Chapter Five: Written Documents 1 Unsigned Documents 1

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Table of Contents

Chapter Five: Written Documents 1

1.Unsigned Documents 1

Parker v The South Eastern Railway Company 2

Plaintiff didn’t read conditions on ticket: are they binding? 2

Lamont v Canadian Transfer Company 2

P contracts to ship bags home, P has to request the receipt, receipt contains conditions 2

Chapelton v Barry Urban District Council 2

P receives ticket w/ time limit, sign “respectfully requests” P get ticket, conditions on ticket 2

Olley v Marlborough Court Ltd. 3

P contracts to rent hotel room, Limitation clause = sign in room, too late to bind? 3

J Spurling Ltd. v Bradshaw 4

P stores D’s item and loses it, limitation clause accepted by D in previous dealings, this time it was received late 4

McCutcheon v David MacBrayne Ltd (key case) 4

P had agreed to limitation clause many times before, not this time. Signature not representation of agreeing if contract is too long/complex 4

Thornton v Shoe Lane Parking Ltd. 5

Conditions on ticket, but ticket is acquired by customer from automated booth 5

British Crane Hire Corp. Ltd. v Ipswich Plant Hire Ltd. 5

Commercial Parties, Can a party rely on limitation clause if it had been signed in past but not this time (yes if standard form exists) 5

Tilden Rent-A-Car v Clendenning 6

Party clearly did not read the contract thoroughy 6

2.Parol Evidence Rule 6

Federal Commerce & Navigation Co. Ltd. v Trade Export S.A. 6

Some weird boat contract where parties disagree on the meaning of terms 6

Prenn v Simmonds 7

Interpretation of contract not limited to linguistic meaning, objective test 7

Farah v Barki 7

Allowing evidence in of fraud 7

Curtis v Chemical Cleaning and Dyeing Co., Ltd. 7

D misrepresents the extent of limitation clause, tries to rely on it 7

Canadian Indeminity Co. v Okanagan 8

Note Case: Reiterates Curtis and includes innocent misrepresentation 8

Hawrish v Bank of Montreal (Key Case) 8

P contracts with D, D gives P collateral agreement, court explains collateral agreements admissibility 8

Morgan v Griffith 9

Collateral Agreement: tenant notices problem w/ property, agrees to resign lease if landlord takes care of it 9

Pym v Campbell 9

Parties agree to K but attach condition precedent that K is not binding unless ____ 9

Corbin on Contracts 9

A summary of the need to include the “matrix of facts” 9

Long v Smith 10

Written agreement disclaims verbal, court bends things for equity 10

City and Westminster Properties Ltd. v Mudd (feels iffy) 10

Promise that serves to invoke party to sign is admissible evidence, similar to promissory estoppel 10

Tilden Rent-A-Car v Clendenning 11

Party signs contract, asks if paying for insurance covers everything, clerk says yes, exclusion clause exists 11

Gallen v Allstate 11

Alford doesn’t like but has good list of parol evidence exceptions 11

3.Rectification 12

U.S.A. v Motor Trucks, Limited 12

Mistake in drafting, party seeks rectification 12

Bercovici v Palmer 13

Parties make deal, item is added that shouldn’t be, judge uses subsequent actions to determine intentions 13

Sylvan Lake Golf and Tennis Club Ltd. v Performance Industries Ltd. 13

Mistake in drafting, court lays out 4 requirements for receiving rectification 13

Paget v Marshall 14

If parties can’t agree on what the contract should be. If there is no clear intention, contract may be void ad idum 14

Chapter Six: Protection of Weaker Parties 14

2. Minors 14


Contracts with Children under the age of majority 14

Sales of Goods Act 15

The act governing minors 15

Nash v Inman 15

Children buying things, is the thing a “necessary” (return to this as well) 15

3. Forfeitures and Penalty Clauses 15

Shatilla v Feinstein 15

$10,000 in liquidated damages for breach of non-compete: penalty or liquidated damages 15

H.F. Clarke Ltd v Thermidaire Corp Ltd. 16

Note Case: liquidated damages will be read as a penalty clause if blatantly punitive 16

Stockloser v Johnson 16

What Case is about 16

4.Clauses Excluding Liability 17

George Mitchell Ltd v Finney Lock Seeds Ltd 17

Gives history of exemption clauses: notes that the focus now will be on who can better bear the risk 17

Photo Production Ltd. v Securicor Transport Ltd. ???? 17

Fundamental Breach? Allowing for freedom of contract when terms are explicit 17

Hunter Engineering Co. Inc. Et al. v Syncrude et al 17

Fundamental Breach put to bed by split SCC, focus is on unconscionability 17

Fraser Jewellers (1982) Ltd. v Dominion Electric Protection 18

Unconscionability 18

Davidson v Three Spruces Realty 18

Extreme abuse of freedom to contract constituting unconscionability 18

Delany v Cascade River Holidays Ltd. 19

Will liability clause be enforced(party died, death wasn’t mentioned in liability clause) 19

Tercon Contractors Ltd. v British Columbia 19

Settling the score on limitation clauses, 3 step test for limitation clauses 19

Tercon Note Cases 20

Rules for Liability Clauses 20

5.Unconscionability and Undue Influence 21

Post et al. v Jones et al 21

Unequal Bargaining Power, P has no choice but to accept terrible deal 21

Marshal v Canada Permanent Trust co. 22

Unequal bargaining: Party A purchases land from old man grossly underpriced 22

Mundinger v Mundinger 22

Unconscionability with a relationship where there is no typical mental weakness (abusive marriage) 22

Lloyds Bank Limited v Bundy 22

Proving there is undue influence 22

Credit Lyonnais Bank Nederland NV v Burch 23

What Case is about 23

Royal Bank of Scotland p.l.c. v Etridge (No.2) and Other Appeals 23

3rd parties to the contract and undue influence (Bank) 23

Mccaulay v A. Schroeder Music Publishing 24

What Case is about 24

Pridmore v Calvert 24

What Case is about 24

Horry v Tate 25

What Case is about 25

Woods v Hubley 25

3 criteria allowing unconscionable transactions to be voided 25

6.Duress 25

Greater Fredericton Airport Authority v NAV Canada 25

What Case is about 25

Chapter Seven: Public Policy 26

1.Introduction 26

7.The Effects of Illegality 26

Holman v Johnson 26

Vendor knows purchaser is using product to commit illegal act. = illegal contract? (nope) 26

8.Contracts Contrary to Public Policy Expressed in the Common Law 26

Egerton v Brownlow 26

Note case regarding the traditional view of how judges can use public policy 26

In the Matter of Baby “B” 27

Public Policy (public moral views on relationship of mother and child) inform law 27

3.a) Contracts in Restraint of Trade 27

Shafron v KRG Insurance Brokers (Western ) Inc. 27

Non-Compete Restrictive Covenant-> Validity of this 27

3.b) Contracts Related to Gaming 28

Boardwalk Regency Corp v Maalouf 28

Public Morality and Gaming 28

3.c) Contracts in Furtherance of illegal Purposes 28

Alexander v Rayson 28

Contract is valid but purpose of document is to defraud 3rd party->void 28

3.d) Contracts Conferring Benefits as a Result of Crime 29

Brissette Estate v Westbury Life Insurance Co. 29

Who gets life insurance if one spouse kills the other? 29

Oldfield v Transamerica Life Insurance Co. of Canada 29

Insured party dies committing crime: can beneficiaries receive insurance money? 29

9.Contracts Contrary to Public Policy Expressed in Statute 30

Kingshot v Brunskill 30

Contracts contravening statute, judge won’t do anything 30

Doherty v Southgate (Township) (KEY CASE) 30

D trying to take advantage of their own statutory failure, trying to void contract 30

4.b) A common Intent to Perform a Contract Illegally 31

Ashmore, Benson, Pease & Co. Ltd. v A.V. Dawson Ltd. 31

Contract is performed illegally ->contract is voided 31

10.Mitigating the Consequences of Illegality 31

5.a When the Claim is founded on an Independent Right 31

Mistry Amar Singh v Serwano Wofunira Kulubya 31

Illegal Lease, does property right transfer? Or can illegal tenant be evicted 31

5.b Restitution 32

Kiriri Cotton Co. Ltd. V Rachoddas Keshavji Dewani 32

Party is trying to recover money paid/property transferred under an illegal contract 32

Outson v Zurowski 33

Exceptions to the rule there can be no recovery under an illegal contract 33

5.b Severance of Illegal Provisions 33

William E. Thomson Associates Inc. v Carpenter 33

Loan contract has illegal interest rate, can interest rate be severed? 33

New Solutions Financial Corporation v Transport North American Express Inc. 34

Doctrine of “notional severance” as opposed to blue-pencil 34

11.A More Modern Approach? 34

Still v The Minister of National Revenue 34

Party acts in good faith but unknowingly behaves illegally -> should courts be harsh 34

Chapter Eight: Performance and Breach 35

1.Repudiatory Breach 35

Kingston v Preston 35

When can an action for breach be brought? 35

Note Cases 36

Rules of CivPro-bringing breach action + how paying damages isn’t a good solution 36

Bettini v Gye 36

How the Court determines if a stipulation is a condition precedent or an independent condition 36

Pussard v Spiers and Pond 37

Will damage caused by unintentional breach goes to root of contract and dissolve obligations) 37

Maple Flock Company, Ltd. v Universal Furniture Products (Wembley) Ltd. 37

Can a single breach justify rescinding entire contract? 37

12.Waiver and the True Condition Precedent 38

Panoutsos v Raymond Hadley Corporation of New York 38

P1 allows P2 to breach in small way, can P1 claim breach and rescind contract? 38

Turney and Turney v Zhilka (Lead case) 38

Waiving precedent conditions that are dependent on 3rd party for performance 38

13.The Position of the Party in Breach 39

Jacob Youngs, Inc. v Kent (Lead Case) 39

Do the parties have to provide “perfect” performance? Court defines principle of substantial performance 39

Hoenig v Isaacs 40

What is this about 40

Sumpter v Hedges 40

Can Party receive payment for partial performance if K requires full performance and then payment 40

Chapter Nine: Mistake 41

1.Introduction 41

14.Misrepresentations 42

Grotius article 42

When people can recover for errors regarding facts 42

Heilbut, Symons & Co. v Buckleton 42

If party can’t show a warranty it is just an innocent misrepresentation: how to show warranty 42

Bentley (Dick) Productions Ltd. v Smith (Harold) (Motors) Ltd.f 43

How to show something is a warranty 43

Redgrave v Hurd 43

P1 makes false representation, P2 finds out and refuses to perform 43

Newbigging v Adam 44

With innocent misrepresentation you don’t get full compensation, only get back obligations of contract, no “damages” 44

Kupchak v Dayson Holdings 45

Did a party affirm a contract induced by misrepresentation by minimizing damages? 45

Redican v Nesbitt 45

Rescinding innocent misrepresentation, won’t happen after full execution of contract 45

Leaf v International Galleries 45

In order to rescind contract you must bring action within reasonable time 45

O’Flaherty v McKinley 46

What is this about 46

Murray v Sperry Rand Corporation 46

Manufacturers who have made representations about products are liable to customers regardless of privity 46

4. Mistake About Contractual Terms 46

Hobbs v Esquimalt & Nanaimo Railway Company(IC) 46

What is this about 46

Raffles v Wichelhaus (IC) 47

What is this about 47

Seaiman Steel Ltd. v Commercial & Home Buildings 47

What is this about 47

Henkel v Pape(IC) 48

What is this about 48

Smith v Hughes (IC) 48

What is this about 48

5. Mistake in Assumptions 49

Bell v Lever Brother Ltd. 49

Solle v Butcher 49

What is this about 49

Magee v Pennine Insurance Co. 50

What is this about 50

Miller Paving Limited v B Gottardo Construction Ltd 50

What this is about 50

Scout v Coulson 50

What is this about 50

Sherwood v Walker 51

Mistakes that are based on categorical error regarding reality 51

McRae v Commonwealth Disposals Comm. 51

What is this about 51

Wood v Boynton 51

What is this about 51

Chapter 10: Frustration 52

15.The Rule of Absolute Promises 52

Paradine v Jane 52

What is this about 52

16.Relaxation of the Rule of Absolute Promises 52

Taylor v Caldwell 52

Supervening event occurs frustrating the contract, implied condition 52

Amalgamated Investment and Property Co. Ltd. v John Walker & Sons Ltd. 53

P buys property, next day supervening event makes it worthless: rescission? Maybe… 53

Capital quality Homes Ltd. v Colwyn Construction Ltd. 53

P purchases land but ability to develop becomes frustrated by legislation: judge says K is frustrated 53

Victoria Wood Development Corp v Ondrey 54

Goes back on Capitol, makes note of reasonable foreseeability, if supervening event is foreseeable contract for it 54

Howell Coupland 54

Contract is purchase of sale for specific items, if supervening event makes specific items unavailable K = frustrated 54

Canadian industrial Alcohol Company, Ltd. v Dunbar Molasses Company 55

P1 makes big K with P2 to supply X’s product, P1 does not K with X to ensure product -> not supervening, no frustration 55

Parrish & Heimbecker Ltd. v Gooding Lumber Ltd. 55

When it is an implied condition that the item delivered is specific 55

Krell v Henry 56

Classic Case establishing frustration, contract is fundamentally different 56

Aluminum Co. of America v Essex Group Inc. 56

Severe increase in financial burden on one party may (in America) frustrate contract 56

Eastern Air Lines v Gulf Oil Corp. 57

K will be frustrated due to impracticability if supervening event is foreseeable 57

Edwinton Commercial Corporation and Another v Tsavliris Russ 57

Will delay due to supervening event frustrate contract/prevent payment (comes down to foreseeability) 57

Tsakiroglou & Co. Ltd v Noblee Thorl G.m.b.H 58

Whether breach of an implied “customary” term frustrates contract (ie common sea route closed to ships) 58

Transatlantic Financing Corp v United States 58

Similar to previous, but actual charter contract as opposed to purchase of sale; 58

Davis Contractors Ltd. v Fareham Urban District Council 59

Good summary of frustration: Foreseeability? Was risk allocated? Root of matter? 59

Chapter Two: Remedies 60

1.The Interests Protected 60

Wetheim v Chicoutimi Pulp Company 60

Quote 60

Bollenback v Continental Casualty Company 60

Modern Restitution: Can receive deducted partial consideration + definitions 60

Anglia Television Ltd. v Reed 61

Reliance damages: Denning awarding wasted expenditure for breach of contract 61

Pitcher v Shoebottom 61

Damages for material breach (p agrees to buy land, d breaches and sells to third party) 61

Hawkins v McGee 61

Damages for breach of warranty for hairy hand 61

17.Problems in Measuring Damages 62

1.Cost of Substitute Performance or Economic Value? 62

Carson v Willitts 62

How should damages be rewarded if assessing amount is difficult 62

Groves v John Wunder Co 62

People’s ability to contract for worthless things. Damages = cost of performance, strong dissent 62

2.b Lost Volume 63

The Sales of Goods Act 63

General Rule for Breach of Contract to Supply 63

If the plaintiff has proved a breach he is entitled to be placed, as far as money can do it, in as good of a situation as if the contract had been performed 63

Thompson (W.L.) Ltd. v Robinson (Gunmakers) Ltd. (1955) 63

Party refuses delivery of cars. Dealership sues for lost profit. 48(3) Discusses available market. 63

Charter v Sullivan 64

Loss profits is the amount lost because contract is breached. If would have sold all anyways then no loss 64

18.Remoteness 64

Case British Columbia Saw Mills Co. v Nettleship 64

Not case: cases where a party’s negligence causes a remote damage are triky 64

Hadley v Baxendale(THE RULE) 64

when a breach/inadequate performance by B causes a damage to A that is unknown to B 64

Horn v The Midland Railway Company 65

When giving notice of potential remote damages, notice must give rise to contractual obligation 65

Note Cases 66

A person contemplates the performance and not the breach 66

Koufos v C. Czarnikow Ltd. (The Heron II) 66

Breach causing loss of profits: if its reasonably foreseeable breacher is liable 66

Transfield Shipping Inc. v Mercator Shipping Inc. (The Achilleas) 66

Are damages for reasonably foreseeable losses always imposed? Limited to liabilities parties reasonably expected to assume/pay for 66

Cornwall Gravel co. Ltd. v Purolator Courier Ltd. 67

What is this about 67

19.Intangible Injuries 68

Addis v Gramophone Company 68

Can’t receive damages other than what is listed in contract if the breach is malicious 68

Kolan v solicitor 68

Mental stress isn’t available 68

Jarvis v Swan Tours Ltd. 68

Usually can’t recover for mental duress, but this contract was specifically about mental enjoyment 68

Fidler v Sun Life Assurance Co. of Canada 69

GO TO IF THERE IS MENTAL DAMAGES: Affirms Hadley as THE rule 69

20.Punitive Damages 69

Whiten v Pilot Insurance 69

When punitive damages are justified because the person is terrible 69

21.Mitigation of Loss 70

Payzu Limited v Saunders 70

Duty of parties to mitigate economic loss: Can modify w/o consideration to mitigate loss then sue for breach 70

Roth & Co. v Taysen, Townsend & Co. 70

If one party repudiates and there is an open time frame for the contract the non-breaching party cannot just rely on breaching party to pay for losses 70

White & Carter (Councils) Ltd v McGregor 71

Dissent informs Laskin in next case: Repudiation does not end a contract 71

Finelli et al. v Dee et al. 71

Is a cancellation a rescission or repudiation? 71

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