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COMM 393 Midterm & Final Notes.doc

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University of British Columbia
COMM 393
Deborah Meredith

COMM 393 Midterm Notes Common Law • Based on ‘theory of precedent’ o Stare decisis • Judges must look at past cases with similar or identical facts from a higher or equal to decide new cases Equity • Based on church law • “Courts of Chancery” gave equitable remedies o Specific performance o Injunctions o Rescission • Equity MAY provide a remedy if: (ALL required) o $ is inadequate to compensate o Subject matter of contract is unique o Act quickly o Act with “clean hands” Constitutional Law • Constitution Act, 1982 o Sets out country’s fundamental laws o Charter of Rights and Freedoms is ‘entrenched’ into Constitution Act • Charter of Rights and Freedoms o Applies to government o Prevents government from creating laws which are unconstitutional o All legislation is presumed valid until challenged in court  If challenged and found unconstitutional: Law declared “ultra vires” • Null and void o S.1: Reasonable Limits o S.2: Fundamental Freedoms o S.7-14: Legal rights o S.15: Equality of the law o S.33 “Notwithstanding”  sunset clause: Laws that are unconstitutional have a 5 year effective period Contract Law • Contract o Mutual exchange of promises OR a promise for an act • K law is very flexible but MUST contain six elements o Intent  All parties must intend to be bound by their promises  The law presumes intent to exist where parties are “strangers” (and in commerce) • Arms length transaction  Presumption is the opposite in K between close friends/family  Where the presumptions are rebutted, the court will ask • Would a reasonable person looking at outward conduct of the parties say they showed intent? • Carlill v. Carbolic Smoke Ball o Offer  Proposal + Intent with certainty and clarity on • Parties, Price, Subject matter 1  Proposal that lacks intent: “invitation to treat” • Not an offer, cannot be accepted  Generally, ads in papers are mere invitations UNLESS they call for a specific act  Offers lapse when: • Time limit specified in offer expires • Without a time limit, offer lapses after a “reasonable time” • The offer is rejected (counter offer = rejection) • The offer is revoked - Allowed if prior to acceptance • When a counteroffer is made (Any change to original terms of offer) • When either party dies or becomes insane prior to acceptance o Acceptance  Must be ‘mirror image’ of offer  “meeting of minds”  Acceptance must be an unequivocal acceptance of ALL terms without change  Offeror must control: • Terms • Attach a time limit • Dictate how acceptance should be made • Dictate what law (jurisdiction) applies and how disputes will be resolved  The acceptance must be made in the manner requested  If offer comes without instruction, acceptance should be made using the same method offeror used to communicate offer  Generally, K is made where acceptance takes place, and the law of that jurisdiction applies to the K  Modes of Communicaiton • Face-to-face • Telephone: Acceptance complete when words are heard • Fax, email: No law, K must be very clear • Courier: When documents are delivered and read • Mail o Postal Acceptance Rule o If the offer comes by mail (w/o stipulations on acceptance) or acceptance by mail is stipulated in offer, then acceptance is complete when letter is posted (i.e. dropped in mailbox) o K is made even if letter is lost o Revocation by mail is complete upon delivery to offeree’s address o Consideration  Unilateral contracts • Promise in exchange for an act/service  Bilateral contracts • Promise in exchange for a promise • need not be an exchange of equivalents • adequacy of exchange is not looked at unless there is fraud or pressure • “Seal” is a consideration substitute o Something has been given in return o Capacity  Law protects infants and incapacitated (mentally) persons  Infants Act • A contract made by an infant is unenforceable against him/her unless o Another statute makes K binding on the infant 2  Cda Student Loans Act o Affirmed by the infant upon reaching 19 o Partly perform/perform K within 1 year after reaching age of majority o If K is not affirmed and not performed at 19, then infant has until his/her 20 birthday to repudiate K • K is enforceable by infant against adult • Infants can be sued for negligence and can be charged on criminal offences  Intoxication/Insanity • Must pay a reasonable price for necessities o Food, clothing, housing, etc. • To avoid a K for a non-necessary, these persons must prove o So incapacitated didn’t understand K o The other person (party) knew of his/her condition at time of K o Legality • K can be oral or written – with 2 exceptions in BC o K for land must be in writing to be enforced o K for personal guarantees must be in writing Gratuitous Promises • Gratuitous promises are unenforceable because they lack consideration • Should SOMETIMES be enforced if certain factors can be proved o There must be a pre-existing K between parties o Which is later modified by one party making a gratuitous promise to the other (can be implied by conduct, and the promise can be to relieve the other party from a contractual obligation) o The other party relies on the promise to his/her detriment o The other party would suffer some hardship if the promise is not kept • If ALL can be proved, equity enforces the promise o Equitable Estoppel  Can only be used as a shield, not a sword,  Can only be used as a defense to a claim made by promisor Sale of Goods Act • Set of implied terms • Protects consumers from unscrupulous sellers • Only applies to the: o “Sale” where title/property/ownership passes from seller to buyer for money consideration o “of Goods” - Personal property: anything NOT attached to land (Tangibles/chattels) • Act does NOT apply to gifts, services, barter • Sale of food in a restaurant = good Warranty vs. Condition Warranty Condition •Minor, unessential term •Essential term •Breach of warranty does NOT ‘discharge’ •K discharged on breach K •K over – parties may walk away •Both parties must still perform K •Injured party has choice of remedy o $ or rescission (not both) •Injured party can sue for damages •K is unwound and parties are placed at status quo Sale of Goods Act S. 16 • Unless K states otherwise, there is an implied condition that the seller have title to goods before the sale to buyer 3 Sale of Goods Act S. 17 • Implied condition that goods correspond with their description • Breach must go to the essence of the good. A breach of a minor/secondary characteristic is a breach of warranty Sale of Goods Act S. 19 • In a sale by sample, there is an implied condition that the “bulk” of goods correspond with sample in quality • Buyer has a reasonable opportunity to inspect goods • Goods must be free from defects rendering them ‘unmerchantable’ that were not apparent on inspection (hidden/latent defects) Sale of Goods Act S. 18 • Fitness for purpose o Communicate purpose (w/in reasonable precision) o Show reliance on seller’s skill and judgement o Seller normally sells those goods • Merchantability o Goods not fit for any purpose o Not saleable, defective • Durability o Goods must last a “reasonable” time having regard to the use to which they would be put and all surrounding circumstances Sale of Goods Act S. 20 • Where a dealer sells new goods to an ordinary consumer (not for resale or business use) the seller may NOT exclude liability under S. 17, 18, 19 SGA • Any attempt to do so is void • A dealer may exclude liability under SGA (17-19) if goods are USED or if dealer sells new or used goods to buyers for business, resale, commercial enterprise, corporation trustee in bankruptcy, liquidator, sheriff • However, if the dealer does not exclude liability, SGA does apply SECTION OVERVIEW • S.16: Seller must own goods • S.17: Condition of goods = description (no fundamental breach) • S.18: o Fitness for purpose  Seller is a dealer  Buyer makes purpose known  Shows reliance on seller  Not a sale under a trade name o Merchantability o Durability • S:19: Sample must match “bulk” of goods’ quality Exclusion Clauses VOID if: • Evidence of a fundamental breach o Goods are irreparable • Evidence of a fraudulent misrepresentation • Gross or criminal negligence • Sale of new “goods” to an ordinary consumer • Failure to give reasonable notice (eg. Waiver) Title and Risk • Risk of loss follows title 4 • Most K dictate when title passes • Otherwise, for sale of specific goods in a deliverable state, titles passes when K is made and it is immaterial whether the time of payment or delivery or both are postponed • Title of unascertained goods transfers upon delivery Frustration • A completely unforeseeable event (beyond your control) • After K is made • Makes K impossible to perform • If can prove frustration, NO damages are awarded and parties are left in original position Interpretation • Express Terms: Approaches o Plain/literary/dictionary definition o Liberal – context: Text over context o Contra proferendum: Case decided against party drafting the K • Implied Terms o Only if the term gives effect to the obvious intent of the parties Damages and Breach • Damages recoverable are those flowing directly from breach or those in the reasonable contemplation of parties at time of K • Some parties decide in their K what damages will be if either breach • “Liquidated Damages” o Parties agree to take this amount instead of suing • Courts will enforce a liquidated damages clause if it is a genuine pre-estimate of the loss capable of pre-estimate at the time of K • If it is exorbitant, unfair, unconscionable – penalty clause in unenforceable considering: o Sophistication of parties o What the K says o Industry standards  Real estate = 10-20% o The fact that the plaintiff suffers no loss or in fact makes a profit is irrelevant • Breach of condition: candidate + damages (PROMPT) • Breach of warranty: damages only o Purpose of damages (for breach): to place parties in position they would have been in if contract had been fulfilled o Damages must be reasonably foreseeable o Plaintiff must try to mitigate damages Misrepresentation • False Statement o Innocent: Maker honestly believes statement is true  Rescission o Negligent: Careless statement (usually made by a professional)  Rescission or damages ($) o Fraudulent:  Nullifies exclusion clause  Omission: Failure to disclose a hidden defect you are aware of at the time of K  Rescission or damages ($) o Damages = contract price – market value • Silence is not misrepresentation unless: o Contract = good faith (prospectus and insurance) o Real estate vendor must disclose hidden defects they are aware of 5 o Misleading
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