INVITATION TO TREAT:

Facts Issue Ratio CANADIAN DYERS ASSOCIATION LTD. v. BURTON CDA wrote B for lowest price, B wrote anyone else I ask more... CDA sent check, B sends check back and says no contract Did the correspondence constitute an offer or invitation to treat? It was an offer A mere quotation of price does not constitute an offer to sell, but conduct and correspondence may go beyond the bounds of a simple quotation and establish that an offer has indeed been made. (offer depends on: language and circumstances) PHARMACEUTICAL SOCIETY OF GREAT BRITAIN V. BOOTS CASH CHEMISTS Facts Issue Ratio Boots owned pharmacy, medicine on shelf could only be purchased when pharmacist present When is the contract formed? When the customer picks up item or when they pay for it? No, when paid for Goods on shelf is invitation to treats, acceptance occurs when payment is made in exchange for item CARLILL v. CARBOLIC SMOKE BAL CO. C posted add that anyone who got influenza while on ball could collect $100.00 reward, plaintiff tried it and got cold Was contract formed when the plaintiff performed conditions? Yes Some adds can constitute offers and where there is offer to the world at large, which is accepted by performance of an act and is carried out by offeree it is a mode required A unilateral contract is a contract in which there is a promise only on one side, in consideration for which is not a return promise but the doing of some act GOLDTHORPE v. LOGAN [1943] O.W.N G sees add from L that guarantees hair removal, after treatment hair continued to grow Was there a contract between G & L? YES The unilateral contract provides a technique to ensure the enforcement of promises made to the public at large HARVELA INVESTMENTS LTD. v. ROYAL TRUST CO. OF CANADA (C.I.) LTD. Facts Issue Ratio Share to be sold to highest bidder- H bids $2,175,000, L bids $2,100,000 or $101,00 more than H Was this a call for fixed or referential bid? Does Ls referential bid count? No A referential bid should be set out clearly in the invitation to tender An invitation to bid if specific will be characterized an offer and can be accepted as receipt of the highest bid A court will construe a term offer in the context in which it occurs and give it its ordinary meaning R v. RON ENGINEERING & CONSTRUCTION (EASTERN) LTD. Gov. calls for tenders !R.E. submits irrevocable tender!bid accepted!R.E wants to edit bid, and refuse job, want deposit back Is R.E. bound by call for tenders? No Can they amend/withdraw tender? No Return Deposit? No Call to tenders is Contact A (unilateral contract)! Deposit is consideration Construction (contract B) is acceptance of tender (2 PART CONTRACT RULE) ! Contract B is entered after formation of Contract A Tender invitation and a tender bid are seen as a unilateral contract that is brought into being almost immediately on submission of bid M.J.B. ENTERPRISES LTD. v. DEFENSE CONSTRUCTION M.J.B. invited tenders w/ privilege clause!contract given to X but bid was non-compliant... Does inclusion of privilege clause allow D.C to accept non-compliant bid? NO should M.J.B. get damages? Yes Privileged clause must be compatible with the obligation to accept only a compliant bid A privilege clause allows for the acceptance of bids other than lowest bids Tender documents must express all operative terms, no bid shopping BLAIR v. WESTERN MUTUAL BENEFIT ASSN. (BC CA)

UNILATERAL OFFER:
Facts Issue Ratio

Facts Issue Ratio

INVITATION TO BID: TENDERING:

Facts Issue Ratio

Facts Issue Ratio

COMMUNICATION OF OFFER:

Facts Issue Ratio

Resolution (while B working as stenographer) that if B retired she would get $8000! retired wants salary promised Was resolution a unilateral contract? No An offer must be clearly communicated (formally or otherwise) before it can be accepted (cannot be accepted on facts) Communication addressed to one person will not normally be understood as an offer to another WILLIAMS v. CARWARDINE (1833, Kings bench) M witnessed brother commit murder, brother of deceased offered reward for capture of murderer, Ms brother beat her and she got scared went to police for her own safety Is she entitled to reward despite not being induced by the reward? Yes Knowingly performing a condition of an offer is acceptance, knowledge of offer is required, motive is irrelevant R v. CLARK (Australia High Court) C gave information to clear his own name which led to arrest of others, but he did not know about of reward Was there a contract established between the crown and Clarke? NO Where the offer invites conduct on the part of the offeree as the acceptance of the offer, the conduct must be undertaken not only with the knowledge of the offer but with intention to accept it The motive of the offeree in providing the conduct requested is immaterial LIVINGSTONE v. EVANS Vendor offers sell land $1800, buyer offers $1600, vendor says cant reduce price buyer wants it, but sold to 3rd party Was cannot reduce price rejection of counter-offer and re-instatement of original offer? Yes As an exception to general rule that counter-offer destroys original offer, if renewal option, right to bind still remains BUTLER MACHINE TOOL CO. (buyer) v. EX-CELL-O CORP. (seller) EX selling machine had acceleration clause (value on day delivered), BM place order with diff. conditions, EX sends back 3 rd form accepting as per our terms Battle of forms Was there a contract and on whose terms? Yes, Buyers terms If a material change in the contract is brought to the sellers attention a valid counter-offer has been made (tear off slip) Where there are different terms, if the difference is so material that it would affect the price the buyer ought not to be allowed to take advantage of the difference unless he draws it specifically to the attention of the seller. TYWOOD INDUSTRIES LTD. V. ST. ANNE-NACKAWIC PULP & PAPER CO. LTD St. Anne requests QUOTE and provided terms, T replied to quote with own terms and condition no modification(OFFER), St. Anne sends purchase order with tear off and arbitration clause (not brought to Ts attention) not signed, goods delivered to St. Anne Did parties agree to arbitration clause? Which conditions prevails? Application for arbitration not accepted Where the terms and conditions not mirror images then attention must be drawn to them in order to make them binding Under the traditional analysis, there would be a strong argument that the sellers purchase order constituted the last shot and that the sellers performance of the contract constituted an acceptance of those terms ProCD v. MATTHEW ZEIDENBERG AND SILKEN MOUNTAIN WEB SERVICES INC. ProCD has box and software that comes with restrictions that has to be accepted by user MZ Is there a contract between ProCD and defendant such that defendant must obey? Yes there is contract The offeror may invite acceptance on conduct and may propose limitations on the kind of conduct that constitutes acceptance, the offeree may accept by performing acts that the offeror proposes to treat as acceptance Computer software licenses are enforceable unless their terms objectionable on grounds applicable to contracts in general DAWSON v. HELICOPTER EXPLORATION CO.

Facts Issue Ratio

Facts Issue Ratio

Facts Issue Ratio

ACCEPTANCE: (BATTLE OF THE FORMS)

Facts Issue Ratio

Facts Issue Ratio

COMMUNICATION OF ACCEPTANCE:
Facts Issue Ratio

SILENCE:
Facts Issue D staked claim, H proposes to re-stake and D gets 10%, H says they will go by helicopter D agrees, then H backs out, D files breach Was bilateral or unilateral, and was silence abandonment of contract? Yes, bilateral and no abandonment

Ratio

Silence alone does not constitute an abandonment of a contract but rather you have to look at the circumstances of each case Acceptance must be clear but it need not be expressed, rather it can be implied by the language and conduct of the parties There is a tendency of the courts to treat offers as calling for bilateral rather than unilateral contracts FELTHOUSE v. BINLEY

Facts Issue Ratio

F wanted to buy horse from B, misunderstanding over price, F says hears no more assume agreement, horse sold Was there a contract between F and B? No You must communicate acceptance and silence is not a mode of acceptance ST. JOHN TUG BOAT CO. V. IRVING REFINERY LTD. (1964 SUPREME COURT)

Facts Issue Ratio

St. John agreed to supply I with tug, and to provide stand by, but can work elsewhere, silence for period while boats are standing by, invoices to I, no payment Did Is conduct constitute acceptance of offer, and make them obligated to pay? Yes enforceable contract Acceptance may be inferred by partys conduct acquiescence (acceptance w/out protest) to the benefit of services, provided with expectation of payment, will be taken as having requested services and accepting offer ELIASON v. HENSHAW (1819) E write to H wanting to buy flour writes accept by sending wagon, H responds, not by wagon, H sends flour, E refuses it Does H (sellers) acceptance by mail instead of wagon mean E (buyer) no longer obligated to purchase? Yes Offeror is master of offer and sets out terms & conditions of the offer which the offeree must accept on terms & conditions Any qualification or departure from those terms invalidates the offer, unless agreed to by the other party HOUSEHOLD FIRE & CARRIAGE ACCIDENT INSURANCE CO. v. GRANT H gets offer from G to buy shares in H, notice of allotment from H lost in mail, G placed on books as shareholder but never paid, H went bankrupt sues G for payment, G claims he is not a shareholder Was there a contract despite the fact that the defendant did not receive the letter of allotment? Yes Contract by snail mail is concluded when letter is put in post box even if never delivered (POSTAL RULE) Contract is concluded where and when a letter of acceptance is posted where post office is agent for both parties HOLWELL SECURITITES v. HUGHES (1974) HS approached H about real estate, option to be exercised by notice in writing within 6 months, HS sends letter to exercise option but never received by H Did HS exercise an option to purchase the premises by posting letter to H which he never received? NO (required notice in writing) Where you have an option and it says notice in writing, the postal rule will not apply because the law relating to option is that the grantee must comply with strictly the conditions stipulated BRINKIBOB LTD. V. STAHAG STAHL (1983 House of lords) Party in London say contract came into effect in London when they sent telex to Vienna (per postal rule), B wants steel from S Is an acceptance of an offer by telex from London, received in Vienna a contract made in UK? No contract made in Vienna Cases of instantaneous communication, contract is completed when received by offeror and in the jurisdiction of the offeror RUDDER v. MICROSOFT (1999) R brought action against M for breaching member agreement, M had clause action in Washington (jurisdiction clause) Was contract formed by clicking I Agree? YesWas acceptance to all despite reading? Yes Normal rules of contract formation in writing are applicable to agreements in electronic form Acceptance may be communicated by click I Agree, acceptance is held to apply to ALL terms in agreement even not read BYRNE v. VAN TIENHOVEN (1880)

Facts Issue Ratio

MAILED ACCPTANCES:
Facts Issue Ratio

Facts Issue Ratio

INSTANTANEOUS COMMUNICATION:
Facts Issue Ratio

Facts Issue Ratio

TERMINATION OF OFFER:

Facts Issue Ratio

VT make offer to B (buyers) by mail from NY, VT then makes revocation letter, B accepts offer by telegram then after B receives letter of revocation Whether withdrawal of an offer has any effect before communicated and before the offer has been set? NO revoking if accepted Whether posting a letter of withdrawal is communicated to the person to whom it is sent? Postal rule doesnt apply to revocation Postal rule applies to acceptance not to revocation, An uncommunicated revocation is no revocation at all An offer can be withdrawn before accepted and it is immaterial whether or not the offer is considered open for acceptance DICKINSON v. DODDS (1876) Do. offer to sell to Di. (open till Friday 9am), Di accepts offer Thursday but wasnt informed offer already revoked and sold If offer made but before accepted the offeror makes other binding agreement, and offeree knows can he still make offer? No An offer can be withdrawn before it is accepted even if offeror states that it will be open, revocation must be communicated A revocation may be effective if the offeree learns indirectly that the offeror is no longer willing to stand by offer ERRINGTON v. ERRINGTON AND WOODS (1952) Es father paid house told son to pay mortgage and would transfer title after mortgage, E&W paying mortgage, father dies his widow tries to evict W after son leaves her in house Was there proper acceptance to create a contract? Yes Promissor cannot revoke a unilateral contract if the offeree has started performance of the act that is required by offeror BARRICK v. CLARK (1951) C offered to buy land for possession b/w Jan.1 and Mar. 1 and asked B to respond by telegram, B responded in writing saying wanted deposit and balance paid and wrote hear from you soon but went on vacation and sold to 3rd party Given no date for acceptance, what is reasonable time for offer to stay open, and had that time elapsed? Yes time elapsed When offer does not specify acceptance time the offeree has reasonable time: ! depends on: nature of subject matter, normal business practice, circumstances of order including conduct in negotiations) R v. CAE INDUSTRIES LTD. (1986) Gov. looked for someone to maintain Air Canada base, Gov. said it would use best efforts to secure employment hours Was a contract intended, and is it too vague, uncertain or incomplete? YES binding contract, NOT vague Court will use an objective test, the reasonable person test to determine intentions Contracts will not be held void for uncertainty if terms can be meaningfully construed MAY & BUTCHER LTD. v. R. (1934 House of lords) MB agree to buy extra tentage, price to be agreed upon from time to time as tentage is available with arbitration clause Whether terms of contract sufficiently defined to constitute a legal binding contract? NO not bindng Agreement to agree on essential terms is not a legally binding contract (incomplete and vague b/c no price) A reference to future agreements may not necessarily be construed as an intention not to be bound FOLEY v. CLASSIQUE COACHES LTD. (1934)

Facts Issue Ratio

Facts Issue Ratio

LAPSE:
Facts Issue Ratio

CERTAINTY OF TERMS: VAGUENESS:

Facts Issue Ratio

INCOMPLETE TERMS:
Facts Issue Ratio

Facts Issue Ratio

CC agreed to buy land from F, subject to CC agreeing to buy fuel from F with arbitration clause, CC buys fuel elsewhere Was the supplemental agreement between parties binding? YES Where course of dealings in the past, missing terms such as price, may be applied and a reasonable price assumed HILLAS & CO. v. ARCOS LTD (1932 House of lords) H contracted to buy wood from A in future at discount, A then sold all their lumber, none left for H Was the option clause a binding agreement (reduced price)? Yes contract binding Court will strain to find a contract where common sense tells that there is one Contracts for future performance may leave important matters to be adjusted in the working of contract and still be valid

Facts Issue Ratio

AGREEMENTS TO NEGOTIATE:
Facts Issue Ratio EMPRESS TOWERS LTD v. BANK OF NOVA SCOTIA (1991 CA) BNS renting from ET, BNS tried to renew rental agreement and wrote offer with no reply from ET, ET responded the day the term was to expire and said will rent provided $ 15,000 paid immediately and $5,400/ month after Was renewal clause void for uncertainty or was it agreement to agree? NO not void, was agreement to agree Courts will try to give proper effects to any clause intended to have legal effect In cases with a standard (market value) courts will find terms of negotiating in good faith reasonable to promote efficacy MANPAR ENTERPRISES LTD. V. CANADA (1999 CA) M agreed with R to remove and sell sand for 5 yrs. w/ good faith clause to renew, M intended to renew, R tried to back out Was renewal clause uncertain? YES should there have been an implied term requiring R to negotiate in good faith? No Each contract must be looked at in context of its own facts Implication of terms can only be made if both parties likely to agree to such terms (satisfy officious bystandard test) A term can be implied in contract if it is found necessary by court to give business efficacy Duty to negotiate in good faith will not be implied in agreement if there is no language to provide an objective benchmark WELLINGTON CITY COUNCIL v. BODY CORPORATE (2002 New Zealand CA) Facts Issue Ratio WCC had agreement to agree with BC which obliged WCC to negotiate in good faith for sale of property Was there legally enforceable contract? No contract unenforceable, process contract to be separate from substantive contract The enforceability of contracts to negotiate will depend on their terms and particularly on the specificity of terms Parties must have reached consensus on all essential terms or objective means to determine terms BAWITKO INVESTMENTS LTD v. KERNELS POPCORN (1991 O. CA) Facts Issue Ratio Bs agent inquired for franchise rights from K, was given package with app., representatives of B and K made oral agreement Was the oral contract complete binding contract? No Was it subject to subsequent agreement? Yes still required formalization When essential provisions to be put into formal agreement are decided, and it is intended to be binding, it becomes binding When essential terms have not been agreed or too uncertain, and is dependent on making formal document, obligations are deferred until formation of the formal contract has been approved and executed, original agreement is not a contract GOVERNORS OF DALHOUSIE v. ESTATE OF ARTHUR BOUTILLER (1934) AB offers to donate to GD consideration is the subscription of others, AB financial difficulties, cant pay then dies Was there good and sufficient consideration to make a binding contract? No consideration, No contract A charitable pledge even though formally made is a gift, and even the detrimental reliance by GH is not good consideration BRANTFORD GENERAL HOSPITAL FOUNDATION v. MARQUIS ESTATE (2003) M pledged to BGH to donate, then M died however already gave $200K to start pledge, M named BGH beneficiary in will Is the signed pledge form a legally binding contract or does it fail for lack of consideration? No, there is lack of consideration For a pledge to be enforceable there must be consideration shown, name recognition not sufficient consideration WOOD v. LUCY, LADY DUFF-GORODON (1917, US) LLD fashion designer, employs W to market and have exclusive rights and split profit, LLD put name on other products, W sues Was there consideration and if so, is contract enforceable where no explicit promise made by W? YES An implied promise of one party can be sufficient to constitute consideration for a contract and support action for breach Courts will reach to find something reasonable for the purpose of salvaging an enforceable contract EASTWOOD v. KENYON (1840) E guardian to S, borrowed money for education w/ promissory note to re-pay, S pays interest and marries K, takes over promise

Facts Issue Ratio

ANTICIPATION OF FORMALIZATION:

EXCHANGE AND BARGAINS:

Facts Issue Ratio

Facts Issue Ratio

Facts Issue Ratio

PAST CONSIDERATION:
Facts

Issue Ratio

Is there a binding contract to pay the loan or does it fail for lack of consideration? No consideration Past consideration is no consideration at all, a pre-existing moral duty does not confer consideration Theres no consideration for a voluntary gift not requested by person receiving it LAMPLEIGH v. BRATHWALT (1615)

Facts Issue Ratio

B asks L to get pardon for Bs crime, L works to get it done, B offers 100L to continue but then doesnt pay Is there a binding contract or does it fail for lack of consideration? Yes A request with a promise to pay amounts to binding contract even though request and the promise are separate in time THOMAS v. THOMAS (1842) Husband promises P (wife) house after death, executors witness written statement give her house if she pays $1/yr. D (brother of husband ) tries to kick wife out for lack of consideration Was there an obligation to allow wife to retain possession of house, was consideration sufficient? Yes Consideration must be something of value in law, flowing from one person to another, may be small (peppercorn theory) Wish to honour someone elses wish is not sufficient consideration SHADWELL v. SHADWELL Nephew gets engaged, uncle says will pay him $150/yr. if he stays married, he marries, uncle dies estate stops paying Is encouragement sufficient consideration? Yes Duty owed to a third party will constitute sufficient consideration Promise made to a 3rd party is good consideration and the performance of duty owed to 3rd party is good consideration PAO ON v. LAU YIU LONG (1980) Side agreement b/w P & L to exchange shares, agreed not to transfer all shares at once, P worried Ls value wouldnt maintain so formed side agreement guaranteeing value in second agreement Was there consideration in second agreement, was it promise to perform pre-existing duty, and want consideration? Yes consider. An act done before giving of a promise to make a payment or give a benefit can sometimes be considered for the promise a) Act must be done at promisors request b) parties must have understood that the act was to be given in exchange for a payment or some benefit c) payment or the giving of a benefit must have been legally enforceable had it been promised in advance STILK & MERIT (1809 English Kings Bench) S was sailor, hired for 5L for completing voyage, 2 sailors got off ship, M says if they stay will get salaries of other 2 Was S entitled to higher rate of wages, and was there consideration for the promise to pay higher wage? No dont have to pay Performance of pre-existing contractual duty, already owed to the promisor, is no consideration for another contract GILBERT STEEL LTD. V. UNIVERSIT CONST. LTD. (1976 OCA) G enters contract to deliver steel to U (Contract 1), price of steel rose twice asked U for more $ (contract 2 &3) in C3 G sends agreement with 2 undiscussed clauses to U but U doesnt sign, kept accepting steel and pay lower amount G sues for remainder Was agreement to pay higher prices legally binding or did the agreement fail for lack of consideration? Failed lack consideration A promise to perform a pre-existing contractual duty already owed to the promisor does not constitute consideration Where parties have agreed to a mutual recission of a prior agreement, new agreement is binding despite increased burden WILLIAMS v. ROFFEY BROS. & NICHOLLS (Contractors) (1990 UK) R hires W to do work, R fears work will not be done so offers more to W, when work done R doesnt want to pay Was there consideration for defendants promise to pay additional money for completion? Yes Court will strain to find consideration where it is just under circumstances Where a party undertakes to make additional payments on existing contract and gains advantage it has consideration

CONSIDERATION MUST BE OF VALUE:

Facts Issue Ratio

DUTY OWED TO THIRD PARTY:

Facts Issue Ratio

Facts Issue Ratio

DUTY OWED TO THE PROMISOR (PROMISES TO PAY OR PROVIDE MORE):

Facts Issue Ratio

Facts Issue Ratio

Facts Issue Ratio

GREATER FREDERICTON AIRPORT AUTHORITY v. NAV CANADA (2008 New Brunswick CA) Facts Issue Ratio G request N to move an instrument, N refuses to relocate instrument unless G pays, G finally agrees to pay so N buys it and installs it, then G refuses to pay Was the promise made by G to pay for the instrument supported by consideration? No A post contract modification unsupported by consideration may be enforceable so long as it is established that the variation was not procured under duress FOAKES v. BEER (1884) Facts Issue Ratio F owed B money, entered agreement to pay over time on condition B agreed not to take proceedings, F pays debt B wants interest Whether to treat a perspective agreement for satisfaction of debt by series of payments is binding? No consideration Payment of a lesser sum on the due date is not sufficient consideration The doctrine of accord and satisfaction does not create an exception to the normal requirement of consideration Re SELECTMOVE LTD (1995) CA England S had overdue taxes, tax collector proposed deal, said would get back to S if new payment unacceptable, no further communication, S paid, Gov. then wanted payment in arrears Was there consideration for the agreement? No Pinnels rule ! A lesser sum on due date is not good consideration for the whole FOOT v. RAWLINGS (1966 SCC) F owed R money, they agreed for F to pa $300/mth. w/ lower interest and to give 6 cheques, R accepted because needed money, R sues for whole amount despite Fs proper performance Whether R received consideration in the agreement? Yes because paying by check A negotiable instrument can be substituted for cash to satisfy the exception to the rule in Pinnells case (above case) HUGHES v. METROPOLITAN RAILWAY COMPANY (1877) H leases land to M and asks them to make repairs within 6 months, M writes asking to defer commencements because they want to purchase the property, negotiations commence, H never responded to proposal to delay repairs, and brings action Did landlord waive his right to insist on strict performance such that he could not now insist on doing so? Yes If parties who entered into distinct terms involving legal results afterwards by their own acts or consent enter a course of negotiations which has the effect of leaving one party to suppose the strict rights arising under contract will not be enforced or will be suspended the person who might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealing CENTRAL LONDON PROPERTY TRUST LTD. V. HIGH TREES HOUSE LTD. (1947 UK) HT gets 99 year lease of block of flats, war hits flats not fully let, CLP agrees to reduce price, HT pays lower price through the full letting period, CLP demands full rent in future and arrear payment for the past Was HT bound to pay arrears for the full amount of rent when fully let? No, only last part For promissory estoppel where one has given a gratuitous promise that was indented to be binding and was intended to be acted upon and was acted upon, the promise should be considered to be binding so far as its terms properly apply even where there is no consideration JOHN BURROWS LTD. V. SUBSURFACE SURVEYS LTD. (1968 SCC) J sold business to S, part of purchase price secured by promissory note providing for monthly payments and J to claim entirety if failure to pay a monthly payment, S was consistently late for payment, following disagreement J sues for entire amount Does the defense of equitable estoppel or estoppel by representation apply? No ! S has to pay Indulgences are not promises and therefore promissory estoppel does not apply Promissory estoppel there must be a promise either by words or conduct and its effects must be clear and unambiguous Estoppel can only be evoked when the parties that have entered into a contract afterward by their own consent or act

PROMISES TO ACCEPT LESS (ACCORD AND SATISFACTION):

Facts Issue Ratio

Facts Issue Ratio

PROMISSORY ESTOPPEL AND WAIVER:

Facts Issue Ratio

Facts Issue Ratio

NATURE OF THE REPRESENTATION:

Facts Issue Ratio

enter into a course of negotiations which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced

EQUITIES:
D & C BUILDERS LTD. V. REES (1966 CA) Facts Issue Ratio R refused to pay DC for services, R offered to pay less than total, DC in need of money and accepted less money Is the settlement binding? NO Equity for equity: he who seeks equity must do equity Promises extracted by intimidation; promissory estoppel not applicable where the promise was extracted by intimidation SASKATCHEWAN RIVER BUNGALOWS LTD. v. MARITIME LIFE ASSURANCE CO. (1994 SCC) MLA issued policy on employee of S, S failed to pay within grace period but was reinstated, then defaulted later and MLA refused to re-insure, guy dies Did MLA waive their right to compel timely payments under policy? NO Waiver will be found only where the evidence demonstrates that the waiving party had a) full knowledge of rights and b) an unequivocal and conscious intention to abandon them As it concern a notice to re-instate rights the court found that a person who waives a right, especially one based in time can restore that right by giving reasonable notice INTERNATIONAL KNITWEAR ARCHITECTS INC v. KABOB INVESTMENTS (1995 CA) IKA leased land from K, IKA had difficulties, K agreed to reduce rent, IKA missed payment and K brought action Is K estopped from making claim for back-rent? Yes If two parties have agreed to some variation that variation is enforceable, it must have consideration; exception is estoppel Absent any other contractual provisions, with proper notice the party, which would otherwise be estopped, can gain back original rights in the original contract (prior to variation) Notice of reversion to rights is allowed, as long as reasonable notice is given W.J. ALAN & Co. v. EL NASR EXPORTS & IMPORTS (1972) B bought coffee w/ price in Kenyan, payment confirmed by irrevocable letter, B opened confirmed letter of credit under different currency, S raised no complaints and shipped coffee, later currency dropped S wanted more money Was B bound to pay seller in the currency of the original contract? NO Waiver: if one party by his conduct leads another to believe that the strict rights arising out of the contract will not be insisted upon then they will not afterwards be allowed to insist on those rights when it would be inequitable to do so Reversion: the party who gives a waiver can on occasion revert to his strict legal rights for the future by giving reasonable notice on that behalf Societe Italo-Belge Pour Le Commerce et Lindustrie S.A. v. Palm and Vegetable Oils (Malysia) Sdn P agreed to sell oil to S, S wants to sell it to others, P had to make declaration of ship sailing in writing, P didnt do this until a month later, on receipt of declaration S rejects oil, P claims damages Does the doctrine of promissory estoppel apply (did S wiave right to reject Ps tender of documents)? No (buyer can reject) If one party by his conduct leads another party to believe that the strict rights arising under the contract will not be insisted upon then they will not afterwards be allowed to insist on those legal rights when it would be inequitable to do so To establish inequity it is not necessary to show detriment; it may be inequitable at least without reasonable notice for the repressentor to enforce his legal rights Detrimental reliance: when legal rights trying to be revived, it would cause inequitable harm to the other party. If a party relies on the other partys waiver of rights, but there is no detriment, there can be no estoppel. COMBE v. COMBE (1951) Parties married then divorced, husband said would pay 100L allowance but never does, wife brings action for all money owed Could wife use promissory estoppel to make husband pay? NO was there consideration to make binding? NO You cannon sue to make a promise legally binding without consideration Promissory estoppel can be used as sword combined with another cause of action, but it is not a cause of action in itself

NOTICE:
Facts Issue Ratio

Facts Issue Ratio

RELIANCE:
Facts Issue Ratio

Facts Issue Ratio

SWORD OR SHIELD:
Facts Issue Ratio

Facts Issue Ratio

PETRIDIS v. SHABINSKSY (1982 Ontario High Court) P rented from S w/ clause requiring 6 months to renew, start negotiating in Jan. say talk after holidays, S and Ps employee negotiate but dont agree, S leases to someone else, P declares they exercised option to renew and go to arbitration Did S waive his right to enforce deadline of the option clause? Yes Can P use promissory estoppel as sword? Said it was a case of waiver (which can be used as sword) If you suspend or waive your rights and the other party relies upon that, you cannot change your mind-requires notice ROBICHAUD v. CAISSE POPULAIRE DE POKEMOUCHE LTEE. (1990 N.B. C.A.) R owed money to Bank and C who said they would accept a lower amount to settle the debt but later they reneged, R sues Can he use promissory estoppel as a sword? Yes, where equity demands it Promissory estoppel may be used as sword where equity demands it WALTONS STORES v. MAHER

Facts Issue Ratio

Facts Issue Ratio

W negotiated lease with M, and W wanted new building, seemed contract would go through then, M sent documents for approval with amendments requested by W, W did not respond, M started construction, W wanted to back out Was their binding contract? NO Was W estopped from denying existence of contract? Yes Where one of the parties has injuriously relied on the promise and it is inequitable for the other party to back out, court will enforce promise even where there is no contact, or pre-existing legal relationship M.(n.) v. A. (A.T) (1993 B.C.C.A) M promised A to pay mortgage if she came to live with him, A resigned from job, M loaned A $100 K but didnt pay mortgage Can A use promissory estoppel as a sword? NO Promises made in romantic relationships not generally suggest parties intended legally binding contract for estoppel BALFOUR v. BALFOUR (1919 English CA) Wife sues husband for allowance he promised her when he was leaving to sail Was there an intention to create legal relations? NO Closely associated parties (spouses) will be presumed not to intend to create legal relations in absence of clear evidence ROSE AND FRANK CO. v. JR CROMPTON AND BROS LTD. (1923 House of Lords UK) R was sole agent for JR, signed honorable pledge form not subject to legal action, JR didnt comply, R sues Was there an intention to create legal relations, which were binding? NO Although it is generally presumed that the intention to create commercial relations is present in the making of commercial arrangements where parties wish to be bound in honor only and so express themselves the absence of intent is established TORONTO DOMINION BANK v. LEIGH INSTRUMENTS LTD. (1999 OCA) GE owns P who owns L, so P gives bank 5 letters of comfort (not legally binding) so that L gets money, bank sues P Did the parties intend the letter of comfort to be legally binding? NO Letters of comfort do not impose binding contractual obligations as there is no intention to create binding legal relations ROYAL BANK v. KISKA (1967) RB bought action on guarantee signed by K, no wax seal was attached, but word seal was printed next to signature Do the words written under seal make the doctrine of consideration null and void? No must be recognized seal Promisses made in a sealed document are enforceable not withstanding the absence of consideration The presence of words given under seal are anticipatory of a formality which must be observed (actual seal required)

Facts Issue Ratio

INTENTION TO CREATE LEGAL RELATIONS (FAMILY ARRANGEMENTS):

Facts Issue Ratio

COMMERCIAL ARRANGEMENTS:
Facts Issue Ratio

Facts Issue Ratio

FORMALITY (PROMISES UNDER SEAL):

Facts Issue Ratio

FORMALITY (OPERATION OF THE STATUTE):

Facts Issue Ratio

DYNAMIC TRANSPORT v. O.K. DETAILING (1978) D to buy land from OK, created purchase agreement but before closing land value UP, OK argues contract void for lack of clarity Whether the contract lacked clarity? Yes but oral evidence was permitted to clarify Courts strain to find sufficient writing to satisfy statute of frauds in certain cases, oral evidence permitted for explanation Transfer land must be clearly described in writing, sufficient certainty of description to enable property to be identified DELGAMAND v. GUARANTEED TRUST COMPANY (1954 SCC) D lived with aunt, aunt promised him house if he looked after her, she dies D contests will for not getting house How does part performance affect an oral agreement, and despite statute of frauds requiring land transfers in writing can D get house? NO In order to invoke doctrine of part performance the act must be unequivocal, must have relation to one agreement and no other (this case introduced unjust enrichment) THOMPSON v. GUARANTEED TRUST (1974 SCC)

CONTRACTS FOR THE SALE OF AN INTEREST IN LAND:

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T ran farm, promised the farm if he stayed and worked, will was later stolen, relatives (GT) want property, was oral agreement Lack of memorandum in writing whether acts were sufficient part performance to take the case out of s.4 statute of frauds? Yes Acts of part performance that are unequivocally referable to some interest or contract in land render the contract enforceable despite the statute of frauds LENSON v. LENSON (1984 Sask. CA) 11 children, 1 has farmed a lot, father says he will sell him farm, other kids object father doesnt sell him farm, he sues Do the acts of part performance override the statute of frauds? Yes Case of part performance, if acts are unequivocally referable to their own nature to some dealing with land the test is met TWEDLER v. ATKINSON Couple engaged, fathers of both parties agreed to pay groom (300L jointly) fathers die, groom sues both estates Could groom sue on contract established between T and W, that was made for his benefit? NO No stranger to the consideration of a contract can take advantage of a contract even if its made for their benefit, love and affection is not consideration DUNLOP PNEUMATIC TYRE v. SELFRIDGE UK D sells tires to DC (wholesaler) with agreement not to sell below certain price, DC sells to S who then sells at lower price Can D enforce contract made between D and DC w/ third party S? NO No stranger to a consideration can take advantage of the contract even if it is made for their benefit BESWICK v. BESWICK (UK) Prior to Old Bs death gave nephew (young B) money promising to pay aunt 5L/wk., young B only made 1 payment, aunt sues Could aunt sue to recover money? Yes Remedy of specific performance may be useful for circumventing doctrine of privity Where 3rd party can show a sufficient interest in the contract (e.g. being administrator) then they have capacity to seek specific performance VANDEPITTE v. PREFERRED ACCIDENT INSURANCE Co. (1933 Privy Council)

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DOCTRINE OF PRIVITY:
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WAYS IN WHICH 3RD PARTY MAY GET BENEFIT (SPECIFIC PERFORMANCE)

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TRUST:
Facts Issue Ratio V injured in accident with JB who was driving fathers car, father had insurance which extended to her, daughter was sued Was provision in insurance that extended indemnity to person driving w/ permission, held in trust by father for benefit of daughter? NO A trust will only arise to benefit a 3rd party beneficiary in circumstances where it is clear that the parties intended to create a trust relationship

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AGENCY:
Facts Issue Ratio McCANNELL v. MABEE MCLAREN MOTORS LTD. (1962) MMM manufactured cars, Mc was retailer who contracted not to sell outside territory, this was made with ALL dealers Is privity of contract between the dealers? Yes If the promisee is contracting as agent on behalf of 3rd party the doctrine of privity has no application between the 3rd party and promisor NEW ZEALAND SHIPPING Co. LTD. v. A.M. SATTERTHWAITE & Co. LTD. (1975) Shipper was manufacturer of drill, carrier company had bill with clause saying no servant or agent responsible for damages, AM received damaged drill (damaged in unloading by people hired by carrier) Was carrier acting as agent for NZ shipping when contracting for shipment of drill such that NZ can take advantage of limited liability clause? Yes they were acting as agent and could take advantage of limited liability 4 part test for agency: a) 3rd party was intended to receive benefit under contract, b) Promisee is acting as agent for 3rd party, c) Promisee has authority from 3rd party to act as agent, d) Consideration must move from 3rd party LONDON DRUGS v. KUEHNE & NAGEL INTERNATIONAL (1992) Transformer owned by LD stored in KN unit had limitation of liability clause (limited to $40 any more pay extra), LD did not ask for extra insurance, KN employees damage transformer, LD sued employees directly Can KN employee obtain benefit from limitation of liability clause? YES Employees may obtain benefit of limitation of liability clause as long as following circumstances are satisfied: Employee seeking benefit from LL clause must have been actin in course of employment, and performing the very services provided for in the contract when loss occurred EDGEWORTH CONSTRUCTION LTD. v. N.D. LEA & ASSOCIATES LTD. (1993 SCC) E was contracted to build road by province, E loses money because ND made errors in drawings, Liability clause was between E and province, E sues ND Whether engineers (not part of contract) could claim benefit of its limitation of liability b/w E and province? NO Employment exemption created in LD is dependent on actual intentions of the parties and not just as status as employees FRASER RIVER v. CAN DIVE SERVICES (1999 SCC) F owned barge and chartered it to CD, Insurance can step into Fs shoes however there was clause waiving that right, insurer decides to waive right to subrogation, allowing F to sue, CD says because waiver is in contract cannot be waived Can CD claim protection of subrogation clause even though it was a stranger to the contract based on principle established in London drugs? F and insurance cannot subrogate, CD protected by original clause Exception to the doctrine of privity can be established when: Parties extended contractual benefit to 3rd party and 3rd party acting in manner set out by contract to which not party

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EMPLOYMENT:
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SUBROGATION:
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