AFM 231
Using contractual terms to manage risk- changed circumstance
changed circumstances can make it very advantageous for one party over another
What characteristic distinguishes Quebec's civil law from Canada's common law?
-Civil law courts are not bound by earlier interpretations of the Civil Code.
Special damages
-ambulance costs, medication costs, housekeeping, yard work
Reasonable care
-care that a reasonable person would exhibit
Remedies for misrepresentation
-damages in tort can be awarded if misrepresentation is fraudulent or negligent -if innocent- recission of contract
Exemption clause
-indentifies events causing loss for which there is no liabilty
Tort law
-whereby compensation
Intoxication is regarded as a form of mental incapacity under the law. T/F?
False
6. A patient has suffered physical, psychological, and financial loss as a result of a doctor's omission. How will the court apply the reasonable person standard in this case?
The standard will be inadequate, and a higher or specialized standard will be imposed.
In contract law, the presence of which of the following elements would immediately alert a court to the possibility that an agreement may be voidable due to duress?
The use of a threat of physical harm results in a contract.
Why are contracts that unduly interfere with the ability to earn a livelihood or reduce competition generally unenforceable in common law?
They are contrary to the community's common sense and common conscience.
A bill put before a legislative body represents a proposed piece of legislation that a political party wants to make into law. T/F?
True
Courts for tort law are governed by precedent. T/F?
True
Liability between parties engaged in a contractual business relationship refers specifically to the legal responsibility of one party to the other for any event or loss that may occur due to breach of the contract.T/F?
True
The legislative branch of government is the source of statute law. T/F?
True
What are the legal terms given to a criminal and the criminal's victim?
accused, complainant
What is meant by the term "contractual quantum meruit"?
as much as merited or deserved
6. What form of tort is a premeditated harmful act?
intentional
The tort of negligence is not common in the business world. T/F?
False
Purpose of criminal prosecution
-condemn behaviour like impaired driving -secure sanction of fine, imprisonment
What is a void contract?
-contract has a defect so substantial that it is of not force/effect, considered to have never existed at all
What does it mean for a contract to be voluntary?
-contract must be freely chosen and not involve coercion
What types of contracts must be written?
-contract of guarantee -contract not to be performed within a year -contracts dealing with land -contracts for the sale of good
Contrary to public policy
-contrary if they injure public interest, ex. interfere with other side's ability to earn livelihood
pecuniary losses are awarded to compensate plaintiff for...?
-cost of future care -loss of future income -special damages (out of pocket expenses)
Specific performance
-court orders the party to do exactly what they were obligated to do in the contract -Equitable remedies
What does it mean for a contract to be "complete"?
-it must be certain, all terms must be settled
What is contract law?
-judges create contract law (falls under civl law)
If the party can prove one of these doctrines, what are the possible outcomes?
-keep the contract in existence or they can bring it to an end (voidable contract)
When is the standard of the reasonable person NOT applied?
-professionals such as doctors, accountants, engineers, lawyers must meet a higher standard of care b/c level of expertise of average member of society is simply inadequate
if a breach in contract is a warranty (what is warranty?)
-promise of less significance or importance -innocent party is entitled to damages only
What is an offer?
-promise to enter into a contract with certain terms
What is a contract of guarantee?
-promise to pay the debt of someone else if that person defaults on the obligation -written
What is a contract not to be performed within a year?
- hard to remember promises made in distant future
If one party does XXXX, it is considered mispresentation
- provides partial information to the other side -actively conceals the truth -neglects to correct an earlier assertion that was correct but isn't anymore -in a relationship with another party that requires good faith (insurance law- insured must provide all info) -statute imposes a positive obligation to disclose information (??)
How do you know if there is consideration in a contract?
-C/S @ the bottom of the contract means that the contract is under seal & consideration doesn't matter, the contract is legal
Injuction
-Equitable remedy -if you make promise not to engage in specified activities, but then disregard promises by doing them, you breach the contract -injunction is a way for the court to make sure that you don't continue to violate contract
What is consideration?
-It means that there is an exchange of value from one party to the next (both parties must be getting a tangible benefit) -whether you paid a fair price is not relevant -both parties must get the same benefit, if you don't get extra benefit then you don't have to pay extra
Deceit/Fraud
-a false representation intentionally or recklessly made by one person to cause another damage -lying to someone to convince them to make a purchase
Remoteness of damage
-absence of a sufficiently close relationship between the defendant's action & the plaintiff's loss
What is an agreement? What is acceptance of an offer?
-acceptance of that offer with those terms
How does undue influence operate?
-actual pressure: a transaction arises because one party exerted unfair influence on the other (ex. elderly signs over an estate to caregivers in exchange for care) -presumed pressure based on special relationship: family members, lawyer + client, doctor + customer, the more powerful party needs to show that undue influence was not present
termination through frustration
-after the formation of the contract, an unforeseen event occurs like the destruction of the subject matter of the contract or the death/incapacity of one of the parties -contract is brought to an end and neither party is held responsible
What is a contract?
-agreement between two parties that is enforceable in court of law
What does tort law do?
-allows for the law to distinguish between if the person who suffered the loss should be compensated by the person responsible or if they should not be compensated -impose liability based on fault
Restitutionary remedies
-allows plaintiff to be compensated for work they did if the contract is nonenforceable -remedy unjust enrichment (when the defendant has undeservedly or unjustly secured a benefit at the plaintiff's expense)--> court will order that the defendant pay a restitutionary quantum meruit (amount reasonble given the benefit) to the plaintiff, pay compensation to restore the plaintiff to their original position before
What is tort?
-any harm/injury caused by one person to another, not by breach of contract -law provides a remedy (usually compensation)
A defendant owes a duty of care to ...?
-anyone who might reasonably be affected by defendant's conduct (neighbour principle)
Managing the risks of unenforceability
-are the parties to the contract under legal incapacities -has one party taken unfair advantage of the other -had one party misled the other -has a substantial mistake been made -is the contract contrary to legislation/violation of public policy -is the contract required in writing
Punitive damages
-award to plaintiff to punish the defendant for malicious, oppressive, and high-handed behaviour
Condition subsequent
-bind the parties to a contract when an event occurs -ex. want to buy building but only if they get financing from bank
termination through performance
-both parties fulfill their contractual obligation, ideal way to end contract
What is a common mistake?
-both parties makes the same mistake (car is sold, but later discover that it is actually an antique)
Transfer of obligation can occur if?
-both parties must agree
What does it mean for a contract to be deliberate?
-both parties must want to enter the contractual relationship
termination through breach
-breach of contract if serious enough can release the innocent party from continuing with the contract if he doesn't want to -if breach isn't serious enough, the innocent party can get damages
fundamental breach
-breach of contract that affects the entire foundation of the contract , whole contract is inoperative+ innocent party should be compensated
Anticipatory breach
-breach that occurs before the date of performance (advise them that they will not be able to deliver the goods)
Liability in contract
-business makes a contractual promise that it fails to perform, business is liable for breach of contract (absence of negligence is no defence)
What happens if you ignore tort risk?
-can incur costs of tort (lawyers fees) -losing insurance coverage b/c of poor claims history -losing hard-earned business reputation
Non-solicitation
-clause forbidding employee to contact business customers
When is it common for liability in tort law and contract law to overlap?
-common in professional advice lawyers, accountants, bankers give to clients -if the advice is incompetent, the professional is in breach of contract & has committed tort of negligence
Aggravated damages
-compensate plaintiff for intangible injuries like distress, humiliation causes by defendant's bad conduct -ex. if held in jail + treated badly
What is the purpose of damages in contract law?
-compensate the plaintiff
Purpose of tort law? What types of injuries are compensated?
-compensate the victim for the harm suffered because of someone else -physical injury or loss -mental pain -emotional distress
Negligence law seeks to ?
-compensate victims for their loss/injury -determine who is liable to compensated another, why + for how much
What is private law?
-composed and regulated by non-govt entities (ex. Quest Electrical Engineers Inc. contractually committed to provide specialized services to a construction project with specified deadlines for completion. Quest has to meet deadlines or face penalties.)
Illegal by statue
-criminal code forbids loans at a rate of 60%+/yer (considered criminal) -federal competition act doesn't allow certain commercial transactions that restrict competition -Ontario real estate & Business Brokers act provides that unlicensed realtor cannot maintain an action for services rendered
Exceptions to privity are:
-customer insurance (lack of privity is no defence for an action brought under the act for a breach of warranty) -insurance legislation permits the beneficiary to sue the insurer even though the beneficiary i not a party in the contract
What happens if you fail to mitigate?
-damage award will be reduced accordingly
Punitive/Exemplary Damage
-damages awarded to the defendant for malicious, oppressive, high-handed conduct where defendant may profit from the behaviour
What is the test for remoteness?
-damages claimed are recoverable if 1. the damages could have been anticipated, having "arisen naturally" from the breach or 2. damages are reasonably foreseeable b/c of unusual circumstances were communicated to the defendant at the time the contract was being formed -ensures that defendant don't face unlimited liability for the consequences of a breach and to inform them about the circumstances to give them the option of turning down the job, charging a higher price, getting insurance
Thin Skull Rule
-defendant is liable for the full extent of a plaintiff's injury even where a prior vulnerability makes the harm more serious than if otherwise might be
How to succeed on the defence of voluntary assumption of risk?
-defendant must show that the plaintiff knowing of the virtually certain risk of harm, released his right to sue for injuries incurred as a result of any negligence on the defendant's part (both parties must understand that the defendant has assumed no legal responsibility to take care of the plaintiff and that the plaintiff does not expect him to)
Contributory negligence
-defendant successfully argues that the plaintiff was responsible for at least part of the loss
When will rescission be delayed?
-delay in seeking court assistance
Contracts can take three forms
-entirely oral, written, or both (all are equally enforceable)
What is a mistake?
-error made by one or both parties that undermines the contract (ex. price of $11000 car is written as $1100 by accident is a big deal, if it is written as $10000 by accident then no big deal)
Carelessness
-failure to show reasonable care
What is misrepresentation?
-false statement of fact that causes someone to enter a contract
Pecuniary damages
-financial loss
non-competition clauses
-forbidding competition for a certain period of time
Vicarious Liability
-form of strict liability -employee is automatically responsible for the torts of his employee when there is a significant connection between what the employer was asking the employee to do and the employee's tort
Recovery of non-pecuniary damages
-hard, nearly impossible, but has been done
Intentional tort
-harmful act committed on purpose 1. false imprisonment (security personnel prevent customer from leaving store if they think that they stole something- intented to keep them) 2. tort of battery - intentionally inflicted harmful or offensive physical contact
if the debtors becomes entitled to less what happens to the assignee?
-he/she will receive less
Torts committed by negligence
-if someone is negligent, he is liable for damages even though he did not intend to cause the event -ex. if you neglect the fact that someone is drunk and you let them drive, you committed tort through neligence
When will injuction be denied?
-if the plaintiff does not deserve it or if it delays bringing the claim to court
Mental incapacity when signing contracts
-if they were mentally impaired by illness or intoxication by alcohol/drugs and the other party was aware of that, they may be able to avoid the contract
If a breach in contract is a condition (what is condition?)
-important term -the innocent party has the right to sue and treat the contract as ended -the non-defaulting party can consider herself free from the remaining obligations in the contact
Specific performance can be denied if..
-improper behaviour by the plaintiff (bad motive or conduct) -delay (failure to bring the claim promptly) -impossibility -severe hardship (to anyone) -employment contracts (being forced to work for someone against their will violate their personal freedom)
Transfer of Contractual Rights can happen if??
-in order to transfer the rights, a party must be privy to certain circumstances -Party X doesn't have to agree to let Party Y transfer rights
Less common alternatives for compensation in tort
-injunction (court order requiring or prohibiting certain conduct)
interlocutory injunction
-injunction for a limited period of time -requires someone to stop doing something until the whole dispute can be resolve through trial
Legal action in tort law is started by who? Actions are called civil actions because??
-injured party brings the legal action to enforce his/her personal or private right to secure compensation for injures -actions are called civil actions because it is enforcing the right belonging to an individual -injured person is the plaintiff
Burden of proof in tort law
-injured party must prove the other party is liable for negligence on the balance of probabilities
Torts are categorized in 2 ways
-intentional tort -torts committed through negligence
What is an invitation to treat?
-invitation to other parties asking them to make an offer to form a contract
To prove that contract was entered freely by the weaker party, make them get independent legal advice about the transaction
-lawyer will attest the he/she explained the proposed transaction, the weaker party seemed to understand it, and they are proceeding with the transaction on a free and informed basis
What is a contract dealing with land?
-leases and sales of land -written unless person attempting to enforce oral agreement has performed acts in relation to the land that could be explained by the existence of an agreement
Limitation of Liability Clause
-limits liability for breach to something less than would be otherwise recoverable -ex. trackers liability is limited to the unit price of tracking and in no event shall it include loss of profit
The parol evidence rule
-limits the evidence a party can introduce about the contents of a written contract (b/c it should be clearly written) -doesn't apply if the contract is partly oral or is intended to be partyl oral UNLESS there's an alleged problem with the formation of the contract or the language of the contract is ambiguous
Non-pecuniary damages
-loss of enjoyment, mental distress (not financial) -can't be recovered (usually cuz it's hard)
Pure economic loss
-loss that is only financial and involves no personal injury or property damage to the plaintiff
What is undue influence?
-manipulation that compromises someone's free will/choice
damages
-money when there is a breach of contract
1) Why would many (although not all) doctrines in this chapter be challenging arguments to prove? (chap. 8)
-must prover the doctrines as promptly as possible or risk losing their case
To prove a breach of contract the plantiff
-must show that on the balance of probabilities, there is a 1. privity of contract ( contract between the parties- doesn't exist if there is a clause that protect party x from the liability) 2. breach of contract (other party failed to keep one or more promises or terms of the contract) 3. entitlement to a remedy (plaintiff must prove that it is entitled to a remedy)
What happens if a contracts end through frustration but one party has begun to perform and incurred costs?
-no easy way to be compensated
Is there vicarious liability for crimes committed by employees?
-no there isn't even if there is a big connection between the conduct authorized by the employer and the wrong committed by the employee
Can you end a contract if you think that the other party is in breach?
-no you can't make an assumption, you will be subject to a lawsuit from the other party
Penalty clause
-not enforceable because it sets a large amount that one party has to pay to another in the event of a breach -meant to punish and contract law is not interested in the punishment of the party but rather the compensation to the innocent party
Minors in contracts...
-not obligated to the contracts they make -can fulfil their contractual obligations + enforce a contract against another party if that party is in breach -obligated in contracts for essentials (food+shelter) and must pay for them (2 step test- is it necessary and do they already have enough?) -contracts are binding for minors if they are largely for the benefit of the minor (ex. employment contract) -contracts that minors signed when they were younger remain unenforceable when they past the age of majority unless they involve necessaries/beneficial service contracts UNLESS they adopt/ ratify it, in which case it is enforceable OR UNLESS the agreement is permanent/continuous. They must reject this obligation once they reach the age of majority or they will have to deal with it o/w.
Duty to mitigate
-obligation to take reasonable steps to minimize the losses resulting from a breach of contract or other wrong -everyone who suffers a breach of contract has duty to mitigate
Vicarious liability arises because
-of relationship that someone has to the person who actually commits the tort -employer is liable for torts committed by its employees in everyday employment so long as the employees conduct is authorized by the employer
Inequality between parties
-one party may be uneducated, unsophisticated, can't speak properly, or is of a lower economic standing--> use in court to their advantage
Non-pecuniary losses are awarded to compensate plaintiff for...?
-pain + suffering -loss of enjoyment of life -loss of life expectancy
Condition precedent
-parties don't enter a contract until an event occurs -ex. real estate firms have the contractual obligation to sell if there is adequate water and sanitary sewer services to the property
termination through agreement
-parties volunteer to bring their contract to an end -both parties walk away or one pays to another
Losses for which damages are awarded are categorized as...?
-pecuniary (monetary) -non-pecuniary
Tort-Feasor
-person who commits a tort
Cost of future care examples
-personal care attendant -modifications of living accommodations to increase accessibility -costs related to equipment + treatment of his condition
What is common law?
-precedents
Two kind of liability in tort law
-primary and vicarious
Strict Liability
-principle that liability will be imposed irrespective of proof of negligence -defendant is liable for plaintiff's loss even though the defendant was not negligent and had exercised reasonable care -not common b/c law of negligence provides a remedy to most victims of accidents who merit compensation
An improvident bargain
-proof of substantial unfairness, it benefited one party a lot more than another --> then you can set aside
How do you prove unconscionability?
-proof on inequality between the parties -proof of thoughtless (improvident) bargain or exploitation -stronger party must show that the contract was fair
Commencing legal action in criminal court is called
-prosecution -usually brought by Crown prosecutors not the injured party
What is civil law?
-protects the private rights of citizens (contracts, torts, property, family)
What is statutory law?
-protects the rights of the general public (regulatory laws, etc.) -manages the relationship between the governments and individuals
How do you prove misrepresentation?
-prove statement is false, clear & ambiguous, material to the contract (is significant to the decision of whether or not to enter the contract), actually induces the party to enter contract, concerned with a fact not opinion (unless speaker has special knowledge related to opinion)
A contractual term coul...
-provide a formula to set price of goods supplied to be tied to market value -set the price according to the cost of the materials + specific % for profit -allow parties to reopen negotiations or terminate the contract if certain events occur
Duty of care
-responsibility owed to avoid carelessness that causes harm to others
Rescission
-restore the parties to the situation they were in before the contract began -if not able to restore each other, court can order that the innocent party is compensated (do what is practically just)
what is a contract for the sale of goods?
-sale of goods above a certain amount must be in writing to be enforceable by courts (~30-50) -if partial payment is made by buyer or if buyer accepts all/part of the goods no written evidence is required for contract to be enforceable
Tort law & contract
-same set of facts can give rise to liability in tort and in contract -nightclub punches a patron mistakenly thinking they will start a fight--> vicarious tort + contract law is broken because nightclub expected to offer safe environment
What are contingency fees?
-service free is paid if result is favourable
Liquidated damages clause
-specifies how much a party has to pay to the other if they breach the contract, -decide worth of breach before it happens -not enforceable if it sets an large amount as a remedy to the innocent party, if it is genuine it is enforceable
Reasonable Person
-standard used to judge whether a person's conduct in a situation negligent
innominate term
-term that is not easily classified as either a condition or a warranty
How do you determine the kind of damages recoverable in contract law?
-test for remoteness
What happens to the amount of money that plaintiff gets if he is partially responsible (contributory negligence)?
-the amount of damages that the plaintiff gets is lowered by however much the plaintiff is responsible
What is equal bargain power?
-the assumption that parties of a contract are able to look out for themselves
Burden of proof in criminal law
-the crown has the burden of proof in criminal action -proof beyond a reasonable doubt
Voluntary Assumption of risk
-the defence that no liability exists as the plaintiff agreed to accept the risk inherent in the activity -complete defence to the lawsuit, plaintiff will be awarded with nothing by a judge even though the defendant has been negligent
Tort and Criminal Law
-the same event can give rise to one legal consequence in tort law and one in criminal law
What can the other party do if there is an anticipatory breach?
-they can sue immediately b/c each party is entitled to continuous expectation that the other party will perform during the contract -innocent party entitled to damages, can treat the contract as an end
If terminated by agreement...
-they may enter a new contract (novation) -vary terms of the contract (may want something else not stated in the contract, must compensate the other party to get it) -end contract (both parties don't enforce their rights, may pay the other part to bring obligations to an end) -substitute a party (one party's rights + obligations are transferred to someone else), everyone must agree to this
Joint tort-feasors? Who can be sued? What can the plaintiff get?
-those who commit a tort with others -one of more or all of the people involved can be sued -plaintiff can get 100% of judgement from any of the defendants
Recovery of pecuniary damages
-those who suffered a breach of contract can get their monetary losses UNLESS a clause is included that limits, excludes, or fixes liability at a set amount -ex. can get the cost of the items lost in a warehouse from warehouse owner
What is duress? Economic duress?
-threats, violence, constraints, or other action brought to bear on someone to do something against their will or better judgment -threat of economic harm that pushes the other party and results in a contract
Torts are broken down in categories
-trespass to land -deceit/fraud -negligence
What about consideration under partial payments of debt?
-under common law, if you don't pay all of the debt, debtor can keep asking you for $ at any time (law thinks that the debtor is not getting consideration) -NOW--> because of statute law, partial payment is binding
Legal doctrines that are not enforceable when they are formed IF....
-unequal relationship between the two parties -misrepresentation or important mistakes concerning the contract -defect within the contract itself
What is a unconscionable contract?
-unfair contract formed when one party takes advantage of the weakness of another
termination through frustration: event must be
-unforeseen -not arise b/c of the other parties -make the purpose of the contract impossible or much harder to achieve -not be a risk the occurrence of which was contractually allocated to either of the parties
Contributory Negligence
-unreasonable conduct by the plaintiff that contributed - or caused by the injuries that were suffered
Negligence
-unreasonable conduct, including a careless act or omission of an act that cause harm to another -unsafe lane change, incompetent advice, over serving alcohol to a customer
expectation damages
-way of measuring damages -get money equal to performance (contract is to complete house and they don't complete, must provide enough $ to get it done)
conditional agreements
-when one party want to do X but only if Y happens (ex. want to buy building but only if they get financing from bank)
What is a breach of contract?
-when party fails to meet its contractual obligations, it is liable for breach of contract + responsible to the other party to fulfil any reasonably foreseeable damages the breach might have caused
Trespass to land
-wrongful interference with someone's possession of land -parking without a ticket in a parking lot
Establishing a Negligence Action
1. Does the defendant owe the plaintiff a duty of care? 2. Did the defendant Breach the Standard of Care? 3. Did the defendant's careless act or omission cause the plaintiff injury?
Categories of misrepresentations
1.Fraudulent-speaker has deliberate intent to mislead/makes a stmt without knowing/believing that it is true 2.negligent-speaker makes stmt carelessly/negligently 3.innocent- misrepresented a fact
What are the essential elements of a contract?
1.Offer + acceptance--> to any reasonable person, they signed a contract -invitation to treat+ acceptance of offer 2. Complete 3. Intent-must intend to enter the contract (ie. do you have the ability to enter?) 4. Mutual Benefit/Consideration
In what way is a void contract different from a voidable contract?
A void contract contains a defect so substantial that it is of no force or effect.
What principle could you reasonably expect Canadian common law courts to apply when dealing with cases involving standard form contracts?
Ambiguous terms should be construed against the party that prepared the contract.
Stage 2:
Are there residual policy considerations outside the relationship of the parties that may negate the imposition of care? -determine whether there were any more general considerations that should eliminate/reduce duty of care
Transfer contractual right to someone else
Assignment
Contractual Quantum meruit
Awarding one party a reasonable sum for the g/s provided under contract
What characteristic distinguishes Quebec's civil law from Canada's common law?
Civil law courts are not bound by earlier interpretations of the Civil Code.
The same event cannot give rise to legal consequences in criminal law and in tort law. T/F?
False
Where the same incident has led to both criminal charges and the commencement of a civil lawsuit, what will most likely be the result?
Criminal conviction is relevant to establishing a related civil action in tort.
2. Which of the following established the neighbour principle?
Donoghue v. Stevenson [1932] A.C. 562 (H.L.)
Was the injury suffered by the plaintiff too remote?
Even if there is an obligation to take reasonable care and it was breached, how far will the legal liability of the defendant stretch?
Because of the rules of precedent, the Supreme Court of Canada must always follow its prior decisions.TRUE/FALSE
FALSE
Courts are never allowed to refer to external sources (e.g., dictionaries) when trying to determine the meaning of ambiguous terms used in contracts. T/F?
FALSE
Liquidated damages clauses are never upheld by courts since they unfairly limit damage claims. T/F?
FALSE
When the parties fail to address an important aspect of their contractual relationship, the law always helps to "fill in the blanks" through implied terms. T/F?
FALSE
10. Canadian courts frequently ignore the tort of negligence and impose strict liability on a defendant. T/F?
False
11. The thin skull principle is the standard applied to judge whether a person's conduct in a given situation is negligent. T/F?
False
2. In tort law, manufacturers do not owe a duty of care to consumers of their products. T/F?
False
8. Disappointed purchasers of a manufacturer's poorly produced or poorly designed product have no recourse in tort law for negligence. T/F?
False
A lawyer selling his practice initially provided information regarding its value that his accountant later informed him was inaccurate. The lawyer is not required to disclose this new fact to the lawyer interested in purchasing the practice as both are commercially and legally sophisticated players who are fully capable of watching out for their own interests. T/F?
False
Assault involves a threat of physical harm followed by actual physical contact. T/F?
False
Because of the rules of precedent, the Supreme Court of Canada must always follow its prior decisions. T/F?
False
Commission of an intentional tort will lead to liability, while commission of a negligent act typically will not. T/F?
False
In order for a contract to be considered written, all of the parts of the contract must be in ONE document called "the contract or agreement." T/F?
False
International commercial contracts typically do not have an arbitration clause. T/F?
False
Jurisdiction over environmental issues in Canada is the sole responsibility of the provincial governments.T/F?
False
Sanjip has elected to build up the earth around the cracked foundation of his home prior to listing the home for sale. Sanjip's action will not amount to misrepresentation if he fails to disclose the cracks to potential purchasers. T/F?
False
The law of torts will automatically provide a remedy when a business has suffered economic loss. T/F?
False
The only basis for a contract being held to be illegal is if it is prohibited by the Criminal Code. T/F?
False
Even though Dalbert knew Rahim had consumed copious amounts of alcohol during the afternoon, both signed a contract written on a napkin whereby Rahim agreed to buy Dalbert's old car for top dollar. Upon regaining his legal capacity, if Rahim opts to repudiate the contract on the basis of an improvident agreement, how must he proceed to void the contract?
He must claim relief due to undue influence.
Stage 1:
In the relationship between the plaintiff & defendant, is there a prima facie duty of care?
What is the paramount function of Canadian constitutional law?
It establishes Canada's structure of legal authority.
What is the function of an express term in a contract?
It explicitly states contractual promises.
Which of the following would very strongly suggest that a business has been ignoring the need to manage tort risk?
It loses insurance coverage
Which of the following best describes the defining characteristics of public law?
It regulates relationships between governments and individuals.
What is the goal of the common law remedy of rescission?
It seeks to return parties to their pre-contractual positions.
What is a distinguishing characteristic of the principle of precedent law?
Like cases should be treated alike
How do you fulfil stage 1?
Plaintiff must demonstrate two things: 1. Reasonable Foreseeability: That the harm that occurred was a reasonably foreseeable consequence of the defendant's act 2. Proximity: there's a relationship of sufficient proximity between the parties such that it would NOT be unjust to impose a duty of care on the defendant
3. A large group of people who have similar claims against the same defendant are likely to be given certification as a class action in Ontario courts. T/F?
True
Why is it important for businesses to monitor government policy?
Rules and regulations are periodically revised.
What is meant by the term "rules of construction" in contract law?
Rules limiting evidence concerning a contract's contents
Creditor
Someone entitled to the payment from a contract
Debtor
Someone obligated to make the payment
A seller unknowingly made a misrepresentation during negotiations to sell his car. Now that the seller is aware of the misrepresentation and the prospective buyer is returning to make an offer, what recourse is available to rectify the situation and accept the offer without risking an ensuing lawsuit?
The seller must attend to the prompt disclosure of the correct facts to the prospective buyer.
A product that contains a shrink-wrap licence typically bears a notice stating that opening the package constitutes agreement to the licence terms. T/F?
TRUE
An entire contract clause is used to ensure that the parole evidence rule applies to the contract. T/F?
TRUE
An implied term may be imposed by the court in order to give effect to the parties' intentions. T/F?
TRUE
Contracting parties can agree to limit the liability for a breach of the contract to less than what is recoverable under the principles of contract law. T/F?
TRUE
It can be difficult to predict how a court will interpret any given contract because the principles for interpreting a contract are guided by conflicting rules of construction. T/F?
TRUE
Liability between parties engaged in a contractual business relationship refers specifically to the legal responsibility of one party to the other for any event or loss that may occur due to breach of the contract. TRUE/FALSE
TRUE
The Supreme Court of Canada has held that the parties to a contract must act "honestly and reasonably, not capriciously or arbitrarily." T/F?
TRUE
The early English court of equity established rules that focus on what would be fair given the specific circumstances of a case, as opposed to what the strict application of the common law might dictate. TRUE/FALSE
TRUE
What does it mean for a contract to be between competent persons?
They must have the legal capacity to sue and be sued.
How do Crown prosecutors serve as the gatekeepers of the criminal courts?
They typically determine which criminal offences to prosecute.
6. A plaintiff's damage award arising from the tort of negligence will be reduced in proportion to his/her own responsibility in causing the loss. T/F?
True
7. A business that has a product liability problem can face claims arising under both negligence law and contract law. T/F?
True
What matches the reality that contracts cannot recite or provide for all contingencies, leaving some issues unstated?
The degree of certainty established in a contract is not entirely absolute.
A court hearing a contractual dispute has determined that an ambiguous term must be construed against the party drafting the agreement. What is the policy rationale for the court's finding?
The drafter of the contract should bear the risk of ambiguous language.
7. An elderly woman with osteoporosis suffered numerous broken bones as a result of a minor car accident. A person without osteoporosis would not have suffered any broken bones in the same circumstances. What would you reasonably expect a court to determine with respect to a negligence claim by the elderly claimant?
The elderly claimant will receive full compensation on the basis of the thin skull principle.
What is the preferred means of ensuring each party to a contract knows its obligations and the obligations of the other party?
The essential terms of a contract are articulated.
. Why would a court consider a lawyer who provided improper advice to a client, who in turn suffered a loss, liable in negligence to the client?
The lawyer owed a duty of care to the client.
While negotiating a commercial agreement, Juan made a misrepresentation that goes to the heart of the ensuing formal contract between the parties. How do you think the other party to the contract will probably act, once it becomes aware of the misrepresentation?
The other party may opt to enforce the contract or have it set aside.
The decisions of the Supreme Court of Canada are best described as:
binding on all other courts in all Canadian jurisdictions
1. What legal term is derived from the Latin word meaning "crooked"?
Tort
2. Neither Jeremy nor Jayson could afford the $60 ticket price for the concert, but they were determined to go nonetheless. They were humiliated when they were apprehended shortly after sneaking in through a side entrance, and escorted from the building. What is the most likely basis for a civil (i.e., non-criminal) action against them?
Trespass to land
1. To succeed in an action for negligence, Mary must establish that she is owed a duty of care. T/F?
True
9. Employers may be liable in negligence for injuries and damage caused by their employees away from the office due to the consumption of alcohol at office parties. T/F?
True
A contract provides the legal backdrop to commercial relationships by defining the rights and obligations of the parties, but it is the business relationship itself that will determine whether, in a conflict, the parties will insist upon strict enforcement of their legal rights. T/F?
True
All municipalities in Canada are created by provincial legislation. T/F?
True
An important factor to be considered when deciding whether to proceed with litigation of a conflict that failed to be remedied through ADR is whether the business can devote the necessary resources to proceed with litigation. T/F?
True
Canada's federal Parliament is composed of the House of Commons and the Senate. T/F?
True
Contract law refers to a collection of rules used to establish contracts as binding agreements between contracting parties and to ensure their obligations can be legally enforced. T/F?
True
Defendant may raise defences against the plaintiff in order to place at least some of the responsibility for the loss on that party. T/F?
True
Intentional torts are harmful acts that are committed on purpose. T/F?
True
Parties are not obligated to volunteer information. They are expected to look out for themselves and ask for information T/F?
True
People seeking to avoid a contract owing to mental capacity, duress, undue influence, or unconscionability must do so promptly. T/F?
True
Public law deals with the regulation of relationships between individuals and government. T/F?
True
Recent events in Canada involving fraud on the public have confirmed that failure to comply with legal obligations can lead to severe consequences for businesses, including financial penalties and possibly criminal prosecution. T/F?
True
Some Canadian common law courts have ruled that, where proper circumstances allow, a party's lack of a practical or realistic alternative can establish valid evidence of economic duress. T/F?
True
The early English court of equity established rules that focus on what would be fair given the specific circumstances of a case, as opposed to what the strict application of the common law might dictate. T/F?
True
The law requires the plaintiff to prove each and every element in a negligence action. T/F?
True
The process of discovery includes the examination of documents, oral testimony, and expert reports. T/F?
True
The purpose of the Statute of Frauds is to prevent fraud and perjury regarding certain kinds of contracts. T/F?
True
The word "tort" is a legal term used to describe any type of harm or injury caused by one person to another, excluding instances of breach of contract. T/F?
True
There are many different torts, each with its own unique set of requirements. T/F?
True
To a business that has become the target of litigation, contingency fees can result in more litigation by improving accessibility to the legal system for claimants who might otherwise lack the resources to sue. T/F?
True
To establish undue influence, evidence of actual pressure requires the party seeking relief to show, among other things, that the influence existed. T/F?
True
Tort of Negligence makes the defendant liable for failing to act reasonably. T/F?
True
When a dispute is covered by insurance, it is important that employees are aware that an attempt to negotiate a settlement may jeopardize coverage unless the insurer consents to the company conducting negotiations. T/F?
True
When a relationship exists between a lawyer and a client, the court is entitled to assume presumed pressure amounting to undue influence. T/F?
True
self-induced impossibility is not frustration by law. t/f?
True
A breach in contract can occur at the time of performance. T/F?
True - ex. fail to deliver machinery on the date you promised in the contract
The law of assignment of rights permits the creditor (assignor) to assign the right to collect to another person (assignee) without agreement of the debtor. T/F?
True, but the debtor must know so that they pay the assignee instead of the creditor
Establishments can be liable to members of the public who are injured by the conduct of their drunken customers. T/F?
True- because clubs, bars, taverns get money from serving drinks to their patrons so commercial establishments should have some positive obligation to the patron and those put at risk by the patron
When a person not in a contractual relationship causes someone else to suffer a detriment, such a loss is no recoverable. T/F?
True- prevents defendants from being overwhelmed with liability
What difference between litigation in Canada and litigation in the United States is a concern for Canadian companies that do business in the U.S. marketplace?
Unlike in Canada, most U.S. jurisdictions do not require a losing party to pay a portion of the winner's costs.
Did the defendant's careless act or omission cause the plaintiff injury?
Would the harm NOT have occurred but for the defendant's actions?
What is the meaning of the Latin term prima facie?
at first sight or on first appearance
What is the definition of the legal term "voidable contract"?
a contract that allows an aggrieved party to choose to keep it in force or bring to an end
What would establish a maximum level of liability for one of the parties if it commits a breach?
a limitation of liability clause
Which of the following would establish that damages of $10 000 will be payable by a supplier if it fails to deliver products to a retailer on time?
a liquidated damages clause
What is a required element in the procedure for passing federal legislation through Parliament?
a majority vote of the members in the House of Commons and in the Senate
What is a required element in circumstances where ADR has been chosen as the preferred method of resolving a dispute between commercial entities?
a mutual desire to retain the relationship
What is the legal definition of a "guarantee"?
a pledge to pay another's liability in the event of default of such duty
What is the meaning of the term "limitation period"?
a set period of time in which a legal action must be commenced
What is legal capacity?
ability to make binding contracts
force majeure clause
allows parties to contractually define what events lead to frustration and would bring it to an end
What is the legal definition of "mistake"?
an error made by one or both parties that seriously undermines a contract
Which of the following would provide that a supplier will NOT be liable to a retailer under any circumstances if it fails to deliver a particular product on time?
an exemption clause
What would have to be present in a contractual situation in order for a court to refuse to apply the parol evidence rule?
an intentional partly oral and partly documented contract
5. What type of physical act is necessary to argue that the tort of battery has been committed?
an uninvited intentional physical violation of another's bodily security
What term is given to the losing party who will be filing an appeal of a trial court's decision?
appellant
Walter receives and considers submissions from both parties involved in a commercial dispute. He will deliver his decision shortly. In accordance with the terms of the contract governing the disputing parties' relationship, they are bound to comply with that decision. What role does Walter play in providing a resolution to this dispute?
arbitrator
What are the categories of pecuniary damages that may be awarded in accordance with tort law?
compensation for out-of-pocket expenses, loss of future income, and cost of future care
What is the source of the law that governs lawmaking authority within the Canadian legal system?
constitutional law
Illegal contract
contract that cannot be enforced b/c it is contrary to legislation/public policy
Windy Energy Inc. recovered most of its property stolen by a former employee. The employee was placed on probation and ordered to pay restitution. What type of law determined the employee's punishment?
criminal law
Davey Jones Law Firm has filed a claim with the court on behalf of its client, naming Gaston's Commercial Fabricators Inc., as the opposing party. What title is given to Gaston's in the claim?
defendant
11. Which of the following would be owed a duty of care by a manufacturer of dairy products?
distributors, retailers, consumers
14. On what is tort law based?
fault
What categories of actionable misrepresentations entitle an innocent party to a common law remedy in damages?
fraudulent and negligent misrepresentation
15. Which of the following is a very critical element of a plan to manage risk related to tort liability?
insurance coverage
Who is characterized as a good listener whose professional function is to provide assistance to disputing parties wanting to negotiate a settlement of their dispute?
mediator
To which level of government would a business make an application for a property zoning variance, and why?
municipal government; provincial constitutional delegation of authority
primary liability arises because?
of one's own personal wrongdoing
A supplier and a retailer have a long, established relationship. Earlier contracts between them have always provided the standard "within 30 days of delivery" payment provision. A new contract between them makes no reference to payment terms. What would a court most likely rely on to arrive at a decision that payment is due within 30 days of delivery?
past dealings
vicarious performance
performance of contractual obligations through others -law holds individual responsible for the incompetence of others though
Quest Electrical Engineers Inc. contractually committed to provide specialized services to a construction project with specified deadlines for completion. Quest has to meet deadlines or face penalties. What type of law governs the relationship and conduct of the parties to this contract?
private law
3. Rodolfo was permanently injured in a vehicle collision. He retained Pilgren, a lawyer, six months prior to the expiry of the limitation period to commence a law suit on his behalf. Pilgren incorrectly noted the limitation date. As a result, he failed to file the claim within the prescribed time. What is the tort that arises in these circumstances?
professional negligence
What is the burden of proof required to be satisfied in a civil lawsuit?
proof on the balance of probabilities
12. Which of the following would immediately suggest to a lawyer that a client has a reduced chance of receiving an award in negligence for her damages?
pure economic loss
Causation
relationship that exists between the defendant's conduct and the plaintiff's loss or injury
What is recission?
remedy that results in parties being returned to their pre-contractual positions
8. The absence of a sufficiently close relationship between Roger's action in negligence and Jamel's injury is based on which of the following?
remoteness of damage
What is business law?
rules governing commercial relationships and the enforcement of rights
The Province of Newfoundland and Labrador enacted new regulations to better control hazardous waste disposal throughout the province. What type of law should specialized waste control businesses operating in Newfoundland and Labrador refer to in order to ensure their commercial activities are legally compliant?
statute law
13. On what would you reasonably expect a European Union state court to base its findings when determining a matter involving product liability?
strict liability
Canadian environmental activists are sometimes charged with offences for actions taken during their protests. Which of the following might constitute a basis for activists to challenge convictions arising out of their protest activities?
the Charter rights of freedom of peaceful assembly and freedom of association
The activities of a large multinational corporation violated federal and provincial environmental laws. It polluted a clean water source and caused illness among the people and wildlife inhabiting the affected area. What would the corporation's lawyers most likely suggest as the main reason for attempting to force resolution of the legal dispute through ADR?
the ability to keep details of the contamination and of the settlement private and confidential
When duress is established...?
the contract is voidable at the option of the party subject o the duress
What outcome would eventually result from approaching the operation of a business with an unethical perspective combined with a lack of respect for adherence to and enforcement of the law?
the demise of the business
The duty to love your neighbour imposed by society is synonymous with what duty imposed by law?
the duty to not injure your neighbour
if the same debt is assigned to more than one assignee, what happens?
the first assignee to get in contact with the debtor is entitled to payment
4. What type of physical act is necessary to argue that the tort of assault has been committed?
the intentional threat of imminent physical harm
What criteria must be satisfied in order for a misrepresentation to be actionable?
the misrepresentation must be material to the contract
10. In negligence law, which of the following is equivalent to the statement "it is not enough to establish some of the steps or even most of them"?
the plaintiff's requirement to prove each and every step of a claim for negligence
What is the meaning of "evidence" in the legal environment?
the proof presented in court to support a claim
Which governing bodies are the primary regulators of business activities in Canada?
the provincial and municipal governments
5. Which of the following is synonymous in law with the standard used to judge whether a ordinary person's conduct in a certain instance is negligent?
the reasonable person test
Which of the following elements would a court consider when determining the enforceability of a non-competition clause on the grounds of reasonableness?
the reasonableness of geographic and time restrictions
What would a negotiator most likely caution against with respect to the notion of building flexibility into contractual agreements?
the risk of having no contract at all if the resulting document is too unfixed
A mediator attempting to negotiate a resolution to a commercial dispute has conceded that she is unable to move the dispute through the mediation process. What would the mediator most likely say is the main factor contributing to the failed mediation?
the unwillingness of one party to compromise and quickly resolve the issues
9. A negligence victim experienced a prolonged recovery from injuries owing to an inherent physical weakness. What principle would a court apply to prevent a negligent defendant from escaping liability for full compensation in these circumstances?
thin skull
What is the purpose of contract law?
to enforce expectations and facilitate planning
Marty has made his acceptance of an offer to purchase his house subject to his lawyer's approval. Why did Marty's lawyer advise him that it was essential for him to do so?
to ensure contractual obligations are properly expressed and appropriately limited
What is the role of the pleadings stage of the litigation process?
to facilitate the exchange of formal documents stating the basis of the suit
What is the goal of negotiation?
to reach a fair and acceptable outcome
Plaintiff will get damages in event of breach and in special cases they will get equitable remedy. t/f?
true
The filing and service of a defence is part of the pleadings stage of a legal action. T/F?
true
The party ordered by the court to pay a specified amount to a winner of a lawsuit is known as a judgment debtor. T/F?
true
What is the definition of "undue influence" with respect to contractual relationships?
unfair manipulation that compromises someone's free will
