Law Lecture 6 – Nov 6
Term Paper –
Mike Harris uses a system (email and ask about this system) where they don't have to go
through parliament. Closes the women hospital in Toronto, the Mont Ford Hospital in
Ottawa – Francophone’s used their constitutional rights to secure the Mont Ford Hospital,
and the language right is a quasijudicial norm and you cannot use it. The government
went before the appeal court and lost; many provincial governments recommended not to
go the Supreme Court because when the Supreme Court makes a decision, it becomes
law for the rest of Canada. The Federal government revamped the Mont Fort and put in a
350 million package to build another one. Benefits today is the next thing to go (first is
pension, then health benefits) – make sure your contract secures these. The norm set in
the public sector are mirrored in the private sector. **In your contract establish secured
What is contract law about
o An agreement between parties, regarding the execution of promises where
there is mutual consideration and is enforceable before the courts.
o The idea is that a contract is between different types of parties
o A promise enforceable by law
o Paper is on employment law –
o Example: see delavile (disease common amongst hospitals, employees and
patients bring in stool as preventative measure). If you are actually going
to be operating in hospital, you provide the hospital with stools when you
start, they freeze them, and then they can exrete bacterial cultures to treat
these. The problem is, at the hospital, when people are waiting 5 or 6
hours with their stool, it starts to smell – who has to clean this? Is this part
of the janitors tasks to clean these containers. If the contract says it, you
have to do it, it is your obligation. The General Hospital in North York is
actually facing this right now.
What are the legal factors that affect the creation of a contract?
o 1)Communication: the relationship in which we inform the parties of their
obligations. The terms have to be very well established.
Must focus on the details and the technicalities
How do we make sure parties understand these relationships
Example: promotions at Sens game that if the Sens score a goal in
the last 60 seconds, you get a free Big Mac. Did they say one Big
Mac per person – no, so they had to give the Professor 4 for his 4
tickets, even though it was just him.
o 2) Bargaining power – equal bargaining power in the ability to negotiate.
This concept assumes individuals are able to look after their own affair. It
doesn’t necessarily mean you are both savvy. The objective standard test: What would a reasonable person
negotiate in the circumstances. It is a matter of context. Is it so far
from reality, that you would think it could not happen? For
example, Mike Duffy filing 42 expense claims when he wasn't
physically at the place where the expense occurred. This is too far
from possible for it to be reasonable.
Due process: It is a matter of circumstances and following the
3) Business relationships: how do we create the contract and we entertain the
relationship between the parties. The key thing is dealing with this concept, how
did we approach the relationship to create the contract, what was the intention of
the parties, and what were the presumptions it was built on. For instance, buying a
vehicle; buying a used vehicle; did you take the right steps to ensure you are
protected (check its quality).
4) Economic reality: The context in which we sign contracts. The interest rates
resulting from the difficulties of the system. For instance, on bonds, you want a
higher interest rate because you are taking a risk, it involves the notion of
securities (Blackberry offering 7% for bonds) – Blackberry has quality patents.
Blackberry and Apple copy each other, who ever is copying more will be paid out
a certain amount of shares. Blackberry sued many times in the past – so now they
are licensing things out – blackberry is going back to software.
5) Reputation of Management: Business expectations in terms of reputations in
management. Costco will happily take everything you want to return because they
make a ton of money. They have a cop on weekends to control traffic.
a. An offer is a promise to perform a specific act on certain terms.
Consequently, we have an agreement to execute specific things. For
example, advertising is not an offer; you are inviting people to treat.
Advertising becomes an offer if it is very specific; for instance, putting
up a sign for a reward of 250 for the cat. Someone returns it but it has
been hit by a car; it is dead, the person is still entitled to the money.
This is the same concept as a ticket sale approach. You bought a
hockey ticket, and they give it to someone else; your ticket is a
contract; if a clause is printed but if it is not brought to your attention,
it is not binding (for example, online you have to click the I agree
button). The clause must be brought to the person’s attention.
Standard form contracts; you have to be made aware of it. The ones
online are deadly – many require you to scroll down manually.
2) Acceptance: When there is a clear commitment to be binded by the promise.
Someone is making a promise, and you have to communicate that acceptance.
a. The first one can be by a verbal statement.
b. The second can be in writing.
c. The third one is by mail (acceptance by mail is when it is delivered in
the mail box it needs to be stamped to confirm the date – Canada Post cannot prestamp for you). The contract is formed where we drop the
d. The fourth is electronic means – we always need to confirm the
acceptance of an agreement (how do you know they received it). When
you buy shares on the web – you send in the acceptance, and they need
to confirm they receive it, otherwise the transaction is not complete.
Over the phone – receive the words over the line. The contract is
formed when we receive the confirmation.
3) Consideration: the price paid for a promise
1) Bigg vs. Boyd: One part believes that they have concluded a term. The other party
still believes they are in a negotiation file. The idea behind this is the notion that
the purchase of a property. There is an exchange of letters, but where there is a
misunderstanding of the assertions of the parties. Lets look at the negotiation of
the parties. Let look at how the reached the agreement. The language itself will
dictate the outcome. In your term paper. If one party thinks they have a deal, and
the other thinks they are still negotiating – they will look at all the letters/emails
between the people to see what people really thought. Whenever you have a
meeting, return an email to clarify what you talked about. Two parties believe
there are different assertions. They look at the intentions of the party based on the
language, and the objective reasonable standard test proves it
2) Dickinson vs. Doggs : Can we renegade the commitment of an offer for a given
time? For instance, I want to buy your property, and they say you have until
Friday to do so. The purchaser asks for an extension, and the seller agrees to keep
it until Monday. Then the guy changes his mind; is he entitled to do this? It was
permissible to do that, because the offer can be properly revoked because it was
not accepted, so the buyer can revoke it at any time. The only acceptance was if
the buyer had paid extra money to keep it open. Unless you make payment that
was accepted, the offer can be revoked. Example: Lindros was on pace to beat
Gretsky; then he was drafted, his mom advises him not to sign with the team, so
they sit him on the bench. Then the Quebec Nordic questioned if they really
wanted him. The GM is now the President of the Olympic Committee, and
Lindros will never be on the Canadian team. Never burn a bridge. There was a
deal; Lindros ended up in Philadelphia, then Toronto. The Quebec Nordic gets
3) Lowe vs. Upperclemings: This is a situation where there was a contract and a
problem arose. There is an issue in how we draft a contract. There are issues
regarding the construction of an amusement park. They have reached an
agreement, but it is never signed. The terms are not properly spelled out. There is
extra costs that generate from production. We look at the actual agreements and
how people have accepted the offers. What we do conclude is that when people
accept, and start acting upon the terms, they have agreed to the term, even though
they haven’t signed the contract. The element is that you do not properly negotiate the terms of the agreement and start executing the contract, then the vagueness of
the agreement will impact you. Agreed, but didn't go through the formalities
(similarly to entering into marriage without make all the preparations). For
instance, “agreement to pay graduate studies” – what are graduate studies?
4) Carlille vs. Carbolic : there was advertising, and they are saying we will pay you
100 dollars if you have a disease and you are using this product (they give a reward).
The usage of the cream itself, does it generate the contract? You can communicate
traditionally the acceptance. If you use the product as acceptance, then it is the
creation of a contract. (example, in a buffet, as soon as you put food on your plate,
you have confirmed acceptance. Then you have to pay). Agreements are often made
just because of conduct.
In Ontario, if the price is higher at the cash then what is advertised on the shelf, then its
free if the item is under 10 dollars
If its 15 dollars on the shelf and they punch in 16, then its 10 dollars off, pay 5
1978 – women are legally equal to men
• Ring ▯not entitled to speak to other men without the presence of their fianc é. Men
did not have this
Consideration – price you pay for the execution of the promise
• Reasonable payment:
o If consideration is so low that it is unreasonable, it becomes a gift. Ex:
computer for 300 instead of full price
o If it is not reasonable contract law does not apply
o Unilateral contract notion of doing a promise without the expectation of
receiving a promise in return or other payment.
1 week of salary per year to Carleton to give back to the school
gratuitous promise: only required to pay if they act upon it for a
Example – Eric Sprott
fiscal fraud if your money is going to something else
• A promise in reduction of debt: your saying to someone if you pay me early you
pay 800, instead of 1000. If you pay early, the 200 dollars can still be asked
because there is no exchange of consideration (nothing in return) unless he has to
do something to make it happen
Terms of agreement – types of terms:
• Express terms: explicitly provided and defined
o When I give you a promise I will tell you that it is enforceable
o Understand the interpretation of the term Ex: veggie burger ▯what is a veggie burger ?? How do you know
there is no meat? There is no legal definition
o Three factors of an express term:
1. Construction and interpretation: We will look at the intent of the parties to
see what they are trying to define for. What is the purpose, what are we
trying to construe
2. Narrow perspective: If the term is more specific we will use a narrow
approach to define it ex: contact lenses to correct, for changing color to be
3. Definition of drafting of a clause: the more definition there are in the
contract, the more your specifying and narrowing the terms.
o Can use a dictionary but it gives a literal definition not in terms of
• Implied terms: are a part of the contract world ▯not spelled out but something you
understand as a part of the contract
o Essential in the necessity of making the contract work.
o These terms can not all be covered for
1. Business efficacy: would not be able to actually complete things.
Cannot tell you exactly what to do all the time or the contract would
never end. Standard business practices
2. Customs or trade of the industry
a. Buying cupboards for the kitchen to install them, but have to
get them removed
3. Previous dealings:
a. Steak sandwich – the usual – the guy doesn’t need to be told
what to use as he has already been told
o If the law provides for the provision, then it overrides everything. Ex: non
for profit legislation – 10$ default system, not in the textbook. It is a
legislation that is already established.
Key things of terms of agreement
• Specific contract laws – rules that exist to define how we should be
making/analyzing a contract
o Entire contract clause: dealing with a concept where the parties agree that
the term of the agreement is complete. If it is not in the agreement it does
As any verbal promise is not enforceable
o Parole evidence rule: a rule that limits the evidence a party can introduce
concerning the content of the contract
Cannot use a verbal statement to complete or explain a written
statement unless it is a minor correction
Example: what does the word disability mean
o Quantum meruit : reasonable sum we will give for the purchase of
goods/services o Conditions of sequence: event or circumstance that if/when it materializes
will bring an end to the contract
o Condition of precedence: something we need to complete before we
execute the terms
o Exemption clause: where you cannot claim compensation resulting from
an event that causes injuries
o Limitation of liability clause: specific amount that you can claim,
regarding an injury ex: kettle in the instruction manual
Competency & legal capacity –
Legal capacity: looking at the actual measures that allows a person to be binded by an
1. The notion of minors: considered an adult at 18, drinking at 19, 16 for health
reason. Changes based on location
a. Key rule: a minor cannot be binded if it causes hardship that are
associated with necessities of life
2. Mental capacity: when an individual cannot express his thoughts and there is a
limitation in understanding the consequences of his actions
a. Cardiologist example, alzeihmers
3. Duress: whether is a threat of harm or this is this coercion to cause harm
a. Ex: sex tape – used to bribe criminal provision
4. Under due influence: someone is manipulating you because they have the
ability to remove your free will
a. Authority, police officer – pressure
b. Presumption of conduct: pregnant – pressure by doctor to breastfeed
5. Enemy of the state: Government defines the enemy of the state for people who
use violence as means to achieving their result
a. Criminal offense to do business with them
Law Lecture 8 Wednesday November 20
*** MAKE SURE THERE IS AN ARBITRATION CLAUSE – in terms of ethics, look at
if they are having them waive all of their rights ****
When you speak in the question period, you are required to speak the truth – i.e. the chief
of staff for the prime minister sent an email giving Mike Duffy his options – did the
Prime Minister lie to the House? Technically, the PM may lose the confidence of the
House of Commons. This is an aspect of fiduciary duty.
FLQ – hiding a guy in the closet, was found out by cops, he got his legal pardon and
becomes a lawyer, is appointed to the bench. Appointed to Superior Court, and then
someone challenged his ability to be on the bench because he arbored a falcist. If you
want to be a judge in Canada, you need uphold very high standards. Lawyers – need to give the limits of how far you can go
Bribery – Jean Chretian had a mentor, he was paid a dollar a year, but always making
sure that Jean Chretian was not getting into trouble. For example, the Sponsorship
scandals – people took funds and used them for their own needs (result of referendum),
so they began to run campaigns to run the brand image of Canada. This guy was a
Federal Government employee, but they made sure the Government could never say they
knew what was going on. PMs never take money for their own sake. Journalist Daniel
LeBlanc receives envelopes that inform him of how the money has been spent at the
sponsorship scandal, coming from inside the public service. The crown can only sue for
restitution of the funds within 3 years of the event. If the public servant is high enough in
the government, they can cross examine, but the journalist wont reveal his source.
Last week – enemy of the state, legal capacity
Enemy of the state: an enemy of Canada used violent means to achieve their
objectives. Can not use violent means against a friend of Canada; those who take
violent means cannot be friends with Canada. It forces business to not do things
that are ethically wrong
The largest engineering consulting firms in Canada, was hiding briberies of public
officials in foreign countries. This happens when NATO is bombing Libya. SNC
says they have lost 50 million dollars in Libya, much of their money that went to
Gadafi. Senior executives were uninformally rewriting the books to pass on 50
million in different accounts.
One of the countries that has the least bribery of public officials is US. Criminal
legislation nails those executives at the top.
Terms of contract
express vs. im