MIDTERM Weekly Questions

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Capilano University *

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300

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Law

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May 27, 2024

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WEEK 1 Questions – Answer Guide Question 1.1: In what sense did the court use an “objective” approach to interpretation of the words and conduct in Canadian Dyers ? [Question 2 on page 44 of the casebook.] Answer: While the court didn’t explain this clearly, in referring to the Burton’s words – “the price…is the lowest I am prepared to accept…if it were to any other party I would ask more” – the court suggested any reasonable person would conclude this was an offer. The court stated: “Surely, unless l anguage is used to conceal thought, this is an offer .” Question 1.2: Objective intention is determined by looking at the alleged offeror’s words, conduct/actions, and the surrounding circumstances. What happens if such language is ambiguous? What did the court do here? Answer: The first question is a difficult one. The court does refer to the question of ambiguity, but doesn’t fully explain how the courts approach this issue. In Contracts II, we will learn that the courts use a number of techniques to determine meaning when confronted with ambiguous contractual language. One approach is to look at the entire contract in context to determine if that removes the ambiguity of the words in isolation. Concerning what the court did here, it stated that if the language here was ambiguous, the conduct/actions of Burton (not disavowing the contract after receiving a part payment, but preparing a draft deed and working toward closing the deal) suggested he regarded his letter as an offer. In other words, sometimes ambiguous language can be clarified by looking at the party’s conduct as well. This relates back to question 1.1, as well. Burton’s conduct objectively showed he intended to make an offer. Question 1.3: In a retail situation similar to the Boots case, what would happen if the contract to purchase a good was completed when the customer puts it in her basket? Answer: Potentially, no substitutions would be permitted. You’d be stuck with it once it was in your basket. Question 1.4: If the customer usually makes the offer in retail contexts, is there anything stopping a seller from refusing to accept an offer because he doesn’t like a customer, perhaps because of the customer’s race or sexual orientation? Answer: Despite the ruling in an old Supreme Court of Canada (SCC) case, Christie v York Corporation , human rights legislation across Canada now prevents such behaviour when dealing with the pubic. See also question/note 3 on pages 49-50 of the casebook.
2 Question 1.5: In the Carlill case, what was it about the facts, specifically, that led the court of conclude that an offer was intended by the terms of the newspaper advertisement? Answer: The court focused on the £1,000 that had been deposited in the bank. This showed that the Carbolic Smoke Ball Co.’s intention to make an offer, despite its extravagance, was serious. Also, the fact that the offer called for action on the part of offerees/acceptors in order to accept (using the smoke ball three times a day for at least two weeks) meant that a broad-based offer — to all who read or knew about the ad — is not a problem when the intention is clear, as it was here. Question 1.6: As in Carlill , there were multiple issues in Goldthorpe . For now, we are just interested in the offer issue, but try to list them all, together with any sub issues. Answer: The court in Goldthorpe referred to three issues: 1) Was there negligence in performing the hair removal procedure? (This is a tort claim and the court held there was no evidence of negligence.) 2) Was there a contract between Logan and Goldthorpe? This triggered the following sub issues: a. Did Logan make an offer? (Yes, both in the ad and when Goldthorpe visited Logan’s place of business.) b. Was the offer accepted by Goldthorpe? (Yes, by assenting to the terms of the proposal.) c. Did Goldthorpe provide consideration for the Logan’s promise? (Yes, when she submitted to the treatment [and also when she paid for it].) 3) If so, assuming it was breached, what was the remedy? (Yes, damages, the main part of which represented the value of her expectation to be rid of hairs, which was valued at $100.) Question 1.7: This last question foreshadows an issue we examine in the next lecture. In BC, when is a contract completed at an auction sale? See question/note 3(a) on page 58 of the casebook. Answer: According to s 72(b) of BC’s Sale of Goods Act , with the fall of the hammer. So, the bidder makes the offer when indicating a bid in the customary way (waiving a paddle, tugging an ear, etc.) and the auctioneer accepts with the fall of the hammer (or other customary way).
WEEK 2 Questions – Answer Guide Question 2.1: What distinguishes a bidding process that is structured as a fixed bidding sale as opposed to one structured as an auction? Answer: A fixed bidding sale requires the bidder to submit one price without reference to other bids. Auction sales are generally structured to allow bidders to bid against each other. Question 2.2: Following the KA/KB analysis, when is KA formed and when is KB formed? Answer: Contract A is formed after the bid is submitted and, according to the bidding rules, the tendering process is closed and the bid is stated to be irrevocable. Contract B is formed when the winning bid is accepted. Question 2.3: In your opinion is the traditional approach to tenders ( Harvela ) or the KA/KB approach ( Ron Engineering ) the better one? Explain. Answer: No right answer, but the finding of a Contract A creates legal certainty of rights and obligations, such as the promise of irrevocability. Question 2.4: In Ron Engineering and MJB Enterprises , we see the KA/KB analysis applied between owners and contractors. In some larger contracts, general contractors may base their bids on bids they have in turn invited for subcontracting work covering just part of the overall project. Does the KA/KB analysis also apply to subcontracting bids? See page 70, note 5. Answer: Yes, the relationship between general contractors who receive bids from subcontractors is also governed by the KA/KB analysis, which means that contractual obligations concerning those bids will apply in the same that they do between owners inviting bids from contractors. See Naylor Group Inc v Ellis-Don Construction Ltd , 2001 SCC 58. Question 2.5: BC Hydro enters into and administers contracts worth hundreds of millions of dollars each year. Once bidding is closed in a BC Hydro tender, do you think BC Hydro has to act in good faith when considering the bids? If yes, what legal arguments could be made to support this obligation? See page 70, note 3. Answer: This is a difficu lt question, so don’t worry if an answer didn’t come to you right away or at all. There are at least two possible answers. One, there is an implied term to exercise good faith (based on an MJB Enterprises analysis), or two, following Bhasin
2 (SCC 2014) and other case law, there is a general obligation to exercise good faith during contractual performance (at least in terms of not actively misleading the other party). You will look at implied terms and the Bhasin rule in more detail in Contracts II.
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