Introduction 5 A. Remedies for breach 5


Tudale Mining Explorations v. TECK



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Tudale Mining Explorations v. TECK


  • Tudale was a small mining corporation whish owned certain mining claims. TECK was a large mining company. TECK wanted three year contract with Tudale where they could enter Tudale’s land and do exploratory work. After doing the exploratory work they had 1st option to proceed to develop claim as a joint venture between Tudale and TECK. TECK would have the majority of ownership in any joint venture.

  • TECK spends lots of money exploring the sites. Option expires. Before it expires they increase time by one month. During that month they wanted another 60 days and also wanted to make a new joint venture proposal. Tudale gives an oral agreement for only a 30-day extension. TECK writes back asking for 60-day extension. Right before the 30 day extension expires. Tudale pulls the plug. The take back their claims.

  • 4 days later TECK exercises option to establish NewCo (the joint venture company)

  • Court found on the basis of estoppel the promise of the extension was enforceable and TECK could exercise its option to establish NewCo.

  • Relied on Hightrees decision where a promise or assurance which was intended to affect the legal relationship between tow parties and if other party acts upon it to their detriment then the promisor will be held to the promise.

  • There was an argument presented that TECK was using estoppel as a sword in this case. Said that they were only using it as a defense to Tudale’s stopping the contract.

  • This is a clear example of detrimental reliance on Tudale’s promise to extend the contract. Tudale could of advised them prior to the expiry then that would have been alright but they did not do that. They waited until after the option had expired.


Baxter v. Jones


  • Where parties make statements or give advise then they may be held liable for the reliance on that information.

  • The Plaintiff asked the defendant to put fire insurance on his property. He had other fire insurance, which stated that “co-insurance notification policy”. He was required to inform the other companies if the insurance was increased.

  • Plaintiff asked to have the other insurance companies notified. The Insurance Company forgot. There is a fire. The other companies deny coverage because they had not been notified. Plaintiff suffered a loss so sued the insurance company in negligence for failing to notify other companies and also sued in contract.

  • Insurance Company said they had no consideration. It was just a gratuitous offer to notify the other company.

  • Court found that the payment of the principle was consideration for both things: the insurance and the promise to notify.

  • If someone agrees to do something and I rely on it and they do not do it negligently and as a result I suffer damages they are liable for those damages. Here contracts and torts overlap.


D). UNILATERAL CONTRACTS





  • Unilateral contract is a promise in exchange for an act(when performance complete-before that called “an offer for a unilateral contract”

  • Bilateral contract is a promise in exchange for a promise



Carlill v. Carbolic Smoke Ball


  • Defendant’s are proprietors and vendors of medical preparation called Carbolic Smoke Ball; put ad in the paper saying would give a reward to any person who contracted the flu or related illness after having used the preparation; plaintiff bought and used the preparation but still got the flu; defendant refused to pay

  • Court said was a promise to pay like in Leftkowitz, ad can be promise if intended to be so; defendant argued had to be notified of acceptance as in Larkin v. Gardiner; court said not when a unilateral contract: can have acceptance by performance-an exception to general rule

  • If a person who makes an offer shows by his/her language and from the nature of the transaction that he/she does not expect or require notice of acceptance apart form notice of the performance, acceptance is not required

  • Unilateral contract provides a technique for enforcement of promises made to the general public; offer need not be made to one particular person

  • Where offer is made expressly or impliedly waiving requirement of communication of acceptance, acceptance is sufficient by fulfilling conditions-intention of whether offer is binding or “mere puff” will be found in conduct of promisor

Errington v. Errington


  • Father bought house for son and his wife to live in; he told daughter in law that part of cost was a present for them but left them paying installments on mortgage and that house would be their property when mortgage was paid; daughter in law has been paying off mortgage; when father died the house was not transferred to the couple and the widow sought a possession order for the house

  • The father’s promise was a unilateral contract-he expressly promised the couple the house in return for their act of paying mortgage installments; the promise could not be revoked by him once the couple entered on performance of the act but would cease to bind him if they left it incomplete and unperformed

  • A unilateral contract cannot be revoked if parties are performing the acts agreed to; no contract until full performance is completed but there is an intermediary stage where the offer is not revocable; offeree can stop anytime without repercussions but the offeror can’t revoke the offer once performance has started

  • Courts still divided on issue of whether can revoke an offer after performance has begun or is acceptance the complete performance



Dawson v. Helicopter Exploration


  • Plaintiff was negotiation by mail with defendants regarding an arrangement to fly him in and explore some mineral deposits; offer made by Springer to give Dawon 10% if her showed them deposits

  • Springer argued this was an offer for an unilateral contract because called for acceptance via performance of act; thus was revocable until completed; Dawson did not perform thus no contract; problem was that performance in control of Springer

  • When offer accepted but ability to perform as promised is dependant upon the offeror as to time, place method, a contract exists and can be enforced

  • This case casts some doubt as to Errington-says can revoke before performance is complete

  • Case also shows that courts will be willing to find bilateral contract when intention, promise and terms stipulated-a remedial contract

Table of Contents




INTRODUCTION 5

A). REMEDIES FOR BREACH 5

1). INTERESTS PROTECTED 5



GENERAL PRINCIPLES FROM CASES: 6

Bollenback v. Continental Casualty Co. 6

Anglia TV v. Reid 6

Pitcher v. Shoebottom 7

Hawkins v. McGee 7

2). PROBLEMS IN MEASURING DAMAGES 8

Carson v. Willitts 8

Groves v. Wunder 8

Thompson v. Robertson, 1955 8

Charter v. Sullivan, 1957 9

3.) REMOTENESS 9

Hadley v. Baxendale 9

Victoria Laundry v. Newman Industries 10

The Heron II (Koufous v. Czarnikov) 10

Cornwall Gravel v. Purolator 10

Monroe Equipment & Canadian Forest Products 11

Scryup v. Economy Trailer 11

OR 11


AND 12

4). INTANGIBLE INJURIES (non-economic loss) 12

Addis v. Gramophone Co. Ltd. [1909] 12

Jarvis v. Swan Tours - loss of enjoyment 13

Newell v. Canadian Pacific Air 13

Vorvis v. Insurance Corp. of B.C.-non-enjoyment losses 14

Wallace v. United Grain Growers 15

Ridiero v. ICBC 15

5). MITIGATION OF LOSS 16

General rules of mitigation: 16

Payzu v. Saunders 16

Roth & co. v. Taysen Towsend 17

White and Carter Council v. McGregor 17

Asamera Oil v. Sea Oil 18

6). SPECIFIC PERFORMANCE 19

GENERAL PRINCIPLES: 19

Falke v. Gray 20

Sky Petroleum v. VIP Petroleum 20

Warner Bros. v. Nelson 20

Page One Records v. Britton 21

7). TIME IN MEASURING DAMAGES 21

Wroth v. Tyler 21

Semelhago v. Paramadevan 22

8). RESTITUTION 22

Deglman v. Guaranty Trust 24

McCamus Article: 25



B). THE KINDS OF PROMISES LEGALLY ENFORCED 25

A). BARGAINS 25

1). PRELIMINARY NEGOTIATIONS 26

Denton v. Great Northern Railway 26

Lefkowitz v. Great Minneapolis 26

Pharmaceutical Society v. Boots 27



General Principles: 27

W.H. Hillas and Co., Ltd. v. Arcos ltd. 27

May & Butcher v. King 28

Foley v. Classique Coaches ltd. 28

Brown v. Gould 28

Empress Towers v. Bank of Nova Scotia 28

2). ACCEPTANCE 29

General Principles: 29

Larkin v. Gardiner 29

Felthouse v. Bindley 29

Wheeler v. Klaholt 30

Eliason v. Henshaw 30

3). CONTRACTS BY CORRESPONDENCE 30

Household Insurance v. Grant 30

4). CONSIDERATION 33

White v. Bluett 34

Hamer v. Sidway 35

Thomas v. Thomas 35

5). MUTUAL PROMISES 35

Great Northern Railway Co. v. Witham 36

Tobias v. Dick and T. Eaton 36

Wood v. Lucy, Lady Duff Gordon 36

6). PRE-EXISTING DUTY/ MODIFICATION CASES 36



GENERAL PRINCIPLES: 36

Harris v. Watson 37

Stilk v. Myrick 37

Smith v. Dawson 37

Raggow v. Scougall and Co. 38

Gilbert Steel Ltd. v. University Construction 38

Williams v. Roffey 39

Foakes v. Beer 39

7). COMPROMISES 40

Cook v. Wright 40

B). INTENTION 41

Balfour v. Balfour 41

3). NON-BARGAIN PROMISES 44

1). PAST CONSIDERATION 44

Lampleigh v. Brathwait 44

Roscorla v. Thomas 45

Pao On v. Lau Yiu Long 45

2). SUBSEQUENT RELIANCE 46

Summary of Principles: Estoppel and Reliance 46

Dalhousie College v. Boutilier Estate 47

Hedley Byrne v. Heller 47

Hughes v. Metropolitan Railway 47

Central London Property Trust v. High Trees 48

Combe v. Combe 48

D & C Builders v. Rees 49

John Burrows v. Subsurface Surveys 49



Tudale Mining Explorations v. TECK 49

Baxter v. Jones 50

D). UNILATERAL CONTRACTS 51

Carlill v. Carbolic Smoke Ball 51

Errington v. Errington 51

Dawson v. Helicopter Exploration 52

CONTRACTS AND THIRD PARTIES 57

1.Third Party Beneficiaries 57



Beswick v. Beswick [Agency] 57

New Zealand Shipping v. Satterthwaite [Agent] 58

London Drugs v. Kuehne & Nagle [Principle Exception to Privity Rule] 58

Frasier River v. Can-Dive 59

2.Mistake of Identity 59



Lewis v. Averay [Fraud = Voidable] 59

3.Documents Mistakenly Signed (Non Est Factum) 59



Marvco Colour Research v. Harris et al. 60

WRITTEN DOCUMENTS 61

1.Unsigned Documents 61



Parker v. South Eastern Railway: 61

McCutcheon v. MacBrayne 61

Thornton v. Shoe Lane Parking 62

2.Signed Documents: 62



Tilden Rent-a-Car v. Clendenning 62

3.Parol Evidence Rule: 62



Federal Commerce v. Tradex [Standard Form K] 63

Prenn v. Simmonds 63

Hawrish v. Bank of Montreal 64

Tilden Rent-a-Car v. Clendenning [Reasonable Notice] 64

Gallen v. Allstate Grain 65

4.Rectification 66



USA v. Motor Trucks 66

PROTECTION OF WEAKER PARTIES 67

1.Minors 67

2.Forfeitures and Penalty Clauses 67

Shatilla v. Feinstein 68

H.F. Clarke Ltd. v. Thermidaire Corp. Ltd. 68

Stockloser v. Johnson [Forfeiture] 68

3.Clauses Excluding/Limiting Liability 69



Karsalis v. Wallis (1956;Eng.CA) [FB] 69

Suisse Atlantique v. N.V. Rotterdamsche (1967;HL) [Eliminates FB] 69

Photo Production v. Securior (1980;HL) 70

Beaufort Realties v. Chomedey Aluminum (1980 few months after Photo; SCC) 70

Securicor (1982;HL) 70

George Mitchell v. Finney Lock Seeds (1983;HL) [Reasonableness] 70

Hunter Engineering v. Syncrude (1989;SCC) 71

4.Unconscionability 71



Lloyds Bank v. Bundy [Bargaining Power] 72

National Westminster v. Morgan [Undue Influence] 73

Macaulay v. Schroeder Music [Restraint of Trade] 74

Unconscionable Transactions Relief Act 74

PUBLIC POLICY 75

Christie v. York (Supp) 75

Ian Ayres: “Fair Driving: Gender and Race Discrimination in Retail Car Negotiations” 75

Farrar v. McPhee (Supp) 75

Jones v. Daly 76

Chrispen v. Topham 76

Quantum meruit: 2 ways to recover 76

Baby M 76

1.Illegality 77



Holman v. Johnson (1775) 77

Archbolds Ltd. v. Spanglett Ltd. (1961) [Performance] 77

Kiriri Cotton v. Dewani [Restitution] 79

PERFORMANCE AND BREACH 80

Cehave N.V. v. Bremer [Intermediate Stip] 81

Hongkong Shipping 81

Panoutsos v. Raymond Hadley Corp. [Waiver] 81

Turney v. Zhilka (1959) [Condition Precedent - Waiver] 82

Barnett v. Harrison 82

Sumpter v. Hedges 82

MISTAKE 84

1.Misrepresentation 84



Heilbut, Symons & Co. v. Buckleton [1913; H.L.] [Collateral K] 85

Bentley Productions v. Smith Motors 85

Esso Petroleum v. Mardon (1976) [Negligent Misrep] 86

Sealand of the Pacific v. McHaffie 86

Murray v. Sperry Rand 87

2.Mistake as to Terms 87



Hobbs v. Esquimalt Railway 87

Raffles v. Wichelhaus 88

Henkel v. Pape [3rd party mistake] 88

Smith v. Hughes 88

3.Mistake in Assumptions 89



Bell v. Lever Bros. 90

Solle v. Butcher [Equity] 90

Maggee v. Pennine Insurance (CA) 90

R. v. Ron Engineering 91

M.J.B. Enterprises v. Defence Construction 91

FRUSTRATION 93

Paradine v. Jane [Rule of Absolute Promises] 93

Taylor v. Caldwell [Relaxes the Rule of Absolute Promises] 93

Krell v. Henry 94

Aluminum Co. of America v. Essex Group 94

Fibrosa v. Fairburn Lawson 95




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