BUSLAW

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Legal effect of a counteroffer - Destorys original offer
Offer can be revoked - at anytime before accepted
Laura/31 - court will find restraint unreasonable
A man in Toronto has 2 houses, he agrees to sell on for $200,000 to a friend at a HS reunion, the friend immediately agrees and writes him a deposit check. The owner changes his mind and returns the check to him. - Withdraw

The common law is law that is not written down as legislation. Common law evolved into a system of rules based on precedent. This is a rule that guides judges in making later decisions in similar cases. The common law cannot be found in any code or body of legislation, but only in past decisions. - courts, in deciding cases by interpreting the federal or a state constitution.




Malicious prosecution
Edith caused Louisa to be prosecuted for crime, knowing that the crime had not been committed, because Edith said that she made the story up that got Louisa convicted. Therefore, the fact situation falls within “malicious prosecution”.

Charter of rights
Purpose of the Charter is to protect the rights of people, businesses and organizations from violations by the government. The charter applies only to actions of the government, but this can include actions of government agencies. Most charter cases are concerned primarily with the validity of a law that a government has created and whether the law violates rights guaranteed by the charter.

Vicarious Liability
Employers are vicariously liable for the harm caused by their employees in the normal course of their work

False Imprisonment
False Imprisonment - To hold or retain a person against with no legal right to do so.
Stores can use reasonable force to hold a shoplifter until the police arrive
ONLY police can search people
If the person did NOT steal the store can be liable for false imprisonment

Malicious Prosecution
Malicious Prosecution - Causing a person to be prosecuted for a crime without an honest belief that the crime was committed
About 1 in 8 CROWN attorneyes are sued for this tort

libel
false statement that is damaging to a person's reputation; a written defamation.




CHAPTER 1 FUNDAMENTAL RIGHTS

Why study Business law?

• Avoiding legal pitfalls in business
• Businesses use law against competitors (‘legal warfare’)
• Learn: obligations and rights (Torts and Contract law = “law of obligations”)
– Property rights
– Obligations to employees
– Avoiding expensive lawsuits
• IMPROVE YOUR BUSINESS SKILLS
• LEARN TO RECOGNIZE WHEN LEGAL ISSUES FIRST ARISE BEFORE A CRISIS OCCURS
• PROTECT YOUR BUSINESS INTERESTS
• TRY TO PREVENT LAWSUITS

CONSTITUTION ACT SECTION 91
FEDERAL GOVERNMENT POWERS

CONSTITUTION ACT SECTION 92
PROVINCIAL GOVERNMENT POWERS



LOCAL/MUNICIPAL GOVERNMENTS

— BORROW POWERS TO MAKE LAWS ON LOCAL ISSUES:
— LOCAL POLICE & FIRE DEPARTMENTS
— LAND USE & ZONING
— LOCAL ROADS
— GARBAGE
— TAXATION

Parliamentary power

• King was absolute monarch
• Ruled by divine right
• Glorious Revolution (1688)
• Parliament with King had absolute power
• “Parliament can do anything but make a man a woman and a woman a man." (“supremacy”)
• Today: Parliament limited by Charter of Rights
• Pre-charter, constitutional law about division of powers

Sources of Constitutional law

Fundamental constating documents of Canada:
Constitution Act, 1867 (Division of Powers)
• Division of Powers
• Canada is a federal nation (provincial and federal governments)
• What about municipal government?
• Municipal government powers come from provincial legislation (Municipal Act)
• S.91 Federal Powers
• S. 92 Provincial Powers
Statute of Westminster (1931) (control over foreign policy)
Constitution Act (1982)
• Canadian Constitution ‘repatriated’
• British Parliament passed legislation giving Canada the power to amend its own constitution
• Charter of Rights added to Canadian Constitution

The Canadian Charter of Rights and Freedoms (1982)


— SUPREME LAW CREATED IN 1982
— NO OTHER LAW GOVERNMENTS PASS CAN VIOLATE THE RIGHTS PROTECTED IN THE CHARTER
— STRENGTHENS THE POWER OF THE SUPREME COURT OF CANADA
— CHARTER ONLY APPLIES
— TO THE ACTIONS OF THE GOVERNMENT AND GOVERNMENT AGENCIES

Gun Registry Case

• Federal firearms registry (Liberal government)
• Challenge to law as ultra vires
• Provincial or federal power?
• What would provinces argue?
• What would federal government argue?
• “Pith and substance’ was criminal in nature
• Court: within federal power

Intra Vires vs Ultra Vires

• Intra vires = within powers
• Ultra vires = outside powers
• Government (federal or provincial) cannot act outside the powers given to it by the constitution
• Same with Municipal government
• Example: strip clubs (cannot ban strip clubs, sex shops etc. –can limit location, signage, how close they are together)
• Why not?
• Morality (criminal law = federal)

Ultra Vires
• If a law is ultra vires the power of the government (federal, provincial, municipal) it is of no force or effect
• Delegation of power: government can delegate power to lower level of government
• Example: marriage licenses issued by municipality but marriage is federal
• By-laws (clean up dog poop or pay a fine!) delegated power by province to municipality


R.I.D.E

• Melissa is driving home one night when she is stopped at a police roadblock. Police have set up a R.I.D.E. program to check cars for impaired drivers.
• “Everyone has the right not to be arbitrarily detained or imprisoned.” S.9 Charter of Rights and Freedoms
• Have her rights been violated?
• R. v. Hufsky [1988] 2 SCR 621



Section 1 of the charter REASONABLE LIMITS

— THE RIGHTS IN THE CHARTER ARE GUARANTEED SUBJECT TO REASONABLE LIMITS THAT CAN BE JUSTIFIED INA FREE AND DEMOCRATIC SOCIETY
— e.g. Laws restricting the advertising of tobacco products are a justified violation of the companies freedom of expression
• “The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society. “
• R.I.D.E programs saved by s.1


Charter Analysis: Steps
• 1. Is there a right protected by the Charter? (government or state action?)
• 2. Has the right been violated?
• 3. Is the violation saved by section 1? (Is it subject to such limits prescribed by law as can be reasonably justified in a free and democratic society?)

• David Oakes searched by police Found to have 8 1gram vials of hash oil. Mr. Oakes claimed he purchased the vials for $150 for his own use.
• Criminal code provision creating a ‘reverse onus’ for possession of narcotics.
• If a person found in possession of narcotic, then is up to the accused to prove he is not in possession for purpose of trafficking.

Effect of Charter
• Constitution supreme law of land s.54
• Previously only if law was ultra vires the powers given to it could it be struck down by courts
• Government (provincial + federal) had power to restrict civil liberties if they chose
• Charter shifted power towards courts

Charter: Business Relevance?
• Free speech: Advertising laws: children and tobacco
advertising
• Search warrants: Corporation has same rights as a natural person (rights against warrantless search and seizure)

Charter Application
• Government action (public law)
• Laws passed by government
• Not private situations
• Provincial Human rights law address discrimination in housing, employment, services (restaurants, stores)

SECTION 15 EQUALITY RIGHTS

— S. 15. (1) EVERYONE HAS EQUAL BENEFIT AND PROTECTION UNDER THE LAW AND IN PARTICULAR WITHOUT DISCRIMINATION BASED ON
— RACE, NATIONAL OR ETHNIC ORIGIN
— COLOUR
— RELIGION
— SEX
— AGE
— PHYSICAL OR MENTAL DISABILITY

Federal Narcotics Control Act

• Reverse Onus Provisions
• Violation of Presumption of Innocence (Charter)
• Not saved by section 1: Drugs are a serious problem for our society But the means used by government here was disproportionate.
• Courts struck down ‘reverse onus’ provisions in the legislation
• Like using dynamite to kill flies!

Notwithstanding Clause

• 2006 Election campaign: Candidates’ TV debate:
• Paul Martin surprise announcement that if elected he would remove the notwithstanding clause from the constitution
• What role does the notwithstanding clause play?

s. 33 Override/ sunset clause

• 33. (1) Parliament (provincial legislature) may declare in an Act that the Act or provision shall operate notwithstanding a provision included in section 2 or sections 7 to 15 of this Charter. (only certain rights)
• Must be renewed every 5 years
• Quebec/Alberta have used s.33

Sikh Turban

• Railway required hardhats to be worn on the job
• Sikh employee refused to wear hardhat
• Fired for refusing to wear
• Sikh employee claimed this was discriminatory
• What do you think the result was?
• Bhinder et al v Cdn National Railway Co, 1985 (SCC)
• Let’s say Sikh in previous example is willing to wear both turban and hard hat provided his employer provides a chin strap (accommodation)
• Mounties and turbans (SCC case)
• Duty to accommodate
• Cannot cause undue hardship

VRIEND V. ALBERTA [1998] 1 S.C.R. 493

— LANDMARK CASE 1998 - DISCRIMINATION BASED ON SEXUAL ORIENTATION
— DELWIN VRIEND FIRED FROM PART TIME TEACHING JOB AT A PRIVATE COLLEGE BECAUSE HE WAS GAY
— NOT PROTECTED UNDER ALBERTA HUMAN RIGHTS CODE
— SUPREME COURT RULED OTHER AREAS
PROTECTED UNDER S. 15 INCLUDING SEXUAL
ORIENTATION
— 2004 SCC RULES SAME SEX MARRIAGE
LEGAL IN CANADA

BFOR

Bona fide occupational requirement
• Defense to discrimination
• Justifiable
• Health/Safety

Human Rights Remedies

• Order to…
– Stop discriminating practice
– Adopt a special programme or plan to cure problem
– Pay monetary award to complainant
– Reinstate a complainant into employment


— APPLIES TO DISCRIMINATION OR HARASSMENT DONE BY INDIVIDUALS AND CORPORATIONS
— ALSO APPLIES TO GOVERNMENTS WHEN ACTING AS A LEGAL PERSON (NOT IN THEIR LAW MAKING CAPACITY)
— Cases often involve discrimination in: employment situations, housing and the provision of goods and services
— HARASSMENT – ANY UNWANTED PHYSICAL OR VERBAL CONDUCT THAT OFFENDS OR HUMILIATES AN INDIVIDUAL
— THREATS, INSULTS, COMMENTS, GESTURES, INTIMIDATION, ASSAULTS
— SEXUAL HARASSMENT – UNWANTED CONDUCT OF A SEXUAL NATURE THAT OFFENDS OR HUMILIATES
— SOME FLIRTING CAN BE ALL RIGHT
BUT NOT BY A SUPERIOR


EMPLOYER’S DUTIES

• Establish a No-Harassment Policy
• Train Employees on the Policy
• Set procedures to Report Harassment
• Enforce the Policy
• Take Appropriate Action against Offenders


DUTY TO ACCOMMODATE – UNDUE HARDSHIP

— EMPLOYERS MUST ACCOMMODATE EMPLOYEES NEEDS SO AS NOT TO DISCRIMINATE UP TO THE POINT OF UNDUE HARDSHIP
— e.g. Physical & Technology Workplace Changes for Disabled People
— e.g. Allow Employees time off to accommodate their religious beliefs

— UNREASONABLE FINANCIAL COST TO THE EMPLOYER
— EMPLOYEE UNABLE TO FULFILL THE BASIC JOB DUTIES FOR THE “REASONABLY FORESEEABLE FUTURE” DESPITE ACCOMMODATIONS
— e.g. Hydro Quebec case – Worker off a large part of a 7 year period and still unable to return in the reasonably foreseeable future, despite many accommodations, so Hydro could then legally terminate her employment















Chapter 2 Canadian Court System

What is law
Laws are rules of conduct that are enforced by government-sanctioned agencies (Such as the Courts or Police)
Rule of Law:
Every person and institution is subject to and accountable to the law which is fairly applied & enforced
“The Law Rules”

Civil v Criminal Law

• Why did O.J. Simpson face two trials?
• Criminal prosecution (murder)
• Civil proceeding (wrongful death)
• Civil law = private law
• Criminal/regulatory law = public law
• Constitutional law = disputes concerning government powers (between governments or individuals/businesses and government)

Purpose - Criminal vs Civil
To PUNISH the wrongdoer (jail/fines) and to DETER others from committing similar crimes
COMPENSATE the victim
Terms
Complainant ( Injured Party)
Accused/Defendant (wrongdoer)is charged with an offence
- Guilty or Not Guilty
Plaintiff (Injured Party)SUES the Defendant (wrongdoer)
– Liable or not liable

Lawyers
Accused selects & pays their own lawyer
Victim does not hire a lawyer, a CROWN ATTORNEY (government lawyer) will prosecute the accused
Each side selects and pays their own lawyers
Jury
12 people on the jury, all 12 must agree, if not, it is a mistrial
Some provinces prohibit civil juries – in Ontario 5 of 6 people on a civil jury must agree for a verdict
Timing
s.11(b) of the Charter, criminal trial must occur in a “reasonable” time
-About 12-18 months for smaller offences, longer if more complicated case
No right to a civil trial in a reasonable time
-Often wait 3-5 years for large civil trial in a big city
Burden (Standard) of Proof
Higher, harder standard of proof, hard to get a conviction, as the crown must prove BEYOND REASONABLE DOUBT the accused did it
Easier, lower standard, the plaintiff’s lawyer has to prove ON THE BLANCE OF PROBABILITIES the defendant did it


Common Law
Based on the “Rule of Precedent” - Stare Decisis
Judges must follow precedents - which are earlier decisions made by a higher court in the same jurisdiction
Much of Canadian common law is based on old British cases
Much of tort & contract law is common law
Quebec has a separate statute for civil law - Quebec Civil Code

Statutory Law
People elect a government and then the government can pass new statutes (laws)
If you want the law changed, elect a different government that may change the law

3 Levels of the Canadian court system
Supreme Court of Canada
Provincial Courts of Appeal
Trial Courts

Trial Courts
Many different trial courts
Court selected depends on the type of case it is (e.g. Criminal, Civil, Family, Traffic, Young Offender)
Different courts based on the seriousness of the crime or the amount of money claimed
E.g. Small Claims Courts hear civil cases for smaller claims, in some provinces it is under $25,000

Provincial Appeal Courts
Appeal Courts do NOT conduct trials
Appeal Courts do decide whether or not an error was made at the lower court
Appeal Courts can give various results: e.g. Confirm or over turn a trial decision, Order a new trial,Change the length of a jail term, Change the amount of money awarded
ABOUT 90 OF APPEALS FAIL

Supreme Court of Canada
DOES NOT CONDUCT TRIALS, it is and appeal court
ONLY 9 JUDGES on the sccand 5,7, or 9 per case
SCC hear about 80-90 appeals per year
SCC can confirm or over turn a lower court decision, order a new trial, change the length of a jail term, and change amount of money that is awarded
About 90 of appeals here fail

Civil Lawsuit: Preliminary Issues
Jurisdiction - The Plaintiff can sue in the court where the defendant lives OR where the event occured
Limitation Period - The length of time you have to start the civil lawsuit varies greatly, e.g. In Ontario it is 2 years from the date the damages arose in most cases

5 Stages in a Civil Lawsuit
Stage 1 - Pleadings
Stage 2 - Discovery
Stage 3 - Pretrial Conference
Stage 4 - Trial Process and Judgment
Stage 5 - Enforcing the Judgment

Stage 1: Pleadings - 2 Parts
1) Statement of Claim - Plaintiff’s version of the events, law that applies & remedies that are claimed
Must be served on the defendant
2) Statement of Defence - Defendant’s version of the events, law that applies & remedies claimed.

Stage 2: Discovery - 2 Parts
Discovery of Documents - Both sides must exchange key documents: e.g. financial, business, medical records
Examination for Discovery - Each side questions the other side under oath, no judge present, answers are recorded

Stage 3: Pretrial Conference
Both sides meet together informally with a judge who tries to encourage the two sides to come to a settlement
Settlement
At any time up until the judge delivers a decision, the parties can settle and reach an agreement on their own
Advantages: It can be Faster, Cheaper (less legal fees) and there can be more Control and Satisfaction with the outcome
ABOUT 90 OF ALL CASES SETTLE and do not go through a full trial
A Settlement Agreement includes a RELEASE and often a CONFIDENTIALITY CLAUSE
Release - A written statement that releases a party from any further legal action in the lawsuit
Confidentiality Clause - Prohibits parties from revealing any of the settlement details to others

Stage 4: Trial Process and Judgment
Adversarial Process - winner/ loser
Plaintiff must prove on the Balance of Probabilities that the defendant is liable
Court will render a judgment
Remedies that can be awarded: Monetary Remedies and Non-Monetary Remedies




Monetary Remedies
Pecuniary Damages - Financial Losses e.g. repair costs, medical costs, lost wages, lost profits
Non-Pecuniary Damages - Non-financial losses - Money awarded for pain & suffering, loss of enjoyment of life and shorter life expectancy
1978 SCC set a Maximum Limit on Non-Pecuniary Damages at $100,000 and now it is approximately $375,000 with increases due to inflation
Aggravated Damages - Money awarded for mental distress, anguish or emotional upset, but medical proof is required
Punitive Damages - Extra money awarded to punish in intentionally bad behaviour
Nominal Damages - Small amount awarded when no real economic losses incurred

Non-Monetary Remedies
Injunction - A STOP order issued by the court
Order of Specific Performance - Perform a contract for the sale of something rare or unique
An Accounting - Produce business records and pay illegal profits made
Deliver Up Order - Deliver certain items to the Plaintiff
Anton Piller Order - A surprise civil search warrant

Stage 5: Enforcing the Judgment
Debtor’s Examination - Debtor must tell of all their assets under oath
Garnishment Order - Plaintiff uses this order to get money from the defendant’s bank account or can be used to take part of the defendant’s wages
Writ of Seizure & Sale - Authorizes a Court Official to seize & sell specific assets of defendant and give proceeds to the Plaintiff.

Class Actions
Lawsuit brought by a group of individuals againsts the same defendant
Class must obtain certification from the court, and it is often difficult to obtain
Allows Plaintiffs to share legal costs
A representative Plaintiff is selected to represent the class
If certified the case OFTEN SETTLES
Lawyers can often get 15-30 of the damage award fees



Famous Class Action Cases in Canada
Residential Schools - Aboriginal children forced into school - almost $4 billion in possible damages
Hepatitis C - Blood Transfusions infected with Hep C - almost $2.7 billion in damages
Maple Leaf Foods - Listeriosis Bacteria in cold meat - 22 died - 5000 ill - $27 million settlement

Alternative Dispute Resolution
Parties agree to an alternative to going to court
An outside 3rd party is brought in to settle a dispute
TWO TYPES
Mediation - Suggests a decision
Arbitration - Forces a decision












Chapter 3 Intentional Torts
Torts
Tort - A wrongful act that causes harm in civil law
Many torts can also be crimes as well. E.g. the tort of conversion can be the crime of theft
2 Types of Torts: - Intentional
- Unintentional

Vicarious Liability
Employers are vicariously liable for the harm caused by their employees in the normal course of their work

False Imprisonment
False Imprisonment - To hold or confine a person against their will with no legal right to do so
Stores can use reasonable force to hold a shoplifter until the police arrive
ONLY police can search people
If the person did NOT steal the store can be liable for false imprisonment

Malicious Prosecution
Malicious Prosecution - Causing a person to be prosecuted for a crime without an honest belief that the crime was committed
About 1 in 8 CROWN attorneyes are sued for this tort

Trespass to Land & Trespass to Goods
Trespass - Entry onto another’s land without their permission or a legal right to do so
Reasonable force can be used to remove a trespasser
Trespass to Goods - Intentionally damaging or interfering with another’s goods. E.g. intentionally break another’s car windows

Nuisance
Nuisance - Intentional interference with another’s use or enjoyment of their property. E.g. Loud Noises, Bad Smells, Pollution or even golf balls
Courts consider: Sensitivity of the Plaintiff, Nature of the area, Importance of the activity & Who was there first
Courts often grant an Injunction as a remedy


Assault & Battery
Assault - The threat of physical harm
Battery - Intentional physical contact without consent
Self-Defence can be a defence
Provocation can reduce the damages
Consent can be a defence - contact sports - what level of contact is consented to? E.g. Moore v. Bertuzzi hockey case.
Spanking - Not illegal if a child is age 2-12, and must be open hand, on the butt only, just a few times
Doctors must get patients’ consent before doing medical procedures or it may be battery

Invasion of Privacy - Intrusion upon seclusion
Some provinces have limited laws on invasion of privacy
Never been a tort recognized in Canada
2012 case Jones v. Tsige Ontario Court of Appeal - new tort INSTRUCTION UPON SECLUSION recognized
New tort applies when a deliberate, significant and offensive invasion of personal privacy occurs
Suggested upper range of damages of only $20,000

Defamation
Defamation - A lie that damages the reputation of a person or a business
2 types of defamation:
Slander - Lie is spoken but not recorded
Libel - Lie is recorded (Taped or Printed)
Often the Media (newspapers, radio, TV) are sued in libel cases
THINK BEFORE YOU LINK OR POST COMMENTS - the Internet is a major source of defamation

Defamation Defences
The Truth - If it is true you can say it, the truth cannot be defamation
Innocent Dissemination - A person who is found to have published a defamatory statement may evoke a defence of innocent dissemination, which absolves him/her of liability provided that he/she had no knowledge of the defamatory nature of the statement, and that his/her failure to detect the defamatory content was not due to negligence. (E.g. Bookstores, Libraries and ISPs can use this)
Absolute Privilege - People testifying under oath and statements made by politicians when in parliament
Qualified Privilege - Person with a right or duty to make an evaluation or complaint
Fair Comment - Comments on topics of public concern are not defamation if a “Fair person could honestly express that opinion”
Public Interest Responsible Communication - If a story is in the public interest and due diligence is done, if a small part of the story is untrue this defence may apply

Injurious Falsehood
Often called Product Defamation
False statement lie that damages the reputation of goods or services
People can protest bad products so long as they do not trespass and their comments are true or a fair comment or they have a qualified privilege

Deceit
Deceit - A lie that causes economic losses
Often called civil fraud
E.g. Company lies about its profits so it won't have to pay the full royalties it owes

Intentional Business Torts
Passing Off
Inducing Breach of Contract
Misuse of Confidential Information
Inducing Misuse of Confidential Information
Intentional Interference with Economic Relations
Conspiracy

Passing Off
Passing off your goods as someone else’s (Fake Goods, “Knock offs”)

Plaintiffs must prove 3 things:
1) the names were similar
2) the public was confused
3) it caused economic losses

Remedies often: Pecuniary and Punitive Damages, Anton Piller Order, Injunction, An Accounting, a Deliver up Order
Inducing Breach of Contract
Intentionally causing one party to breach their contract with another

A has a contact with B, and C induces A to break the contract with B and A does - A is liable for breach of contract and B is liable for inducing breach of contract

Misuse of Confidential Information
Includes: Designs & Plans, Client Lists, Secret Formulas, Trade Secrets
Employees, agents or others cannot take, sell or in any way use private information outside of the company

Inducing Misuse of Confidential Information
Intentionally inducing another party to misuse confidential information

Intentional Interference with Economic Interests
3 Requirements:
a) The defendant intended to injure the plaintiff
b) The defendant did interfere with the plaintiff’s economic interests by illegal or unlawful means
c) It caused economic losses

Conspiracy
Two parties acting together using unlawful means to intentionally injure the economic interests of another

Confusion over what is meant by “Unlawful Conduct”











Chapter 4 Negligence
Negligence
Negligence - Is unintentional carless conduct that results in reasonably foreseeable damages
There are more civil law cases on negligence than any of the other torts

4 Considerations in a Negligence Action
Did the defendants owe the plaintiff a duty of care?
What standard of care should have been taken?
Did the defendant’s actions actually cause the plaintiff’s damages?
Were the damages reasonably foreseeable

Duty of Care
Part One: Is there a close enough proximity between the parties to impose a duty of care? And if so,
Part two: The Anns test: Are there any policy reasons to limit the imposition of this duty?

Standard of Care
If a duty of care is owed: how much care must be taken?
What standard of care must be met?
The amount of care a “reasonable person” would take in the same circumstances
Not a perfect person, a reasonable cautious person
Higher standards are imposed on a person on a person with a high skill level such as a doctor

Causation
The plaintiff must prove on the balance of probabilities that the defendant caused their damages
“But For” the defendant's negligence, the plaintiff's injury would not have occurred
Beware of circumstantial evidence and coming to the wrong conclusion
E.g. Fontaine v. B.C. - two men dead in a truck at the bottom of ravine, no proof the driver was negligent





Remoteness of Damages
The defendant is only liable for damages that are reasonably foreseeable
If the damages are too remote then the defendant is not liable for them, even if they caused the damages
A test of proximate cause or reasonable foreseeability

Two Possible Defences in a Negligence Action
Contributory Negligence - Plaintiff is partly liable for their own injuries
E.g. passenger 20 liable for own injuries for not wearing a seatbelt
Voluntary Assumption of Risk - Plaintiff is 100 liable for their own injuries as they voluntarily assumed the risk
E.g. often in high risk sporting activities, you sign a waiver

Do Waivers Work?
YES: waiver valid, so the company was not liable
Cases: Ochoa skiers died in heli-skiing, Isildar died suba diving, Dyck injured in a snowmobile accident
NO: waive not valid, so company liable
Case: Crokcer injured while drunk & tube racing at ski resort

Waiver Consideration
The waiver clearly brought to the attention of the plaintiff?
Was the clause clearly worded?
Was there any misrepresentation by the defendant?
Is this unconscionable or against public policy?

Occupiers’ Liability
The occupier of a property has a duty of care to keep their property reasonably safe for the people who come onto it
Many provincial occupiers’ liability statutes
Maintain physical condition of the property
E.g. clear snow & ice, repair steps
Ensure safety of customers
E.g. clean up sills, remove violent customers
Certain duties for some when alcohol is served





Three Situations where Alcohol is Served
Commercial Host Liability
Business Host Liability
Social Host Liability

Commercial Host Liability (Bars, restaurants, hotels, etc.)
Must take reasonable steps to prevent a drunk customer from injury to themselves or others when they leave
Ensure drunk customers leave with a sober adult or agree to take a taxi
Don't over serve customers
Bars often found 15-30 liable if a drunk customer has an accident

Business Host Liability
The “OFFICE PARTY”
The company has power over its employees
The company has a duty of care to ensure that if alcohol is served at a company party, the employees get home safely
Duty owed to others the employee may encounter on the way home also
Guidelines for an Office Party:
Have a bartender
Stop serving alcohol 1 hour before closing
Give free taxi vouchers
Serve food with the alcohol
Do NOT announce “last call”
Offer free hotel rooms nearby

Social Host Liability
Is the social host partly liable for injuries that occur when people drink at the place you're hosting (your house)?
Do you have to monitor your friends' alcohol consumption?
Well it all depends!
Courts are usually reluctant to impose this duty on social hosts
Courts recognize it will lead to significant increases in home insurance rates
Exception: Duty is imposed on homeowners if underage children drinking there are injured in an accident





Manufacturer’s Negligence - products liability - 3 AREAS
Negligent Process
The product is normally fine, but something went wrong in the production process
E.g. snail in ginger beer
Negligent Design
Product was designed badly
E.g. GM gas tanks put in wrong area on trucks resulting in fires, or drug has side effects
Inadequate Warnings
Company sells a potentially dangerous product but fails to give adequate warnings of the dangers
E.g. failure to fully warn of fire risk

Strict Liability
Strict liability holds a defendant liable even though they may have done nothing wrong
Used in U.S. to hold manufacturers liable for defective products so plaintiff does not have to prove negligence
No strict liability for manufacturers liability in Canada
Strict Liability only used in Canada when something dangerous escapes from property & causes damage even though there was no fault by the owner
E.g. water leaks onto neighbouring land

Professional Liability
Professionals such as accountants, doctors, lawyers, brokers, bankers, engineers can be liable for negligence
Major negligence consideration apply
Some professionals owe very trusting and vulnerable clients a higher fiduciary duty of care
Fiduciary Duty - A duty of trust, care, & good faith, put the clients interests first, no conflicts of interest

Professionals and Limitation or Exemption Clauses
Many professionals cannot use limitation or exemption clauses to reduce or avoid liability
E.g. accountants, doctors, lawyers, can't use them
These professionals buy malpractice insurance
Some professionals such as bankers, brokers, financial planners, and real estate agents can try to use disclaimers and may have some success
Tax Fraud Rules
If an accountant assists a client to commit a tax fraud or tax evasion:
The accountant can be charged criminally and can be 100 liable for the gross amount of the fraud
If an accountant prepares documents to support a false claim (e.g. two sets of books) the accountant can be liable in civil court for up to 50 of the damages awarded

Tax Fraud Convictions
In 2011-2012 there were 137 convictions in Canada for tax evasion or fraud
The convictions resulted in fines of $6.4 million in fines
There were 35 people sentenced to jail for a total of 36.17 years






CHAPTER 5 MAKING ENFORCEABLE BUSINESS AGREEMENTS

CONTRACT

—CONTRACT - AN EXCHANGE OF PROMISES BETWEEN TWO OR MORE PARTIES THAT WILL BE ENFORCEABLE IN A COURT OF LAW
— PARTIES GENERALLY HAVE THE FREEDOM TO CONTRACT AND CAN SET THE TERMS THAT THEY WANT
— THEY CAN ACCEPT THE COMMON LAW CONTRACT RULES, VARY THEM OR EVEN REJECT
THEM IN THEIR OWN SPECIFIC
CONTRACTS

WRITTEN REQUIREMENT

— Most contracts DO NOT HAVE TO BE IN WRITING to be valid
— Oral contracts are valid in most situations
— But it is a good idea to put any contract in writing that is important
— A written record helps prevent disputes
— e.g. Sharing lottery winnings

CONTRACTS THAT MUST BE IN WRITING

— SOME STATUTES REQUIRE CERTAIN CONTRACTS TO BE IN WRITING TO BE VALID
THE FOLLOWING CONTRACTS MUST BE IN WRITING:
— Sale or Mortgage of Real Estate
— Leases that are longer than 3 years
— A 3rd Party Guarantee of another’s debt
— A Marriage or cohabitation agreement
— Certain financial contracts that involve credit, loans & interest payments

CAPACITY

— PEOPLE MUST HAVE THE LEGAL CAPACITY TO FORM A LEGAL CONTRACT
— CERTAIN PEOPLE MAY LACK THE CAPACITY TO CONTRACT:


• MINORS
• INTOXICATED PEOPLE
• MENTALLY INCOMPETENT

MINORS

— Minors are children under the age of majority (18 or 19 depends on the province)
— Parents NOT liable for contracts their children make unless they agreed to be
— Most contracts children make are not enforced by a court
— Contracts for necessities (food, clothing & shelter) can be enforced, though it must be at a fair price
— If a contract by a minor is not enforced the minor may get all or part of the money refunded

INTOXICATED PEOPLE

— Intoxicated people who are mentally impaired due to alcohol or drugs (legal or illegal drugs) when they made a contact
— The contract may void if they can prove 3 requirements:

1. At the time the contract was made they were intoxicated
2. The other party knew they were intoxicated and took advantage of them
3. As soon as the person was sober, they promptly tried to repudiate (end) the contract
e.g. Delores Horton case

ILLEGAL CONTRACTS

— Contracts that break a criminal or civil law are illegal e.g. a contract for a drug deal or a murder for hire
— An interest rate over 60 is illegal, if higher rate is charged, then court can reduce the rate to 60 or less
— Pay Day Loans can legally charge interest rates over 500 due to provincial law exceptions for this industry

CONTRACTS AGAINST PUBLIC POLICY

— Contracts that go against public policy and the good of the community may be unenforceable
— Most cases are contracts that are “in restraint of trade”
— This involves an unfair restriction on a person’s ability to earn a living ( e.g. can’t work in a competing business for 5 years within 5 km.)
— Two common situations:
—1) Sale of Business
2) Employment Contract

SALE OF A BUSINESS

— A Non-competition Clause restricts the right of a person who sells a business from opening a competing business e.g. Can’t open a competing business within 10 km. for 5 Years
— The non-competition clause can be valid if:
— It is necessary to protect the business that has been sold &
— The restrictions on area, time and subject matter are no greater than needed to protect the purchaser
— e.g. Payette v. Guay 2013 SCC

EMPLOYMENT AGREEMENTS

— Employers often try to restrict the right of an employee to work for a competitor after leaving
— Only allowed on employees with a special skill or knowledge
— Non-competition clause (e.g. Can’t work for a competitor for 1 Year within 10 Km.)
— Non-solicitation clause (Can’t contact former clients for 18 mo.)
— If the clause is considered too restrictive, thecourt will eliminate the clause (blue pencil it) and not rewrite it
e.g. Mason v. Chem-Trend, Lyons v. Multari

RESTRICTION ON EMPLOYEES

• Non-competition clause: Employee can’t compete in a certain area for a certain time period
• Non-solicitation clause: Employee can’t solicit former employer’s clients

CONSENSUS

A valid contract requires CONSENSUS between the parties “A Meeting of the Minds”
STEPS IN REACHING A CONSENSUS

VALID OFFER

— An offer must be serious, contain all the essential terms and be clearly communicated
— An offer can be withdrawn if no party has accepted or no option was purchased to keep it open to a specific time
— An offer expires on a set date, or within a reasonable time if no date set
— If a party dies or becomes mentally incompetent before acceptance, the offer is terminated
— If the goods are destroyed before
acceptance, the offer is terminated

OPTION

— An option is a new & separate contract to keep an offer open for a specific time in return for consideration, usually money
— Option money not refunded if the offer is eventually rejected
— Option money not credited as part of the purchase price if the offer is eventually accepted
— A stock option gives a party the option to purchase shares in a specific stock at a specific price for a specific time period

COUNTER-OFFER

— If a party changes any terms in the original offer, it is a counter-offer not an acceptance
— Then the counter-offer can be accepted or rejected
— Multiple counter-offers often occur during negotiations
— A counter-offer terminates the previous offer
e.g. A offers to sell his car to B for $5,000 and B says he will pay $4,500, B made a counter-offer

CONDITIONAL OFFERS

— A Party can make a conditional offer – the contract depends upon a certain condition being fulfilled
— If the condition is not fulfilled then there is no contract
— All parties must co-operate in attempting to fulfil the condition
— e.g. A will purchase B’s house on the condition that A can obtain financing

VALID ACCEPTANCE

— A valid acceptance is an unconditional acceptance of the exact terms of the offer
— Any changes to the offer is not an acceptance it is a counter-offer
— Silence is not acceptance
— Acceptance can be done in various ways: e.g. in writing, spoken, click of an icon, by conduct
— If the contract states that acceptance must be done in a specific way, if it is not done that way, then no contract
— e.g. Gretzky & Lindros cases


COOLING OFF PERIODS

— Normally a party is not allowed to get out of a deal or they may be liable for breach of contract
— However for certain contracts where sellers often use high pressure sales tactics, the government has passed laws that allow for a “Cooling Off Period” to protect consumers
— During this period a person can get out of a contract even if they have paid and used the goods and services
— They must notify the company IN WRITING within the specific cooling off time period

CONTRACTS WITH COOLING OFF PERIODS IN ONTARIO

— PERSONAL IMPROVEMENT CONTRACTS e.g. Fitness club memberships, dance lessons, modelling contracts, martial arts lessons (10 Day Cooling Off Period)
— Contracts made by a “DOOR TO DOOR SALE” at your home (10 Days)
— Door to door water heater contract (20 days)
— Time Share Condominiums (10 days)
— Newly built condominium (10 days)
— Pre-paid funerals (10 days)
— Pay Day Loans ( 2 days)

SERIOUS INTENTION

— All parties must have a serious intention to be bound by the contract
— The test is: Would an objective reasonable person hearing the promise assume the person meant to be bound?
— Many ads businesses use are just “Puff” but a serious promise in an ad can form a contract e.g. double your money back
— Courts are less likely to think there was a serious intention when family members or friends make promises e.g. promises to share lottery winnings if they win

CONSIDERATION

— Each party to a contract must get Consideration - “Something of Value” usually money, goods or services
— Consideration does NOT have to be of equal or similar value
— Past consideration is not valid, but future consideration is valid
— If a contract has a seal then the court will enforce it even without consideration e.g. a seal is a sticker or circle beside the signatures
— Promissory estoppel may prevent one party from avoiding a promise they made without consideration if the other party relied on the promise to their detriment



Chapter 6- IMPORTANT TERMS AND CONTRACT INTERPRETATION

CONTRACT INTERPRETATION

— Courts want to enforce contracts as written, but sometimes strict enforcement can lead to significant unfairness
— So courts have developed ways to interpret contracts to avoid the problems and to achieve a better result

STANDARD FORM CONTRACTS

— Standard form contracts are very common and necessary for ease and convenience in business
— Unequal bargaining power though– written by the company
— Complex legal terms (legalese) and the consumer usually never reads nor understands it and just signs it
— Where is the consensus?
— e.g. car rental agreement, airline ticket, dry cleaning receipt

ENFORCING STANDARD FORM CONTRACTS

— Standard form contracts are usually enforced
— But what if there is an unfair surprise in a term?
— e.g. Tilden case – No insurance on a rental car if driver had any alcohol at all
— Unfair surprising term only enforced if reasonable measures were taken to bring the term to the attention of the consumer e.g. Bold large print, different colours
— If contract is between two businesses, no duty to bring it to the attention of the other party


CONTRACT INTERPRETATION

— The meaning of a term is what a “reasonable person” would understand it to mean
— Dictionary definition may assist
— In a standard form contract if a term is unclear then the courts apply contra proferentem: the term is interpreted in favour of the party that did not draft the contract
— e.g. Shafron case and Baughan case

PAROL EVIDENCE RULE

— STRICT RULE: If a contract is in writing no extrinsic oral or written evidence that contradict the contract terms will be considered
— Only the final written document counts
— BUT sometimes this rule can be too strict if one party has made different statements when the contract was formed especially if it is a standard form contract
e.g. a salesperson promises a 3 year guarantee but the written contract has only 1 year

EXCEPTIONS TO THE PAROL EVIDENCE RULE

— Since the parole evidence rule is so strict, courts have found ways to let in other evidence
— Exceptions can be made if the court rules:


ENTIRE AGREEMENT CLAUSES

— Some contracts have a clause that states “This agreement is the entire agreement”
— It’s inserted so no other statements can be considered
— But in “exceptional circumstances” the court will allow in other statements
— Clause can’t be used as “a tool to dupe the unwary”
— The exception is made if there is strong proof of the extra statements e.g. written, not oral statements

EXCLUSION CLAUSES (LIMITATION & DISCLAIMER CLAUSES)

— Exclusion clauses try to limit liability
— Limitation clause limits the damages a business is liable for
e.g. airline limits liability to $300 for lost luggage
— Exemption or disclaimer clauses state the business is not liable for ANY losses e.g. a parking lot states not liable for any loss or damage to vehicles however caused

ENFORCEABILITY: CONSUMER AND BUSINESS

— Courts want to enforce contract terms as they are written
— But in a contract is between a consumer and a business the court may make exceptions:
— An exclusion clause must be “brought to the attention of the consumer” if a business wants to use it. e.g. Trigg case- shipping co.’s limitation clause not enforced
— If it is unconscionable the court will not enforce it
— e.g. Solway case- enforcing moving co. clause would have been unconscionable

ENFORCEABILITY: TWO BUSINESSES

— These clauses are usually enforced between two businesses as there is equal bargaining power
— No duty to bring it to the attention of the other party here
— e.g. Fraser Jewelers case – 2 companies, security company limited its liability to $970, the clause was effective despite security company’s negligence which caused a $50,000 loss from a robbery

EXCLUSION CLAUSES & FUNDAMENTAL BREACH

— Courts in the past could refuse to enforce an exclusion clause if there was a “fundamental breach”
— A breach so large that the entire contract was destroyed including the exclusion clause
— e.g. Plas-Tex v. Dow -Dow sold resin for natural gas pipes knowing pipes would leak & create dangers, Dow’s exclusion clause void due to fundamental breach
— But the fundamental breach doctrine was applied very inconsistently by courts and created much uncertainty

END OF FUNDAMENTAL BREACH

— In 2010 SCC tried to end the use of fundamental breach
— In Tercon Contractors case SCC said the fundamental breach doctrine should be replaced with a 3 Part Analysis for the enforceability of an exclusion clause:
1. Does the exclusion clause apply to the specific facts of the breach?
2. Was the exclusion clause unconscionable at the time the contract was made?
3. Is there a public policy reason that justifies not enforcing the clause?
LIQUIDATED DAMAGES

— Liquidated damages are the pre-set amount of damages that a contract states will be paid if there is a breach
— If the amount is out of proportion to any realistic amount, it is considered a penalty and is not enforced and then the court will set a fair amount
— A cancellation fee can be charged so long as it is not a penalty

DEPOSIT

— A deposit is seen as a sign of good faith
— Common law rule is:
If the buyer decides not to complete the deal the seller can keep the entire deposit but cannot sue for any losses
— (Exception in real estate, seller can also sue for extra losses)
— If a deposit is too large and not a fair estimate of damages, it can be considered to be a penalty and then the court will set a fair amount

DOWN PAYMENT

— Down payment is considered part of the purchase price
— If the buyer does not complete the deal the down payment may be returned depending on whether the seller had a loss
— If the seller resells the goods for the same price or more the down payment is fully refunded
If the seller resells the goods for less than the original price, the seller deducts the loss from the down payment and can sue if the down payment does not cover the loss


INTEREST RATES

— It is illegal to charge an interest rate over 60 per year
— If it is higher the court can reduce it to 60 or lower
— Exceptions are allowed for Pay Day Loan companies
which can charge over 500
— If no annual rate is stated, then the maximum rate that can be charged is 5 per year


VENUE CLAUSE AND GOVERNING LAW CLAUSE

— A venue or forum selection clause decides in which place a trial over a contract dispute will take place
— The governing law clause states what law will apply
— e.g. “The parties agree that this agreement shall be governed by the laws of Alberta. The parties further agree to submit to the courts of Alberta.”
— Beware of U.S. trials, juries often give very large damage awards e.g. Loewen Group case

PRIVITY OF CONTRACT

— Old strict rule that ONLY the parties that made the contract can sue to enforce the contract
— Outside 3rd parties have no rights to sue enforce the contract
— Exceptions are made in life insurance policies so that 3rd party beneficiaries can sue the insurance company if they are not paid when the party who made the contract dies


ASSIGNMENT OF CONTRACT

— An assignment of a contract is an exception to the privity rule
— A party can assign (transfer) their benefits under a contract to a 3rd Party
— The party whose duty it is to provide the benefit must be informed in writing of the assignment, but their consent is not required
— They now make their payments to the 3rd party (so they are in a contractual relationship with someone they probably have never met)
— Benefits can be assigned but duties cannot

EXAMPLE OF AN ASSIGNMENT

— Ben purchases a stove from Leon’s and agrees to pay $100/month for 3 years
— Leon’s then ASSIGNS the contract to the Atlas Finance Co.
— Ben must be told in writing of the assignment, but Leon’s did not need Ben’s consent to do it
— Ben must now make his payment to Atlas
— Ben cannot assign his duty to pay to someone else, he can only transfer his duty to pay by making a new contract (a novation) and he cannot do that unless Atlas consents

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