Contracts cases and ratios

The Governors of Dalhousie College at Halifax v. Boutilier

Consideration must move from the promisee

Consideration must be good and sufficient

Charitable pledges are not enforceable

Wood v. Lucy, Lady Duff Gordon

If both parties must perform complementary action in bilateral K, offeror cannot terminate K for want of performance if they fails to discharge complementary obligation

Eastwood v. Kenyon

Past consideration is insufficient consideration

A mere promise is insufficient consideration

Thomas v. Thomas

Sufficient consideration is something that has some value in the eyes of the law

Courts will assess the sufficiency of consideration but not the adequacy of consideration

B. (D.C.) v. Arkin

Forbearance is good consideration, but only if it is for a valid legal claim

Lampleigh v. Brathwait

Prior request + express promise = legally sufficient consideration

Stilk v. Myrick

Performance of a pre-existing duty is not legally sufficient consideration

Gilbert Steel Ltd. v. University Construction Ltd

Performance of pre-existing legal duty is legally insufficient consideration

Greater Fredericton Airport v. NAV Canada (Part 1)

Post-contractual modification, unsupported by consideration, may be enforceable if established it was not procured under economic duress

Foakes v Beer

Part payment of a pre-existing debt is not legally sufficient consideration

Foot v. Rawlings

Paying in a different manner is sufficient consideration for a debt -> exception to rule that part-payment ≠ consideration

Rosas v. Toca

Variation of K, w/o new consideration = enforceable absent duress, unconscionability or other public policy concerns

Scotson v Pegg

Pre-existing legal obligation to a third party = consideration

Provender v. Wood

a third-party beneficiary, who is not a party to the contract, may still have the right to enforce a promise made for their benefit

Tweddle v. Atkinson

TP beneficiaries cannot sue as strangers to K

Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge & Co. Ltd

Only parties to K can sue for breach of the K

Must show consideration between TP beneficiary and other party if able to sue as agent

Privity = "fundamental principle"

Beswick v. Beswick (C.A.)

Where K is made for TP's benefit, who has a legitimate interest, TP can enforce [Denning]

Beswick v. Beswick (H.L.)

TP can sue as administrator of a party to K's estate BUT NOT in personal capacity

McCannell v. Mabee McLaren Motors Ltd

Principals may sue another principal to agreement with common agent

London Drugs Ltd. v. Kuehne & Nagel International Ltd

Two-part test to determine whether employees should benefit from K = (1) Intention -> must be intended that employees were covered and (2) Employees must be doing job AND acting in the course of employment

Fraser River Pile & Dredge Ltd. v. Can-Dive Services Ltd

Test for whether TP should benefit: (1) Did parties to K intend to extend benefit to TP seeking to rely on provision; (2) Are activities performed by TP contemplated as coming within the scope of K or specific provision

In appropriate circumstances courts must not abdicate judicial duty to decide on incremental changes to common law to address emerging needs/values

Brown v. Canada

Contract can generate tortious obligations to TPs therefore giving right to sue

Redgrave v. Hurd

Under common law, statements must be fraudulent to get recission (recklessly and w/o care whether true/false)

If someone makes a material representation it is presumed that the other party relies on that representation when entering k

Exception: if misrepresentor can prove other party had knowledge of facts or did not rely on the representation

Smith v. Land and House Property Corp

Under common law, statements must be fraudulent to get recission (recklessly and w/o care whether true/false)

If someone makes a material representation it is presumed that the other party relies on that representation when entering k

Exception: if misrepresentor can prove other party had knowledge of facts or did not rely on the representation

Kupchak v. Dayson Holdings Ltd

If recission for fraudulent misrepresentation is impossible, compensation may be granted as an alternative remedy

Dick Bentley Productions Ltd. v. Harold Smith (Motors) Ltd

If a representation is made for the purpose of inducing the other party to act on it, and they do, there is a prima facie presumption that the representation is a warranty (rebuttable)

Leaf v. International Galleries

Once the buyer has accepted or is deemed to have accepted chattels, the claim for innocent misrepresentation is barred

Law of mistake -> if parties mistaken about substance/identity (vs mistake about quality) of the goods = no meeting of minds = K is void

Hong Kong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd

Test to distinguish btwn warranty vs condition -> has party been deprived of substantially whole benefit of the contract? [Substantial Deprivation Test]

Third category of terms = innominate terms I.e., neither a condition nor warranty

Wickman Machine Tool Sales Ltd. v. Schuler A.G.

Language is a strong indication of parties' intentions but not determinative

Must look at the seriousness of the consequences of a breach of condition i.e., breach of a term of fundamental character going to the root of K

Bhasin v. Hrynew

General organizing principle of good faith: parties generally must perform their contractual duties honestly and reasonable and not capriciously or arbitrarily

Principle is already in our law and applied in many circumstances -> incremental change

Common law duty of honest performance: parties must not lie or knowingly mislead as an imposed term

CM Callow v. Zollinger

Silence that misleads the other party could be a breach of the duty of honest performance

Wastetech Services v. Greater Vancouver Sewage & Drainage

Exercise of discretion must be honest/reasonable under contextual analysis + depends on intention; must be connected to the purpose of K

Acting (aggressive pursuit of) in own self-interest is not a breach

Substantial nullification may be relevant but isn't determinative

Quebec (AG) v. Pekuakamiulnuatsh Takuhikan

(chatgpt) During negotiations, good faith does not require a specific outcome but does require parties to seriously consider each other's interests and avoid unreasonable or superficial conduct.

Machtinger v. Hoj Industries Ltd

Test for imposed terms is necessity -> only impose terms on the basis of law when necessary

Necessity = practical sense for the fair functioning of the agreement given relationship of parties (i.e., about fairness)

Scott v. Wawanesa Mutual Insurance Co.

Courts should not give different meaning to clause expressed by clear terms unless K = unreasonable or contrary to intention of parties (M)

If Dfs want to put an exclusion of liability in K they must give clear/sufficient notice to the other contracting party (D)

DirectCash ATM Management v Maurice's Gas

Ks must be interpreted as a whole in contextual approach within factual matrix of the parties (i.e., larger context/purpose of relationship)

Contra proferentem should be applied as a last resort measure when all other interpretive rules have failed; principle of last resort

Parker v. South Eastern Ry. Co Gabell v. South Eastern Ry. Co.

If person receiving ticket did not see/know there was writing = not bound

If person receiving ticket knew there was writing and knew/believed it contained conditions = bound

If person knew there was writing but did not know/believe there was conditions AND party issuing ticket gave reasonable notice = bound

Burden on party issuing ticket to give reasonable notice there is conditions

Thornton v. Shoe Lane Parking Ltd

Customer bound by exempting condition if he knows ticket is issued subject to it OR if company gave reasonable notice

Exclusion of liability for personal injury is so severe that notice must be given with red ink with a red hand drawn to it or something similar

McCutcheon v. David MacBrayne Ltd

Conditions not brought to attention b/f signing K = unenforceable (M)

Even if have some knowledge there are conditions, not enough to put risk on consumer (D)

Tilden Rent-A-Car Co. v. Clendenning

In signed Ks, sometimes L'Estrange rule applies depending on the context and whether reasonable notice given (proportionality)

Do not apply L'Estrange rule in consumer context / when signing does not reflect intention of the parties

Karroll v. Silver Star

Notice req applies as an exception to L'Estrange rule where a reasonable person should have known party signing was not consenting to exception

Pl has onus to show special circumstances apply

Loychuk v. Cougar Mountain Adventures

If there is to be a limitation on clauses completely denying all liability for negligence must come from leg not courts

Negligence does not rise to the serious criminality or egregious fraud required for public policy exclusion

Royal Bank of Scotland v Etridge

(chat gpt:) Undue influence can arise where one party places trust in another and the transaction lacks a satisfactory explanation.

Once shown, the burden shifts to the dominant party to prove no undue influence.

Banks must ensure independent legal advice is provided in such cases.

Morrison v. Coast Finance Ltd

Unconscionability: relief against an unfair advantage gained by an unconscientious use of power by a stronger party against a weaker

Test for Unconscionability: (1) Proof of inequality in the position of the parties arising out of the ignorance, need or distress of the weaker, which left him in the power of the stronger; (2) Proof of substantial unfairness of the bargain obtained by the stronger + (3) Burden switches to other party to show bargain was fair, just, and reasonable

Lloyds Bank v. Bundy

An exception to the L'Estrange rule is when parties meet on unequal terms

The law must give relief to those who, without independent advice, enter into agreements which are very unfair or transfers of property for a consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own needs or desires, or by his own ignorance or infirmity, coupled with undue influences or pressures brought to bear on him by or for the benefit of the other

Harry v. Kreutziger

Test for unconscionability (Lambert): Whether the transaction as a whole is divergent from community standards of commercial morality?

Heller v Uber Technologies

Test for unconscionability: 1) Inequality of power; 2) Improvident bargain

Unconscionability can be established w/o proof the stronger party knowingly took advantage