Commercial Law 21/09/2009 13:02:00

← Passing law
• Ultra Vires
• Additional law for challenging legislation
o Charter of Rights
o Constitution can be changed only with the consent of the
federal gov’t and 2/3 rep 50% of population
←
← Government Action
• Charter
• s.2 fundamental freedom
• s.7-14: legal rights `
o promptly informed of right to counsil etc.
• s. 15: equality rights
• s. 33 override
o 5yrs
o Gov’t cannot override aboriginal rights
• Lord’s day act
←
← Mandatory Retirement
←
← UBC – not gov’t
← Colleges – are – covered by charter
• Why gov’t got rid of mandatory retirement?
o Too many old, too few young to support
←
← Criminial code – prevents polygamy
←
← Leibmann Case end
←
← Alternative methods to dispute resolution
←
← Alternatives:
• Negotiation
• Mediation
o parties agree to appt mediator to try to help reach settlement
o identify common ground
o med is not binding and does not decide dispute
o no forced agreements
o mediator is just a facilitator
• Neutral case evaluation
o decision probably will mirror what a judge will say in a trial
o don’t need to accept decision
 o may help parties
• Arbitration
o Binding decision
o parties must agree to go to arbitration
 in event of dispute involving this contract, the argument
will go to arbitration under these rules…
o Should be faster
o Non-appealable

← Offer – Acceptance – consideration

• Breach of contract
o normal remedy is damages (monetary compensation)
o specific performance available only if subject matter is unique
o Right of renewal
 tenant can renew for a further 5 yr term at a rent to be
agreed upon
←
← Advertisement is not an offer – just invitation to do business
• invitation to ‘treat’ not an offer
• Cannot hold them to that price
•
← Readings on offer acceptance.
 21/09/2009 13:02:00
←
• QUANTUM MERUIT
o When goods/services are requrested and provided in a
business context and no price is set, there’s a implied promise
to pay a reasonable price.
• PROMISSORY ESTOPPEL
o if a party creates an impression that it wil not enforce strict
legal rights, it can’t take the other party by surprise.
o shield (defense) not sword
o
 21/09/2009 13:02:00
← if the contract clearly says you can’t rely on the seller to protect you –
you can’t
←
← 1. s. 20 of sog act
← 2. no acceptance
← 3. fraud
← 4 fundamental breach
• protect’s seller
• get it inspected
o expensive
• Boat
o $21,000 worth about a third of what they paid
o hit something
o $8,000 – value
o fundamental breach – boat that’s not a boat
← 5. Contra Proferentem
• exemption clauses – non negotiated
←
←
← You run a river rafting business
• You want an exemption clause
• What will you say?
←
← “The participant agrees to waive the right to sue RR Inc. for
negligence.
← Agrees that RR inc., it’s employees, directors, officers, will not be liable
for personal injury including death and loss of or damage to personal
property from any cause whatsoever, including negligence pertaining to river
rafting.
← ____________________________
←
← ex. cypress bowl case
← generally they will be bound by this. Should protect business.
← Waiver is important, but circumstances are equally important.
← Make sure equip is properly maintained, ees are trained and you have
proper insurance. Problem – families river rafting – lots of kids. Problem
because in BC any body under 19 is under the age of majority. Infants act
says any infant (<19) contracts are UNENFORCEABLE against the infant.
Nothing that a child can sign that will give up the child’s right to sue. The
parent will file to be a guardian ad litem.
←
← What is the appropriate standard of care?
←
← Cannot sure a child under 19 for a contract issue.
←
• Future shop  $2000 home audio  18 Year old
o $200 down, $150 / month
• Can future shop sue? NO
• Contracts with infants are not void, they are just unenforceable to
anyone under 19
o UNLESS the infant
1. Affirms the contract after turning 19 OR
2. Performs or partly performs the contract
within one year after turning 19
 3. Or does not repudiate the contract within
one year after turning 19
←
← Marriage split (phil and andrea Collins had another kid)
← When simon turns 19 he can sign the contract.
←
← If you recognize the other party’s judgment could be altered by
alcohol, that may reduce your ability to enforce your side of the contract
←
← Passing of risk of title, discharge. Kovacks case?
←
Expect midterm to breach of contract and damages.
 21/09/2009 13:02:00
←
• Mental incapacity (alcohol, drugs)
o If you should have recognized the incapacity, you are liable
o Extreme old age
←
← COMMITTEE
← Shipping terms with accepted internation definitions
• FOB
o Obligation - delivery
• CIF
o Seller ob – arrange for shipping and deliver to carrier
• CFR
o Sellers ob – insurance, and shipping and delivery

Under all these terms, risk passes when the goods are delivered to the
carrier.
s. 3 If there’s an unconditional contract for the sale of specific goods (id’s)
this is an unconditional contract in a deliverable state ready to go – passing
of title occurs when contract is made. Risk and Title passes.

When there is something do be done to make it into a deliverable state – the

title passes when the work is done and the buyer is informed of the finishing
of ‘things’ done. i.e. title passes at phone call.

Risk will pass at a specified time – risk will pass after a reasonable time

Subsection 7 –
← (7) If there is a contract for the sale of unascertained or future goods by
description, the property in the goods passes to the buyer when goods of that
description and in a deliverable state are unconditionally appropriated to the
contract

Unascertained goods – gravel – don’t know which pieces of gravel!

Goods have to be segregated irrevocably for the seller.

← (9) If, in pursuance of the contract, the seller delivers the goods to the buyer
or to a carrier or other bailee, whether named by the buyer or not, for transmission
to the buyer, and does not reserve the right of disposal, the seller is deemed to
have unconditionally appropriated the goods to the contract.
• Made the goods deliverable to ME in specific, unconditionally

I have ordered 100 chairs to be delivered by robin’s trucking. Once the seller
delivers to the carrier, title passes to me.
DISCHARGE
When do contracts end?
1. PERFORMANCE
• Agreed to terminate performance prematurely
• Issue of consideration
2. AGREEMENT
3. STATUTE
o Ex. Limitations act in BC
o Provincial statute – after a certain length of time, contractual
limitations are at an end (generally 6 years) 6 years from
what?
 After the last acknowledgment of the contract
 Obligations terminated because of limitation
4. BANCRUPCY/SOLVENCY ACT
o Assets are liquidated
o Courts can discharge you in bancrupcy
o Court can decide you can work hard and pay off – no right to
bancrupcy
o For the honest but unfortunate debtor

Discharge
POOL & SHANKS

Breach of contract, Damages

WESTCOAST TRANSMISSION
 21/09/2009 13:02:00
Sprague’s  well  mills
←
• Nova Scotia statute – must have a license
• Sprague did not have a license
• Illegality
o Intentionally seek unlicensed vendors?
o If they do poor job – cant seek remedies
o
o Non competition agreements
• Illegality?
• Public policy is supposed to favour free compeition
• Agreements that restrict are void
o Non-competition agreements – certain legitimate situations
 Purchasing another business
 Employment contracts
 Protect customer base and trade secrects
• Covenants in restraint of trade are considered void unless the party
seeking to enforce the agreement can show they’re reasonable and
not against the public welfare
• The vendor agrees not to open shop within 50 km for 2 years
• Is there a reason for it?
o Business has been there for 20 years – built up goodwill
o Scope
 o Don’t want to be too broad – make sure you draft carefully so
only goes so far as necessary – courts just yes/no no mods
o Geographic limit
o Time limit
←
← The Employment Contract
• Employee owes the employers fiduciary duty
• Accountant should not be doing books for private clients at night
o Could be forced to turn over profits
o Must get consent
o Could be competing with your employer
o A fiduciary duty is a legal or ethical relationship of confidence
or trust between two or more parties, most commonly a
fiduciary or trustee and a principal or beneficiary. One party,
for example a corporate trust company or the trust
department of a bank, holds a fiduciary relation or acts in a
fiduciary capacity to another, such as one whose funds are
entrusted to it for investment. In a fiduciary relation one
person justifiably reposes confidence, good faith, reliance and
trust in another whose aid, advice or protection is sought in
some matter. In such a relation good conscience requires one
to act at all times for the sole benefit and interests of
another, with loyalty to those interests.
o Key employees duty – not to solicit business away after
termination
 A lot of customer contact
 Senior position
 For how long? 18 months
 Future employer may also be liable
 Careful about hiring away key employees from
competition – bc if they solicit business away from
former employer – you could be liable

• Competitor  software company employees  microsoft