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Sample/practice exam 2 February Winter 2020, questions and
answers
Commercial Law (University of Manitoba)
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Sample/practice exam 2 February Winter 2020, questions and
answers
Commercial Law (University of Manitoba)
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Midterm Questons
What is law?
Law is a subset of rules and is diferentated in the formalites of documentaton and enforcement. They are not value neutral; they manifest from the politcal / philosophical values of the law maker.
What is Procedural Law?
Procedural law
: the process through which liabilites can be enforced. What is Substantve Law? What are the two subcategories?
Substantve law
: the rights and dutes which person has in society. It is the law that tells you what you can and cannot do. Two subcategories:
1.
Public law
: concerned with the conduct of government and with relatons with government on one side and private persons on the other. Divided into criminal, consttutonal, administratve laws.
2.
Private law
: composes the rules governing the laws between private persons
What are the two types of cases that courts create law from?
1.
Cases regarding legislaton – interpret the meaning of legislaton
2.
Judge made / common law – declaring law in areas untouched by legislaton
Why was legislaton seldom used prior to the 20
th
century?
1.
Courts did the job adequately, people were content with their small narrow view and did
not think about broader social concepts and proactve views 2.
The government didn’t have as big a role, the church had the majority of roles 3.
The process is difcult, it requires thorough knowledge of a partcular situaton which needs to be remedied and the ability to devise a practcal means to implement it
Why was the signifcance of legislature and the courts reversed in the 20
th
century?
1.
In order for courts to make law they must wait for disputes to arise (courts are reactve, legislature is proactve)
2.
Previously there wasn’t a great demand for law (no social services, not as many laws, legislatve process was difcult, expensive, sophistcated)
3.
Society fnally had sufcient wealth to support an ongoing legislature functon (industrial
revoluton)
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What is a system?
System:
an orderly combinaton or arrangement of partcular parts or elements into a whole, especially such combinatons according to some ratonale or principle.
What is the Magna Charta?
“Big Charter,” forced the king into surrendering some of his powers back in 1215.
What does it mean that the amendment process is “patriated”?
The amending process with respect to entrenched aspects of the consttuton is wholly domestc.
What is a Rato? The Rato Decidendi
is “the narrowest and necessary legal principle upon which a decision is based”.
Ratos are the binding aspects of a case. What does the phrase “Mutats Mutandis” mean and in what context was it used during this course?
In Latn means “the necessary changes being made.”
It applies to bills; drafs of statutes of Canadian Parliament and Provincial Legislature which are not yet legally operatonal as they have not yet received the ascent of parliament. Parliament is stll reviewing the bill and making changes.
What is the Law of Equity?
The Law of Equity is a set of rules which can be invoked to supplement the defciencies of common law or to ease the working of common law actons and remedies. The Law of Equity principles overrule Common Law principles.
Roscoe Pound is best known as an adherent to what School of Jurisprudental thought?
Social Engineering. Social engineering held that through the scientfc study of people’s needs and expectatons and of prevailing values, more ratonal adjustments of the rights given to competng interests could be made to improve the laws of society.
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What is a limited partnership and identfy the danger to an investor if he/she partcipates in the management of such a partnership?
A partnership in which in additon to one or more general partners, some of the partners are limited partners; they limit their liability to the amount of their capital contributon so as to isolate their personal assets from liabilites of the business. Limited partners are prohibited from
taking an actve role in the business. If a limited partner partcipates in the management of such
a partnership, he/she will become liable as a general partner, incurring a considerable personal risk (unlimited liability), essentally becoming a general partner. What is Stare Decisis?
Stare Decisis is a theory of precedent, which means to “stand by previous decisions”
in Latn. This is the technical name of the doctrine of precedent. It has been used for 1000’s of years, but
only in the 19
th
century did it become a rule of law that needed to be followed. The doctrine of Stare Decisis has two aspects:
1.
Defnitonal or substantal
– The principle of law is found in the precedence called the Rato Decidendi: the narrowest and necessary legal principle upon which a legal decision
was based. This is the aspect of the case that binds future courts and must be followed. 2.
Structural
– Tells us which precedent cases must be followed – courts are bound by decisions of courts above it in the hierarchy and fnal appellate courts are bound by their
own decisions
What are the 3 C’s?
The doctrine of Stare Decisis is said to produce the 3 C’s:
1.
Certainty – we must know what the law is
2.
Consistency – similar cases are treated equally
3.
Contnuity – no doubt in the law through judicial departures from precedent
What is the Reliance Principle?
Reliance Principle:
people order their afairs in reliance on judicial decisions and therefore their interest should be adversely afected if judges altered principles. Relates to “Contnuity”
What is the adversary system in the Canadian legal system? Defne and explain.
In civil disputes it is up to the partes, not the court, to initate and prosecute litgaton, to investgate the pertnent factors and to present proof and legal arguments to the decision making tribunal. The basic concept is that presentaton and prosecuton is made by two self-
interested partes, with the court actng as essentally as a passive arbitrator. The courts’ functon in general is limited to adjudicatng the issues submited to it by the partes or the proof presented by them and to apply appropriate procedural sanctons upon the moton of a party. Downloaded by Vasd (vasd089@gmail.com)
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Name the four basic dutes an agent owes to his principal.
1.
Agent must comply with the contract establishing the agency or he is liable
2.
Agent must be diligent in reprising 3.
Duty of care implied: must be careful
4.
Duty of personal performance: can't sub delegate the tasks
What does the term Ultra Vires mean?
Ultra Vires in Latn means “beyond the power”
. Delegate bodies can only create legislaton within the jurisdicton given by statutes. So whenever delegate bodies create legislaton that is found to be outside their jurisdicton given to them by statutes, the legislaton is Ultra Vires, and
therefore void.
What is the Corporate Veil? A corporaton has a separate existence from its shareholders. The separate entty principle gives rise to the limited liability of the corporaton. It acts like a protecton towards individuals within a corporaton. What does “piercing the corporate veil” mean and when will a court pierce it?
To pierce the corporate veil means to ignore the separate entty principle with the result that the individuals who control the corporaton are responsible for their acts personally. The court will pierce the corporate veil in: 1.
Taxaton situatons – statutory piercing
2.
Agency principles
3.
Instances of fraud
4.
For the residence of the corporaton and the controlling shareholders
What is subordinate legislaton? Give an example a subordinate/delegate body.
Subordinate legislaton is legislaton made by a person or body other than the sovereign parliament by virtue of power confrmed either by statute or by legislaton, which is itself made under statutory power. It is the type of legislaton made by delegate bodies. It makes up the majority of the legislaton that impacts us on a day to day basis and makes up the bulk of legislaton in existence. Ex. MPI
What is standing?
People need standing to sue. That means the litgant or in partcular the plaintf must have a special interest and right to be vindicated. The reason for the concept of standing is to prevent frivolous claims.
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What does the term “intra vires” mean?
Intra vires means “within the power,”
or anything within the law.
Canada is described as having a consttuton that is “Quasi Federal.” What does this mean?
This means that Canada is a country that has some federal aspects as well as non-federal aspects. What is conventon in the consttutonal context? (What is a Conventon of the Consttuton?)
Conventons are traditonal and generally accepted principles that guide politcal actors in how they functon. However, conventons are not enforceable by courts, for example responsible government.
What is the J.C.P.C? Judicial Commitee of the Privy Council. They were the fnal appellate court prior to 1949. It was comprised of law lords from Britain that listened to appeals from overseas dominions and colonies. Now the Supreme Court of Canada is the fnal appellate court.
What is a Pre-trial Conference?
The litgants and the lawyers meet in front of a judge before the trial (not the same judge that hears the case). The lawyers present a brief to the judge in advance. The judge will tell the partes what their view of the outcome is. It is done to promote setlements and free-up courts. If the pre-trial conference fails to achieve a setlement, the judge will set the trial date.
What is a court of “frst instance” and give 3 examples.
It is the courts where acton must frst originate. They are also known as trial courts. They are subdivided into Provincial Courts and the Court of Queen’s Bench. Examples of courts of frst instance include small claims court, youth court and trafc court.
What was the holding in Hodge vs. The Queen and why is it signifcant?
The rato: “the provinces are not delegates of the federal parliament; the provincial legislatures are in their own spheres supreme.”
It was signifcant because it allowed provincial legislaton to be supreme within the province.
What are the fve roles of the court?
1.
Arbitrator of the consttuton
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2.
Interpreter of the legislaton
3.
Protector of civil libertes
4.
Arbitrator of disputes between private persons
5.
Arbitrator of public law disputes
What is the Civil Law System?
It is the system of law whose modern form originated in the Roman/Byzantne Empire, greatly infuenced by the Napoleonic Code of 1804. The essence of the civil law system is the existence of a code, which is used to setle disputes. Only if the code does not cover the new problem is the court free to setle the problem from general principles in the code. In theory, a later court need not follow the earlier reasoning in a similar case as there is no doctrine of precedence in the civil law system. It is a deductve system; it is organized on the basis of general principles applied to specifc situatons.
What is a fduciary and give an example?
Fiduciary:
a person holding a character of a trustee or a character analogous to a trustee in respect to the trust and confdence involved in it and the scrupulous good faith and candour which it requires. A fduciary is a person having duty created by his undertaking, actng on behalf of another, primarily for another's beneft. For example, a director of a corporaton has a fduciary duty to the shareholders to avoid any conficts of interest between the director’s personal interest and that of the shareholders.
What is Natural Law?
Natural law is a form of legal philosophy concerned with the queston “what should the law be.”
1.
Classical conservatve view
: Old school, “the law should be based on eternal fundamental truths inspired by God.”
2.
Deistc Natural Law
: believes that it rests not on Devine inspiraton, but on the assumpton that ratonal people, by applying their inheritabilites of reason and logic to their percepton of the world, will arrive at basic principles of justce.
What is “legal positvism?”
Legal positvism is a form of legal philosophy which seeks to answer “what is the law?” It does not ask what it should be. It is value neutral as it does not evaluate the law in regards to the ethics of it, whether it is good or bad. The founder of legal positvism is Augustus Compt. To positvists, law is a mater of what has been posited (ordered, created), not what has merits and
value.
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What is “Legal Realism?”
Legal realism is a school of legal philosophy which seeks to answer, “why the law is what it is” / “why decisions are made in the manner they are made by the judges / courts.” It looks at why legal decisions are made in the legal system. It’s a perspectve of explanaton not a perspectve of evaluaton. What is “Responsible Government” in the consttutonal context?
It provides linkage between the legislatve and the executve of the parliament. It is to ensure that an element of democratzaton to executve government at least in electon of executve government and at least to the degree that the legislatve branch is elected according to democratc principles. In Canadian Consttuton, responsible government means, a) the appointment of persons to the executve who sits in the elected assembly and who have the support of the elected assembly, b) the analogue to this is that the Monarch or representatve in giving assent must follow the advice of the executve rather than his or her own personal bias.
What are the 2 amendment formulae identfed in the Consttutonal Act 1982? (2 amending formulae in respect to the entrenched aspects of the Canadian Consttuton?)
1.
General Procedure
- it requires both:
a.
The resoluton of the Senate and House of Commons, b.
The Resoluton of the legislatve assemblies with at least 2/3 of the provinces (7 provinces) with 50% of populaton called the 7-50 rule.
2.
Unanimity Provision
– Applies to things that are so important that general procedure is not applicable. Requires the unanimous approval of all the provinces. No change should be made to the Consttuton unless there’s agreement of all 11 legislatures (parliament and the 10 legislatures).
What are the 2 basic legal rules concerning delegate bodies creatng subordinate legislaton?
1.
Delegate bodies can only create legislaton within the jurisdicton given by statutes. Anything else is ultra vires (beyond the power/jurisdicton) is void (has no force or efect). 2.
Delegates can’t delegate –can’t further delegate their power. For example, in estate law you appoint an executor, they can’t delegate their powers, unless legislaton allows them, they have to atend to them personally.
Give 2 examples of procedures in our legal system in civil cases that might be said to encourage people to consider setlement rather than proceed to trial.
1.
Examinaton for discovery
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2.
Pre-trial conference Defne 2 approaches employed by the Courts to interpret statutes.
1.
Plain meaning approach
– dictonary defniton 2.
Mischief/liberal approach
– they look at the object of the statute in the context it was created. Judges look at context to give meaning for disputed terms
What is a class acton?
It is an acton in which an individual represents a group or class of individuals with the same issues and dispose of the maters for all. Courts are reluctant in having class actons because it takes away an individual’s right to litgate his own claim. However, this type of acton does free the courts of many individual cases. To whom are “costs” awarded in a court acton?
Costs are awarded to the winner, whether it is the plaintf or the defendant, because they shouldn’t have had to go through the court to reach setlement.
What is a contngent fee in relaton to legal services and when is it usually used?
Under a contngent fee arrangement, the lawyer agrees to act on the basis that if the client is successful the lawyer will take as a fee a certain percentage of the proceeds of the litgaton, and in the event that the client is unsuccessful the lawyer will make no charge for the services rendered. It is usually a fairly high percentage of the winnings because you are overpaying the lawyer for the risk that nothing will be paid if you lose. It is usually used when it is the only practcal way of bringing an acton
Who was the Emperor Justnian and what was his pre-eminent legal achievement?
Emperor Justnian was the famous emperor of the Eastern Roman Empire in the 6
th
century A.D. He developed the Justnian Code, which was inherited by the whole of contnental Europe and formed the foundaton for most of the civil law legal system.
Who was Jeremy Bentham and for what principle is he best known? Defne it.
Jeremy Bentham is known for the principle of utlity. The principle states that the goal of society should be to increase the sum total of human happiness, “the greatest happiness of the greatest number.”
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What is the Royal Prerogatve?
The royal prerogatve is residue of legal power residing in the crown and passing through the crown to its representatves. The authority of the royal prerogatve rests on the historical recogniton of the Crown and its ability to make law. The royal prerogatve powers existed to protect the democracy when the ministers were not actng appropriately. The prerogatve powers that currently exist include the power to:
1.
Appoint the Prime Minister or Premiers
2.
Dismiss the Prime Minister or Premiers
3.
Dissolve the electve assembly
4.
Declare war and appoint the ambassadors
Why is the Judicature Act Signifcant?
In 1865, in response to Charles Dickens’ negatve commentary on court systems, Blique House
, they created the Judicature Act: a piece of legislature which combined the common law and the equity law into one system of law, which we stll have today. Both bodies of principles remained separate, however, both are considered during court cases, where equity law stll upholds common law. This was applied to Canada and Manitoba. Prior to this cases could take up to 60-70 years
What is Wheare’s defniton of federalism, which he calls the federal principle?
The federal principle is the method of dividing powers so that the general and regional governments are each within a sphere co-ordinate and independent. The existence of federal principles in a country allows it to be regarded as a federal state. In a federal country, governmental power is distributed between a central authority sometmes called a natonal authority or federal authority and several regional authorites sometmes called provinces or states. It is distributve in such a way that every individual is subject to two authorites. What is a legal liability and give an example.
A legal liability is a right that is enforceable by the law for which a remedy may be obtained in court. For example, a legal liability exists between the principal and the agent in that the agent must act as a fduciary for the principal.
What is the diference between Hume’s Physical and Normatve laws?
Physical laws are laws of nature which we learn in studying the natural sciences like physics and chemistry. Normatve laws are rules governing human conduct created and/or enforced by human beings. It is impossible to break physical laws, whereas a person may break normatve laws and face the consequences.
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What is the “cabinet” in Canadian consttutonal law?
Cabinet is made up of members of House of Common and Senate. It is the actve part of the Executve. The PM is the head of the cabinet, appoints the cabinet members and acts as the sole advisor to the monarch. What is “legal aid”?
Legal assistance provided for poor litgants. This service is only available for domestc and criminal claims. We have a legal aid system in Manitoba.
What does “delgatus non potest delagare” mean – in what context is it used?
One of the insttutonal sources of law is delegate body. Delegate bodies have been given power and can create law within the jurisdicton given by the statutes. Delegates non protest delegare means “delegate bodies can’t further delegate their powers.”
What is the last Canadian province to have an upper house?
Quebec was the last Canadian province to have an upper house in 1966.
What are the 3 authoritatve sources of consttuton?
Legislatures: – create statutes that are consttutonally relevant to Canada. Include:
a) UK parliament, b) Canadian parliament and c) Provincial legislatures
Courts – Produce consttutonal law in accordance with common law, interpret consttutonal statutes
Royal prerogatves – is the king or queen’s ability to make law. This is the contemporary residue of ancient power.
List 4 categories of the persuasive sources of consttutonal law?
1.
Conventons, 2.
Learned authors’ writngs, 3.
Parliamentary rules or custom of parliament, 4.
Relevant judicial decisions from other jurisdictons.
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Name 4 ways in which the relatonship of agent and principal can be established.
By Express Agreement
– oral or writen with defnite understanding between principal and agent
Agency by Ratfcaton
– a person acts as agent when they know they have no authority but hope ratfcaton of contract will occur in future
Agency by Estoppel
– when a person allows another to believe a certain state of afairs exists with the results that the other relies on that belief (failure to deny). The person will aferwards be prevented from statng the true state of afairs was diferent.
Agency by Necessity
What is the rato in the Maritme Bank case?
“The lieutenant governor is not merely a federal ofcial; rather the Lieutenant Governor passed all the prerogatve power of the Crown.”
This is the indicaton of an equal and co-ordinate status between both levels of government.
What are the 2 component parts of the legislature in MB that must approve legislaton?
Legislatve assembly and the Lieutenant Governor
Describe 3 ways that civil libertes were protected prior to the Charter of Rights & Freedom.
1.
Democratc system
– people can elect the politcal leaders. If the elector abuses the use
of power, they won’t be elected again
2.
Independence of the judiciary
– judges are not responsible to legislatve bodies for their
decisions
3.
The common law
– if somebody does something to violate the civil liberty, they can be sued
Who is Justta?
The Roman goddess of justce, portrayed as a blindfolded woman holding a set of scales in one hand and a sword in the other. A statute of her is ofen seen outside of courthouses.
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What is ADR? What are the advantages? ADR is Alternatve Dispute Resoluton. It exists so that courts aren’t involved, or that they have minimal involvement. ADR’s don’t replace the courts. The ADR’s stll look at laws made by the courts and think about how the courts would resolve a similar case. Advantages over courts include: 1.
Bypasses difcultes of going through litgaton process
2.
Cases are resolved much quicker
3.
Have a cost savings associated with them
4.
You get your choice of adjudicator or mediator if one is required (courts have lotery system for picking a judge for the case, and sometmes judges are picked who have no background in that type of law)
5.
Confdentality in the case (there is public record for court cases)
6.
Preserving the ongoing relatonship (courts tend to push partes to the extreme, which leads to claimants being ‘enemies’ aferwards)
What are the 4 main types of ADR?
1.
Arbitrators:
have fnal decision making authority, they hold an informal trial and then a decision is rendered. It is a more casual trial that does not have the same strict procedures. The arbitrators are typically experts of law in the feld. 2.
Mediator:
a neutral third party, can only suggest a soluton – mediators do not have fnal
decision making authority. They bring partes together and suggest solutons which are not binding. Used ofen in family maters. Not used in commercial maters at this point
3.
Conciliaton:
gets the party talking but can’t suggest anything. Have even less fnal decision making authority in that they just facilitate discussions and cannot suggest anything. Seen in labour and human rights discussions.
4.
Setlement: disputes resolved but not by the courts. The people just make a deal. This is the best method because it is formalized and others pay atenton to it
Does the law infuence the development of society or is it the refecton of changing value in society?
Both are correct, but not usually simultaneously occurring. In the case of drinking and driving, it used to be substantally less serious, but through lobbying groups and other interested partes, the laws were made more serious. In the case of smoking, law was ahead of people’s views and health concerns arose, made it illegal to smoke indoors (people weren’t marching down the street to ban smoking in restaurants – the law was ahead of society)
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Can scientfc method be used to improve the quality of law making or are scientfc methods neutral instruments to be used by social groups? Yes they have been used to improve the quality of law making – environmental impact studies used to improve laws based on new scientfc evidence. Yes, but they can also be abused. Scientfc methods ofen misused, abused, misinterpreted.
If scientfc methods can be efectve in exposing society’s ills is there a danger that they will destroy the myths upon which society depends?
A myth in our society is that similar cases will be treated similarly – however socioeconomic status, race, ethnicity and appearance come into play; convictons are much higher for minorites, therefore the myth can be destroyed through scientfc study. Another myth is that generally speaking, only the guilty are convicted
Essay Questons:
Discuss and defne the doctrine of “Stare decisis”.
Stare decisis means to “stand by previous decisions”
in Latn. The doctrine of stare decisis is a doctrine of precedence and has two aspects: 1) defnitonal or substantal – the principle of law is found in the precedence called the rato decidendi: the narrowest and necessary legal principle upon which a legal decision was based. This is the aspect of the case that binds future courts and must be followed. 2) Structural: Tells us which precedent cases must be followed. Rupert Cross wrote a book called Precedence in Legal Law
and described the structural component of the stare decisis as: every court is bound to follow any case decided by a court above it in the hierarchy of courts and appellate courts are bound by their own decisions (except the court of Canada and the house of lords). Historically, the doctrine of stare decisis, although it persisted as the organized principle, was never itself a doctrine of a rule of law. It operated solely based on the rule of custom untl around the 15
th
century when people became concerned with consistency and certainty in the law. The doctrine of stare decisis could provide them with this and it became more rigidly followed. It wasn’t untl the 19
th
century that the House of Lords accepted the doctrine of stare decisis and proclaimed it law. This was infuenced by: 1) the industrial revoluton – there was more wealth, more business and commercial contracts and people thus required more certainty
in their afairs. 2) People were increasingly more intellectual, ratonal and positvists. 3) Commercial printng had become even more developed and greater distributon systems were available thus efectve case reportng emerged and court documents could be distributed and precedence known to the courts.
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being treated similarly, and contnuity – we must avoid the disastrous inconvenience of introducing doubt into the law through judicial departures from precedent. Linked to this is the reliance principle: that is the principle that people order their afairs in reliance on judicial decisions (principles declared by judges) and therefore their interest should be adversely afected if judges altered principles. People order their afairs on the basis of these decisions therefore interests would be adversely afected if judges departed from decisions.
Some problems exist with the respect to the doctrine, however. 1) There is not much to be said for the certainty of injustce. Because you follow pre-existng decisions, if one of these courts makes an error or bad principle, it will persist for a long tme. 2) The principles or ratos themselves in the common law system aren’t that clear and are thus open to interpretaton and interpolaton. Very seldom are those ratos clarifed, which creates a level of uncertainty which the civil law system doesn’t have.
What are the roles of the Court in society and why are they important? Is the role of the Court in society expanding? Why? Discuss. Impact of 1982 changes on the role of the courts.
1)
Arbitrator of the consttuton
– not actually assigned to the courts in the BNA act of 1867, but they have assumed the role and both partes have respected it. We are a quasi-federal country and thus have two levels of government who are independent and
assigned diferent jurisdictons. Because the consttuton was made in 1867 there are many new issues that didn’t exist back then (tech), so there are disputes over their jurisdicton, which the courts arbitrate.
2)
Interpreter of legislaton
– some things may be unclear so they need to provide defnitons and interpretatons for terms. They use two diferent approaches: a) plain meaning approach - dictonary defniton, and b) mischief/liberal approach – they look at
the object of the statutes in the context it was created. The golden rule is to use the liberal approach only when necessary.
3)
Protector of civil libertes
– the freedoms of the individual. However the 1867 act gave no jurisdicton to either level of government in respect to civil libertes. Because civil libertes were not entrenched the courts didn’t have the fnal decision making power. In 1982
with the entrenched Charter of Rights, the courts could protect the libertes through a process of interpretaton to seek to limit the efect of statute. The efect of the charter of rights is that it empowers the judiciary and gives the court the last word, ultmately the Supreme Court of Canada. Because the charter of rights is very generally worded and the courts are the interpreters, it gives the court lattude and authority. As well, the court can fashion whatever remedy it deems ft.
4)
Arbitrator of disputes between private persons
– people go to the courts to have their disputes resolved. This is how precedents are created. Gave rise to contract law, tort law and family law.
5)
Arbitrator of public law disputes
– between two government agencies or a person and the government. Includes criminal law, consttutonal law and administratve law.
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The role of the courts in society is diminishing. Up untl the 20
th
century, the most signifcant insttuton for creatng laws was the courts. In the early 20
th
century, delegate bodies exploded and the relatve roles of signifcance were reversed. This occurred for 3 reasons. 1.
In order for courts to make law they must wait for an appropriate dispute to arise. They are therefore reactve, whereas legislature is proactve
and can deal with things outside the context if what the courts are limited to. 2.
Prior to this there wasn’t a great demand for law
– social services, the jurisdicton of legislature, were non-existent, and the legislatve process was difcult, expensive, sophistcated and intellectual. Suddenly with the industrial revoluton there was a big change in society. The legislature, because they were proactve, they could immediately act to the problems of the industrial society, however, the courts, because they were conservatve, couldn’t/didn’t react lost their dominant positon. 3.
Society fnally had sufcient wealth to support an ongoing legislature functon. Ironically, it was the industrial revoluton that fuelled the wealth and allowed for the problems to occur. It required more legislaton and aided it come about. The industrial revoluton provided both the wealth and problems.
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A learned author has described the Consttuton Act 1982 as “A Cultural Revoluton.” Do you agree? Why? Discuss.
No, it wasn’t a cultural revoluton because it made few substantal changes to the content of the
BNA Act of 1867. Although some changes were signifcant it did not create a new consttuton. It only:
1.
Provided for a domestc amending process for entrenched aspects of the consttuton
2.
Provided for a charter of rights
3.
Provided an additonal subsecton with respect to the division of powers
4.
Provided there be a conference for the rights of aboriginal people,
5.
Provisions for equalizaton payments (for regional disparites)
6.
It also allowed the UK parliament to promise to sign of, would never legislate for Canada again
However, some of these changes were revolutonary to the court system, since many aspects were entrenched, including: the ofce of the Queen, the compositon of the Supreme court of Canada, the amending formulae, and the charter of rights. Because the amending formulae was entrenched it is has made it very difcult for any changes to be made to the consttuton and in fact no changes have been made thus far. Because the charter of rights is now entrenched, the parliament cannot just eliminate the civil libertes. Now they have to go through the process of consttutonal amendment which is so difcult that there hasn’t been an amendment to the consttuton to date. So all statutes in Canada, both provincial and federal, must now live up with the standard of the Charter of Rights. If they don’t, those laws will be without efect. These entrenched aspects gave the Supreme Court of Canada the fnal word and
because the courts are interpreters it gave them lattude and authority.
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What is the Adversary System as it exists in the Canadian Legal System?
It is a characteristc of the court system, not really a system in itself. It means: In civil disputes it is generally up to the partes, not the court to initate and prosecute litgaton, to investgate the pertnent facts and the present proof and legal argument to the decision making tribunal. The courts functon is limited to adjudicatng the issues submited to it by the partes, the proof presented by them and to apply appropriate procedural sanctons upon the moton of a party. Individualism is emphasized and self-interest is upraised. Jerome Frank developed fght theory which stated that the basic concept is that presentaton and prosecuton is made by two self-
interested partes, with the court actng as an essentally passive arbitrator (like two boxers and a referee).
There are 2 assumptons which the system is based on:
1.
The factual truth and appropriate legal principal is more likely to emerge from bilateral investgaton and presentaton motvated by self-interest than from judicial investgaton motvated only by ofcial duty. In other words, if you have something at stake and are self-interested, it will compel you beter to do a beter job, investgate beter and work harder.
2.
The moral force, legitmacy, and acceptability of a decision will be greatest when it is made by one who does not have and does not appear to have the kind of psychological commitment to the result that is implied in initatng and conductng a case. It is a more acceptable decision when there is party (the judge) who is not involved in the investgaton and adjudicates a decision. There is also a belief that there will be a beter, fairer decision resultng when you are actvely involved in the process. Legitmacy means
that we have the day in court to argue our case and even though the result isn’t what we
want, you were able to represent yourself. There are 3 reasons the adversary system doesn’t always work:
1.
People aren’t of equal means (poor, middle class, rich). If you’re rich, you can hire beter
council to represent you. You can hire beter expert witnesses. 2.
Lying and covering up evidence. Due to great self interest
3.
Self-interests can create abuses of procedures. In Canada we don’t have a pure adversary system; lawyers are court ofcers and have dutes to the court not to lie. For example, the lawyer won’t do the case if he knows the client did it and is going to lie. Secondly judges will move the case along. They are involved in the court process. This seems to make up for the defciencies in the adversary system.
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Discuss the relatonship between Law and Politcs as revealed in this course.
Laws are not value neutral, they manifest from the politcal/philosophical values of the law maker and ofen of society. Generally they emerge from the law makers. There is a clear relatonship between law and politcs – laws come from politcal insttutons. Laws are the methods by which politcians actualize their politcal agendas. Legal philosophies are basically dressed up politcal philosophies. The process that leads to law (most signifcant) is the legislature (at least in Canada). There are two parts of the legislature: 1.
legislatve assembly who are elected to positon and are politcians and 2.
the monarch: Queen Elizabeth II, and the governor general (federal) or lieutenant governor (provincial).
The monarch approves the bill by the legislatve assembly. Essentally the laws are the crystallized product of the politcal process. Law is not unique, detached or discrete. Politcs govern through law.
The consttuton refects the relatonship between law and politcs. Laws make up part of the consttuton but they refect politcal values and in turn defne the politcal process. The courts are all insttutons which have been established through politcal liberty. Judges are appointed by politcians and the laws which governed and established courts have been created
by politcians.
Purpose of law is to achieve a fair and orderly relatons in society, but this is a politcal view which difers based on what people’s vision of a just society is.
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Is Canada a Federal Country? Discuss.
K.C. Wheare defned the federal principle: is the method of dividing powers so that the general and regional governments are each within a sphere co-ordinate and independent. In essence this means that neither government is legally subordinate to the other. There are 2 corollaries: 1) to be truly federal, a fnal arbitrator of consttuton is required which neither level of government alone can control or appoint, and 2) a method of consttutonal amendment in areas related to the division of power is required which neither level of government can control.
We are a federal country: 1.
We are subject to the laws of 2 authorites and jurisdictons assigned to both.
a.
BNA Act 1867 created provincial areas of jurisdicton and separate areas of federal jurisdicton
2.
The statutes are entrenched (not changeable by one authority alone)
3.
The existence of the amending formula to amend entrenched aspects are beyond control of either level of government
4.
“The colonies are to be federally united” (as writen in BNA Act 1867 by the fathers of confederaton
5.
There were judicial decisions that consolidated federal realites. 2 most important were given by the JCPC:
a.
Hodge vs. The queen – Rato: the provinces are not delegates of the federal parliament; the provincial legislatures are in their own spheres supreme
b.
Liquidator of the Maritme Bank of Canada vs. the Receiver General of New Brunswick – Rato: the lieutenant governor is not merely a federal ofcial, rather the lieutenant governor passed all the prerogatve powers of the crown.
-
The JCPC actually made us more federal because it was a truly independent arbitrator (it no longer exists however)
We are not a federal country; in fact Wheare states that we are a quasi-federal in law and predominantly federal in practce. Canada is not by defniton federal, however it acts federal. The centralizing features of the Canadian consttuton that undermine the federal principle have
fallen into disuse, however they exist in sectons in the BNA Act:
1.
Power of Disallowance – the federal government is given the power to disallow any act passed by a provincial legislature, which is essentally straight veto power 2.
Federal govt has the power to appoint the lieutenant governor for each province and the
provinces are denied the ability to alter the ofce of the lieutenant governor (who has fnal stamp on provincial legislature)
3.
Power of reservaton - the federally appointed lieutenant governor of each province can,
on instructon from the federal government, reserve provincial bills for the consideraton
of the governor in council in Otawa
4.
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advantage of Canada”. The parliament can take away the power of the province if it is in
the best interest of the country.
5.
Remedial legislaton by the federal government in the event that Roman Catholics and Protestants are deprived of their traditonal rights to religious educaton.
6.
Federal government power to appoint judges of the superior court (and above) and in additon allowed the federal government to create the fnal appellate court of Canada and appoint the judges.
7.
The Charter of rights – The judiciary is empowered to trespass on provincial legislatve jurisdicton if the provincial legislaton doesn't meet the Charter.
The beter view is that Canada is not a federal country because it does not measure up to the federal principles and corollaries.
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In Western European societes, there are two great systems of law, each of which exists in some degree in Canada. Discuss each system, providing a defniton for each one and a brief account of each system’s history. Compare and contrast these systems of law.
Civil law is the system of law whose modern form originated in the Roman/Byzantne Empire. Emperor Justnian was the famous emperor of the Eastern Roman Empire in the 6
th
century A.D. He developed the Justnian Code, which was inherited by the whole of contnental Europe and formed the foundaton for most of the civil law legal system. The civil law system was greatly infuenced by the Napoleonic Code of 1804. The essence of the civil law system is the existence of a code, which is used to setle disputes. Only if the code does not cover the new problem is the court free to setle the problem from general principles in the code. In theory, a later court need not follow the earlier reasoning in a similar case as there is no doctrine of precedence in the civil law system. It is a deductve system; it is organized on the basis of general principles applied to specifc situatons.
Common law originated from the feudal ages. In feudal tmes, the king was the fountain of justce
This jurisdicton was exercised by the king himself. The king was only in one area, and to travel to him was very difcult to get a ruling for a case, so individual, local, feudal courts were established. Decisions only came to the King and Council when the local feudal courts could not come to a decision (similar to local courts being appealed to higher courts in our society). Judges dispensed law that was common to all people in England. By 1400, the common law courts had become distnct of the king’s court. The king’s court only dealt with major issues and
the common law courts dealt with more mundane issues. It did not however strip the king of all judicial authority, he retained an overriding residual authority to administer law outside the common law courts (he had fnal say to override decisions). It was however, only invoked when the common law courts were unable to uphold justce. The king was approached for equity. There were too many cases so he appointed the chancellor to deal with these cases. Eventually it was too much for the chancellor, so a new court emerged. It was called the Court of Chancery
or the Court of Equity
. Equity principles overruled common law principles, because equity principles evolved of lack of common law principles. This is because these laws are at a higher level and stem from the King’s ability to override common law.
Cases could take up to 60 or 70 years. In 1865
, in response to Charles Dickens negatve commentary on court systems, Blique House
, they created the Judicature Act
: a piece of legislature which combined the common law and the equity law into one system of law, which we stll have today. Both bodies of principles remained separate, however, both are considered during court cases, where equity law stll upholds common law. This was applied to Canada and Manitoba
•
Common law takes an individual circumstance and takes broad generic principles from it to apply in future cases
•
Civil law uses broad based general principles that they have, and they apply it to specifc cases
•
They are essentally mirror images of each other
-
common law is inductve, civil law is deductve
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-
Only in the common law system do courts have the ability to generate new laws
-
Civil law and common law are two systems used by judges to adjudicate cases
-
In the civil law system is clearly artculates what the precise principle is, so there isn’t the
certainty that some commentators make about the common law system (in common law
the rato isn’t explicitly stated for each case)
What is ADR? What are the advantages? What are the 4 main types. Discuss each type.
ADR is Alternatve Dispute Resoluton. It exists so that courts aren’t involved, or that they have minimal involvement. Advantages include: looking at the shortcomings of the court, bypasses difcultes of going through litgaton process, cases are resolved much quicker, have a cost savings associated with them, you get your choice of adjudicator or mediator if one is required (courts have lotery system for picking a judge for the case, and sometmes judges are picked who have no background in that type of law), confdentality in the case (there is public record for court cases), preserving the ongoing relatonship (courts tend to push partes to the extreme, which leads to claimants being ‘enemies’ aferwards). ADR’s don’t replace the courts. The ADR’s stll look at laws made by the courts and think about how the courts would resolve a similar case. There are four major types of alternatve dispute resoluton (ADR):
5.
Arbitrators:
have fnal decision making authority, they hold an informal trial and then a decision is rendered. It is a more casual trial that does not have the same strict procedures. The arbitrators are typically experts of law in the feld. 6.
Mediator:
a neutral third party, can only suggest a soluton – mediators do not have fnal
decision making authority. They bring partes together and suggest solutons which are not binding. Used ofen in family maters. Not used in commercial maters at this point
7.
Conciliaton:
gets the party talking but can’t suggest anything. Have even less fnal decision making authority in that they just facilitate discussions and cannot suggest anything. Seen in labour and human rights discussions.
8.
Setlement: disputes resolved but not by the courts, however they pay atenton to methods resolved by the courts. The people just make a deal. This is the best method because it is formalized and others pay atenton to it
Post Midterm Questons
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What is a “Tort Feasor”?
The person who perpetrates the tort (the wrongdoer). What are 3 excuses which would absolve the defendant in an intentonal tort case from liability?
1.
Self-defense within extreme limits
– no other way, had to use force to escape
2.
Consent
– agree to enter into an actvity (ex. Boxers)
3.
Defense of Legal Authority
– some individuals have authority to perform certain acts that would otherwise be deemed courts (ex. Police)
Defne “Standard of Care” as it relates to the Tort of Negligence.
The law places a duty on every person to conduct all actvites taking reasonable care not to injure others or their property. The standard of care is summed up as: whether a reasonable person would reasonably foresee danger or harm to another or their property and whether the steps taken, if any, to avoid this danger of harm were reasonably sufcient.
What are the 3 elements in Undue Infuence?
1.
Special relatonship between the victm and the dominator – based on special knowledge and skill causing the victm to place confdence or trust and care in the dominator.
2.
Circumstances were such that the dominaton was probable
3.
Reversal of burden of proof – if 1&2 are satsfed, burden of proof shifs to dominant party and they must prove they did not exert undue infuence
What is the Doctrine of Part Performance?
It enforces contracts concerning land if the plaintf can show that they initated performance of the contract with reliance on it, and then the courts would accept evidence of part performance
in lieu of evidence in memorandum. The doctrine of part performance was made to blank the negatve efects of the statute of fraud for contracts regarding land.
What is the Doctrine of Privity?
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Relates to contract law. It states that as a general rule, a contract cannot confer rights or impose
obligatons arising under it on any person except partes to a contract. -
No one except a party in the contract can acquire rights under it
-
No one expect a party in the contract can be subjected to the liabilites of it.
What are the Five Factors that determine a Chatel to be a fxture?
1.
Nature of the artcle
– some artcles are designed to be fxtures, ie. a hot water tank
2.
The mode of atachment
– fimsy atachment (a plug, a picture hanging on the wall) does
not make it a fxture. If it is screwed in, wired in, or nailed in, it is typically a fxture.
3.
The circumstance it was atached
4.
The purpose to be served
– by the artcle
5.
The positon of the partes
What is Severance?
Severance is the process to make a fxture into a chatel again.
What is Bailment?
Bailment exists when one person takes temporary possession of a personal property that is owned by another. Title and possession are being split. What are Easements?
Easement:
is a right enjoyed by one land owner over the land of another for a special purpose, rather than the general use and occupaton of the land. Typically easements are atached by agreement. Purchasers of the land acquire the easements with it. What is Escheat?
Escheat
: is the reversion of land to the crown. Occurs when an owner of a fee simple estate dies
intestate (without a will) and without heirs.
What is the duty to mitgate in court? A person who has sustained a loss as a result of a breach of contract must do what they can to mitgate (limit) the extent of the loss. The damages they recover at law will not include what they might have reasonably avoided.
In the context of Corporate Law, what does “locked in and frozen out” mean and how can such a situaton be remedied?
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Locked in:
minority shareholders will have a hard tme to sell their shares because no one wants
them, so they must sell at a huge discount, or sell them to the majority shareholders to get rid of them. Most ofen, they are unable to sell and must remain a minority shareholder.
Frozen out:
Minority shareholders do not have sufcient votes to get somebody on the board of
directors, so they are frozen out of management (therefore they lack any real power/control)
Remedy: the use of provisions in a shareholder’s agreement and especially a shot-gun clause which gives the minority shareholder the opton to sell their shares to the other shareholders at
a fair price. In the situaton of a breach of contract, various equitable remedies are available. Name 3 such remedies. SIR
1.
Specifc Performance:
the court orders the defendant to complete a specifc act.
2.
Injuncton:
a court order restraining a party from actng in a partcular manner.
3.
Rescission:
a court order restoring the partes to the positons they would have been in had the contract not been made at all.
What are the elements necessary for the impositon of an equitable remedy in contract law?
1.
Plaintf must have clean hands – can’t be guilty of unethical conduct
2.
Plaintf cannot have acquiescence – no long delays, must act promptly upon becoming aware of the misconduct / breach
3.
A court will refuse to intervene if doing so would afect an innocent third party
4.
Requires substantal consideraton – the seal is insufcient
Briefy defne a guarantee. Indicate when a guarantee might be employed and for whose beneft.
The person who promises to answer for the default of the principal debtor is called the guarantor and his promise is called a guarantee. A guarantee usually arises when a prospectve creditor refuses to advance money, goods, or services solely on the prospectve debtor’s promise to pay for them. The creditor must look frst to the debtor for payment, and only afer the debtor has defaulted may the creditor claim payment from the guarantor. The guarantee is for the beneft of the creditor.
What does limited liability mean in the context of Corporate Law?
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A shareholder has limited liability in the sense that they can only lose their capital investment and/or the amount of the price of the shares for which they have not paid. It protects the shareholder’s personal assets. It is a feature of corporatons.
State the purpose of damage awards in Tort and Contract.
Tort law – to place the injured party in the same positon had the tort not occurred. Contract law – to place the injured party in the same positon had the contract been fulflled.
What is meant by the “Standard of Proof”? Name the civil standard of proof and criminal standard of proof.
The Standard of Proof is a set of specifc elements that must be proven within tort law. The standard of proof in civil cases is the Balance of Probabilites (>50% for each element) which requires that intenton, causaton, and proscribed harm be proven. Standard of Proof in criminal
cases is “guilty beyond a reasonable doubt” - >95%.
What does the phrase Sine Qua Non mean and in what context was it used during this course?
“Sine Qua Non” means “without that nothing” and is also referred to as the “but for” test. If the accident would not have occurred but for
the defendant’s negligence, then his conduct is a cause of the injury. The defendant doesn’t have to be the
cause, but he must be a
cause.
What is the “liberal” approach to contractual interpretaton?
It looks to the intent of the partes in drafing their agreement. It stresses the circumstances surrounding the contract, negotatons leading up to the contract and the knowledge of the partes and any relevant facts as due by the reasonable person. Thus, it can lead to endless speculaton of intent, and allows judges to determine relatonships as they see ft. Briefy defne “Gatekeeper Liability” as it exists in corporate law.
The purpose of gatekeeper liability is to control wrong doings by companies by making the directors liable for those dutes owed to shareholders, employees, creditors, compettors, government, and the community at large. The category of persons to whom a duty is owed has expanded and the types of breaches of ofences have increased and exposure of directors is no longer limited to fnancial liability. The ratonale was that the normal sanctons and liabilites pinpointed on the business or actual wrongdoer were insufcient in reducing corporate wrongdoing. Problem with it is we are really harming the corporaton’s ability to make money. Who wants to be a director?? There is so much liability. Downloaded by Vasd (vasd089@gmail.com)
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Name the 6 elements necessary to establish a contract.
1.
Ofer
– contract in draf, a tentatve promise made by one party, the oferor, subject to a conditon or containing a request to the other party, the oferee. 2.
Acceptance
– The oferee must communicate acceptance to the oferor.
3.
Consideraton
– the price for which the act or other party is bought (exchange)
4.
Capacity
– Presumed to exist
, mental competence of the party to bind him or herself in contract
5.
Intenton to Create Legal Relatons
– presumed to exist
6.
Legality of the Contract
– presumed to exist
, cannot ofend public policy or violate any law
What is “Contra Preferentum”?
The courts read a contract against the interest of the party that created it if two interpretatons are possible.
What are 4 Ways to Terminate an Ofer?
1.
Rejecton
: oferee rejects and terminates the ofer
2.
Counter-ofer
: a response to an ofer where you vary one or more terms. Amounts to rejecton and terminaton of the original ofer
3.
Lapse
: ofer is no longer open for acceptance
4.
Revocaton
: A withdrawal of the ofer by the oferor which prevents its acceptance
Describe what the “lapse of an ofer” in contract law means, and then briefy defne when an ofer may lapse.
A lapse of an ofer is the terminaton of an ofer; it is no longer open for acceptance. It occurs when any of the following occur:
a.
The oferee fails to accept within the tme specifed in the ofer
b.
The oferee fails to accept within a reasonable tme, if the oferor has not specifed any tme limit
c.
Either of the partes dies or becomes insane prior to acceptance.
What is the mail excepton?
When an oferor chooses the mail as the means of acceptance, the mail excepton applies. Acceptance is efectve when the mail is deposited in the mail box.
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What is Revocaton by Mail?
Revocaton leter need only arrive at destnaton for the ofer to be revoked. It does not need to be known by the receiver.
What are the 3 categories of property or acton that can form from consideraton?
1.
Property
a.
Personal Property (things that aren’t real estate) 2 types:
i.
Chatels: anything tangible that is not land or money
ii.
Choses in Acton: intangible, right to sue of some sort
b.
Real Property (ie. land, buildings)
2.
Services – labour, restraint on behavior
3.
Money
What is an Assignment?
Transfer of a choses in acton.
What does it meant to Impunge a contract?
To atack its integrity. The defendant is the one who wants to impugn the contract, because they
are the ones needing to avoid it. What is the “Doctrine of Substantal Performance”?
If you breach a conditon in a minor partcular, the Doctrine of Substantal Performance applies. With this doctrine, the courts are willing to recognize substantal performance by the promisor though defectve or incomplete in minor respects to keep the other party bound. A party in breach can only have damages awarded against, and cannot have the contract discharged. In essence, it ensures that a breach of a conditon in a minor respect is not fatal; it makes the conditon equivalent to a warranty.
Briefy defne the diference between a void and voidable contract. Discuss how a holding by a court that a contract is void or voidable is signifcant to innocent, subsequent, third partes for value.
Void contract
– it was never formed in law, thus there is no agreement. Title/ownership of property at common law would not pass under void contracts and the inital party will be compensated for their loss from innocent subsequent third partes for value, whom lef without remedy. Downloaded by Vasd (vasd089@gmail.com)
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Voidable contract
– a party has entered into a contract under some conditon, either misapprehension or misrepresentaton, that will render it unfair if the contract terms were enforced against them. Title may pass from one contractng party to another. Innocent, subsequent third partes for value are treated more fairly under equity and are not required to return the goods to the inital party. Defne consideraton as it exists in the Law of Contract.
Consideraton is the price for which the promise, act or property of the other is bought. When people make a contract it is about the exchange of money, goods, or services and an exchange of promises. The mater of exchange is called consideraton.
Defne “wrongful dismissal” in the context of employment Law. What is it? On what basis, if any, are damages awarded?
Wrongful dismissal is when an employer has broken a contract and fails to give the employee the notce to which he/she was enttled. In an employment contract, we must ask what amount
of damages will compensate the employee for failure to receive the required notce of terminaton. To determine this, the court has to determine what length of tme would have been reasonable notce given the circumstances (length of service, type of occupaton, state of economy in general and in respect to the occupaton, age of employee).
What is agency by estoppel? What is apparent authority in agency law? Give three examples of corporate law principles or issue upon which it has an infuence and discuss that infuence.
Agency by estoppel arises when the agent’s authority is merely apparent, not real. When one party allows another to believe that a certain state of afairs exists and the other person relies upon that belief, the frst party will be prevented from aferwards statng that the true state of afairs was diferent. Agency by estoppel has relevance to the law of agency in two types of cases: apparent authority and holding out. An agent may acquire apparent authority from a past manner of transactng business with the principal or from trade custom. Such circumstances may make it appear to third partes that the agent has authority for the contract in hand. In fact, however, he/she does not have any real authority for the purpose. There existed no understanding between the agent and the principal, express or implied, grantng this authority. Ex. Lawyers & Stock Brokers Apparent authority has manifested infuence in 3 ways:
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1.
The efect of publicly fled documents
– the public was deemed to have notce of the contents of fled documents whether they had read them or not, and thus could not rely
upon what otherwise might be the ofcer’s apparent authority to perform those acts. However this has since been abolished by statute
2.
Indoor management rule
– a person dealing with a corporaton is enttled to assume that its internal procedural rules have been complied with unless it is apparent that such
is not the case.
3.
Pre-incorporaton contract
a.
The corporaton is bound by the contract and is enttled to the benefts thereof as if the corporaton had been inexistence at the date of the contract and had been a party thereto, and
b.
A person who purported to act in the name of or on behalf of the corporaton ceases to be bound by or enttled to the benefts of the contract.
What is the Parol Evidence Rule? Identfy 4 exceptons to it.
A rule preventng a party in a contract from later adding a term previously agreed upon, but not included in the fnal writen contract, to contradict the contract. 4 exceptons:
1.
Doesn’t apply if a party can show the writen contract was never to embody all of its terms
2.
It doesn’t exclude oral agreements reached subsequent to the writen agreement.
3.
Collateral agreements (means separate agreement) require separate and additonal consideratons, and if such exist it will be enforced.
4.
Conditon precedents for writen contracts need not be in writng. Conditon precedent is any set of circumstances or events, which the partes stpulate, must be satsfed or must happen before their contract takes efect.
What is a conditon subsequent?
Conditon subsequent is an uncertain event that brings a promisor’s contractual liability to an end if it occurs.
What is a conditon precedent?
A future or uncertain event that must occur before the promisor’s contractual liability is established. Ex. Contract for sale of a house with conditon precedent that mortgage fnancing need be obtained frst.
What is “non est factum” in contract law?
In Latn it means, “It’s not my doing”. It’s a contractual clause that helps illiterate people to avoid contractual obligatons, because it is grounds to impugn a contract from contractual liability and determine the contract to be void.
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What does it mean to discharge a contract?
To cancel the obligaton, make the contract null and inoperatve. When a contract is discharged, the obligaton is at an end.
What are the 4 basic categories for discharging a contract?
1.
Discharge By Performance
– everyone follows the contract, can also occur over tme
2.
Discharge By Agreement
a.
The Waiver – formally discharges both partes, partes agree between themselves
that a contract doesn’t have to be performed
b.
Substtuted Agreement – a new agreement replaces the frst agreement
3.
Discharge By Frustraton
– courts excuse persons for failure to perform their contracts in a wide variety of circumstance where the inability to perform is not their fault
4.
The Contract Provides for its own Dissoluton
What is the Frustrated Contracts Act?
Allows for the relocaton of the benefts already exchanged when frustraton occurs.
What are the four basic limitatons on the separate entty principle in corporate law?
1.
Taxaton – a Corporaton is eligible to enjoy a lower tax rate on its frst $200,000.
2.
Residence – the residence of the controlling shareholder may determine the company residence.
3.
Agency – the agent cannot represent a shareholder unless a shareholder agreement has been signed.
4.
Fraud – when fraud has been commited the court will disregard the separate entty principles, and will see the directors as having commited the fraud.
Why is the case Donoghue v. Stevenson signifcant?
This case is signifcant because it established the neighbour principle
, which clarifed to whom we owe a duty of care, by rejectng the need for a contractual relatonship for negotaton to exist. You owe a duty of care to your neighbour, and thus don’t need a contract. So third partes are permited without a contract to sue in tort for negligence. The neighbour principle states that we “owe a duty to persons who are so closely and directly afected by my act that I ought reasonably to have them in contemplaton when I am directng my mind to the acts or omissions, which are called into queston.”
The House of Lords decided that manufactures are liable in tort for damages when their products are most likely to be used without immediate examinaton. The case was over drinking a half a decomposed snail in a botle of ginger beer. She wanted to sue the manufacturer, not her friend, but at the tme the manufacturer didn’t owe anything to the end Downloaded by Vasd (vasd089@gmail.com)
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consumer, only the retailers. The House of Lords crafed the neighbour principle that allowed persons to sue the company (the case of Donoghue v. Stevenson). In tort law the ultmate consumer did not have a contract with the producer and thus could not sue them in tort, however they couldn’t blame anyone else
What is rectfcaton in law?
Rectfcaton is a correcton of a writen document to refect accurately the contract made by the partes. The rectfcaton will be made if three conditons are met:
1.
There is a complete agreement between the partes, free from ambiguity
2.
Partes didn’t engage in further negotatons to amend the contract
3.
The change in the writen document appears to be an error in recording
Explain the diference between a Warranty and a Conditon in respect of the Law of Contract. What are the consequences of this classifcaton? Essental terms of a contract are known as conditons and non-essental terms are known as warrantes. The breach of a warranty only allows for a suit for damages. The breach of a conditon allows the innocent party to either:
a.
Afrm the contract and sue for damages
b.
Elect to discharge the contract and sue for damages.
What are the 5 bases for professional liability?
1.
Criminal Liability
– held criminally for one’s acts
2.
Professional Liability
– in breach of a code of conduct by professional body
3.
Contractual Liability
– breach of contract
4.
Fiduciary Liability
– to perform dutes with care and skill and in good faith
5.
Tort Liability
– intentonal and negligence
What are the 2 primary dutes of a Director of a Corporaton and to whom are they owed?
The primary dutes of a director are fduciary dutes which revolve around 2 things:
1.
Care and Skill
– a director is bound to exercise reasonable care and that means that he or she cannot be negligent in carrying out dutes.
2.
Good Faith
(bona fdes) – must act appropriately in a confict of interest. 2 types:
a.
Disclose a personal interest in contracts with the company b.
Intercepton of corporate opportunity – can’t hear about opportunites and seize them for yourself
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What are “the artcles of incorporaton” as used in the law of corporatons? Name four basic features of the “Artcles of Incorporaton”.
The artcles of incorporaton are the basic consttutonal document of corporatons incorporated
in most Canadian jurisdictons. Under the artcles of incorporaton system, persons who wish to
form a corporaton sign and deliver artcles of incorporaton to a government ofce and in turn are issued with a certfcate of incorporaton. Features of the “artcles of incorporaton” include: 1.
Name of the company
2.
Corporate head ofce locaton
3.
Nature of business
4.
Types of shares and their rights, privileges and other characteristcs
5.
Names of the frst directors and the incorporators
6.
Any restrictons on the company carrying out business
The Sale of Goods Act applies to certain transactons. Describe the transactons as identfed in the Act.
For the sale of goods act to apply the contract must be dealing with the transacton of “goods”, which is defned as all personal chatels (tangible personal property). It excludes other things such as services, real property, choses in acton and money.
In an Insurance Contract, what is an insurable interest?
Insurable interest separates insurance from a wager. Insurable interest exists where the insured derives a fnancial beneft in the contnuing existence of the insured object or sufers a fnancial loss from the loss of the object. Compensaton will be paid by the insurer to the individual named as a benefciary.
What is an injuncton?
An injuncton is a court order restraining a party from actng in a partcular manner. It is an equitable remedy for a breach of contract. For the remedy to be available, the courts require the contract to contain a negatve covenant (a promise not to do something).
What is a presumpton in Tort Law or Contract Law? (What is a presumpton in law? Give two examples)
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With respect to intentonal torts, it is presumed by the courts that the element of intenton exists because it would be difcult for the plaintf to prove the defendant had intent. Thus, because the plaintf is taken to have established the element, it is up to the defendant to enter proof to reverse the presumpton or conclusion.
With respect to contracts, the three elements: capacity, intenton to create legal relatons and legality of the contract are all presumed by the courts. 2 Examples of intenton to create legal relatons:
1.
Example, your mother invites you over for dinner and promises to make the meal, but you can’t come for dinner because you have other plans. Your mother sues you; there is
an ofer made by the mother, there is acceptance, the consideraton on the mothers part
is a promise to make the meal, and the son promises to show up for dinner. 2.
The son borrows money from his mother. 20 years later the mother wants to retre and needs the money. The mother takes him to court. In both cases, it is up to the son to rebut the presumpton that there was intenton to create legal consequences. What is the principle of remoteness in the Law of Contract?
The issue is just like in tort; it is whether the damages were foreseeable at the tme of the contract. If a special use is to be made out of an item sold, that has to be communicated at the tme of the contract or else a failure of the item will not be a breach of contract as the item’s use was remote, or obscure. Defne the term of subrogaton as it exists in Insurance Law.
The right of an insurer who has paid a claim to “step into the shoes” of the insured and sue the person responsible for the loss. When the insurer has compensated the insured by paying a claim for a loss, the insurer is enttled to step into the shoes of the insured and sue the person liable for the loss. What principles of law are established by the case of Hedley, Byrne & Co. Ltd. V. Heller & Partners?
This case expanded the normal rules of negligence law to professionals. Pure economic loss was
deemed sufcient to ground a claim of negligence against a professional. The only harm recognized previously was if it was physical. What is the remedy of Specifc Performance?
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It is an equitable remedy for a breach of contract. The remedy is an order requiring a defendant to do a specifed act (when fnancial compensaton is inadequate) usually to complete a transacton, for example to fnish a building contract. Used for land and heirlooms; situatons where the material is unique and damages thus are insufcient. What is an “assignment” in Contract Law?
An assignment in contract law is the transfer of contractual rights.
What is a shotgun clause and where might you fnd it?
A shot-gun clause is a clause found in the shareholder agreement which gives a shareholder the right to make an ofer to another party to buy their shares at a certain price per share, or the other party can instead buy their shares at that price if they so choose. “$10 per share, you buy me out or I’ll buy you out.” It helps to alleviate oppression of the minority shareholders.
What are the 4 implied conditons in the Sale of Goods Act?
It is implied that:
1.
Seller’s Title
– seller has right to sell the goods 2.
Descripton
– goods sold by descripton will conform to the descripton 3.
Suitability and Fitness
– the goods are of a type that is suitable for the purpose for which
they are bought 4.
Sale by Sample
– when a sample has been provided, the actual goods supplied will correspond to the sample in type and quality.
Why are tort damage awards greater in the U.S.A. as opposed to Canada?
For 3 reasons: 1.
Pain and sufering rewards in Canada have been subject to a limit by the Supreme Court in 1982 of $100,000. Since then it has been indexed for infaton and the current maximum is $400,000. The USA does not have a cap.
2.
Juries make tort awards in the United States; in Canada juries are not used for civil cases.
Juries tend to be more emotonal and as a result will award larger sums.
3.
Americans have jurisprudence that allows for higher rewards of punitve damages that can also be rewarded by the juries. What is the Indoor Management Rule?
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Indoor Management rule is the principle that a person dealing with a corporaton is enttled to assume that its internal procedural rules are complied with unless it is apparent that such is not the case. Rato of Royal Britsh Bank v. Turquand: “In the absence of notce of the irregularity or of suspicious circumstances, everything that appears regular on its face may be relied upon by an outsider and will bind the company.”
An innocent third party may rely on the regularity of corporate act just as he may rely on the apparent authority of an agent.
What does the term “Special Damages” in tort and contract law refer to?
Special damages are losses that can be calculated with accountng accuracy up untl a partcular date, usually the date of the trial or date of the judgement. Ex. Loss of wages, loss of proft from
business, medical expenses. What is the diference between holding property as joint tenants rather than tenants in common?
Both are methods to own land concurrently (by two or more people at the same tme). If you are a joint tenant and one of the joint tenants dies, then the interest of the deceased joint tenant get passed on to the surviving joint tenant. If a tenant in common dies, the interest of that deceased tenant in common does not transfer automatcally to the surviving tenants in common, but rather the interest in the property will be transferred to their heir or benefciary, who contnues to hold their interest with the other tenants in common.
What are the 3 types of Estates in Time?
1.
Fee simple estate:
the estate in land that represents the greatest interest in tme that a person can possess. It can be passed by will to another, or in cases of intestate (dying without a will), is passed to heirs
2.
Life estate:
estates that may be held by a person other than the owner of the fee simple for a partcular life tme usually of the tenant themselves
3.
Leasehold estate:
specifed for a limited agreed upon tme, afer which the land reverts back to the land owner.
What are Freehold Estates?
Estates that are indeterminate of tme. Include Fee simple estates and life estates.
What does the term “collateral agreement” mean?
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An entrely separate undertaking which the partes agreed upon and which they did not incorporate in their original contract.
In what situatons can a contract of a minor be enforced against him and to what extent?
1.
A minor must only pay a reasonable price for all necessaries (things necessary for life, like food, water, shelter, clothing etc.); they need not pay the contract price.
2.
Benefcial contract of service: a minor is bound to the terms of a contract of employment when it is found to be for his beneft. Must be 16+ for employment, or 15 with parental consent.
In what situatons is the Doctrine of Frustraton applicable to discharge a contract?
Discharge by Frustraton
: courts excuse persons for failure to perform their contracts when the inability to perform is not their fault. Occurs in two types of situatons:
1.
When performance is literally impossible. Ex. Rent a concert hall but it burns down
2.
Where performance is physically possible but performance would have a far diferent meaning for the partes then that which they conceived at the tme of their agreement.
The result of frustraton is that the contract is discharged and the partes are relieved of further performance, any benefts already exchanged fall where they lie (ie. The down payment for the concert hall would not be returned). There’s a bit of rough justce, so as a result, the English parliament also passed the Frustrated Contract Act which allows for the reallocaton of the benefts already exchanged.
List 12 criterions an individual should keep in mind when selectng a kind of business organizaton.
1.
Limited liability
2.
Estate planning
3.
Tax planning
4.
Borrowing requirements and relatonship of lenders
5.
Employee ownership
6.
Flexibility of structure
7.
Desirability of perpetual existence
8.
Number of proposed proprietors
9.
Relatonship of proposed proprietors
10. Applicable government requirements
11. Available government grants
12. Costs
Name 5 intentonal torts. (Various proscribed harms)
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1.
Assault 2.
Batery
3.
Fraud
4.
False Imprisonment
5.
Intentonal Inficton of Mental Sufering
Explain the principle of Res Ipsa Loquitur, and give an example of a situaton where it would apply in a negligence acton.
It means “the facts speak for themselves.” Even without direct evidence of how the defendant behaved, the element of duty of care can be inferred. For example, the plaintf was struck by a barrel while standing in a street. It fell from the defendant’s upper window. The conclusion, unless the defendant could prove otherwise, is that the most likely cause of the negligent conduct was the defendant.
Name 2 major problems of enforcement.
1.
Requirement of writng
– relates to the statute of frauds which was repealed in Manitoba.
2.
Ambiguous meaning
– courts interpret contracts and have a bias in holding contracts as enforceable even if the contract is unclear and should be void. Liberal approach to interpretng contracts looks at partes’ intent and minimizes the importance of the actual
words used.
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Essay Questons
ESSAY QUESTIONS:
Mr. Risktaker is thinking about startng a business as a transporter of nuclear waste materials through Canada, however, he requires advice as to the various types of business organizatons
that exist and the advantages and disadvantages of operatng a business using each such type of business organizatons. Provide that advice to him keeping in mind that he may have to secure fnancing of some variety to start the business, and that he is considering contemplatng marriage in the near future and has substantal assets.
The sole proprietorship: Advantages – gives you: 1) the ability to make all business decisions, 2) the right to all profts, 3) the right to deal with all assets without interference, and 4) it is simple and very inexpensive to set up and dissolve. Disadvantages – 1) because the sole proprietorship is not a separate legal entty, he would be liable for all the liabilites of the business and all non-business assets are exposed to creditors of
the business, 2) the business income is added to personal income and the aggregate is taxed at the appropriate rate.
Prophylactc actons should be taken in order for Mr. Risktaker to protect himself. A combinaton
of all possibilites is best: 1) insurance is the best form, 2) place investments in creditor proof assets, however the returns tend to be lower, 3) make a legitmate business and estate plan to redistribute your property and if desirable transfer assets to other individuals; it has to be an absolute transfer done well in advance of going into business. If you transfer the assets to your spouse then in the case of separaton the spouse can be enttled to 50%. As well, you shouldn’t transfer property acquired prior to the marriage or property acquired through inheritance because these are exempt from division in the marriage act. Because he has substantal assets, he could achieve some protecton through a prenuptal agreement; it determines the allocaton of property and support payments in the event of divorce.
Partnership: Advantages – 1) all partners may take part in the management of the partnership, and 2) a partnership is really easy to get into, but it is really tough to get out of or make transfers of ownership. 3) Partnerships also have strong loyalty because they are not allowed to
compete with the partnership. Along with prophylactc actons, a partnership agreement can refne the terms of the partnership to his satsfacton.
Partnership: Disadvantages – 1) because it is not a separate legal entty the separate assets of each partner are at risk to satsfy the contractual and other liabilites of the partnership. Each partner is jointly and separately liable for the liability of the business. 2) Because all partners are agents of the partnership, each individual partner can create liabilites of the partnership. Thus you should only enter into a partnership if you have to and the partner should have lots of money because they will be able to cover the liabilites created. 3) Profts are shared amongst partners. Tax advantages have been eliminated. Downloaded by Vasd (vasd089@gmail.com)
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Corporaton: Advantages – 1) a shareholder has limited liability because the corporaton is a separate legal entty and is thus only at risk of losing his investment. 2) It allows for the use of many investors/shareholders as a means of funding. 3) Transfers of ownership are easy and end
your relatonship. 4) Corporatons also have a contnuous existence so if someone dies the corporaton does not have to dissolve. Corporaton: Disadvantages – 1) shareholders have no authority to partcipate in management, 2) it costs more to incorporate, 3) loyalty is lower because shareholders can hold shares in competng corporatons. You can change this through the use of a corporaton agreement that brings in aspects of the partnership act. 4) As well, there tend to be disputes due to the separaton of ownership and management, since the two partes have diferent interests. 5) Directors are considered fduciaries and thus owe dutes to a number of categories of persons. If they fail to satsfy those dutes then they are liable to someone and thus the liability of directors is expanding and can include their personal assets.
In deciding which type of organizaton to use there are numerous criteria Mr. Risktaker should consider: 1.
Limited liability
2.
Estate planning
3.
Tax planning
4.
Borrowing requirements and relatonship of lenders
5.
Employee ownership
6.
Flexibility of structure
7.
Desirability of perpetual existence
8.
Number of proposed proprietors
9.
Relatonship of proposed proprietors
10. Applicable government requirements
11. Available government grants
12. Costs
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Discuss LLPs
Relatvely new, about 10 years old:
Amendment to Partnership Act
- it makes provision for limited liability partnerships
Def’n of LLP: Provides protecton for the personal assets of an innocent partner from professional liability claims arising from the negligence or misconduct of another partner, associate, or employees in whose work the innocent partner was not involved.
Texas 1991: frst LLP statute following claims from law and accountng frms in late 1980’s
(as a result of the collapse of a number of savings and loans companies) (A partner in acc
or law frm made a huge error resultng in major law suits against the frm, making all partners liable despite the error not being known to them and that they had no hand in. This occurred in a number of frms so they started lobbying for LLP legislaton, and then it spread rapidly across USA then up to Canada)
Only 3 professionals are eligible for LLP’s as they have lobbied for it successfully:
o
Lawyers
o
Chartered Accountants
o
Certfed General Accountants
Once registered a partner in LLP is not liable for:
o
Debts
o
Obligatons/liabilites of the partnership
That arise from negligence, wrongful act or omission, malpractce, or misconduct of another partner or an employee, agent, or representatve of a partnership occurring in the ordinary course of professional practce.
Limitatons o
If partner knew of negligence and failed to take reasonable steps to prevent its commission
o
Negligence was commited by an employee, agent, representatve of the partnership for whom the partner was directly responsible in a supervisory role
This form of liability is what is called a “partal shield” – it protects innocent partners from the negligence, wrongful acts etc…. of others in the frm but does not provide any protecton for contractual or trade debts.
The LLP model which extends protecton to contractual or trade debts is call the “full shield” and only Saskatchewan has this. Downloaded by Vasd (vasd089@gmail.com)
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Discuss how principles of the law of agency relate to and are manifest within the principles of the law of business organizaton.
Agency is a relatonship in which one person, known as an agent, is authorized to bring another party for whom they act, known as a principal, into contractual relatons with third partes. In a sole proprietorship this may be necessary because they cannot do everything on their own. In partnerships, all partners are both agents and principals of the partnership and thus have fduciary dutes. As a result one partner can create liabilites that the other partner will be responsible for. In corporatons, the business is considered a separate entty, but they can’t do much by themselves because they are artfcial. So corporatons must act through human agents: board of directors. One of the consequences is that each director is a fduciary because they are an agent. Agents can create contractual liability for their principal and usually exist by contract or through estoppel. Principles of the law of agency manifest themselves through agency by estoppel in business organizatons. There are two types; apparent authority and holding out. Apparent authority is acquired from a past manner of transacton business by the principal or from trade custom. Such circumstances may make it appear to third partes that the agent has authority for the contract at hand, when in fact they have no expressed authority for the contract at hand. There are 3 areas where apparent authority manifests itself in business organizatons.
1.
The efect of publicly fled documents
– the public was deemed to have notce of the contents of fled documents whether they had read them or not, and thus could not rely
upon what otherwise might be the ofcer’s apparent authority. However this has since been abolished by statute
2.
Indoor management rule
– a person dealing with a corporaton is enttled to assume that its internal procedural rules have been complied with unless it is apparent that such
is not the case.
3.
Pre-incorporaton contract
a.
The corporaton is bound by the contract and is enttled to the benefts thereof as if the corporaton had been inexistence at the date of the contract and had been a party thereto, and
b.
A person who purported to act in the name of or on behalf of the corporaton ceases to be bound by or enttled to the benefts of the contract.
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Discuss and defne the Doctrine of Caveat Emptor. Discuss how this doctrine relates if at all to
the Sale of Goods Act.
Caveat emptor means “buyer beware” or “buyer take care”. The doctrine of caveat emptor is the principle of law according to which the buyer assumes the risk for the conditons of the objects purchased unless some fact about their quality has been misrepresented. Essentally the
buyer must take care and be reasonably cautous. However the doctrine does recognize certain exceptons to prevent the abuse of unscrupulous sellers. The sale of goods act has created or codifed terms which are to protect the buyers and it forms exceptons to the doctrine of caveat emptor. Some say that the sale of goods act is a limitaton on caveat emptor, however these exceptons are consistent with the doctrine; they refer to situatons where the buyer cannot inspect the goods or when there is reliance on the seller by the buyer for informaton. The sale of goods act was passed in the UK parliament through a statute and applies only to the sale of goods, which includes all personal chatels other than choses in acton and money. It does not apply to the sale of services. The sale of goods act also requires that the contract be in writng if the goods are in excess of $50 dollars. The implied conditons are: 1.
Seller’s Title
– in ofering to sell goods, the seller impliedly represents that he has the right to do
2.
Descripton
– goods sold by descripton will conform to the descripton 3.
Suitability and Fitness/Quality
– the goods are of a type that is suitable for the purpose for which they are bought but only when: a.
The buyer expressly or implicitly tells the seller about the partcular purpose for which the goods are to be used, or
b.
Makes known that he relies on the seller’s skill or judgment or
c.
The seller normally sells these goods in the course of business
4.
Sale by Sample
– when a sample has been provided, the actual goods supplied will correspond to the sample in type and quality.
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Does the tort of negligence difer from intentonal torts? How are they diferent and yet how are they the same? Discuss. Provide examples of each kind of tort. In tort law there is two blameworthy states: negligence and intent. Intentonal torts are those torts caused with intenton, example: batery, deceit, or false imprisonment. Negligent torts occur when someone has failed to live up to the required standard of conduct; they have been careless.
Diferences: Intentonal torts are based on the presence of 3 elements: 1.
Intenton
– must be a voluntary act commited by the defendant, which is presumed to exist
2.
Causaton
– it must be the operatve cause, close in tme with no intervening acts
3.
Proscribed Harm
On the other hand, negligence does not require the element of intenton
. There are various approaches for establishing the tort of negligence. The best is advocated by Linden, who proposed 6 elements: 1.
The defendant’s conduct must be negligent – in breach of the standard of care
2.
The claimant must sufer some damage
3.
The damage sufered must be caused by the negligent conduct of the defendant
4.
There must be a duty recognized by law to avoid this damage
5.
The conduct of the defendant must be a proximate cause of the loss; it cannot be too remote a result of the defendant’s conduct
6.
The conduct of the plaintf should not be such as to bar his or her recovery – plaintf must not be guilty of contributory negligence and must not voluntarily assume the risk
Similarites:
1.
The test of causaton is the same for both types of torts, it’s called the “but for” test (the
accident would not have occurred “but for” the defendant’s actons
2.
Both types use the same standard of proof – the balance of probabilites which requires >50% for civil cases
3.
They have the same category of damage measurement – special damages, general damages, and punitve damages, 4.
They both focus on compensaton for the victm rather than punishment of the wrongdoer, so damages will be rewarded (want to put the victm in the same positon had the tort not occurred)
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What are the similarites between the laws of tort and contract?
Both in tort law and contract law damages are to be compensatory with the objectve of compensatng the wronged party. In tort law compensatons is used to place the innocent party
in the same positon they would have been in if the tort had not occurred. In contract law it is very similar except worded slightly diferent. In contracts compensaton is used to place the victm in the positon that they would have been in if the contract had been fulflled. In fact, contract law was derived from tort law.
As well, the diferent types of damages that may be awarded are almost the same in both the law of tort and the law of contract. There are:
1.
Special damages
– those losses that can be calculated with accountng accuracy up untl a partcular date
2.
General damages
- losses that cannot be calculated with accountng certainty (future costs or pain and sufering), 3.
Punitve damages
– are ordered, are discretonary, and given when the defendant is guilty of conduct that can be described as vindictve, aggravated or retributory
Also, in both tort law and contract law there are elements that must be proven to the same standard of proof – the balance of probabilites. In tort law there are 3: intenton, causaton, and proscribed harm. In contract law there are 6 elements: ofer, acceptance, consideraton, capacity, intenton to create legal relatons, and legality of the contract. Thus in tort law and contract law there is an element that concerns intenton and in both the laws this element is presumed to exist because it if very difcult for the plaintf to prove that the defendant had intent. Finally, both tort law and contract law use the principle of remoteness – whether the damages were foreseeable at the tme of the contract. If using something for an obscure purpose, the seller cannot be liable unless he is aware of the remote use of the product at the tme of sale.
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What is a professional? What are some examples? What are the 5 types of professional Liability? Discuss why professional liability is expanding.
Professionals are a member of an occupaton that is regulated by a delegate body that is created by statute, and the directors of the body are elected by the members of the profession to govern its afairs. The delegate body creates subordinate legislaton relatve to the following: 1.
Admission
to the profession
2.
Code of conduct
in respect to professional actvity
3.
Discipline
in respect of members of the profession who violate the subordinate legislaton established by the delegate body
4.
Educatonal requirements
of being a member of the profession
They were created historically to protect the consumer, because you want certain standards created so that the client knows they are dealing with a credible person. Examples: accountant,
lawyer, doctor, engineer, dentst, architect (traditonal professionals)
The 5 types of Professional Liability:
1.
Criminal Liability – held criminally for one’s acts
2.
Professional Liability – in breach of a code of conduct by professional body
3.
Contractual Liability – breach of contract
4.
Fiduciary Liability – to perform dutes with care and skill and in good faith
5.
Tort Liability – intentonal and negligence acts
Professional liability is expanding for many reasons: 1.
The practce of professionals is becoming more complex so there is greater chance of making an error
2.
There is a tendency for professionals to take on more clients and fles due to economic pressures, therefore greater chance of error, 3.
Instantaneous communicaton through technology has created an expectaton for immediate results so professionals act more hurriedly and more errors occur
4.
Clients are more aggressive, sophistcated and litgious, 5.
Normal rules of negligence law are being applied to professionals and thus professional liability is expanding due to various court cases. Example, the Donoghue v. Stevenson case established the neighbour principle (don’t need a contract to have a duty of care with a party) and the Hedley, Byrne v. Heller case which determined pure economic loss was deemed sufcient to ground a claim of negligence against a professional. The only harm recognized previously was if it was physical
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6.
The advent of contngency fees has made it easier to retain a lawyer and sue professionals
In the context of the law of contract, misrepresentaton exists both as a ground to impugn a contract and also in respect of a breach of a term of the contract. Discuss both varietes of misrepresentaton and the consequences, including the applicable legal remedies.
As a ground to impugn a contract, misrepresentaton is voidable under the law of equity. Under
a voidable contract the contract stll exists. Since a voidable contract will remain enforced untl it is declared otherwise, ttle may pass under it from one contractng party to the other. The recipient of the ttle may then transfer the ttle to an innocent third party for value even though the intermediate ttle holder acquired the ttle by means that render the inital transacton voidable.
Misrepresentaton is either:
1.
Contained in the contract – then a breach of contract has occurred
2.
Not a term of the contract but rather a representaton that has induced an individual to enter into the contract. It is determined by the objectve test, the reasonable person standard. The remedies will depend on the type of misrepresentaton. If the misrepresentaton was:
1.
Innocent
– the party believed that the informaton was true, then the only remedy is to rescind the contract (no tort damages)
2.
Negligent
– the contract will be rescinded and damages awarded
3.
Fraudulent
– a party deliberately atempts to deceive the other party, then the contract will be rescinded and damages for deceit awarded. The courts make a further distncton
that the misrepresentaton can only be based on a false asserton of facts and not opinions. Downloaded by Vasd (vasd089@gmail.com)
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4.
Defne the phrase “implied term” in the law of contract. How do implied terms relate to an acton for wrongful dismissal? Discuss.
An implied term is a term that does not exist in a contract but nevertheless the courts will insert
it into the contract even though the partes never agreed to it. The court has the opinion that reasonable people would have agreed to the term when the made the contract if they thought of the possibility of the subsequent difculty arising. They are usually the result of long established customs or by precedence.
There are two types of implied terms in interpretng contract: 1.
Statutorily implied terms
– terms implied by statutes
2.
Common law implied terms
– terms implied by judges – ex. To fre someone you must give them reasonable notce, or else it is considered “wrongful dismissal”
In employment contracts the “reasonable notce provision” is an implied term that the courts have implied into non-collectve bargaining. It states that if an employer wants to terminate an employee, they must give the employee reasonable notce. It is also implied that employees must give reasonable notce, but they are rarely held to it. The major issue is in the case of wrongful dismissal where there is no just cause. In determining reasonable notce various factors are considered: length of service, type of occupaton, the state of the economy in general and in respect to the specifc occupaton, and the age of employees. It is usually between 2 and 4 weeks’ notce for every year of service up to a maximum of 2 years. This was determined in the UGG v. Wallace case. If an employee’s dismissal is handled in a mali fdes manner, the length of notce can be extended. The courts also allow for the opton of giving the equivalent of notce in severance.
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The Statute of Fraud indicates that certain types of contract are unenforceable because they are not in writng. What are the types of contracts that are afected? What does “in writng” mean?
1.
Promise by an executor or administrator of an estate of a deceased person to answer for
damages out of his or her own estate, 2.
Guarantee of the debt of another 3.
Agreement made in consideraton of marriage; prenuptal agreement 4.
Agreement concerning an interest in land, 5.
Agreement not to be performed for 1 year
6.
Ratfcaton of an infant’s contract, a minority contract
In writng: if a contract falls within the scope of the Statute of fraud, there must be a memorandum in existence containing the essental terms of the contract.
The identty of the partes, the subject of the consideraton, possession date include, must be signed by the partes, but doesn’t have to be in one document, can be included in several documents.
Only the party to be sued needs to sign it but sometmes that’s hard to predict in advance, so it should be signed by both partes. Downloaded by Vasd (vasd089@gmail.com)
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As discussed in the lectures and textbooks for this course, what are the grounds upon which a
contract can be “impugned?” What is the efect of a contract being impugned and how can these grounds be categorized? Also discuss how each form of invalid consideraton is a manifestaton of a gratuitous promise.
Void – To decide that a contract is void is to say it was never in law formed at all; if it is void there is no contract. Contracts can be deemed void when:
1.
Missing an element or uncertainty
2.
Non est factum (not my doing, illiterate people being misled)
3.
Mistake of subject mater or identty
4.
Errors in recording contracts or transcripton Voidable – Where a misapprehension or misrepresentaton would render it unfair if the contract
terms were enforced against him or her. Contracts can be deemed voidable when: 1.
Misrepresentaton
– of informaton
2.
Duress
– illegitmate pressure such as exerton of physical force, threatening physical force or economic duress
3.
Undue Infuence
– The dominaton of one party over the mind of the other to such a degree as to deprive the later of the will to make an independent decision
4.
Diminished Capacity
– vegetatve state or being a minor
Unenforceable 1.
Requirement of Writng
– Some contracts in certain jurisdictons require contracts to be in writng to be enforceable, such as those types of contracts covered under the Statute of Frauds (however, this was repealed in MB). Also, the Sale of Goods Act requires writen documentaton for the sale of chatels in MB over $50 to prove there is a contract. 2.
Illegality
– the contract is illegal
A gratuitous promise is a promise made without consideraton in return. It is not enforceable by the laws of contract. There needs to be an exchange made of some sort. There are various manifestatons of the gratuitous promise:
1.
Past consideraton
– is no consideraton, a promise made to reward for an act previously gratuitously done is not binding. There has to be an exchange because a contract is based on an exchange.
2.
Existng Legal Dutes and Consideraton
– when party A is bound by the existng contractual duty to party B, a later promise by B to pay A something extra to perform the
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same obligaton, is not binding. However the common law will recognize the exchange of nominal consideraton from A to B and the promise by B to pay A something extra would be binding; for example, a pepper corn, small amount of money, or the seal. Equity however requires a transfer of real consideraton and will investgate if the consideraton was substantal. Equity does not consider the seal substantal.
3.
The rule in Foakes and Beer
– the rato: “a creditor’s gratuitous reducton of debt for a payment is not enforceable,”
because no consideraton was exchanged. The borrower will need to use some form of nominal consideraton. This has been replaced by statute.
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What is a Negotable Instrument? What are 3 types? What 7 elements need to be present for a contract to be a negotable instrument?
Negotable Instrument: means to transfer funds between partes to a transacton without the immediate and physical exchange of cash.
Negotable instruments create a debtor-creditor relatonship and form a contract. First utlity is the replacement for cash so we don’t need wheelbarrows of cash. It also gives greater certainty to certain types of assignments. Not all fnancial instruments are negotable instruments. The rules that govern negotability distnguish the NI from others.
3 Types:
1.
Promissory Notes: prepared by the debtor, a writen promise to pay
2.
Cheques
3.
Bills of Exchange
Criteria for Negotability: 1.
Promise/order must be in writng.
2.
Obligaton must be for money payment(s) (can’t be for 3 dozen carrots).
3.
Sum of face of instrument must be for a certain fxed sum.
4.
Promise/order must be unconditonal.
5.
Instrument must be payable at a fxed or determinable tme or upon demand.
6.
The whole instrument (complete sum) must be negotated (not just part of it).
7.
The Instrument must be signed by drawer/payer (the debtor).
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What are Secured Transactons? What is Collateral? What are the advantages of secured transactons? What are some examples? What did the Personal Property Security Act do?
Secured transactons mean the lender has security. If the debtor doesn’t pay, the lender can sue
or seize an item. Most common secure transactons is mortgages; if the debtor doesn’t make payments the bank seizes your home by “foreclosing” on you. Security or collateral, is some insurance to the creditor that the debt owing will be paid or recovered from certain assets of the debtor. Ie. if the debtor does not pay, the creditor has some ability to seize property to satsfy the liability of the debt beyond the normal ability to execute on a judgement.
Collateral – security is dealt with in a separate contract. When you buy a house there is a contract to purchase the house and a separate contract with the lender for security, ie. the mortgage. The second contract is referred to as the collateral contract. The object of security, the house, is known as collateral
Advantages:
1.
It is more direct, efcient and less expensive than the court system
2.
In courts, afer receiving judgement, you stll have the hassle of collectng
3.
You have priority over general creditors to seize property
4.
Interest rate is lower for the borrower because there is less risk for the lender
Examples:
1.
Conditonal sales contract
– the transfer of ttle (ownership) to the buyer is conditonal on the buyer’s completon of a series of scheduled instalment payments.
2.
Chatel mortgages
– ttle is transferred by a mortgage
3.
Share hypothecaton
– used to secure a private share purchase. The physical shares are pledged and transferred to the lender (ofen the seller of the business)
4.
Floatng charges
– a general mortgage of all assets owned and future assets except those
used in business operatons by the borrower
Personal Property Security Act
: emerged to establish a single unifed system with common rules for the following purposes:
1.
To defne a secured party’s remedies against the debtor
2.
To create one system of registraton for all security interests (doesn’t mater what kind of security interest)
3.
To defne priorites between a secured party and third party purchasers and indeed to defne priorites between all secured partes and general creditors.
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MISSING STUFF:
Queston compiling everything on certainty (this was on Richard’s exam, something along the lines of ‘in what ways do statutes and doctrines in canadian law provide for certainty?’)
Queston on bankruptcy
Queston on negotable instruments
Queston on secured transactons (this was on Richard’s exam, something along the lines of ‘as a
creditor, why would you prefer to lend money as a secured transacton?’)
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