you pay if the other doesnt
Has to be in writing
Indemnity pay someone elses debt
Doesnt have to be in writing
o Marriage contracts
o Land Contracts
o Contracts not to be performed for more that a year by either party
o Ratification by former infant
What is writing
o Note or series of notes signed by the defendant
Doesnt have to be signed by plaintiff
o Must contain essential terms
Names of parties
Subject matter
Consideration
What is signing
o Typed on letterhead
o Email
If you are in breach of statute of fraud, contract is still binding, you just cant sue on it
Statute doesnt say when it has to be signed
Statute must be in the pleadings to be enforced
Exception
o Doctrine of part performance
Any with land
If land deal is verbal and partly performed

19

Preventative Law
o Put everything in writing

Interpreting Contracts

Preventive Law
o Use clear language
Focus on interpretation issues when writing
3 Approaches used by the court
o Interpret against the drafter
He was the one who made it ambiguous
o Strict Meaning Approach
The dictionary approach
Doesnt always provide an answer
o Liberal Approach
Looks at intent and surrounding circumstances
Problem: assumes both sides had same intent
Returns to mistake issues
Paral Evidence
o Verbal evidence which contradicts or adds to written agreement is inadmissible
Prevents people from challenging accuracy of written agreement
o Exceptions
Condition Subsequent
Clause which, if it happens, ends the deal
Condition Precedent
Condition which must be met before the deal happens
Collateral Agreement
Makes separate agreements their own contracts
Contracts must be able to stand on their own
Need to show that the verbal agreement was reason you signed
the contract
Miscellaneous
o Implied terms
No such thing
Exceptions
Trade customs
Quantum meroit
Statute
o Court tries to enforce what parties intended
Will have failed if it finds there is no agreement
o 2 risks for poorly-worded contracts
no deal
interpreted different that you intended
probably the worst case

Privity and Assignment

Privity

If you are not a party to a contract, then you are not bound by it
Exceptions
o Novation
Substitution of parties with others consent

20

Vicarious Performance
Hiring someone to do what you were contracted to do
Permitted unless contract calls for personal performance
Law of Trusts
o Under Privity, child is not part of contract between Parent and Trust company
o Courts called the Equitable Trust because C is the beneficiary
Beneficiary is considered the owner of the money
Undisclosed Principle (Silent Partner)
o Undisclosed principle is deemed to be a part of the contract
Insurance Contracts
o First, sue the negligent party
o If they dont pay, you can sue the insurance company
Insurance Act
o

Assignment

You cant assign your obligations without consent

You can assign you benefits
Called Equitable Assignment
o Court cases must involve all parties
o Conveyance and Law of Property Act
Statutory Assignment
o 3 Criteria
Assignment Agreement is unconditional
No condition subsequent/precedent
Written form
Notice to Promissor is in Writing
Implications
o If B pays wrong person, B must pay the right one
Promissory should insist on written notice of assignment
o What if A assigns it to two different parties?
B pays the first notifier
o Cant assign for more than you have (rights, not money)
If there is undue influence in first contract, then assignee inherits the
undue influence.

Discharge

If contact is breached it may be discharged

4 Ways to Discharge
o Performance
Do what is called for in contract
You might not perform if other side doesnt
need to show you were reading, willing, able to perform
o dangle check in front of nose
o tendering performance
o must be done for land deals
o Agreement
Make agreement to end the agreement
Many different types
Novation
Change consideration
Conditions subsequent/precedent

21

Option Clauses
Waiver
o Waive your future rights
o Most dont have consideration
Wont be binding unless under seal or option

Frustration
Normal rule
If you dont do something you agreed to do, you are liable
o Fault is not relevant
Frustration Exception
Unexpected event makes performance not possible
Must make the task impossible, not extra difficult
When is problem severe enough?
Economic impossibility is not excuse
Frustration can not be self-induced
Both parties are released from obligations
Even if one party has finished 90% of there part
Frustrated Contracts Act
o You get paid for performance before frustration
o Only get paid the amount that the work has benefited the
other party
Discharge by Statute
Bankruptcy and Insolvancy Act
Discharges contracts
Limitations Act (Statute of Limitations)
Limits the time you have to sue someone
Time limit varies
o When did breach happen
o What type of contract
o Who are the parties
Most situations are 2 years
Time limit from the last of:
o Breach
o Written acknowledgement

Breach

What constitutes a Breach of Contract

o When one or more parties fails in performance
2 Types of Breach
o Breach of Condition
Breach of a Major term
Gets you out of the deal
You can repudiate
Lead to rescission
o Breach of Warranty
Breach of a Minor term
Entitles you to damages
Anticipatory Breach
o Person says they are not going to perform
Expressed Repudiation
You can sue right away

22

 You can find a replacement

Self-induced Frustration
They have acted in a way that makes performance impossible
Can sue right away
Can find a replacement
Must assess if breach is Major or Minor
o If you are wrong, you will be responsible
o Err on the safe side, assume minor
o Must assess the risks of considering it major or minor
Installment agreements
o What happens if they miss an installment
Courts consider it a minor breach
Unless evidence there will be future misses
Preventive law
Put clause in contract about missed installments
Acceleration Clause
If you miss a payment, all future payments are due
o Must be careful on interest
Cant go about 60% or its a crime
Exceptions
o If you elect to receive benefit from contract even though a major breach
Still get damages, but no right to rescission
Remedies for Breach
o Damages
Not generally a crime to break a contract
Should place injured party in financial position they would have been if
contract performed
Burden of proof on the plaintiff on balance of probabilities
Not intended to punish the wrongdoer
Rarely give punitive damages
Duty to mitigate your own damages
Hadley vs Baxingdale
o Foundation case for recovering damages
o Doesnt say you cant recover lost profits
o Does say that you might not get them
o Set legal principles court should use
Damages must either
naturally flow from breach
arise from special circumstances known to both at time of
contract
o sort of means foreseeable
o knowledge could be stated or from past experience
Preventive Law
o Performance bonds
Insurance policy to cover non-performance
o Pre-arrange damages in case of failure
Liquidated damages
Must be a sincere attempt to estimate loss
Cant create punishment
o That would be contrary to public policy (void)
Equitable Remedies
o

23

Injunction
Court forces person not to do what they agreed not to do
o Specific Performance
Court forces person to do what they agreed to do
o Must show that damages are not adequate compensation
Land purchase
Antiques, works of art
Things that are one of a kind
Other Rules
o Cant get specific performance for money payments
Not including fines, or family support
There are no debtors jail for practical and social reasons
o Cant get specific performance for service contracts
Performance is likely to be of poor quality
o To get equitable remedy, you must have clean hands
Must be a deserving recipient
o

Consumer Protection Act

Executory Contract
o Someone does part of the deal later
Applies to goods and services (not land)
Must make you contracts in accordance with the Act
o Intrudes on freedom of contracts
Dont have to pay for unsolicited goods, even if you use them
o Cant sell them because you dont have title to them
Section 21 (cooling off period for door-to-door sales)
o Applies only to a few agreements
Only written contracts
Executory contracts must be in writing or it is not binding on the
buyer
Only executory contracts
Anywhere other than sellers permanent place of business
Must rescind in writing within 2 days
Can be sent by registered mail
2 days starts after buyer receives copy of contract
Security Agreements
o Clause to repossess item if default on payment
o Void if more than 2/3 of purchase price has been paid
Unless allowed by judge
Curtis vs Clark and Wilson
o One of few cases on the CPA
o Arguments for Defendants
CPA doesnt apply because it was a rental agreement
Pig and Cow Doctrine
o You can call a cow a pig, but its still a cow
o Substance over form
No Repossession
In this case there was repossession by trick
Agency
Owner allowed show room and stationary to be used
o Who is the public led to believe they are dealing with

24

Damages
Should have been the value of the TV on date of repossession

Sale of Goods Act

Different from the CPA

o Applies only to goods, not services
Goods: anything not land, services, money, right of action
Not designed to protect everyone
o Recognizes that there usually isnt written contracts for sale of goods
o Act writes out the contract you assume
Section 53:
o If you dont like the act, you can change the contract
CPA Section 34:
o In consumer sale, you cant limit anything in Sale of Goods Act
Implied condition of title
o Seller is legally able to sell it
When you specify a purpose, what you get should fulfill it
o Must rely on sellers skill/judgment
o Must be item the seller normally sells
o Cant specify a patent or trade name
This would limit sellers options
Sale by sample
o Bulk must compare with the sample
o Able to inspect sample and bulk after receiving it
o Goods will be of merchantable quality
Section 27
o Payment and delivery are concurrent conditions
o Able to contract out of it even for consumer sales because it says so in the
section
Delivery
o 3 aspects
Quantity
If Q < contract
o Reject them
o Accept them, and pay at contract rate
If Q > contract
o Accept included, reject the rest
o Reject all
o Keep all, pay contract rate
Time
Early delivery is breach of condition, just like late
Place
Delivery is responsibility of the buyer, unless contract/custom
says otherwise
Damage in transit is responsibility of the owner
Section 19 (Transfer of Property)
o Unconditional contract for specific goods
Property passes to buy at time of contract
Payment and delivery is irrelevant
o Title passes after something extra is done
Eg additional work

25

Title passes after price is determined

Eg weighing and measuring
o Sale on approval
Title passes on approval or keeping beyond approval period
o Unascertained goods
Title passes when parties agree to which specific items are to be sold
Remedies of the Buyer
o Rescission
For breach of contract
Only applicable if goods can be returned
o Damages
Duty to mitigate
Lost profit
Naturally flowing
Etc
o Possible tort action for fraud
Larger possible claim
o Specific Performance
Only when damages are not adequate compensation
Remedies of the Seller
o Sellers Lien
Right to hold possession until buyer pays
Gone when seller gives up possession once
No right of repossession
o Stoppage in Transit
o Resale
Right to seller to someone else
Has to give notice
Should sell as way to mitigate damages
o Money
If title has passed to buyer
Sue for price
If title hasnt passed
Sue for damages
o Retention of Deposit
Deposit can be retained
Unless deposit is seen as a penalty
Difference between deposit and down payment
Deposit = represents good faith
Down payment = partial payment of price
Not clear whether you can take credit for deposit
o

Negotiable Instruments

Instrument = legal document

Negotiable = transferable
Negotiable Instrument = transferable document
Bill of Exchange Act
o Identifies what a negotiable instrument is
o See p. 418
o Should be as similar to cash as possible
Negotiation needs signature and delivery

26

Except for bearer form instruments

Ie payment to the holder
Just needs delivery
Endorsement
o Ways to endorse ) p. 420
Endorsement in blank
Sign name on back
Turns into bearer form
Special Endorsement
Specified new payee
Restrictive Endorsement
Eg Payable to to D only
Destroys the negotiability
Prevents transfers to 3rd parties
Qualified Endorsement
If cheque bounces, D c an sue C or A
o Both are legally liable
Endorses it to D without Recourse
o D only has A to sue
Anomalous Endorsement
When someone wants to be liable for someone else
o Used as guarantor
Courts have been avoiding this
o Lenders now draw up guarantor contracts
Holder in due Course
Someone who possesses the paper (Holder)
Paid something for it, in good faith, no notice of defect (in due course)
P. 425
Enforcement
o Everyone in the chain are jointly and severally liable
Defenses
o Personal Defenses (p 427)
Lack of consideration
Right of set off
Setting off one claim against another
o Defective Title (p. 427)
Duress
If C transferred to D under duress
Defense will lose due to holder in due course
o If D knew about the duress, then it will work
Note: D gave more legal right to E than he originally had
o Real Defenses
Infancy
If C is an infant the defense will work, even against holder in due
course
Abuse
o If you pass on a negotiable instrument you are liable if it turns out to be no good
o Possible criminal liability if it is fraud
Eg writing cheque, then stopping payment
Fraud is based on intent
Stop payment may be an effective bargaining tool
o

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Could be dangerous

Debtor-Creditor Relations

Conditional Sales
o S is selling Piano to B
o S has title and possession of the piano
o Title stays with S until the condition precedent is met
Condition is paying the price
o If B doesnt pay, S can take the piano back
Unless 2/3 has been paid
o If B sells to third party
TP pays B, then B bails
Personal Property Securities Act
Regulates security of personal property
Can S get piano back?
If TP didnt know that S had title
If TP paid something for it
o Registration
List B as the debtor
TP should check for liens
S must have registered previous to contract between B and TP
S has 30 days to register (ie prefect the security)
o Preventive law
Register before giving up item
Chattel Mortgages
o Title and possession transfer to B
o B gives title to F in exchange for money to pay 2
If B doesnt pay F, F can go after a 3rd party if needed
S and F are usually related parties
Floating Charge
o Same as chattel mortgage except its on a category of items
Usually inventories
Assignment of Receivables
o Either general or specific accounts
Bank Act
o Federal statute
o Allows bank to the security of something that doesnt exist yet
o Only for certain inventories, eg forestry, farming
o More complex and many contingencies to account for

Creditors Rights

Bankruptcy and Insolvency Act

o Federal statute
o Who is going bankrupt?
Businesses dont go bankrupt
Either people or limited companies
o Assets in name of bankrupt debtor go to trustee
o Bankruptcy Planning
Giving away assets to family
Courts could transfer it back
Trustee

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Must be licensed trustee in bankruptcy

Eg CA
Not a lawyer
3 Methods of Bankruptcy
o Receiving Order
Order of the court to give the trustee the assets
Pursued by the creditors
Need atleast $1000 of credit
Show that debtor has committed act of bankruptcy within previous six
months
10 possible acts
exceptions not transferred
food, clothes, some life insurance
o Proposal
Offer to creditors
if you let me keep going, Ill give you 50%
has to be accepted by 75% of debt owed
Secured Creditors
o Those with registered security agreement
o Get 100% to the value of their security
Security could be less than debt owed
Preferred Creditors
o Given preferred status by the B%I Act
o Preferred #1 gets 100%, before #2 gets a dime
General Creditors
o Paid on pro rata basis of remainder
Discharge
o Debtor applies for discharge from bankruptcy
o Never has to repay the debts
o Granted by the courts, not the trustee
Sections 172, 173
o Court can grant, refuse, delay, impose conditions
o Circumstances where it cant grant (173)
General creditors get less than 50%
Act doesnt tell court what to do
Purpose is to give fresh start
o What is reasonable for debtor to do and still be free
Certain debts survive bankruptcy
o Student loans
o Money obtained by false pretenses
o

Other important statutes

Bulk Sales Act

o Applies when you sell everything you own
Eg selling a business
o Concerned with creditors of the seller
o Says that the contract must protect the creditors
If it doesnt, the sale is void
Mechanics Lien Act
o Not only for auto mechanics
Anyone who works on stuff

29

Allows mechanic to hold or sell the stuff if you dont pay

Value is irrelevant
Excess goes to original owner
Construction Lien Act
o Applies to land
o People who work on land can file a lien against it
o Very complicated, technical and strict
45 days to file lien
45 days to sue
Statute of Limitations
o Time limits for suing people
Execution Act
o Enforcement of a Judgment
P. 289
Nothing you can do to the debtor that doesnt pay
o Writ of seizure and sale = execution
o Bring the execution to the sheriff
o Sheriff is permitted to seize property of the debtor
You must find the assets yourself
o Sheriff will pay all creditors who have filled an execution with the debtor in that
county
Even if they did no work to find the assets
Creditors Relief Act
o Lets the creditor who didnt find the assets get something
o Sheriff can seize land, but execution must be registered fro 6 weeks
Wages Act
o 80% of wages are protected from garnishment
can be increased by judge
o Examination (in Small Claims Court)
Judge decides how much debtor can pay
Creditors are the prosecutors
o Discoveries (non small claims court)
No judge
Ask about job, assets, bank accounts, etc
o
o

Land Laws

Property
o Real property title to the land
o Includes more than just the surface
Timber
Minerals and oils
Buildings and anything permanently affixed to the building
Column of air above
Quantity of rights is most important
o Zoning regulations (bylaws)
Regulate how land can be used
Not retroactive
Land can be of non-conforming use
o Building codes
Minimum standard of construction
o Planning Act

30

Need approval to split up land

If you dont get permission, the contract is void

Estate in Time

Exclusive possession
Freehold estate
o Indefinite period of time
o Fee Simple
Greatest interest
Succession Law Reform Act
Who inherits your property if you die without a will
o Life Estate
Owe land for 1 life time
Doesnt have to be your own
o Matrimonial Interest
Family Law Act
Must marry the land owner
Live together on the property
If so, you effectively become co-owner
Leasehold Interest
o Definite period of time
Concurrent Interest
o Joint Tenancy (not an actual tenant)
Right of survivorship
If A dies, B gains full ownership
Most common in husband/wife situation
o Tenants in Common
No right of survivorship
If A dies, As heirs get interest
More common in business situations
o Both interests are salable and transferable without permission of the co-owner
If it was originally a joint tenancy, it becomes a tenant in common for the
new co-owner

Interests less than Estate

Oil and Gas Rights

o Most are actually leases
o Gives oil and gas companies rights to use the property
Restrictive Covenant
o Negative in nature
o Binding on future buyers
Exception to privity rule
o Registered with the land
o Exceptions
Unreasonable restrictions
Those that violate public policy
Easements
o Right-of-way
o Ways to acquire
Grant
A document

31

Prescription
Comes from statute of limitations
Can be sold, willed, etc
Burden of Proof on A
o Must have been adverse to B (no benefit)
o Must be open and obvious to be seen
o 20 continuous years
Doesnt apply against the Government
Adverse Possession
A takes possession of Bs land
Same burden of proof, except just 10 year time frame

Usual Conveyance of Land

By grant/deed
o May be done electronically now in some parts of Ontario
Death creates automatic transfer of land
Expropriation
Tax deeds (for payment of real estate tax)
Registration
o Registry System
Registry Act
Have to check all papers in the file
o Land Titles System
Land Titles Act
Only have to check the latest papers
Certified to be correct
Began in mid 1900s
No adverse possession of prescriptions
o Each property is only registered under one system
o Designed to notify the world that you are owner
Registration is assumed notice
o Priority of Registration
First one to register gets it
Make sure there is no one ahead of you before you buy

Real Estate Mortgage

Operates similar to a chattel mortgage

o A pledge of title as security for the loan
o Court can issue order of Foreclosure which stops the equitable title
Mortgages Act
o Combined the common laws and laws of Equity
Rights
o Mortgagor
Keep possession as long as mortgage is up to date
Reclaim legal title when debt is paid
o Mortgagee
2 paths to legal recovery
Foreclosure
o Through Superior court of Justice
o Notice must be given to debtor who can:
Defend the case (rare)

32

Put mortgage in good standing (ie get it up to

date)
Must be within 20 days
Ask for more time
Automatically will be granted 6 months
Ask for court supervised sale
Debtor wants to ensure his money is
recovered

Power of Sale
o Come from mortgage document
Says that in event of default, mortgagee can sell
o Must give 45 days notice
o 2 obligations
try to maximize price
cant sell directly/indirectly to themselves
o more risky option
possible suit for not maximizing price
o used 90% of the time
quicker and cheaper
less rights to mortgagor

Other Clauses
o Pay interest and principle
Interest must be clearly calculable
o Pay property taxes
Sometimes its included in mortgage payments
o Keep in reasonable repair
o Keep insured to the value of the mortgage
o Length of the mortgage
Called the term
Maximum term is 5 years
No right to pay it off early
o Early payment clause
o Open mortgage
Mortgagees are secured creditors for bankruptcy

Landlord and Tennant

Exclusive use of property

Definite length of time
o Period and term are certain
o Automatically renews at end of the period
Tennant Protection Act
o Only for residential tenancy
o Landlord can never get rid of tenant without cause
Commercial Tenancy Act
o Non-residential tenancy
Things to be Addressed
o Covenant to pay rent, including the amount
o Right to assign and sublet
Cant assign obligations without consent (ie Novation)
If you sublet, you are still responsible for the rent
o Use of the premises

33

 If not specified, it must be tenant-like usage

Fitness for occupancy
Residential must be habitable
Non-residential no implication for commercial leases
o Repairs
Residential landlord must fix most
Non-residential no obligations to either parties
o Quiet Enjoyment (both residential and commercial)
Landlord has the title
Non-interference promise
o Insurance
No obligation
o Services (heat, hydro, etc)
Varies
o Taxes
Not important for Residential
Important for commercial
o Fixtures
Anything permanently affixed to the land
Belongs to the landlord
Exceptions
o Pure decorations
o Trade fixtures
o Anything agreed
Remedies
o Landlord
Pursue money
Residential
o Rental housing tribunal
o Court
o Landlord must try to mitigate
Commercial
o Court
o Landlord doesnt have to mitigate for rent arrears
Evict
Must have order from court or tribunal
o Must follow procedure to get order
Must notify tenant
Commercial
o Doesnt need court order
o Must be a major breach
Distress
Right to take possession for rent arrears
Not available for residential landlords
Injunction
Order to force tenant to stop something
o Tennant
Sue for damages
Always have to mitigate
Move out
Get order to terminate tenancy
o

34

Injunction

Business Structure
Agency

Agency is a type of employment contract

Agent has ability to bind Principle into a contract
How is it formed?
o Expressed, stated agreement
Best, most common way
Doesnt have to be written
o Ratification
Principle has to ratify actions of the agent
Doesnt have to be written
o Apparent Authority
Principle makes it appear that A is his agent
o Estoppel
Agent makes it appear that he has the authority
Principle does nothing to prevent this
o Co-Habitation
Some applied authority for domestic needs
Courts generally move away from this
Obligations
o Governed by contract
Subject to the Real Estate and Business Brokers Act
Limits what real estate agents can put in contracts
o Agent Obligations
Duty of obedience
Use of reasonable skill and diligence
Personal performance
Cant have a sub-agent
Fiduciary Duty
Act in principles best interest, ahead of all others
What happens when Agent and Principles interests conflict
o Agent has duty to tell principle of Conflict of Interest
Now he must eliminate conflict
o Principles Obligations
Pay the Agent
Usually commission
Who pays the out-of-pocket expenses?
o Depends on contract
Relationship between P and TP
o A is not a party to the contract
Cant sue or be sued
I.e. no privity
o Exceptions
A describes himself as principle
The actual P is not party to contract
A doesnt say he is an A or a P
A and P are both party to the contract
P is like a silent partner

35

 Happens more frequently

A lies about his authority to act on Ps behalf
Breach of warranty of Authority
B sues A, P gets his book back
Ending Agency Relationship
o End of time/project
o Death or insanity of either party
Even if nobody lese knows
o Bankruptcy of principle
Bankruptcy of Agent might not end relationship
o Notice by either party
i.e. Firing or resignation
can do so at any time, even if it is breach of contract
may have to may damages
cant get specific performance

Partnerships

Joint business enterprise carried on for profit

Courts use Pig and Cow doctrine to determine if it is a partnership
Each partner is an agent of all other partners
o Every partner is both principle and agent
o Authority might be limited, but T.P dont know
Public might assume full authority
Partnership Agreement
o Usually written
o Partnership Act
Your contract if none made otherwise
Not designed for specific business
Partnership may be registered
o Not required
o Gives you right to sue for receivables
o Doesnt protect your partnership name
o If you register, then you can later de-register
Provides some evidence that you terminated partnership
Partnerships are not legal entities
All parties are jointly and severally liable for all debts of partnership to full extent of their
own assets
Partnership creditors have first claim to partnership assets

Corporation

Company is a legal entity

Limited liability for shareholders
o Can go to shareholders in some instances
Sometimes for income taxes
Transfer of shares
o Public company
Shares offered to the public
Securities Act
Must disclose good and bad information
o Private company
Must be a restriction of transfer of shares

36

Management
o Directors who run the company
Owe fiduciary duty to the corporation
Not a duty to the shareholders
Sometimes there is a breach of duty
Corporation can sue the director
o What if director makes decisions because he is majority
shareholder?
Minority shareholder have derivative action
Can sue in name of company
Must have permission from court
Weber Case
o P. 59
o W Ltd. Was one-man company
o W made decision that helped himself personally, but hurt the company
o Receiver took over company in bankruptcy and sued W
Corporations vs Partnership
o Continuity of existence
If a partner dies, the whole partnership is done
Unless partnership agreement says otherwise
o Decision making
In corporation 75% majority needed
In partnership, every partner has veto power
Pre-incorporation contracts
o Can enter into contracts on behalf of non-existent corporation
Must specify that it is with Corporation yet to be formed
Company must approve contract at shareholder meeting
Until this happens, person who negotiated contract is personally
bound
o Should make other shareholders party to the contract
Limited Liability
o Capital funding
Usually need a personal guarantee
Vicarious Liability
o Employee is personally liable for negligence
o Agent needs to ensure he expresses that he is an agent
Shareholder Rights
o By Statute
Right to meeting at least once per year
Right to be notified of meeting
Right to be present and vote
Right to financial disclosure
Derivative action rights
o By Contract
No legal requirement for shareholders agreement
Usually has
Employment contract
o None competition clause
Valuation of shares if shareholder wants to leave
o Shot gun clause

37

If A sets price for shares, B can either pay it or A

can buy Bs shares for that price
The more wealthy shareholder can take
advantage of this

38

Specific Statutes
Evidence Act
o Exception to the hearsay rules
o Business records allowed as evidence
Assumed right unless proven wrong
Insurance Act
o no fault system
exception to general fault rules
o exception to closed mouth doctrine
must disclosure certain information
Negligence Act
o Covers contributory negligence
Apportion fault
Apportion damages
Occupiers Liability Act
o Invited guests
Guard against hazards known of or should have known of
o Licensee
Guard against hazards know of
o Trespasser
Dont recklessly disregard against well-being
Mercantile Law Amendment Act
o P. 24 of courseware
o If you accept part payment of debt, you cant sue for the rest
Even though there is no new consideration
Must expressly accept
Statue of Frauds
o Some contracts must be in writing to be enforceable in court
o Contracts in violation are still valid, just not enforceable in court
o Contracts covered:
Promise to pay anothers debt (guarantee)
Marriage contracts
Land Contracts
Contracts not to be performed for more that a year by either party
Ratification by former infant
Securities Act
o Corporations must disclose both good and bad information in their reports and
prospectus
o Exception to closed-mouth doctrine
Insurance Act

You can sue the insurance company for damages if the negligent party doesnt pay

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Conveying and Law of Property Act

Equitable assignment
o assignment must be unconditional
o written form
o notice to promissor in writing

Frustrated Contracts Act

You get paid for performance before frustration

Only get paid the amount that the work has benefited the other party

Consumer Protection Act

See above

Sale of Goods Act

see above

Bill of Exchange Act

Identifies what a negotiable instrument is

o See p. 418
Should be as similar to cash as possible

Personal Property Securities Act

Regulates security of personal property

o Can S get piano back?
If TP didnt know that S had title
If TP paid something for it

Bank Act

Allows bank to take title to something that doesnt exist yet

o Used for farms, fishermen, etc

Bankruptcy and Insolvency Act

See above

Bulk Sales Act

When you sell substantially all you own, you must protect the interests of your creditors
o Failure to follow the Act makes the sale void

Mechanics Lien Act

Allows people who work on stuff to hold it until they have been paid

Construction Lien Act

People who work on land can file liens against it.

o Very technical act
o Only have 45 days

Statute of Limitations

Time limits for suing people

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Execution Act

Allows sheriff to seize property of debtor

o Must get court order
o Must find the assets yourself

Creditors Relief Act

Allows seizure of land

o Must have registered seizure for at least 6 weeks

Wages Act

80% of wages are protected from garnishment

o can be increased by a judge

Planning Act

Need approval to split you land up

o If you dont the contract is void

Succession Law Reform Act

Covers who gets your land if you die without a will

Family Law Act

Spouse who lives in house will effectively become co-owner

Registry Act

Older land registry system

Have to check all papers

Land Titles Act

Began in early 1900s

o Last transfer is certified to be correct
o Only have to check last one

Mortgages Act

See above

Tennant Protection Act

See above

Commercial Tenancy Act

See above

Issues
Negligence

Occupiers Liability Act

o Guard against harm based on status

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Contributory Negligence

Negligence Act
o Duty of care to yourself
o Apportion fault and damages

Remedy

Take your victim as you find them

o Compensate for lost earnings, expenses, pain/suffering
Needed in all cases!!

Res Ipsa Loquitor

Shift burden of proof to defendant

o Plaintiff needs to show probable fault
o Facts to refute solely in possession of defendant

Causation

Broken chain lead to no further liability

Time, geography in between
Intervening negligence
o Was there negligence in between events

Disclaimer

Person must be made aware of the disclaimer

o Also needs to know the meaning of the wording

Vicarious Liability

Employer is responsible for actions of employees

Plaintiff can sue both parties
o Cant double collect however

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