Week 8 Ch 14 Sales of Goods Act, Ch 15 Bailment and Leasing

Standard of Care Hertz Canada v. Suburban Motors (car theft case)

-Depends on TYPE of bailment; 1. Highest: -gratuitous bailment for benefit of bailee 2. Middle: -contractual bailment 3. Lowest: -gratuitous benefit for benefit of BAILOR Contractual Bailment: bailee expected to take care of goods as a prudent and diligent person; ex. Hertz Canada v. Suburban Motors (car theft case): -thief stole keys from where they were kept in office -court held there was no breach of contract to Suburban Motors (they met their std/ duty of care) Type of goods also a factor (greater care with more expensive goods)

Case Study: Developing website for business - Ch 15, case #5

-4D enterprises delivers Jung 2 computers to help develop website to test system fully -found Jung was not performing very well, heard negative reports about his work -as a result found someone else to do work & asked Jung to return computers -he argued he had done substantial work on the project and demanded payment in full on agreed amnt Is Jung entitled to keep computers until he has been paid? -contractual bailment: transfer POSSESSION of goods but NOT TITLE of goods -can jung keep the computers? -the work has NOT been completed, cannot demand payment -Jung cannot keep computers until he's paid BECAUSE he did NOT FULLY complete the work and payment was NOT YET DUE (cannot use remedy of lien for services) -can rely on breach of contract (provided PARTIAL services of) for PRIMARY argument: -stipulate timing of completing work (reasonable time period for Jung to do work) -Jung could argue secondary: Quantum merit: if the work Jung performed had VALUE to the project, ONLY compensates for VALUE of work performed, he would probably want MORE based on expectation damages (had the job been fully complete)

Sellers Liability: -Unsolicited facts -Breach of Warranty vs Condition -Exceptions to right to rescind -Wrongful detention -Buyers Remdies

-Breach of WARRANTY (by seller): liable for damages, NOT entitled to rescind contract -Breach of CONDITION: entitles buyer to RESCIND contract AND sue for damages UNSOLICITED Facts: -clients received unauthorized facts (unaware of legislation), to be cautious restructure facts of company to limit liability -IMPORTANT TO DO LEGAL RISK ANALYSIS (to make sure business activities are legal ex. Is this mktg technique permissible?) Exceptions to right to rescind: 1. Where BUYER KEEPS the goods or TREATED them in a way INCONSISTENT with seller's ownership Ex. Sell buyer a car, but buyer kept car for some time and drove it (used it), cannot try to rescind after a month, since it is NOT in a TIMELY manner and treated goods in an inconsistent manner that was laid out in contract 2. Contract is for SPECIFIC goods and TITLE has PASSED to the buyer even though goods still in seller's possession (often ignored by courts when goods defective) *special sales contract Wrongful detention: -REFUSAL of SELLER to DELIVER goods where title has passed to buyer (tort) -If seller also transfers goods to a 3rd party, buyer may sue for tort of conversion Buyer's Remedies: -BREACH of CONTRACT (damages and equitable remedies), tort, consumer protection legislation

Rights and Duties of Bailee (possession of goods): -Solway v. Davis Moving Case (movers; $0.60/lb unreasonable) -Davies v. Collins (dry cleaning case; re "necessary handling")

-Express or implied terms of CONTRACT; establish duties, level of care, liabilities Bailees also have DUTY of CARE under TORT law: duty to take care of property bailed to them; standard of care varies according to type of bailment -Exemption clauses may not be enforced by courts if damage or loss if NOT RELATED to ACTUAL performance; -narrowly interpret wording in clauses -fair, equitable understanding Solway v. Davis Moving (movers case; $0.60/lb unreasonable): -assurance made by Davis to Solway to store valuable goods in storage warehouse overnight, then transport goods to new home next day -put goods in locked trailer but stored it overnight parked on the street, with construction happening in warehouse -trailer was stolen -loss suffered did not relate to PERFORMANCE of contract (exemption clause only spoke to performance of contract, what was done/storage of goods did not apply to moving of goods) -Exemption clauses interpreted narrowly; Davies v. Collins (dry cleaning case; exemption clause re "necessary Handling"): -goods delivered to dry cleaners -subcontracted out clothes since they were busy -clothes were damaged, but contract was only subject to Davies (original dry cleaners), exemption clause not privy to the subcontractors

Exemption Clauses

-Implied terms may be NEGATED or modified by terms of contract or CONDUCT of the parties; interpreted NARROWLY by the courts Example: -if clause in contract states "all WARRANTIES excluded", then all implied CONDITIONS still apply; -if clause in contract states that "all implied CONDITIONS AND warranties are excluded", then all express terms, warranties and conditions (those in the contract) still apply -Courts do not allow buyer to completely exempt seller from performance: -Attempt for sellers to limit/ negate sale of warranties, by including clauses in std form contracts (popularly), to over ride exemption acts of Caveat Emptor -parties can LIMIT liability (not FULLY liable) by adding exemption clauses to their contract, stating the implied terms of Sales of Goods Act don't apply Subject to Consumer Protection Act: -provision states in Protection Act: no legislation, contract, clause that attempts to NEGATE the implied terms of Sales of Goods act is enforceable -*for Retailers: MUST HONOUR implied terms of sales of goods (full warranties and implied conditions) act to their CUSTOMERS -on the other hand if they are buying from manufacturers/wholesalers such that the retailer CANNOT in turn look to their manufacturers/ suppliers, important to negotiate contracts bc retailer STILL LIABLE TO CONSUMERS -*retailer MUST provide warranties to consumers, EVEN THOUGH they did not manufacture the goods

Leasing; -Types of Chattel lease; -Operating and Purchase/capital lease -adv of Chattel leasing

-Leese, lessor, lessee Types of Chattel Lease: Chattels: MOVEABLE PERSONAL property (not land) 1. Operating Leases: -TRUE leases; usually SHORT term; NO INTENTION to transfer ownership -true legal relationship, lessor (owner of goods), allows lessee to use goods (receiving consideration), with the expectation that goods will RETURN back to lessor Ex. Rent construction crane for few weeks, don't need to purchase equipment -Ex. Leasing a car -may have opp to purchase goods after, but intention to only to use for certain period of time 2. Purchase Leases (capital leases): -LESSE eventually becomes OWNER; usually LONG term -could be disguised as PERSONAL SALES contract -intention to use goods with the intention that goods can be purchased later on If a purchase/capital lease then: -asset and liability recorded in balance sheet -instalments of purchase price (except interest component) NOT deductible (would be for true lease) - lessee considered owner and entitled to claim CCA for depreciation - lessor must protect its security interest under the PPSA *Operational lease certain tax treatment FULLY DEDUCTABLE *Purchase/capital lease: can be depreciated Advantages of chattel leasing: - goods may only be required for short period of time (for operating leases) -accounting and tax reasons (for purchase and financing leases) -Implied warranties of quiet possession, fitness for purpose apply

Consumer Contracts: 1. Business Sales Tactics 2. Terms in Consumer Contracts Consumer Remedies

-N/A to business to business transactions -Addresses UNEQUAL bargaining power, pressure sales tactics etc. 1. Business Sales Tactics: -Direct sales contracts NOT IMMEDIATELY binding *cooling off period; 2-10 days -Use of UNREQUESTED goods NOT an acceptance of seller's offer Telemarketing: -requires cooling-off periods and disclosure requirements (name, purpose, kind and value of product/service); contests are prohibited; subject to "National Do Not Call List" established by CRT 2. Terms in consumer contracts: -Cannot exempt out of implied terms under SOGA -Required disclosure/information -All express and implied terms given interpretation MOST FAVOURABLE to CONSUMER (application of contra preferentem rule) -Seller's right of repossession lost once buyer has paid a portion of the purchase price -Forced arbitration clauses (with no access to courts) void -Disclosure of true cost of financing -Criminal rate of interest -Assignees of consumer credit contracts to be subject to the equities (assignee shall have no greater rights than the assignor and is subject to the same obligations) -Some industries subject to higher standards of disclosure (ex. time shares, leasing, motor vehicle repair) Consumer Remedies: 1. Sue for damages for breach of implied term or prohibited practice 2. Exemplary damages: to PUNISH bad behaviour

Payment, Delivery and Risk of Loss

-TIME SET for payment is a WARRANTY not a condition -if buyer fails to make payment on time, seller is NOT entitled to rescind contract and get goods back for non payment (ONLY If contract doesn't state otherwise, parties in contract CAN modify to include this) -but general rule that time set for payment is a WARRANTY NOT A CONDITION -Contractual terms specifying quantity of goods to be delivered and/or time of delivery are usually a condition; if no time set for delivery, must be delivered within a reasonable time (in the circumstances) -If not stated in contract, whoever OWNS goods at TIME of LOSS BEARS the loss; *risk of loss FOLLOWS TITLE -therefore moment title passes is important; most contracts deal with delivery and insurance

Rights and Remedies

-Usual contractual remedies for breach by bailor -LIEN for services (ex. lawyers, accountants, bankers) -Right of Sale: in bailment contract or statute

Services vs. Goods: -Criteria to consider -Ter Neuzen v Korn (artificial insemination case) - SCC -Pittman Estate v. Bain (tainted blood Case)

-was the services OR the goods the ESSENCE of the contract? Look at: 1. Existing law 2. Is this fundamentally a good or service contract? 3. consideration being delivered from goods (MUST INCLUDE $ for goods) *BARTERING of goods, DOES NOT apply to Sale of Goods Act Ter Neuzen v Korn (artificial insemination case) - SCC: -Ended up being infected by HIV from semen -sue under negligence and sale of goods act: -does the Sale of Goods Act apply?-is it fundamentally a sale of goods or services (TRUE ESSENCE/purpose of contract); is goods merely incidental, with essence in service? -the essence of contract was fundamentally of services (performing on specific skill/process, operation doing artificial insemination), the delivery of goods (semen) was NOT the KEY COMPONENT of contract -at the time no test to deduct HIV in blood, although doctor had duty of care, they did not breach duty of care to check blood since TESTS DID NOT EXIST AT THE time to test the blood Pittman Estate v. Bain (tainted blood case): -Mr.Bain was a physician and treated Pittman's -Pittman's Husband & wife (husband treated for cardiac procedure, blood infusion had received tainted HIV blood) -Mr. Bain FAILED to tell Mr. Pittman about the blood, fearing he would go into depression, his wife then contracted HIV -the court had to decide whether the procedure provided to Mr. Pittman was primarily in services -Pittman's brought many causes of actions; 1. under negligence tort (was successful) and 2. under Sales of Goods Act (unsuccessful; essence of contract was in service provided of cardiac procedure/operation)

Remedies of Seller (6), if buyer is in breach (not able to pay for goods) 1. Seller's lien 2. Repossession 3. Resale 4. Damages for non acceptance 5. Action for Price 6. Retention of Deposit

1. Seller's lien - right of person in possession of property to RETAIN property until payment. Arises when: (i) contract does not allow for deferred payment/credit (ii) if sold on credit, term of credit has expired without payment, and seller still has possession of goods (iii) where buyer becomes insolvent before delivery 2. Repossession -right LOST once goods DELIVERED EXCEPT in BANKRUPTCY, where buyer becomes bankrupt within 30 days of goods being delivered -seller can retrieve goods within 30 days under Solvency and Bankruptcy act (doesn't apply to sale of goods act) 3. Resale -once/if right of lien exercised -way for SELLER to MITIGATE damages 4. Damages for Non-Acceptance -profits lost (if seller can sell more goods than prospective buyers may order SUPPLY > DEMAND) -deficiency in resale price *LIMITED VS UNLIMITED SUPPLY: -look to see if seller is SELLING MORE GOODS then buyers can buy (BUT LIMITED SUPPLY): -Ex. Only 1 Fridge to sell for $500, buyer agreed to buy but didn't pay, sold to another consumer and got $400, can only sue original buyer for $100 -OR if seller has UNLIMITED supply of goods: -will sue for LOST PROFIT as. Damage award -COST to PRODUCE fridge, and what it would be SOLD for and the DIFF btwn COST & REV (not looking at difference in sale price) 5. Action for the Price -applicable when title has passed; seller entitled to full selling price -subject to consumer protection legislation; most retailers have return policies 6. Retention of Deposit -DEPOSIT may be treated as LIQUIDATED damages -if title has not passed to buyer, seller entitled to retain out of down payment any damages suffered; accountable for rest -sue in tort and breach of contract Liquidated damages: TRUE/GENUINE estimate of total and probable loss agreed by both parties -if they was not a genuine est, only entitled to keep what a reasonable est or what losses actually are -deposits are treated as NON REFUNDABLE, might not rep liquidated damages -down payment is clearly not retained as liquidated damages, whereas a penalty may be

Specific Implied Terms (4) *exceptions to Caveat Emptor Principle 1. Sellers title (ownership) 2. Description 3. Goods Correspond with Sample 4. Suitability and Quality (Champoniere v Mason bath bun Case Wren vs Holt arsenic beer Case)

1. Seller's title (ownership): - implied condition that SELLER has (or will have) RIGHT to sell - *implied warranty buyer will ENJOY QUIET (undisturbed) POSSESSION - implied warranty goods FREE from any LIEN, charge or ENCUMBRANCE NOT known to buyer 2. Description: - goods will MATCH description given by seller (if goods sold by description - e.g. website sales); *providing SAMPLE does NOT remove implied term -if goods DON'T MATCH description from website, buyers don't have to pay 3. Goods Correspond with Sample - implied condition (i) the BULK will COMPLY with SAMPLE in quality, (ii) buyer will have a reasonable opportunity to COMPARE bulk to sample, and (iii) goods FREE FROM DEFECT that make them unmerchantable that was not apparent from sample Ex. Sample of table doesn't match when full table comes in 4. Suitability and Quality - general rule - buyer to satisfy themselves, subject to 2 exceptions: (i)Implied condition goods fit for purpose (implied term of FITNESS) if buyer tells seller of SPECIFIC PURPOSE and indicates RELIANCE on seller's SKILL and judgement; seller is AWARE of purpose Champoniere v. Mason (1905) -the bath bun case: -sugar coating bath bun case -stone within bun -resulting in chipped tooth of buyer -buyer brought action against baker where he purchased good -good were not fit for purpose (to consume safely; be eaten) -was under Sales of Goods Act (essence of contract/ sale of goods) -was an implied breach since the buns were not fit for their purpose (of safe consumption) Note - implied condition of fitness does not apply when goods purchased by its trade name - buyer deemed to have satisfied itself (ii) Implied condition of merchantable QUAlITY -if goods bought by description from seller (but not if buyer could have detected if examined) implied term that that the goods are in reasonable condition and free from defect that would make them unusable, quality RATHER than purpose, REASONABLE condition Wren vs. Holt (1903) - arsenic in beer case: -buyer brought action for implied breach of quality, was successful since buyer couldn't detect/ inspect arsenic in beer (successful exception to Caveat Emptor rule)

Bailment and Leasing; -Bailment -Bailor and Bailee (Ownership vs Possession) -Voluntary vs Involuntary (parting of possession)

Bailment: -transfer of POSSESSION of personal property WITHOUT transfer of OWNERSHIP, and with the INTENTION that the property will be returned to the owner (excl. goods on consignment, since their intent is to be sold not returned) -have a DUTY OF CARE TO PROTECT GOODS *OWNERSHIP and POSSESSION are different Bailor: OWNER of property Bailee: has POSSESSION of property -May be VOLUNTARY (lending a car) or INVOLUNTARY (forgetting coat at a restaurant) Involuntary: -Ex. after buying unit of property, noticed underground parking -an old beat up car was still in underground parking -a form of bailment is here, cannot simply DISPOSE of car, must make a best attempt/effort to return car to original owner -Most often dealing with contractual bailment: (intent of giving goods to another party, with INTENT/ EXPECTATION to get EXACT goods back) Ex. Parting of possession from goods, but still having OWNERSHIP Ex. Giving furniture to moving company's, taking car to autobody shop -NOT A BAILMENT: DEPOSIT of money; what you put in, get SAME AMNT back/equates to it/equal value BUT NOT PHYSICALLY THE EXACT SAME THING -Ex. In Muhjse Shaadi Karogie when Salman khan looses Dog Tommy and returns her dad another bread of dog, but NOT the same Tommy dog :(

Chapter 15 Bailment and Leasing Defs:

Bailment: possession of personal property without ownership Bailor: owner or transferor of the goods Bailee: party accepting possession of goods from a bailor gratuitous bailment: a bailment where one party provides no consideration, or where there is no intention to create a contractual relationship sub-bailee: a person who receives a bailment of property from a bailee bailments for value: contractual bailment fungible goods: goods that may be replaced with different but identical goods common carrier: a business that holds itself out to the public as a transporter of goods for reward inherent vice: a latent defect or dangerous condition of goods Innkeeper: a person or firm that maintains an establishment offering lodging to any member of the public pledge or pawn: a bailment of personal property as security for repayment of a loan where possession passes to the bailee Pawnbroker: a business that loans money on the security of pawned goods Lease: (1) an agreement where the owner of property allows another person to have possession and use of the property for a specific period in return for the payment of rent and (2) the agreement between landlord and tenant creating the leasehold interest Lessor: the owner of the leased property; when applied to land, known as a landlord being a grantor Lessee: the person who takes possession of the leased property; when applied to land the lessee is a tenant, the person to whom an interest in a leasehold estate is granted hire-purchase: an agreement to lease an item of property with an option for the lessee to purchase it at the end of the stipulated term Chattel: moveable personal property or goods; not land operating lease: a lease under which there is no intention to transfer ownership purchase lease: a lease whereby ownership is intended to change hands at the end of the lease term security lease: a purchase lease in which the lessor provides the credit finance lease: an arrangement where a third person provides credit financing, becomes the owner of the property, and leases it to the lessee sale-and-leaseback: a transaction in which the owner of property sells it and immediately leases it back from the new owner quiet possession: a warranty that there will be no interference with the lessee's possession or use of the asset

After det Sales of Goods Act does apply; Implied Terms; Caveat Emptor Condition vs Warranty

Caveat emptor principle (buyer beware): -general principle limited by the Sale of Goods Act and common law; applies where goods are SPECIFIC items that may be inspected and seller has made no representations -general principal: buyer has duty to (applies to sale of goods, real estate etc.); 1. inspect 2.investigate 3.satisfy themselves in terms of the condition of goods before buying goods -unless prevented by seller to inspect goods -if SPECIFIC goods exist during time of buying and opportunity to inspect goods, if they FAIL to do proper inspection it is of fault of the buyer Implied Terms: -NOT required to be in the WRITTEN contract; they are "implied" to be included by the Sale of Goods Act Implied Condition vs. Implied Warranty *Condition: (major BREACH which relieves the innocent party from performing) -doesn't have to pay for goods vs. *Warranty (non-essential term that DOESN'T relieve the innocent party from performing - only allows to sue for damages) -still have to close and perform their end of bargin

Chapter 14 Sales of Goods and Consumer Contracts defs:

Codified: existing common law rules collected and put in statute form agreement to sell: a contract of sale in which the transfer of ownership in the goods is deferred to some future time Consignment: the transfer of only possession of goods from one business to another for the purpose of offering for sale Goods: personal property, excluding both money and choses in action caveat emptor: let the buyer beware Condition: a major or essential term of the contract, the breach of which may relieve the injured party from further performance Warranty: a lesser or non-essential term that, when breached, does not relieve the injured party from performance retail sales: sales of consumer goods by retail businesses, in the ordinary course of their business, to private individuals implied term as to title: it is implied that the seller has a right to sell the goods implied term as to description: it is implied that goods sold by description will conform to the description implied term that goods correspond with sample: the actual goods supplied will correspond to that sample in type and quality implied term of fitness: it is implied that the goods are of a type that is suitable for the purpose for which they are bought implied term of merchantable quality: it is implied that the goods are in reasonable condition and free from defects that would make them unsuitable for use specific goods: goods in existence, identified and agreed upon as the subject matter of the sale unascertained goods: goods that have not been set aside and agreed upon as the subject of a sale future goods: goods that have not yet been produced Appropriated: designated as the subject matter of the contract bill of lading: a document signed by a carrier acknowledging that specified goods have been received by it for shipment Lien: a right of a person in possession of property to retain that property until payment Deposit: a sum of money paid by the buyer to the seller, to be forfeited if the buyer does not perform her part of the contract down payment: a sum of money paid by the buyer as an initial part of the purchase price wrongful detention: the refusal by the seller to deliver goods whose title has passed to the buyer Consumer: an individual (not an organization) purchasing a product or service for personal, family, household, non-business purposes direct sales contract: a contract formed at a place other than the business's place of business Telemarketing: the use of telephone communications for promoting the supply of a product or for promoting a business interest exemplary damages: money over and above losses to punish bad behaviour

Case Study: The used car case - Ch 14, page 325, case #8

Facts: -Buyer bought used car from used car dealer for $8,000 -Seller described car as "one careful owner, low mileage, excellent condition" -Seller actually knew car had 3 previous owners, car had been in collision and had sustained serious damage; odometer had been altered; SELLER KNEW car was in very poor condition -Soon after delivery, car had problems -Seller continued to lie -What are remedies and actions available to Buyer? What are the causes of action that the buyer can have against used car dealership? *Sale of goods act applies 3 implied terms: 1. Wrongful description of goods (implied terms from Sale of Goods Act), goods didn't match description 2. Fit for use 3. Merchantable quality For Contract law: Material Misrepresentation (even if innocent, if it is MATERIAL, could give rights to buyer to sue) From Tort: Tort of deceit committed (breach of duty of care to customer); FRADUALENT misrepresentation (not innocent misrep) What remedies are available (IN CONNECTION OF DIFF CAUSES OF ACTIONS; diff causes of actions give rise to diff remedies): -cause of action is a set of facts that give RISE to legal liability -Remedy what recourse are you claiming against the other party? -diff causes of actions warrants diff remedies (breach of implied condition; NOT required to take the car and pay for it), Under contract law: voidable/ rescind contract. Under Tort law: sue for damages -if sales of goods act says that it is deemed serious -if does not meet merchantable quality (subjective test; goods don't have to be perfect but of "REASONABLE" quality, courts will decide) -bad behaviour of seller, still entitled to damages based on bad misconduct of seller

Case Study: The folding chairs case -Ch 14; pg 325, case #6

Facts: -School board (buyer) orders 2500 folding chairs -Buyer examines several chairs made by seller and other suppliers -Buyer settles on one particular model but requested modifications -Seller makes prototype, examined by buyer -Seller delivers first batch of 500 chairs and continues to make other 2000 -Few days after first delivery, found that chairs tipped easily and were unsuitable for use in classroom Does sale of Goods Act apply? -yes it is a sale involving good of chairs (personal property) for exchange of money -Caveat Emptor corresponds to SPECIFIC chairs (although they reviewed samples, they did NOT review specific goods that were sold), this would NOT be strongest argument -we know 500 chairs were faulty and not fit for purpose (to sit comfortably), we know seller is a MANUFACTURER of chairs there is RELIANCE on seller BUT importantly WE DON'T know if the prototype being examined was faulty or totally operational/fit for purpose or MATCH the 500 chairs delivered -cannot argue breach of sale by sample; since the approved the prototype (sample of chair) -the BUYER made number of modifications (no longer relying on sellers expertise) -seller would challenge fit for purpose, since the buyer is RELING ON THEIR OWN expertise to design their types of chairs -fitness of use: buyer determined specifications -apply on merchants quality: simply defective goods; buyer would argue although they made modifications, the seller should've been fit for its purpose and sell a chair fit for its purpose to sit on the chair -therefore buyer has stronger case -implied warranty (buyer MUST still perform even though seller is in breach and buyer must sue for damages) vs conditions (either sue for damages or decide not to perform in contract) to determine remedies

Title to Goods SOGA Rules for when title passes (if not set out in contract)

Only OWNER can pass good title; -as general rule: *only OWNER of goods can pass title of goods Only the SELLER has the RIGHTS to sell good Ex. Only car dealer can sell the car -if the buyer has NO knowledge of it is the proper seller, they are still entitled to the goods (usually assumed sellers regularly ENGAGE normally in selling goods) -if buyer is aware that this is not the proper seller than they are not entitled to hold onto goods 2 exceptions: 1. Sales made by an AGENT (ex. consignments) -ConsignOR gives goods to consignees (with intent to sell), agent is allowed to pass on title (NOT NEEDING owner) 2. Seller or Buyer in possession - protects innocent buyer who "buys" the goods in the normal course of business without notice of any defect in the seller's title SOGA sets out rules for when title passes if not set out in the contract; Rule 1: where there is an unconditional contract for the sale of SPECIFIC goods in a deliverable state, when the CONTRACT is MADE Rule 2: where there is a contract for the sale of specific goods and the seller is BOUND to do something to the goods to put them into a deliverable state, when the BUYER has RECEIVED NOTICE that it has been done Rule 3: where there is a contract for the sale of specific goods in a deliverable state but the seller is bound to do something to ASCERTAIN their price, when the buyer has received notice that it has been done Rule 4: where goods are DELIVERED to the buyer on approval or on "sale or return," when the buyer SIGNIFIES approval, or does some other act adopting the transaction, or when the buyer retains the goods BEYOND a reasonable time Rule 5: where there is a contract for the sale of unascertained (NOT CONFIRMED) goods or future goods by description, when goods of that description and in a deliverable state are appropriated to the contract by one party with the assent of the other

RBC & Food Invest Case

RBC & Food Invest: -self service express (personally transfer and receive funds to receipt in Canada or outside Canada (could even be another bank) -Food invest used RBC express, funds transferred from Canada to Polish Bank, recipients of bank committed fraud -occurred march-April 2015 -RBS received email that polish bank suspected fraud from 2 received payments -RBC did not pass info on to Food Invest -Food Invest sued RBC as they were under a duty to advise them of the fraud -RBC moved to SUMMARY of judgement (made claim that it was frivolous, non merit and didn't warrant wasting time; no viable cause of action) -trial judge/superior court agreed RBC, that there was no cause of action -appealed to the Ontario Court of appeal (5 years later!), agreed with Superior court. The service consisted of a SELF service without representatives intervening, it was therefore OUT of SCOPE of RBC's control, in the terms of the contract, it did not state that they needed to look into deposits and find info on each transfer -RBC's duty of care to take reasonable steps to make sure transfers go through, the issues and specific transfers are the responsibilities of Food Invest, if they were cheated it is but from the dishonesty of other parties they did business with -acquits Bank from complete liability of case

Sale of Goods -Sales of Goods Act (ON)

Sales of Goods Act (ON): -Codified existing law and implied terms into STATUTE law -PROVINCIAL legislation -Applies to sales of GOODS (NOT services) for money consideration and to all parties to the contract -purpose to PROTECT buyers (no written contract each time a consumer engages in a transaction of goods) -specific types of contract; sale of goods, sellers liability, consumer contracts -Does not apply to barter, leases, consignments, non-contract transfers, land or intangible property, service -"implied terms"; embedded in contracts Ex. Implied warranties, conditions for the BENFIT of buyers -det whether sale of goods applies to your SPECIFIC contract (not to lease of goods or impalements, ONLY FOR TRANSFER OF TITLE/OWNERSHIP OF GOODS and TANGIBLE PERSONAL PROPERTY) Property: Real property: land, buildings, real estate, land fixtures Personal property: (NOT AN INDIVIDUAL or of a personal nature): simply ANY property that is NOT real property (could be intangible personal property; good will, AR, patents, intellectual property AND also tangible; equipment, machinery, piece of a desk etc.)

Special Types of Bailment; -Storage and Safekeeping -Repair & work on Chattel -Transportation -Innkeepers -bailments involving shares

Storage and Safekeeping: (ex. warehousing, safety deposit boxes) Repair and work on a Chattel (ex. auto repair, equipment servicing) Transportation: -distinction between gratuitous carrier, private carrier (selects its customers and type of goods; on occasion), and common carrier -duty of care HIGHEST with COMMON carrier - liable regardless of fault unless an act of God, inherent defect in goods, or default of shipper) Innkeepers: -Pledge or pawn (rights in pledged property governed by PPSA - CH28) Type of bailment involving shares: -shares certificates are pledged to a 3rd party -shareholder owns shares, but delivers shares to creditors for security of loans made (share pledge) -governed under Personal Property Securities Act (deals with financing transactions of property OTHER than real estate, not just personal property, but also other business assets (again not including real estate)