Engineering and Society Law Test

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What are the four main federal Acts governing intellectual property in Canada?

• Patent Act

• Trade-marks Act

• Copyright Act

• Industrial Design Act

What is the legal definition of an "Invention" under the Patent Act?

Any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter.

What key criteria must an invention meet to be patentable?

• Must be novel and useful

• Idea/principle must be reduced to something tangible

List the three conditions under which a patent CANNOT be obtained.List the three conditions under which a patent CANNOT be obtained.

1. Same invention has already been filed

2. Invention has been in public use

3. Invention has been disclosed to the public

What is the term duration of a patent in Canada?

20 years from the date of application.

What happens if an assignment or license of patent rights is not registered with the Patent Office?

It becomes void and unenforceable against a subsequent assignee or exclusive licensee who does register.

What remedies can a patent owner seek in an infringement court case?

• Injunction

• Damages sustained

• Recovery of defendant's profits

• Recovery of profits the plaintiff would have made

Who owns an invention created by an employee engineer?

Without a contract, inventions made by employees belong to the employee. EXCEPTION: If the engineer is specifically employed to invent and produces a patentable invention during employment, it belongs to the employer.

What is the definition of a Trademark?

A mark used by a person to distinguish their wares or services from those manufactured, sold, leased, hired, or performed by others.

What are the key licensing and packaging requirements for trademarks?

• Owner must maintain direct/indirect control over character or quality of wares/services

• Licensee must identify the owner and license on packaging and advertising

How long is a registered trademark valid under the original rules versus the 2014/2019 amendments?

• Original: 15 years (renewable indefinitely)

• 2014 Amendments (in force 2019): 10 years (renewable)

What must a plaintiff prove to succeed in a "Passing Off" action for an unregistered trademark?

1. Mark is identified with plaintiff's wares/services in the relevant marketplace

2. Customers buying from defendant mistakenly believe they are dealing with the plaintiff

List the key changes introduced by the 2014 Trade-marks Act amendments (in force 2019).

• Eliminates requirement to have used trademark prior to registration

• Changes classification of goods and services

• Broadens scope of what can be registered

• Reduces registration term to 10 years (renewable)

What is Copyright and what is its term duration in Canada?

• Definition: The sole right to produce, reproduce, perform, or publish an original work (or substantial part thereof).

• Term: Author's life + 50 years after death.

Who is the first owner of a copyright?

The author is the first owner, UNLESS created during the course of employment, in which case the employer is the first owner (unless agreed otherwise).

What are Moral Rights under copyright law, and can they be transferred?

• Rights to be identified by name/pseudonym (or remain anonymous) and the right to integrity of the work.

• Transferability: CANNOT be assigned, but CAN be waived in writing.

Who owns the copyright to engineering plans, and what restriction applies to the client?

Belongs to the author engineer (or employer if created during employment). The client cannot reproduce plans or use the design in a new structure without consent.

What is an Industrial Design and what are its core requirements and term duration?

• Definition: Features of shape, configuration, pattern, or ornament applied to finished articles judged solely by the eye.

• Requirements: Must be ornamental/aesthetic, novel, and original.

• Term: 10 years.

What is the filing deadline for an Industrial Design application?

Must be filed within 1 year of publication.

What conditions must be met for a defendant to be liable for unauthorized disclosure of a Trade Secret?

1. Information was confidential

2. Implied duty of confidence existed when communicated

3. Secret was strictly confined to a limited group

What is an employee's duty regarding trade secrets after employment is terminated?

The employee must NOT disclose confidential information/trade secrets, even after employment ends. Employers can seek injunctions and damages.

What is an engineer liable for under a contract, and what is the required standard of care?

• Liable for incompetence, carelessness, or negligence[cite: 2].

• The standard of care is the same as for tort law[cite: 2].

Describe the agency relationship between a client and an engineer.

• The client is the principal and the engineer is the agent[cite: 2].

• The engineer must act within the scope of their authority and should seek client approval before accepting a contract[cite: 2].

How should an engineer's remuneration and estimated fees be handled if not explicitly detailed?

• If remuneration is not agreed upon, the engineer should be paid a reasonable amount based on quantum meruit[cite: 2].

• Fee estimates must be cautiously made and emphasized as only an estimate, because clients are entitled to rely on the engineer's expertise[cite: 2].

Where can standard-form engineering agreements be obtained, and how should they be applied?

• Available from Professional Engineers Ontario and the Association of Consulting Engineers of Canada[cite: 2].

• They should be tailored for the contracting parties, which is best left to lawyers[cite: 2].

How can an engineer limit their liability by contract?

By including a provision to limit liability for damages, such as limiting it to the extent of the engineer's professional liability insurance coverage or to an amount less than the engineer's fee[cite: 2].

List the hierarchy of governmental authorities involved in land use planning and zoning, from broadest to narrowest power.

1. Province and its ministries[cite: 2].

2. Regional (or county) municipal authorities[cite: 2].

3. Local municipal authority (city, town, township)[cite: 2].

Define "official plan" and "lawful nonconforming use" in the context of municipal planning.

• Official Plan: The broadest planning document at the municipal level, which is implemented through local zoning bylaws[cite: 2].

• Lawful nonconforming use: An inconsistent land use that is already in place[cite: 2].

What is the difference between a "plan of subdivision" and a "consent to severance"?

• Plan of subdivision: Approval required to create smaller properties out of a large holding[cite: 2].

• Consent to severance: An application to a municipality for the individual re-division of parcels[cite: 2].

What are "density transfers" and "site plan control" in municipal land development?

• Density transfer: Increasing development density by purchasing public usage property and transferring its permitted density to the proposed zone, helping retain open spaces or historic areas[cite: 2].

• Site plan control: A requirement where a developer's proposed design for a new development must receive the city's consent[cite: 2].

Can an engineer be held liable in both tort and contract simultaneously?

Yes, Supreme Court of Canada cases have established that professionals can face concurrent liability in both tort and contract[cite: 2].

What are the potential legal consequences of fraud committed by an engineer?

• The contract may be repudiated[cite: 2].

• Damages may be awarded for the tort of deceit[cite: 2].

• It is a criminal offence punishable by imprisonment for up to 10 years[cite: 2].

Under the Criminal Code of Canada, what are the consequences of an engineer taking secret commissions (bribes or kickbacks)?

The principal-agent relationship is considered, and a conviction for taking secret commissions may result in imprisonment[cite: 2].

List the four Canadian statutes applicable to an engineer's duty of honesty and corruption.

• Criminal Code (Canada)[cite: 2].

• Income Tax Act (Canada)[cite: 2].

• Competition Act (Canada)[cite: 2].

• Corruption of Foreign Public Officials Act (Canada)[cite: 2].

What are the primary purposes of exclusion clauses or exculpatory provisions in a contract?

• To limit dollar amounts for damages if there is a breach of contract[cite: 3].

• To specify limitations periods[cite: 3].

• To preclude the entitlement to sue or claim[cite: 3].

What major legal doctrine was put to rest by the Tercon Contractors Ltd. v. British Columbia decision?

It put to rest the doctrine of fundamental breach[cite: 3].

How was a "fundamental breach" historically defined in the Harbutt's Plasticine Ltd. v. Wayne Tank and Pump Co. Ltd. case?

A breach of such a nature as to go to the very root of the contract, meaning an exemption clause would not protect the party that committed the breach[cite: 3].

What approach overruled the doctrine of fundamental breach in the Photo Production Ltd. v. Securicor Transport Ltd. case?

The "true construction approach," which allowed defendants to rely on an exemption clause[cite: 3].

According to Hunter Engineering Company Inc. v. Syncrude Canada Ltd., under what conditions will an exemption clause be upheld?

Clear and direct exemption clauses will be upheld if negotiated between commercial parties of relatively equal bargaining power, unless the clause is unconscionable[cite: 3].

Based on current Canadian law and the Tercon decision, what are the 2 exceptions that would prevent a clear exemption clause from being enforced?

1. If it is unconscionable[cite: 3].

2. If it is contrary to public policy[cite: 3].

How does the Tercon decision instruct courts to handle exemption clauses, even when a fundamental breach occurs?

Courts must look carefully at the true construction of the contract's wording and consider the true intention of the parties at the time the contract was negotiated[cite: 3].

List the 2 common ways engineering contracts on major projects may limit an engineer's liability.

1. To the extent of the engineer's professional liability insurance coverage[cite: 3].

2. To the amount of the fee payable to the engineer pursuant to the contract[cite: 3].

In the sample case study, why was Prime limited to recovering only $300,000 despite MachineWorks committing a fundamental breach?

Because, following the precedents set by Hunter v. Syncrude and Tercon, the clear wording of an exemption clause limiting liability will stand even in the event of a fundamental breach[cite: 3].

What are the two approaches to interpreting contracts, and what does each consider?

• Liberal: Considers the intent of the parties[cite: 4].

• Strict: Considers specific wording, possibly even dictionary definitions[cite: 4].

What is the Rule of Contra Proferentem?

Ambiguous wording will be interpreted against the party that drafted the provision[cite: 4].

Describe the Parol Evidence Rule and its main exception.

• Rule: Omitted conditions or evidence extrinsic to the written contract prior to execution are not part of a contract, even if verbally agreed upon[cite: 4].

• Exception: You must prove the contract was only to be effective if an agreed-upon condition occurred[cite: 4].

Under what circumstances might a court consider the "implication of terms"?

When parties have overlooked including an obvious term, making it reasonable to imply certain conditions (like work complying with the building code)[cite: 4].

List the four methods by which a contract can be discharged.

1. Performance (all parties completed obligations)[cite: 4].

2. Agreement to Discharge (agree to cancel or terminate)[cite: 4].

3. Discharge Pursuant to Express Terms (provisions state parties may terminate if specific events occur)[cite: 4].

4. Discharge by Frustration[cite: 4].

What is Discharge by Frustration and when does it NOT apply?

• Definition: Changing circumstances radically change the parties' obligations without default by either party[cite: 4].

• Exception: It is not applicable if circumstances simply make performance more onerous[cite: 4].

What is a "Force majeure" provision?

A provision providing that the time for completion will be extended in the event of events beyond the control of either party, such as war, riot, insurrection, flood, or labour disputes[cite: 4].

Why does a labour shortage generally not qualify as Discharge by Frustration?

• It makes performance more onerous but does not radically change obligations[cite: 4].

• The cause of delay could have been reasonably foreseen, stipulated in the contract, and accounted for in the tender[cite: 4].

Define a "Condition" versus a "Warranty" in a contract and the remedies for breaching each.

• Condition: An "essential or vital" obligation[cite: 4]. Breach entitles the non-defaulting party to damages and to consider the contract discharged[cite: 4].

• Warranty: An obligation that is not essential[cite: 4]. Breach entitles the non-defaulting party to damages only[cite: 4].

What is Repudiation and what two options does the non-defaulting party have?

• Definition: When one party tells the other (verbally or by conduct) they do not intend to perform contractual obligations[cite: 4].

• Option 1: Ignore it and the contract continues[cite: 4].

• Option 2: Assume the contract is discharged and claim damages, but this intention must be communicated "with reasonable dispatch"[cite: 4].

What is the "Duty to Mitigate"?

The party that suffers a loss must take reasonable steps to mitigate or reduce the amount of damages suffered, which courts take into account when awarding damages[cite: 4].

What is a Penalty Clause and what term should be used instead?

• Definition: Provisions where a party pays specified damages if a certain event occurs, serving as a genuine attempt to pre-estimate damages[cite: 4].

• Term to use: "Liquidated damages" rather than "penalty"[cite: 4].

When is a payment awarded based on "Quantum Meruit" and what does it mean?

• When to use: When there is no agreement on payment for services, or if a contract provides for payment but the obligated party repudiates and the innocent party treats it as discharged[cite: 4].

• Meaning: It awards "as much as is reasonably deserved" for time and materials[cite: 4].

Describe the doctrine of Substantial Compliance.

If a contractor substantially complies with terms but fails to comply with minor aspects of provisions, they are entitled to be paid the contract price less the cost of damages for those minor deficiencies[cite: 4].

What are Specific Performance and Injunction, and when are they typically NOT provided?

• Specific Performance: Courts require a party to perform a contractual obligation (often for land or unique items)[cite: 4].

• Injunction: A court order prohibiting or restraining a party from performing an act (requires a negative covenant)[cite: 4].

• Limitation: These equitable remedies are not provided if damages provide sufficient relief[cite: 4].

What does the Statute of Frauds of Ontario require, and which specific types of contracts does it apply to?

• Requires certain contracts to be in writing to be enforceable[cite: 5].

• Applies to contracts relating to interests in land and guarantees of indebtedness (but not indemnifications)[cite: 5].

Under the Statute of Frauds, if a contract is not in writing and is deemed "unenforceable," is it void?

No, it may be unenforceable, but the law can still recognize that it exists[cite: 5].

Define Misrepresentation and list the two main types.

• Definition: A false statement or assertion of fact that allows a contract to be rescinded[cite: 5].

• Innocent: The party does not appreciate the statement is false[cite: 5].

• Fraudulent: Made knowingly, without belief in its truth, or recklessly/carelessly regarding whether it is true or false[cite: 5].

What are the legal remedies for Innocent versus Fraudulent misrepresentation?

• Innocent: The deceived party must repudiate within a reasonable time and can claim compensation for damages[cite: 5].

• Fraudulent: The contract is rescinded, the deceived party can claim compensation for reasonable costs, and they can sue for damages for deceit[cite: 5].

Define Duress and Economic Duress in contract law.

• Duress: Threatened or actual violence or imprisonment used as a means of persuading a party (or a close relative) to enter into a contract, making it voidable[cite: 5].

• Economic Duress: Occurs when a party must show no alternative was available but to accept the arrangement or suffer severe economic loss, making the contract not valid[cite: 5].

What is Undue Influence in the context of a contract?

It occurs when one party dominates the free will of another to coerce them into an unfair contract, allowing the victim to repudiate the contract[cite: 5].

Differentiate between Rectification and a Unilateral Mistake.

• Rectification: Used for a common mistake where an agreement was inaccurately recorded, such as a secretarial error[cite: 5].

• Unilateral Mistake: A mistake made by only one party[cite: 5]. Legally, an offeree cannot accept an offer that they know was made by mistake if it affects a fundamental term of the contract[cite: 5].

Explain the difference between Contract A and Contract B in the tendering process as established by the Ron Engineering case.

• Contract A: Formed upon the submission of a compliant bid in response to a call for tenders[cite: 5]. There are as many Contract A's as there are compliant tenders submitted[cite: 5].

• Contract B: The "ultimate" contract that results from the selection of a tendering party and addresses the specific work or services to be performed[cite: 5].

What implied duties does the party requesting tenders owe to the bidders?What implied duties does the party requesting tenders owe to the bidders?

• They have a duty to treat all bidders fairly and not to give any of them an unfair advantage over the others[cite: 5].

• A privilege clause does not give the owner the right to include an undisclosed condition[cite: 5].

What is the legally acceptable process if all submitted bids come in over budget?

The owner should reject all bids per the privilege clause, adjust the scope, and start the process again[cite: 5]. It is a breach of the terms of Contract A to negotiate lower prices with select bidders instead[cite: 5].

When can a subcontractor withdraw their bid, and how does renegotiation of the main contract affect them?

• A subcontractor can only withdraw their bid before the close of the general contract bidding[cite: 5].

• Renegotiation of contract terms between the owner and the general contractor constitutes a counter-offer, which releases the general contractor from their commitment to the original subcontractor[cite: 5].

How can an engineering firm be held liable during the tendering process?

Engineering firms can be liable for negligently recommending a non-compliant bidder to an owner[cite: 5].

Define "Bid shopping" and state its standing in contract law.

• Definition: The practice of soliciting a bid from a contractor with no intention of dealing with them, and then disclosing or using that bid to drive prices down among intended contractors[cite: 5].

• Standing: It is considered unfair bid manipulation[cite: 5].

According to the Ron Engineering precedent, can a bidder withdraw their bid once submitted, and what happens to the tender deposit if the successful bidder refuses to execute Contract B?

• Because Contract A is formed immediately upon the submission of a compliant bid, the bidder cannot withdraw it[cite: 5].

• If the successful bidder does not execute the ultimate contract (Contract B), the engineering firm is entitled to retain the tender deposit for its own use and accept another tender[cite: 5].

What are the five essential requirements for a binding contract in Canadian common-law jurisdictions?

1. An offer made and accepted[cite: 6].

2. Mutual intent to enter into the contract[cite: 6].

3. Consideration[cite: 6].

4. Capacity of contract[cite: 6].

5. Lawful purpose[cite: 6].

What is the rule regarding the "Assignment of Rights" in a contract?

Contractual benefits can be assigned to a third party by one contracting party without requiring consent from the other party[cite: 6]. To prevent this, the contract must expressly state that rights are not assignable without written consent[cite: 6].

How does a counter-offer impact the original offer in a negotiation?

A counter-offer means the original offer is not accepted and no contract is formed on those terms[cite: 6]. The offeree making the variation in terms becomes the new offeror[cite: 6].

What are the two ways an offer can be made legally irrevocable?

The offer must either have "contract consideration" or be sealed[cite: 6].

Describe the timing rules for when the acceptance versus the revocation of an offer becomes effective.

• Acceptance by mail is effective when posted[cite: 6].

• Acceptance by telegram is effective when delivered to the operator[cite: 6].

• Acceptance by other methods is effective when received by the offeror[cite: 6].

• Revocation is not effective until the offeree receives notice of revocation, regardless of the method of communication[cite: 6].

What is the "Battle of the Forms" and how is it treated legally?

It occurs when a party attaches their own terms and conditions to a quotation or demands different terms[cite: 6]. This is treated as a counter-offer, not an acceptance of the original offer[cite: 6].

Are Letters of Intent generally enforceable as contracts?

Generally, no, they are considered an "agreement to agree" and are not enforceable because essential terms are missing[cite: 6]. They may only be considered an enforceable agreement if they are sufficiently detailed[cite: 6].

Define "Consideration" and state whether it strictly requires the payment of money.

• Consideration is the exchange of something of value between parties that induces them to enter into a contract[cite: 6].

• Payment of money is not necessary; the exchange of promises also represents something of value[cite: 6].

What is Equitable (or Promissory) Estoppel?

It is a legal principle that provides relief for a party who relies on a gratuitous promise[cite: 6]. It stops a party from reverting to strict contractual terms if enforcing those strict terms would produce an unfair result after they promised leniency without consideration[cite: 6].

How does contract capacity apply to minors?

Contracts are enforceable by the minor, but not by the other party[cite: 6]. Exceptions exist if the contract is for necessaries or if the minor ratifies the contract upon reaching the age of majority[cite: 6].

Under what conditions is a contract with a mentally incompetent or intoxicated person unenforceable?

• If the contract is for non-necessaries[cite: 6].

• If the other party was aware (or should reasonably have been aware) of the incapacity[cite: 6].

• The incapacitated party must repudiate the contract as soon as possible[cite: 6].

What are the two main ways a contract can be deemed void or unenforceable due to Legality?What are the two main ways a contract can be deemed void or unenforceable due to Legality?

• If it is contrary to statute law (such as the Bankruptcy and Insolvency Act or Competition Act)[cite: 6].

• If it is contrary to common law/public policy (such as restrictive covenants in restraint of trade, like a non-competition agreement)[cite: 6].

What is the general definition and fundamental purpose of a tort?

It is a private or civil wrong or injury involving negligence that arises independently of a contract, with the fundamental purpose of compensating victims[cite: 7]. Privity of contract is not required for tort liability to exist[cite: 7].

What 3 elements must a plaintiff substantiate to succeed in a tort action?

1. The defendant owed the plaintiff a duty of care[cite: 7].

2. The defendant breached that duty by their conduct[cite: 7].

3. The defendant's conduct caused the injury to the plaintiff[cite: 7].

How is an engineer's "Standard of Care" measured in tort law?

It is measured by the applicable professional standards of the engineering profession at the time the services are performed[cite: 7]. Engineers have a duty to use the reasonable care and skill of engineers of ordinary competence[cite: 7].

According to the Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. precedent, when is a person duty-bound to take reasonable care in exercising a special skill?

When one person relies on the special skill and judgment of another, and the second person knows of that reliance[cite: 7]. Without an express disclaimer, the defendant is liable to provide compensation for losses resulting from negligence[cite: 7].

Differentiate between Strict Liability and Vicarious Liability.

• Strict Liability: A party (like a US manufacturer) can be liable for damages resulting from a product even if they were not negligent or at fault[cite: 7].

• Vicarious Liability: An employer is held vicariously liable for the negligent performance of an employee[cite: 7].

What does Products Liability consider under Canadian law, and what is required under the Sale of Goods Act in Ontario?

• Products liability considers both contract law (implied contractual warranties) and tort principles (fault)[cite: 7].

• The Sale of Goods Act dictates that goods must be merchantable and reasonably fit for the purpose for which they are sold[cite: 7].

What is a manufacturer's "Duty to Warn"?

The manufacturer owes a duty to the consumer to warn of any dangerous potential of the product with appropriate labelling[cite: 7].

Define the torts of Defamation (Libel vs. Slander), Occupiers' Liability, and Nuisance.

• Defamation: Reputation is damaged by untrue public statements[cite: 7]. Libel is written; Slander is verbal[cite: 7].

• Occupiers' Liability: An occupier must exercise a standard of care to ensure the safety of individuals coming onto the property[cite: 7].

• Nuisance: Alleviating undue interference with the comfortable and convenient enjoyment of a plaintiff's land[cite: 7].

What happens if a tort or breach of contract action is started after the limitation period?

The action will normally fail because it is "statute barred"[cite: 7].

What is the "Discoverability" concept in relation to limitation periods?

The limitation period commences when the damage is first discovered or ought to have been discovered[cite: 7].

Outline the 2 main timeframes specified in The Limitations Act, 2002 (Ontario).

• The basic limitation period is 2 years from the date the claim is discovered[cite: 7].

• The ultimate limitation period is 15 years from the date the act or omission took place[cite: 7].

Under the 2006 Amendments to Ontario's Limitations Act, can parties change limitation periods?

Yes, contracting parties can agree to limitation periods that differ from those set by the 2002 Act[cite: 7].

Under what circumstance does a limitation period NOT run in Ontario?

It does not run during any time that there is a willful concealment of the fact that injury, loss, or damage has occurred[cite: 7].

What is the Burden of Proof in civil lawsuits (tort/contract) versus criminal suits?

• Civil lawsuits rely on a "balance of probabilities"[cite: 7].

• Criminal suits require proof "beyond a reasonable doubt"[cite: 7].

What is the legal difference between an Expert Witness and a Non-expert Witness?

• An expert witness is allowed to express objective and independent opinions in their area of expertise[cite: 7].

• A non-expert witness only establishes the facts[cite: 7].

How should engineers manage business organizations and political risks when operating in foreign jurisdictions?

• Obtain advice from an experienced lawyer or local consultant[cite: 8].

• Mitigate political risks through insurance (e.g., World Bank) and by carefully selecting a local influential partner[cite: 8].