a. Contracts in Restraint of Trade

 3.a. Contracts in Restraint of Trade

Shafron v KRG Insurance Brokers (Western) Inc.

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  The reasonableness of a restrictive covenant is determined by considering the extent of the activity sought to be prohibited and the extent of the temporal and spatial scope of prohibition
  
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  If the covenant is ambiguous, in that what is prohibited is not clear as to activity, time, or geography (must be all 3) it is not possible to demonstrate that it is reasonable
  

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  2009 SCC Case
  
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  In 1988 Mr. Shafron sold his ownership of his insurance brokerage business to KRG
  
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  He continued to be employed but signed a contract which contained a non-competition clause
  
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    If he left KRG he would not carry on a similar business for three years within the "Metropolitan City of Vancouver" <---- not a place
    
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  In 2000 Shafron left KRG and began selling insurance in Richmond for another company
  
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  KRG sued for breach of contract
  
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  Trial judge found clause unenforceable, Court of appeal reversed, Shafron appeals to SCC
  

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  For Shafron; the clause is ambiguous?
  

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  Policy considerations relating to restraint of trade:
  
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    The public, and every individual has an interest in being able to trade freely
    
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    Restraints of trade are contrary to public policy
    
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      These restraints can be justified if by the special circumstance of a particular case, and if the restraint is reasonable
      
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        Reasonable in reference to interests of the parties and interests of the public
        
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  There is a presumption that restrictive agreements are prima facie unenforceable, but a reasonable restrictive agreement will be upheld
   
  

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  There is a greater freedom to create reasonable restrictions between buyer and seller than between employer and employee
   
  

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  Relation between Buyer and Seller:
  
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    Public Policy requires man not to deprive himself/state of his labour/skill/talent by entering into contracts
    
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      BUT, certain contract will require him to agree not to compete with the other party
      
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      "a person seeking to sell his business might find himself with an unsaleable commodity if denied the right to assure the purchaser that he, the vendor, would not later enter into competition"
      

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  When an individual sells a business there is a payment of goodwill
  

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  Does this payment serve as consideration for the non-competition clause?
   
  

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  Relation between employee employer
  
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    These considerations do not apply to employee-employer relation because:
    

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  There is no payment for goodwill
  
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  The is an imbalance in power between employee-employer
  
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  All competition clauses are potentially void
  
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    this carves out when they aren’t void
    
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  For these reasons the reasonableness of a restraint receives more rigorous scrutiny
   
  

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  The reasonableness of a restrictive covenant is determined by considering the extent of the activity sought to be prohibited and the extent of the temporal and spatial scope of prohibition
  
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  If the covenant is ambiguous, in that what is prohibited is not clear as to activity, time, or geography (must be all 3) it is not possible to demonstrate that it is reasonable
  

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  Policy issue with non-compete clauses:
  
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    “you can’t practice your trade”
    
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      Society suffers, people might pay higher prices
      
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  Different from baby M in a sense
  
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    Balancing freedom of contracts with societies concerns
    
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      Societies concern equaled paternalism 
      

3.b. Contracts Related to Gaming

Boardwalk Regency Corp v Maalouf

 Ratio:

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  English courts refuse to give legal effect to transactions which they hold to be immoral
  
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  In determining whether a contract relates to moral conduct see if the conduct is in the Criminal Code
  
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    If it is check to see if it is conduct that is an outright offence or conduct that could be amended to be regulated?
    

 Facts:

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  Respondent from Ontario got into debt in New Jersey
  
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    Failed to pay debt
    
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    Allowed a judgment to be entered against them in New Jersey
    
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    Now resists that judgement
    
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  …Trial judge says the N.J. judgment should be dismissed based on the public policy in the Ontario Gaming Act
  
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  Appellant's issues:
  
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    Loan was not a wagering agreement (a bet of sorts?) within s.4 of Gaming Act
    
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    The law of the contract is New Jersey not Ontario; and,
    
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    It is not contrary to public policy in Ontario to enforce the New Jersey judgment
    

 Decision:

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Reasons:

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  Public policy concerns that may hinder enforcement of foreign judgements
  
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    English courts refuse to give legal effect to transactions which they hold to be immoral
    
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      Morality is a category
      
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    An agreement which is intended by the parties to promote an immoral purpose are based on immoral consideration
    
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    An important element of Canada's sense of morality is what Canada has consensually determined is not to be tolerated, as found in the Criminal Code
    
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    The court then examines the history of gaming laws
    
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      Goes from way back when up until…
      
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      In 1956 gambling laws shifted because the prohibitions against gambling were seen as not being consonant with the public perception of morality
      
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  Class notes:
  
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    It isn’t legal to loan money in consensus
    
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      But there has been gambling licenses issued in Ontario
      
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      Provinces have the ability to license gambling
      
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      It wouldn’t be immoral to lend money to a friend for him to play lotto
      
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        But statute is enforced because of policy reasons
        
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    Dissent:
    
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      Didn’t need to get to morality: would it have been illegal? Yes, if it was here-> not enforceable
      

Directory: outlines
outlines -> Chabot College Fall 2010 Course Outline for Computer Application Systems 60 business software applications/general accounting
outlines -> Adil Khan Contracts Midterm outline- waldron
outlines -> Remedies for breach of promise (1) The Interests Protected
outlines -> Basic Process for Assessing Damages: 97 Select  interest that deserves vindication 97 a. Restitution 97
outlines -> Chapter Five: Written Documents 1 Unsigned Documents 1
outlines -> College of Science and Health
outlines -> Evidence outline
outlines -> 2. Act, Omission, Status or Circumstances 4 Consequences and Causation 8 Introduction to Mens Rea and Intent 10 Levels of Fault 11
outlines -> Course Outline as/huma 2650 0A

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