Page |1

TOC
Purchaser as Agent...........................................................................................................................2
Listing Agreement and Conditions..................................................................................................3
Deposits...........................................................................................................................................4
Conditional Agreements..................................................................................................................4
SIMPLE CONDITIONS................................................................................................................39
.........................................................................................................................................................5
Matters Relating To lawyers............................................................................................................5
Planning Act Principles & Title Insurance......................................................................................6
Obligation to Satisfy Conditions.....................................................................................................6
Discretionary Conditions Precedent (incl implied duty of GF).......................................................7
Acting on Both Sides.......................................................................................................................8
King Lear.........................................................................................................................................9
Page 50...........................................................................................................................................10
Caveat Emptor Doctrine (Absence of Warranty) & Obligation to Disclose..................................10
.......Risk of quality of condition lies upon PU absent fraud or mistake. V has no duty to disclose
patent (perceivable) defects readily apparent upon inspection......................................................10
Representations, Warranties & Exculpatory Conditions...............................................................11
Rectification Principle...................................................................................................................14
SC OBLIGATIONS (PAGE 64 Rule 2 ).....................................................................................15
Law is clear. L is not a clients insurer. Just something goes wrong doesn't mean it's our fault."
(Gunraj)..........................................................................................................................................15

Real Estate Agents: Standards of Conduct

Full Disclosure Principle - Agent must make full and fair disclosure
to the principal of all material circumstances likely to influence the
conduct of the principal, conflicts of interest, or information affecting
the value of the sale property, otherwise disentitled to
commission(Selkirk)
TEST: What a reasonable agent would consider as likely to influence the
conduct of the principal in similar circumstances (Raso)
Duty to Explain BRA - PUs agent is not entitled to commission if he
fails to explain the nature of the BRA; gives rise to an
unconscionable transact OR if duration of BRA is too long, i.e. one
year Century 21 Real Realty Inc. v. Campbell, (2012) BRA

SA does not owe FD to V unless there are (1)direct dealings such

that establish (2) V reposed trust and confidence in selling agent,
BUT SA cannot deceive/mislead, or withhold material info about offer
submitted. (Knoch Estate)

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FD PRINCIPLES (Hodgkinson v Simms)

FD Test: Onus on party seeking to rely on existence of a FD to establish

reliance in fact determined by the substance of the relationship bt/w party
alleged to owe FD and the party claiming benefit of that relationship. Phillips v
RD Realty Ltd

FD Rule The presence of loyalty trust and confidence distinguishes FR

from merely a tortious liability. A FO carries with it elements of trust,
loyalty and confidentiality
Whether to award damages : Egregious, intentional, outrageous,
deceptive warrants an award of punitive damages. A fiduciary is liable
for breach of duty where he consciously and/or deliberately does not
act in the best interests of his principal (Oscar)
RULE DAMAGES : The proper approach to determining damages for
breach of FD is restitutionary in order to restore the victim to the
position he would have been in had the loss not occurred =
restitutionary damages
DISGORGEMENT REMEDY/ PUNITIVE DAMAGES measure of
damages are disgorgement of profits due to breach of FD; Law of FD
has always carried with an element of deterrence, awarded where
necessary to deter conduct.

Purchaser as Agent
s. 32 Real Estate and Business Brokers Act, 2002 regulations
where RE is a purchaser

s.32. (1) without providing appropriate notice, no real estate agent

shall directly or indirectly
a) purchase, lease, exchange or otherwise acquire for himself, herself, or
itself, any interest in real estate, or make an (Davies gave notice of
intent to purchase)

b) offer to do so; or
c) divest himself, herself, or itself of any interest in real estate, or make
an offer to do so.
S 32(2) Contents of Notice .. in subsection (1) shall be in writing
and shall include,
d) a statement that the registrant is a brokerage, broker or salesperson,
as the case may be;
e) full disclosure of all facts within the registrants knowledge that affect
or will affect the value of the real estate

Consider Remedies:

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Disgorgement of Profits (Hodgkinson;Calandra;Gutman)

Rule: Onus on fiduciary to establish full and frank disclosure when in dual agency if client
commences COA ; price paid for sale ppty must be as righteous as if paid to TP
Rule: Rejection of a a PUs offer does not terminate the fiduciary relationship b/w PU agent and
PU (Calandra A failed to disclose disgorged profits + costs )

Compensatory Damages disentitlement to commission

(Century 21 Realty)
Remedial CT for UR (for breach of FD or F unjustly enriched if
permitted to keep property, Soulos;Lee),
Rule: Agent cannot misuse confidential information to reap personal benefit; like using limited
assets company to purchase in name of spouse (Raso;Lee)

Punitive Damages (Oscar; for breach of FD, freestanding COA)

Rule: Egregious, intentional, outrageous, deceptive warrants an award of punitive damages. A
fiduciary is liable for breach of duty where he consciously and/or deliberately does not act in
the best interests of his principal (Oscar)

Listing Agreement and Conditions

Principle s. 32 Real Estate and Business Brokers Act, 2002
only allows RE agents may sue or bring an action to recover
commission
Principle to determine whether fee in question is commission
(Moore): A functional approach used to assess whether a contractual
term requiring a party to pay a fee constitutes a commission payment
based on all surrounding circumstances. If it is considered as
commission, service provider is not entitled to this payment
unless a RE agent (includes MBs)

Post HP Payment of Commission

(Metropolitan; Mon Boult): An agent is not entitled to commission if
the APS is signed after the holdover period, UNLESS agent can
demonstrate he is the causa causans (last link in the chain of a sale
transaction) which becomes effective during the HP.

Page |4

Strict Interpretation of KS Preconditions to Commission

Entitlement
First City Realty Ltd. v. Hermans (2004)
If an agent seeks to pursue a commission on a listing agreement, the
agreement be construed strictly; V not entitled to comm ppty
failed to satisfy cond of presenting V with all list of prospective PUS
during listing period

Good faith Duty of V to LA Principle

Commission is payable even where RET not concluded if V acts in
bad faith and agent acts in Vs interests to his detriment (TL Willaert)

V must pay commission to LA absent breach of FD,

(Gidda) Negligence of another fiduciary does not disentitle agent to

commission where V attempts to escape obligation to pay commission by
using negligence as a defence to duty

Page |5

Deposits
Amount of deposit (Porto) Deposits can vary, 3-10% of sale
price depending on the time between the purchase & close
date
s. 111 Crt of Justice Act: Crt has right to grant relief against
penalties & forfeitures.
Principle (deposits in re to condos are often exceptional to this rule)
V is entitled to keep deposit, IF a PU breaches APS, unless, (2) PU can
show, on a BOP, that (3)it equity intervenes to prevent an injustice if
it would be unconscionable to allow V to keep a
disproportionately large sum (Cumberland)

IF a deposit is a partial payment, (1)V must prove damages that

exceed value of PP upon breach (2)in order to retain some or all of the
balance paid

Partial Payment or Deposit Standard: use of term deposit is

presumptively valid (Iver) the court will examine all factual
circumstances such as: Who was thePU? Company with limited assets
or shell company? Financial viability of purchaser? What is Vs
exposure to damages? When will the transaction close? (If longer
period, deposit can be larger)What percentage of sale price the deposit
represents? (DePalma)

The proper award for fraudulent misrepresentation re deposit

(BG Preeco) is the amount required to put the innocent party in the
position they would have been in had there been no fraud

Conditional Agreements
TCP Principle Neither party to K can waive TCP obligation dependent
upon a future uncertain & external event depends upon the existence of a
TP.;(Turney)

Exception UNLESS
claimant establish compelling reason (OReilly)
unless a purchaser inserts a agreement a right of waiver in the

agreement ; (diss Laskin J, PU should have implied right of waiver on

conds inserted for his benefit) (Barnett)

Page |6

SIMPLE CONDITIONS
Beauchamp v Beauchamp
condition specifying financing is an exception to Turney so long as
vendor paid in full
Held: V required to close. Cond of financing not
TCP, loosely interpreted, true interest of V was , be paid in full

Matters Relating To lawyers

TIME IS OF THE ESSENCE WAIVER: SC is liable for negligence if he
violates time is of the essence while carrying out instruction of client. If a
party wishes to benefit from a right of waiver under condition, he is
contractually obliged to communicate waiver to other party within that
time(Gaywood-Hall)

DUTY TO TRY AND ESCAPE TRANSACTION ON INSTRUCTION: IF

SC is instructed that client wishes to avoid K obligation if legally possible, Ls
duty is triggered to look for such technicalities that entitle client to do so, like
verifying duplicate docs against original (here fax in this cas, photocopy of
rezoning approval against original (McIlroy)
COUNTER: SCs dont have an obligation to operate on assumption fraud is
being perpetrated (but current commercial reality raises SOC?)

Duty to advise re fraudulent tactics

Maiden name or shell company may be used to purchase a property
unless course of conduct is done for the purposes of misrepresentation
(Fanscali;Raso;Donigi)

Principal is bound by fiduciarys representations in RET

L cannot bind principal without instructions to act; but if they are
slipshod with words, reliance may bind principal (Novatec)

Duty to avoid ambiguity in drafting of conditions / Strict

interpretation of Ks
In an APS, Waiver conds are strictly interpreted. If a waiver cond is ambiguous, it will be void
for want of certainty, the court will not enforce it (Demeri;McKee;Hermans)

Duty to fulfill procedural steps according to K

Failure to deliver condition waiver in accordance with notice requirements of
K, personal delivery, resulting in agreement being null and void pursuant
to K (McKee)
Judicial Interpretation : The court must contextually interpret the notice
of waiver of the due diligence condition by examining the language of the
agreement as a whole and what it contemplates, surrounding provision,
industry standards

Page |7

Planning Act Principles & Title Insurance

s 50: No interest in land unless s 50 of the Planning Acts is complied with; no

person shall transfer land or mortgage enter into an agreement with respect to land
that involves an interest that goes for 21 years or more unless person does not
own any abutting land
s 21: If you breach any of the provs of Act, you do not acquire any
interests in land. IF you give a deed or transfer in breach of Act, PU and lender
barred from title acquisition or charge/lean on land respectively

An owner of abutting parcel of land (or on a reference plan and

remains an owner of abutting land) cannot subdivide, convey or
sell parcel w/o Committee of Adjustments approval ; subdivision a
registered plan is required, incls services, may take up to 3 years

Title insurance - is a L to indemnify a purchaser, owner or lender for

actual losses incurred up to the limits of the policy policy issued that title
has no defects ;for certain stated risks; - no title, no marketability, no
right to use the ppty as a single fam residence, ppty access, no
encumbrances, fraud

Obligation to Satisfy Conditions

APS typically on cond of approval or compliance with the Planning
Act, cannot be waived

Principle implied K obligation that party responsible for satisfying

condition precedent is under an obligation to do all that is necessary to
satisfy the condition and complete the sale ; If good faith duty
breached, injunction may be imposed on party in breach to fulfill GF
duty OR damages(Aldercrest;Dynamic Transport)
Measure of Damages (Eastwalsh;BEM Enterprise)
Where a party is in breach and other is entitled to damages, If P cannot
prove loss of a definite benefit but only the loss of the "chance" of
receiving a benefit, the court will estimate the value of the lost chance
and award damages proportionately

Page |8

Scope of Good Faith Duty (Dynamic Transport)

IF party/vendor succeeds in satisfying the condition the property must
be conveyed;
IF party acts in good faith and is unsuccessful, then the K is
terminated;
IF party does nothing, liable for damages or injunction of performance

RP standard of conduct determination of whether party

discharged GF duty

Campeau The standard of conduct required of a party under its

implied obligations is objective, based on the party w implied
obligation in like circumstances, having regard to entire situation &
parties themselves

GF Duty & Financing (Evans)(What is required to discharge this

duty)
A reasonable PU makes financing application to satisfy good faith duty to
satisfy a financing cond OR does not decide to withdraw from APS
unilaterally. TO research prospective financing terms without more is
insufficient to discharge duty. This does not mean PU is bound to financing
app he could not afford
Zoning Application Approvals - GF Duty (Essex)
If a party has on good authority that a cond will not be satisfied, then duty of
good faith is fulfilled, and party can exercise discretion not to make an
application

Discretionary Conditions Precedent (incl implied duty of

GF)
Sole discretion clause refers to provisions in agreements that make the
performance of the agreement conditional or subject to the "satisfaction, the
discretion or the opinion of a party to the agreement or of a third party

TEST Whether party acted in GF in relying on clause

The sole discretion clause can only be relied upon
(1) by a party acting honestly and in good faith.
(2)The extent to which the proper exercise of a sole discretion
clause is measured by objective or by subjective interests of a party
depends on K interpretation;
(3) If party relies on experts, need not prove that experts are right, just that
he acted reasonably in relying on qualified expert

Page |9

Acting on Both Sides

Full Disclosure Principle: Obligation to fully disclose to clients when
acting on both sides of a transaction, onus on L to discharge burden of proof
that obligation was fulfilled, and when not acting in capacity as L in a
joint transaction with client(Korz)
RE agent: If conflict of interest, agent cannot act on both sides
Lawyer: can act for both sides, for the reality of the business world and
often economics dictate this course of conduct subject to compliance with
LSUC
Consent in writing and notify parties
Element of disclosure if L has a history or special relationship with
the other client (Levan)
Non-confidentiality (1)if retained, (2)duty to disclose all material
facts; duty not to keep anything confidential from one side to the other
;(3) if future conflict of interest arises, L may not be able to continue
acting for either(Smit)
Dual Agency Mortgages (1) full duty of disclosure above; (2) ensure
correct parties are executing legal docs, or L may be liable for
negligence (Yamada;Premier Trust)

P a g e | 10

Principle of ILA Requirement in Dual Agency (Davey V Woolley)

Lawyer must require that a party obtain ILA when acting on both sides if
there is an improper conflict of interest that exists or subsequently arises.
ILA from your firm or a partner there DOES NOT qualify (Bertolo):

(1) (a) If Ls duties to another client, a former client, or a TP (b)create a

substantial of material and adverse effect on the representation of a client
(2) Risk of L using confidential information obtained from client to her
detriment/disadvantage

(3) If L an improper benefit or advantage as a result of SC relationship

(4) Duty to refuse to act absent FD where transaction is
unconscionable (Mackay;Bertolo)
Scope of ILA Duty(Webb): (I) explain legal consequences, (II) risks of not
following legal instructions; (3) Detailed Memos (4) Waiver forms; (5) ensure
information is accessible for client disability issues, otherwise could be
liable for TP indemnification (Beaton)
Negligence Claim onus on to provide that he has acted in best interests
and has discharged duties as dual agent.; otherwise liable
(Davey;Turi;Panko)
Circumstances where ILA is required (Smit, higher onus for
unsophisticated parties)
(1)
Unfair advantage (Korz)
(2)
transact clearly adverse to borrower (Korz)
(3)
undue influence (Panko; Bertolo; Thibeault;Mackay)
(4)
ignorance of circumstance disclose other party has criminal record
(Goldfarb)
(5)
complexity of transact (Davey)

Non Est Factum (Marvco) requires that the contractor or testator who
now seeks to set aside the document establish ALL of the following :
(1)he had intended to sign a document of a fundamentally different nature.
(2) Cover cases of undue influence , (a) relationship of confidence and
(b)pressures contractor or testator to act in a certain manner (Thibeault
mother lacked capacity)
(3)Exception: NEF defence does not apply if the donor's lack of knowledge
about the circumstances arises from laziness or carelessness as
between two innocent parties who suffer from the fraud of a third but one of
the innocent parties is negligent.
(Bulut; Marvco;)

P a g e | 11

King Lear
POA Financial or Health
McMullen v. McMullen [2006] B.C.J.
Financial POA is only engaged if contractor is incapable of managing his own affairs

Conveyance of Property by Gift valid gifts are irrevocable

(Crepeau;Danicki)

TEST of valid gift: (1) donative intention, (2) delivery of gift, (3)
presumed acceptance; (4) irrevocable unless duress or undue influence
applies
(Stanciu) There is no presumption of creation of a life interest where

there is a valid transfer of gift :

where there is a valid transfer of fee simple from mother to adult son.
This requires express language in instrument of transfer.
Gift of an Asset that Title Holder has in trust not transferable to a TP
A ppty within which there is an existing trust - mother as a trustee and
son as beneficiary, cannot be advanced as a gift to another; Held:
Conveyance to daughter of no legal effect.
(Danicki) The law will not intervene to hold parties liable for moral

transgressions
(Son refused to allow mother to reverse transact to be able to convey
equally to son and daughter)
Gift Letters (Crepeau)
Where a gift is alleged, the law presumes a resulting trust, onus on
donee to rebut the presumption; could not oral promise to repay from
son to mother

Law of Resulting Trust and Presumption of Advancement

(limited)

Presumption of resulting trust applies to adult children

(1) Where title holder conveys an asset in the name of his child,
(2)and the asset is purchased with title holder's funds,
(3) the transferee is presumed to hold asset in trust for transferor,
(4)unless transferee can establish it was a transfer by gift.
Presumption of advancement Wilson J, should also apply to adult
children w disabilities (how to define)?

P a g e | 12

Page 50
Caveat Emptor Doctrine (Absence of Warranty) &
Obligation to Disclose
Risk of quality of condition lies upon PU absent fraud or mistake. V
has no duty to disclose patent (perceivable) defects readily apparent
upon inspection
(Antorisa; Ricchio;York Condo Corp 505)Public policy dictates
that PUS seeking protection in relation to fitness or quality of sale ppty
should openly negotiate specific protections as matter of K. Law
will not intervene to do so; no pre K GF duty

EXCEPTIONS
(Marathon Realty) Silence as to a patent defect, discoverable upon
proper diligence of other party, not fraudulent in the absence of a
special trust relationship. Generally there is no fiduciary duty owed to
PU by D.;
Goldstein disclosure required IF known patent defect affects property
value or makes it unusable for its intended purpose

V cannot conceal patent defect, liable for fraud; (Gronau)

Duty to Disclose(Mcgrath) Vendor owes a duty to PU to disclose
existence of (1)latent defects that the (2)V knows render the sale
property OR its vicinity (Sevidal) (3)dangerous, likely to be
dangerous, or uninhabitable. (4)Onus on claimant to establish on a
BOP, (5) D can use CE to rebut prima facie case
POSSIBLE DEFECTS requiring disclosure (Law unclear)
(Kinspain)Law is unclear as to whether a group claim to sale
property in question for entitlement to fees for use of land, but not
legal title, constitutes a latent defect where V had knowledge of its
existence; OR
common knowledge of pedo in the area (Bound)
marijuana grow-op, due to stigma attached to ppty value (Barbieri)

Remedy : Failure to disclose existence of a known latent defect that

renders the premises, dangerous, likely to be dangerous or unfit for
habitation entitles PU to rescission OR damages must mitigate (will
not be awarded damages re expenses where duty is not met
Iamotomasi)
Exclusionary, Limitation of Liability, Exemption, Clause (para 26)
No representation, warranty or collateral conditions other than as
expressed herein
Limit, qualify or exclude Vs liability for warranties, representations
outside of APS, attached schedules or SPIS
AS IS where IS excludes V from tort liability, unless fraud misrep. V thought ppty was
cleaned up (Antorisa)

P a g e | 13
Limited Liability Clause re: BI not enforced if inspector did not
explain it to PU OR briefly explained after services provided (Haliwell)
SPIS (Seller's Property Information Statement)
Voluntary disclosure statements about sale property; possible basis
for claims for rescission for tort of deceit or negligent
misrepresentation

Peel Condominium Corp. No. 505 v. Cam no pre K good faith duty 54
Ratio : Condo developer vendor has a statutory duty of full disclosure
in in K performance, but does not extend to the bargaining process;
Diss Wheeler J CML fiduciary duty of good faith when circumstances
warrant.
Majority: "P is required to get legal advice, review purchase material,
make amendments to APS or don't buy. This not a purchase of
paper plates, they were making a substantial investment in
residential housing units that most intended to be their homes. If they
proceeded without professional advice, that was their decision."

Representations, Warranties & Exculpatory Conditions

Consider what does client want; are you able to characterize and prove
statements that support clients preferred remedy?

1. Innocent Misrepresentation Principle

Claimant must demonstrate that representation is a
(1)statement thought to be true by parting making representation;
(2)independently verifiable; (3)must be objectively of the type that
would influence a person to enter into a K;
(4) absence of EC, presence thereof excludes V liability, UNLESS
Roberts/Beer: If party does not ascent to prov or not brought to PUs
attention
Shelanu: EC is unconscionable, ; unfair; unreasonable; otherwise
contrary to public policy
Hyrsk/Kiani : Error Insubstantialibus:
substantial diff bt/w thing bargained for & thing purchased, so as to
constitute a failure of consideration, relates to quality of land

DAMAGES
(Waxman)Equitable Rescission of Rescission BEFORE closing, unless
ES, but invoked only in rare circumstances
claimant must prove representation was
false statement
material - must of a type that would influence party's decision to enter
K
statement must have induced K-ing party to enter into K

P a g e | 14

2. Fraudulent Misrepresentation/ Tort of Deceit Principle

Claimant must demonstrate that
(1) D or Agent makes a false representation (2) knowledge of, or
recklessness as to, its falsity (3)D or A intended to deceive PL
with representation (4)False representation is subjectively material
(5) False rep induced PL to act; (6) PL suffered damages
Silence can be recklessness that amounts to fraud misrep, for which a
TP can be liable on a non K basis (V's liability);(Hedley;Olsen) (RE
agent liability)

Liability - EC does not shield V liability, Vs can be vicariously liable

for fraudulent misrep of Agents (Semkuley; Scholl)

Equitable Remedy of Rescission AFTER closing , UNLESS

knowledge before close, then right to rescission is waived, but claimant
can sue for damages (Burrows; Cubukgil)
claimant must prove representation was fraudulent
Measure of Damages : restore PL to position he would have been
but for the misrepresentation, not, the position he would have been in
had rep. been true (Parna- 56)

3. Negligent Misrepresentations

P a g e | 15
Claimant must demonstrate that (1) DOC based on spec
relationship bt/w PL & D - V & PU, (2) D made a false statement, (3) D
was negligent in making false statement, therefore breached DOC; (4)
PL reasonably relied on false statement (5) PL suffering damages as a
consequence

Liability V or agent, V is vicariously liability for agent

EC excludes liability for statements outside of APS, not express K terms
(Hayward)(Beer says no)
BUT EC invalidated IF, incl statements outside of APS if:
Roberts/Beer: If party does not ascent to prov or not brought to PUs
attention
Shelanu: EC is unconscionable, ; unfair; unreasonable; otherwise
contrary to public policy
Hyrsk/Kiani : Error Insubstantialibus:
IF representation outside of APS , consider , (Roberts/Beer)
Look at where the statements were located? Whether parties were
consider to have assented to clause
What was the reliance ?
Who were the parties ? vulnerable or sophisticated? (then no
Fraser Jeweller)
What were the circumstances ?
Agents representing PUs?

Equitable Remedy of Rescission BEFORE close; AFTER close damages (Chapman)

claimant must prove representation was fraudulent
Measure of Damages : restore PL to position he would have been
but for misrep
Effect of EC : does not shield V from liability, term collateral to the
agreement .

4.Collateral Warranties (survive closing, stat imposed warranties by ON

New Home Warranties Plan Act)
Statement is not a representation and (2) is collateral warranty
(Jorian) to the main agreement, not go to root of K, expresses some
lesser obligation (Fraser-Reid)
(Jorian) TEST: Warranty or Condition (1)Is the effect of the event
to deprive the innocent party, who has further undertakings still to
perform, (2) of substantially the whole benefit (that amounts to
consideration for performance of further undertakings, (3) which the
parties intended innocent party would obtain according to K.;
(Fraser)IF not cond, is it a warranty: (1) question of fact; (2) Does
the contract disclose a common intention of merger re warranty?
express or implied (3) The K label for warranty is a rebuttable
presumption

P a g e | 16
(Olsen; Glasner) Fraud misrep of agent, entitlement to remedy
of equitable rescission
Montex pre K warranty outside of APS (not a great decision),
misrepresentation of soundproofing
BEFORE close : Nothing.
IF PU breaches before close, V may repudiate K and V is liable for failing to
close (Jonert)
AFTER close ;Remedy of Compensatory Damages, UNLESS MERGER:
TEST :Did parties intend that warranty survive merger (Fraser-Reid)
or insert non merger provision (Alves); but merger is rare
(DeMichele
Loss of Enjoyment of Life Damages - IF PL can recover if able to
establish mental injury was foreseeable result of BOW (DeMichele)
(If you can prove FRAUD MISREP, equitable rescission) (Olsen)
vicarious fraud misrep of agent - silence):

5. Conditions (fundamental terms of APS)no remedies, right to

repudiation
Apply CONDITION test (above at Jorian); consider market forces and
credibility (Townood)
Effect of C : does not shield V from liability ;
Rights for breach : Innocent party has a right to treat other partys
breach as a repudiation of the K (Keen)

5. Universal Remedies EC invalidated IF:

Roberts/Beer: If party does not ascent to prov or not brought to PUs
attention
Shelanu: EC is unconscionable, ; unfair; unreasonable; otherwise
contrary to public policy
Hyrsk/Kiani : Error Insubstantialibus:
Fundamental breach : repudation, unnecessary to commence action:

Anticipatory Breach

Morgan v. Lucky Dog Ltd refusal to close on the basis of PU not

providing an estoppel certification constitutes an anticipatory breach
absent express K terms requiring P to provide V with this

Rectification Principle
(Glasner) In modern commercial relations, where an important unilateral
amendment is being made it is not unreasonable to ensure that knowledge
of such amendment comes to the other side -- party must be given a real
opportunity to appreciate the change ; Duty from V to P can arise when K
concluded under unilateral mistake
TEST Strategeas v. Lloyd Parish Holdings Limited (1991)

P a g e | 17
courts will apply if
i) King parties having reduced into writing the negotiated agreement but ,
ii) a mistake was made in the wording of the final written K altering the
effect of the agreement
Ratio Even if L is negligent in not noticing a significant change to
the original agreement, the party/lawyer making the change has
an obligation to bring it to the attention of the other, or court
may apply rectification
Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd.
(2002), S.C.C. 22
Purpose of rectification: to prevent a written document from being used as
an engine for fraud
Rectification is an available remedy FOR (i) unilateral mistake (or
mutual mistake) if PL shows, with convincing proof (slightly
higher than BOP)
a) Oral agreement not written down properly,
b) D (ought) to know of the error, AND taking advantage of such error
would amount to "fraud or equivalent
c) P must show "precise form" in which written agreement can be made
to express prior intention
d) crt's task is corrective (to restore bargain), not speculative;
e) Punitive damages only awarded if (1) compensatory damages are
insufficient, and (2) denunciation is necessary
Held: D PU liable for damages. (He instructed his L not to raise mistake)
Court ordered rectification and compensatory, not punitive damages.
Corporate veil was pierced to hold the principals of the P personally liable.
(Stevens) It is the SC's duty to turn the mind of the opposing
lawyer to an obvious mistake in a (marriage) K. Rectification
principle: Failure to do so may result in court exercising equitable
jurisdiction to relieve a mistake in fraud/circumstances amting to
fraud/misrep. IF
(1) 1 party knowing of the others mistake as to the terms of an offer remain silent and, (2)
concludes a K under the mistaken terms NWS that party ought to recognize mistake

SC OBLIGATIONS (PAGE 64 Rule 2 )

Law is clear. L is not a clients insurer. Just something
goes wrong doesn't mean it's our fault." (Gunraj)

P a g e | 18

Duty when retained after APS is signed

(Wong) Retainer of L before APS is signed triggers obligation to negotiate
security for warranty; No such duty arises if retained after APS is signed.
The instruction is to conclude transaction
(Enns) Ratio: (1) SC has duty to exercise reasonable skill and care to
advise client, that includes a duty to warn clients of risks involved in a
course of action contemplated by the client; (2)IF SC fails to warn client,
AND to warn of risk AND p probable that client would not take risk had he
been warned, SC will be liable
(Graham) When a L is acting PU regarding a signed APS, SC does not
have duty to negotiate a better deal for clients unless APS discloses
serious deficiencies/risks
.
(Fram) V has a duty to ensure proper fulfillment of duties pursuant to time
sensitive K provisions , TOE, otherwise liable for nelgligence
(Gunraj;6038212) Lawyer may have a duty under certain circumstances
to discuss alternative options even after a signed APS, depends on the
nature of the sale property. ; In Latter, L obtained waiver from client that he
had opted out of following her advice
(Robinson) L has a duty to inform client of the risks of her actions, and
should obtain written documentation where client chooses not to follow
your advice despite risk of legal exposure of her decision.

BEFORE APS SIGNED

(Harelav) Public expectation requires SC has a duty to know what a
clients plans are where it is clear that client intends to develop
vacant land - implications of the zoning by law are critical and
should be reviewed with the client

Advise in relation to risk (Turi)

Ratio : Scope of duty to advise in relation to risks and consequences
may depend on the level of sophistication of the party : Lawyer should
write memo of advice to client and have her sign it
Held: L liable for negligence. Court believed that L advised client re
proper use of corp name but did not advise on risks for improper use or
failure to do so in context of business transactions by sending out memo