Contract Law Cases.docx

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Management and Organizational Studies
Management and Organizational Studies 2276A/B
Frederick King

Contract Law Cases 3/19/2013 6:19:00 PM Cases FORMATION OF CONTRACTS: OFFER AND ACCEPTANCE Campbell v. Scooter Studios Ltd., Manitoba Trail Court  Facts: o Lease expires, so a new lease negotiation is sent to the lessee for a 3 year lease and higher rent o Lessee changes the terms to one year and less rent, signs it, sends it back without notifying the landlord that the terms were changed, the landlord signs it, but then notices the tenant changed the lease  Ratio – the objective test for consensus o A reasonable person would conclude that both parties were aware of the terms so a contract did exist Mlodzinska et al. v. Malicki et al., Ontario Court of Justice  Facts: o One party was prepared to settle in a case and left the room to discuss, then decided to revoke their decision to settle by writing it on a piece of paper to hand it to the other party when they came back in o The other party wrote that the accepted the settlement on a piece of paper  Motion – request for procedural remedy/relief (break, strike a witness, change venues), the result is an order o Juries don’t hear motions o Judge orders for the case to be dismissed and that the exchange of acceptance and revocation took place at the same time, and that the acceptance trumped the revocation o The unsuccessful party appeals the order – the first level of appeal is not to a different court, its to a different judge of the same court  Result was that the lawyer holding up his hand signaling the parties were back at zero happened before the acceptance and the order was overturned Hyde v. Wrench, 1840  Facts: o Plaintiff made an offer to the defendant to buy his farm o Defendant rejected it and made a counter offer o Plaintiff then made another counter offer only to have the defendant refuse again o The plaintiff then said they would accept the counter offer the defendant proposed, but the defendant alleged there was no contract  Court said that the plaintiff, instead of accepting the proposal from the defendant, rejected it and made a counter offer o This put an end to the defendants offer and left the following proposal by the plaintiff unaccepted Scanlon v. Standish, Ontario Court of Appeal  Reinstating that the delivery of a counter offer terminates the power to accept the initial offer Eastern Power Limited v. Azienda Communale Energia and Ambiente, Court of Appeal for Ontario  See international law Kanitz v. Rogers Cable Inc., Superior Court of Justice  Facts: o Sued Rogers for breach of contract of not providing good service o Rogers made a motion to dismiss the case because all disputes would be settled by final and binding arbitration and not litigation, as outlined in their contract o Kanitz said that Rogers can’t just change their agreement, except Rogers followed procedures and notified their customers of the change in the procedures  Court granted the motion, saying that the change in contract was acceptable CONSIDERATION Kohler Canada Co. v. Porter, Ontario Superior Court of Justice  Facts o Kohler gets Porter to sign an employment agreement, which Porter does do, and it says that after you leave Kohler, you will not work with any other company that is in competition with Kohler for one year after o Interlocutory injunction (temporary injunction)  Court says there was no contract o There was no consideration – previous consideration is no consideration because Porter already had a job so he didn’t get anything for signing it  Court also said that the non-competition clause was not reasonable o Courts will not enforce contracts that go against public policy o Contract will not be enforced if it prevents someone from making a living o Void for legality  Ratio – the fact that there was no consideration  Kohler wanted a precedent so no other employees would do the same (work for competitors) and to take down their competitors Central London Property Trust Limited v. High Trees House Limited, 1947  Facts: o The plaintiff (Central London Property) granted the defendants (High Trees – a subsidiary of the plaintiffs) a tenancy for a block of flats for the term of 99 years at a rent of 2,500 a year o The flats were new and not fully occupied because of the lack of people in London due to the war o Under the poor war conditions, it was apparent that the rent owed under the lease couldn’t be paid out of profit from the flats  A written agreement was to be made and the plaintiff wrote to the defendant saying that the rent would be reduced by half per year o Years later, after the war, the initial person who put the promise into play passed away and his partner took his place  He then said that since the war was over, the defendant owed the rest of the rent in arrears  Courts said that promissory estoppel should apply o Even though the war was over and the flats were fully occupied, such a promise cannot be overturned Med-Chem Health Care Inc, Ontario Superior Court  Facts: o After Med-Chem went bankrupt, the landlord filed a claim for rent in arrears on the premises rented by the tenant o The lease showed a rent higher than the tenant actually paid  Court said the doctrine of promissory estoppel applies in this case o There was a course of conduct over an extended period that showed the landlord didn’t rely on strict terms of the lease o The rents were always paid by Med-Chem and were always the same for years prior to its bankruptcy o The same rent was also paid by other companies renting CAPACITY Re Collins, Supreme Court of BC  Facts: o Philip Collins and Ms. Collins were divorced, each receiving a settlement o Ms. Collins wanted to move to Vancouver, so discussions commenced with Philip Collins about his possible contribution  Ms. Collins located a suitable house and Philip Collins paid $750,000 and created an irrevocable “Collins Children’s Trust” to hold the title with the intention of providing a home for Ms. Collins and he two children until the youngest child turned 20, at which time the children would become the property tenants o Ms. Collins wasn’t happy with the ownership contract and after talking with the children, they all signed a new contract saying that the children transfer their beneficial inters tint he trust fund to Ms. Collins, where she would pay their living expenses until they were 25  The court said that the infants signing the contract was acceptable because they both understood what they were entering into o However, the law states that contracts may be entered into on behalf of the infant if it is believed to be for the benefit of the infant  The court didn’t deny that the eldest child had his mother’s emotional well-being in mind, but they believed that Ms. Collins set up a chain of events leading them to believe this contract was necessary  If the children wanted to make the gift once their property was theirs they may, but at that time the children were not bound by the new contract LEGALITY Cerilli v. Klodt, Ontario High Court  Facts: o Cerilli and Robert Klodt (male defendant) had entered into a scheme stating a false price of $45,200 for the purchase of Klodt’s house (where he and his wife were joint tenants), where Sheila Klodt (female defendant) thought the price was $50,000 o The remaining $4,800 was to be paid by the plaintiff directly to the male defendant without the knowledge of Mrs. Klodt so she wouldn’t get any of it  Courts deemed the scheme fraudulent and therefore illegal so the agreement between the plaintiff and Robert Klodt was void and unenforceable in court Boyd v. Newton  Facts: o The plaintiff Boyd was trafficking in marijuana at a local arcade o A stranger approached him looking to buy some “grass” and Boyd told him it would be $10 o Boyd gave him the drugs and both of them went outside to a car driven by the defendant Newton, who was to pay Boyd o Boyd approached the car to get his money when Newton tried to push him out and drive away  Boyd grabbed Newton’s coat and the door frame and was dragged down the street o The injuries were suffered directly by Boyd trying to detain Newton in order to complete the illegal transaction  The court said that the injuries were sustained during the course of a joint criminal enterprise and not after (where it could’ve been deemed negligence against the driver) o Ex turpi causa non oritur action – from an illegal matter no action can arise Button v. Jones, Ontario Superior Court of Justice  Facts: o Jones sold his practice to Button o Of that amount the agreement and sale assigned $84,260 to patents, goodwill, charts, x-rays, models and records o Jones gave Button an association agreement which included a non-competition and non-solicitation undertaking which Jones agreed to for a period of 4 years o In 2000, Button gave Jones notice of the termination of the association agreement and gave notice to his patients that he intended to set up a practice in the same city and Jones, but didn’t tell them about the non-competition agreement or that he sold Button their records  Court said Jones was in clear breach of both parts of the non- competition/non-solicitation agreement THE WRITING REQUIREMENT Gendis Inc. v. Richardson Oil & Gas Ltd., Manitoba Court of Appeal  Facts: o Two executives come to terms on an agreement and shake hands on it for the sale of shares for $39 million o A written agreement is sent over that didn’t have the same terms as the oral one  Court said a contract existed o Believe a reasonable person would conclude that the parties intended to be legally bound Booth v. Knibb Developments Ltd., Court of Appeal of Alberta  Facts: o The Booths an the appellant, Knibb, were business associates and friends o In the course of foreclosure on the Booth’s land, Knibb purchased the land and permitted the Booths to remain there o The Booths alleged there was an oral agreement with the appellants that they could repurchase the land for the original sale price when they were financially permitted to do so o The appellants denied the agreement and relied on the Statute of Frauds claiming the Booths remained on the land pursuant to an informal tenancy agreement  Trial judge discussed the Statute of Frauds and the requirement that contracts involving the sale of land must be evidenced in writing to be enforceable o However, following the doctrine of part performance, courts have enforced agreements for the sale of land, even when not in writing, where and individual has relied on and acted pursuant to the alleged oral agreement o Judge concluded that there was an enforceable oral agreement for resale of the land to the Booths and ordered the title to be transferred  Appeal – the test for part performance is that the acts performed must speak for themselves and must point unmistakably to a contract affecting the ownership of the land – the Booths had satisfied this so the judged looked
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