Contract Law: Misrepresentation and Mistakes
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What must be proven for a statement to qualify as a misrepresentation?

  • The statement can be an opinion if stated as such.
  • The statement was made in good faith.
  • The statement was made with malicious intent.
  • The statement is factually false and material to the contract. (correct)

    • Which of the following scenarios best exemplifies fraudulent misrepresentation?

  • A seller forgets to mention a minor defect.
  • A vendor knowingly provides false information about a product's quality. (correct)
  • An applicant provides incomplete details on a loan application.
  • A buyer claims to have special knowledge about a product.

    • Which type of misrepresentation occurs when the speaker makes a statement carelessly?

  • Negligent misrepresentation. (correct)
  • Innocent misrepresentation.
  • Intentional misrepresentation.
  • Fraudulent misrepresentation.

    • What is the requirement regarding the nature of a fact for it to qualify as actionable misrepresentation?

    <p>It must be an objective fact, not a subjective opinion.</p> Signup and view all the answers

    What defines an innocent misrepresentation?

    <p>The speaker makes a statement without intent to mislead.</p> Signup and view all the answers

    What is a necessary criterion for establishing frustration in a contract?

    <p>The event must not be self-induced, nor controlled, by either party.</p> Signup and view all the answers

    What differentiates a condition from a warranty in contract law?

    <p>A condition provides the right to terminate the contract upon breach.</p> Signup and view all the answers

    In the event of frustration being established, what happens to contractual obligations?

    <p>They cease and parties return to their pre-contract position.</p> Signup and view all the answers

    What does the law of negligence require the plaintiff to show?

    <p>The behavior was careless and caused harm</p> Signup and view all the answers

    Which scenario would likely not lead to frustration of a contract?

    <p>A party deciding not to fulfill their obligations.</p> Signup and view all the answers

    Which principle does the law of negligence operate under?

    <p>To ensure reasonable care is exhibited</p> Signup and view all the answers

    What duty is owed to a contractual entrant who pays for the right to enter a premises?

    <p>A warranty that the premises are safe as reasonable care can make them.</p> Signup and view all the answers

    Which of the following factors would courts weigh to assess a non-competition clause?

    <p>The geographic area and the period of time covered by the clause.</p> Signup and view all the answers

    What does a non-solicitation clause typically forbid?

    <p>Contact with the business’s customers.</p> Signup and view all the answers

    What is a complete defense against liability that recognizes the plaintiff accepted inherent risks?

    <p>Voluntary assumption of risk</p> Signup and view all the answers

    What happens to a plaintiff's monetary award if contributory negligence is proven?

    <p>It is reduced by their proportion of fault</p> Signup and view all the answers

    What is required for a defense of voluntary assumption of risk to be valid?

    <p>The plaintiff must accept a known risk</p> Signup and view all the answers

    What defines negligence in the context of tort law?

    <p>A careless act that results in injury to another party</p> Signup and view all the answers

    What is required for a plaintiff to prove negligence?

    <p>Demonstration of a reasonable standard of care expected</p> Signup and view all the answers

    What does 'reasonable care' refer to in negligence law?

    <p>The level of caution expected from a reasonable person</p> Signup and view all the answers

    Which duty do commercial establishments owe to impaired patrons regarding alcohol service?

    <p>To assist or prevent them from being injured.</p> Signup and view all the answers

    What legal consequence arises if a commercial host fails to assist an impaired patron?

    <p>They may face a lawsuit for negligence.</p> Signup and view all the answers

    What is a key factor that courts consider when assessing the enforceability of a non-competition clause?

    <p>The extent of the activity restricted by the clause</p> Signup and view all the answers

    Which type of covenant is primarily concerned with preventing contact with clients and customers?

    <p>Non-solicitation clause</p> Signup and view all the answers

    In assessing non-competition clauses, which element is least likely to be considered by the courts?

    <p>The business's overall profitability</p> Signup and view all the answers

    What is the primary characteristic of strict liability in tort law?

    <p>Liability is imposed regardless of negligence.</p> Signup and view all the answers

    In the tort of negligence, what does 'reasonable care' refer to?

    <p>The care a reasonable person would exhibit in a similar situation.</p> Signup and view all the answers

    What is the legal term for the act of presenting another’s goods as one's own?

    <p>Passing off</p> Signup and view all the answers

    Which statement best describes the tort of false imprisonment?

    <p>No legal authority to detain someone.</p> Signup and view all the answers

    What must be established for a nuisance claim to be considered valid?

    <p>The interference must be both substantial and unreasonable.</p> Signup and view all the answers

    Which characteristic is true about trespass to land?

    <p>It can occur even if no visible damage is done.</p> Signup and view all the answers

    What defines a voidable contract?

    <p>A contract that can be enforced or terminated at the discretion of one party.</p> Signup and view all the answers

    In which case are minors typically bound to their contracts?

    <p>When the contract is for necessities of life.</p> Signup and view all the answers

    Which of the following is TRUE regarding illegal contracts?

    <p>They are void when they violate public policy or a statute.</p> Signup and view all the answers

    What distinguishes pecuniary damages from non-pecuniary damages?

    <p>Pecuniary damages are associated with out-of-pocket costs incurred by an injured party</p> Signup and view all the answers

    Which of the following is NOT a way a contract can be terminated?

    <p>Mutual agreement to alter the contract</p> Signup and view all the answers

    In which of the following scenarios is an employer likely to be vicariously liable?

    <p>An employee performs an unauthorized act closely connected to their job</p> Signup and view all the answers

    What defense reduces the amount of damages a plaintiff can recover when they are partially responsible for their own harm?

    <p>Contributory negligence</p> Signup and view all the answers

    What is the key characteristic of a joint tort-feasor?

    <p>Two or more persons jointly responsible for a tort</p> Signup and view all the answers

    Which of the following accurately describes primary liability in tort law?

    <p>Liability arising due to one's personal wrongdoing</p> Signup and view all the answers

    A creditor can transfer their right to collect payment without the debtor's agreement.

    <p>True</p> Signup and view all the answers

    Both parties must agree for a contract to be canceled and replaced with a new contract (novation).

    <p>True</p> Signup and view all the answers

    Vicarious liability holds the employer responsible for the negligence of their employees.

    <p>True</p> Signup and view all the answers

    A claim for damages must always pass a remoteness test to be considered valid.

    <p>True</p> Signup and view all the answers

    An increase in costs to fulfill a contract constitutes frustration of the contract.

    <p>False</p> Signup and view all the answers

    Minors can be held to their contracts in certain circumstances, especially for necessaries.

    <p>True</p> Signup and view all the answers

    A voidable contract can be enforced or terminated at the discretion of the aggrieved party.

    <p>True</p> Signup and view all the answers

    A warranty is a minor term that allows the innocent party to terminate the contract if breached.

    <p>False</p> Signup and view all the answers

    In cases of frustration, further obligations under the contract cease for both parties.

    <p>True</p> Signup and view all the answers

    Contracts based on unequal relationships between parties are always voidable.

    <p>False</p> Signup and view all the answers

    Study Notes

    Misrepresentation

    • Misrepresentation: One party provides false info to another party, which can lead to contract cancellation.
    • Rescission: Parties are returned to their positions before contract.
    • Actionable Misrepresentation: Must be proven false, clear, material to the contract, induces party to enter, and is a fact, not opinion unless expert has special knowledge.
    • Categories of Misrepresentation:
      • Fraudulent: Deliberate intent to mislead. Remedy is rescission or tort damages.
      • Negligent: Statement made carelessly. Remedy is rescission or tort damages.
      • Innocent: No fraud or negligence, but fact is misrepresented. Remedy is rescission.

    Mistake

    • Mistake: An error by one or both parties that undermines the contract.

    Termination by Frustration

    • Frustration: An event that makes the contract impossible or radically different from what was agreed.
    • Criteria for Frustration: Unforeseen, not due to parties' fault, not addressed in contract, and makes the contract radically different.
    • Impact of Frustration: Both parties are excused from the contract, and neither is liable for breach.
    • Event Limitation: Making performance more difficult or expensive is not frustration.
    • Self-Induced: Frustration cannot be self-induced (e.g., firing employees).

    Force Majeure Clauses

    • Force Majeure Clause: Defines in advance what constitutes frustration, relieving parties from performance or suspending obligations during the event.
    • Impact: May displace the doctrine of frustration depending on wording.

    Enforcement of Contracts

    • Proof for Contract Enforcement:
      • Privity of Contract: Only parties to the contract can enforce it.
      • Breach: Must demonstrate the other party failed to keep promises.
      • Remedies: Show entitlement to the remedy claimed.

    Breach of Contract

    • Condition: Important term, if breached, allows termination and damages.
    • Warranty: Minor term, if breached, allows damages only.
    • Punitive Damages: Aimed at punishing and deterring behavior. Exceptionally awarded, related to incident, and not excessive.

    Aggravated Damages

    • Aggravated Damages: Compensate for emotional distress caused by reprehensible conduct.

    Tort Law and Contract

    • Overlapping Liability: Same facts can lead to liability in both tort and contract.
    • Plaintiff Choice: Can choose the claim providing the higher payout if there is a difference.

    Tort of Negligence

    • Negligence: Careless act causing harm to another. Failure to show care a reasonable person would in a similar situation.
    • Reasonable Care: Care expected from a reasonable person in a similar situation.
    • Professional Negligence: Can also be a breach of contract with a client.

    Negligent Misrepresentation and Auditors

    • Statutory Audit: Performed by accountants to evaluate management performance. Often used for secondary uses (e.g., attracting investment).
    • Deloitte & Touche v Livent Inc (Receiver of): Auditors not liable for losses arising from secondary uses beyond the audit's scope. Liable for losses related to the audit's intended purpose (e.g., evaluating management performance).
    • Auditor Liability: Generally not liable to third parties like investors who make investment decisions based on the audit.

    Negligence and Product Liability

    • Product Liability: Liability related to product design, manufacture, or sale.
    • Negligence Elements: Same elements as negligence claims against manufacturers.

    Negligence and Service of Alcohol

    • Duty of Care: Commercial establishments serving alcohol owe a duty of care to impaired patrons and the public who are injured by drunken patrons.
    • Rationale: Economic relationship between host and patron.

    McIntyre v Grigg

    • Facts: Student injured by intoxicated driver who had been drinking at a student union venue.
    • Outcome: Court determined the venue had a responsibility to prevent intoxicated patrons from leaving and causing harm.

    Illegality

    • Contracts are contrary to public policy when they injure the public interest.
    • Clauses that restrict someone’s business activities are known as restrictive covenants or covenants in restraint of trade.
    • Restrictive covenants in the sale of a business are subject to less scrutiny.
    • Restrictive covenants in the employment context will be scrutinized due to the power imbalance.
    • Non-solicitation clause: A clause forbidding contact with the business’s customers.
    • Non-competition clause: A clause forbidding competition.
    • Non-competition clauses are enforceable if they are reasonable.
    • Courts will assess whether the employer has a proprietary interest that is entitled to protection.

    Non-Compete Clause

    • Ontario recently banned most non-compete clauses due to concerns regarding unfair disadvantages for employees.
    • Non-compete clauses can still be part of senior executive agreements and be used in the sale of a business scenario.
    • This legislation does not apply to non-disclosure agreements.

    Punitive Damages

    • Punitive damages are intended to punish the defendant for their outrageous conduct and deter future similar behavior.
    • Punitive damages should be exceptional, rationally related to the incident, and no greater than necessary to punish, deter, and denounce the defendant’s behavior.

    Aggravated Damages

    • Aggravated damages compensate the plaintiff for intangible injuries such as distress and humiliation caused by the defendant’s reprehensible conduct.
    • These damages are intended to compensate for the emotional consequences of the defendant’s poor behavior.

    Steve Moore's Tort Action Against Todd Bertuzzi

    • Steve Moore was sucker-punched by Todd Bertuzzi during an NHL game.
    • Bertuzzi pleaded guilty to assault.
    • Moore sued Bertuzzi and his hockey team for vicarious liability and for allegedly encouraging the attack.
    • Moore requested 35Mforpecuniarydamages,35M for pecuniary damages, 35Mforpecuniarydamages,1M for aggravated damages, and $2M for punitive damages.
    • The lawsuit was eventually settled for an undisclosed sum.

    Tort Law and Contract

    • Sometimes the same set of facts can give rise to liability in tort and in contract.
    • Negligence by a lawyer hired to give advice causes loss to the client.
    • The plaintiff can choose the claim that provides the higher payout.

    Negligence

    • Negligence is a careless act that causes harm to another.
    • It refers to a failure to show the care that a reasonable person would have shown in a similar situation.
    • The plaintiff does not need to prove the defendant intended to cause the damage or acted deliberately.
    • The law of negligence aims to compensate victims without discouraging legitimate activity or imposing unreasonable standards.

    Case 11.2: Mustapha v Culligan of Canada Ltd

    • The Supreme Court of Canada agreed that Culligan owed a duty of care to Mustapha to provide clean water and breached this duty.
    • Mustapha suffered serious damages due to a breach of the standard of care.
    • Only if mental injury would occur in a person of ordinary mental fortitude could recovery for such damages flow.

    Defences

    • Contributory negligence: Both the defendant and the plaintiff are negligent.
    • The court will reduce the plaintiff’s award by their proportion of fault if contributory negligence is proven.
    • Voluntary assumption of risk: The plaintiff agreed to accept the risk inherent in the activity and releases their right to sue.
    • This is a complete defense, and the plaintiff will be awarded nothing even if the defendant was negligent.

    Case 11.3: Kralik v Mount Seymour Resorts

    • Kralik, an experienced skier, was trying to clear some snow and ice from a chairlift as it moved toward him.
    • He grabbed onto the chair as it began to ascend and fell into an embankment, injuring his right shoulder.
    • The lift operator was found 100 percent at fault for failing to notice the situation.
    • On appeal, Kralik was found 50 percent contributorily negligent.

    Case 11.4: Crocker v Sundance Northwest Resorts Ltd

    • Crocker participated in an inner-tube race after seeing a video of the event.
    • He was required to sign a waiver but did not read it.
    • The Supreme Court of Canada held that a waiver does not relieve a defendant of their duty of care.

    Negligent Misrepresentation and Auditors

    • Auditors owe a duty of care to those who rely on their work.
    • The auditors were liable for Livent’s losses related to a faulty audit.
    • Livent's losses related to using the audit to solicit investment were not recoverable.

    Negligence and Product Liability

    • Product liability relates to the design, manufacture, or sale of a product.
    • The same elements of proving negligence apply in product liability claims against a manufacturer.

    Negligence and the Service of Alcohol

    • Commercial establishments serving alcohol owe a duty of care to impaired patrons to assist them or prevent them from being injured and to members of the public who are injured by the conduct of their drunken customers.
    • The economic relationship between the establishment and the patron provides a rationale for extending the law of negligence in this way.

    Case 11.5: McIntyre v Grigg

    • McIntyre was struck by Grigg’s vehicle while walking home from a bar.
    • Grigg had been drinking at the bar and other venues, and his blood alcohol level was three times the legal limit.
    • McIntyre sued Grigg as well as The Downstairs John, the bar where Grigg had been drinking.

    Occupiers' Liability: the Common Law

    • An occupier of premises owes different duties of care to the different classes of people who occupy the property.
    • Contractual entrant: Someone who has paid for the right to enter the premises. The occupier must ensure the premises are as safe as reasonable care and skill can make them.
    • Invitee: Someone who comes onto the property to provide the occupier with a benefit.
    • The occupier must warn the invitee of any unusual danger.
    • There is no requirement to warn of a usual or common danger that ordinary reasonable persons can be expected to know and appreciate.
    • Licensee: Someone who has been permitted to enter for the benefit of the licensee.
    • Occupiers are responsible for any unusual danger of which they are aware or that they have reason to know about.
    • Trespasser: Someone who is not invited onto the property and whose presence is either unknown or objected to by the occupier.
    • The occupier is liable for any act done with the deliberate intention of doing harm to the trespasser, or an act done with reckless disregard for the presence of the trespasser.

    Liability under Occupiers' Liability Legislation

    • Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, and Prince Edward Island have enacted occupiers’ liability legislation.
    • A high duty of care, equivalent to the negligence standard, is owed to entrants who are on the property with express or implied permission.
    • Occupiers may not deliberately harm or endanger trespassers.
    • Alberta has special provision for child trespassers.

    Case 12.1: Martin v AGO

    • Martin suffered injuries when he slipped and fell on water in the Hamilton courthouse.
    • When a minor reaches the age of majority, most contracts made while underage remain unaffected.
    • An exception arises if the former minor expressly adopts or ratifies the agreement upon reaching legal age.
    • Agreements of a permanent or continuous nature, like partnership agreements, necessitate express repudiation by the minor upon achieving the age of majority.

    Dealing with Minors

    • Businesses contracting with minors carry the risk of unenforceability due to legal protections afforded to minors.
    • For contracts of significant value, businesses should consider contracting with the minor's parent/guardian, co-signatory, or guarantee of performance from the parent/guardian.
    • Validity of contracts involving mentally impaired individuals depends on both parties understanding the nature and consequences of the agreement.
    • Courts may uphold contracts if:
      • the contract is fair and made in good faith
      • the other party was unaware of the mental incapacity and did not exploit it.

    Duress

    • Contracts made under duress, where one party is threatened with physical harm, are unenforceable.
    • Duress renders contracts voidable at the victim's discretion.
    • Economic duress involves coercive threats of economic harm causing the other party to enter a contract.
    • Lack of practical alternatives strengthens claims of economic duress.
    • Concessions coerced beyond ordinary commercial pressure are likely deemed unenforceable.

    Undue Influence

    • Undue influence involves unfair manipulation compromising someone's free will or choice.
    • Victims can void contracts made under undue influence.
    • The Ontario Real Estate and Business Brokers Act prohibits unlicensed realtors from seeking payment for their services.

    Illegality

    • Contracts contrary to public policy are unenforceable due to their potential to harm the public interest.
    • Clauses restricting business activities (restrictive covenants) are subject to scrutiny to ensure they do not unduly limit livelihoods and competition.
    • Restrictive covenants associated with business sales are generally less scrutinized due to compensation for goodwill.
    • Employment-related restrictive covenants are more closely examined due to the power imbalance between employers and employees.

    Non-Solicitation and Non-Competition Clauses

    • Non-solicitation clauses prohibit contact with a business's customers.
    • Non-competition clauses restrict competition from former employees.
    • Enforceability of non-competition clauses depends on:
      • reasonableness between the parties
      • alignment with public interest
    • Courts assess:
      • geographic scope of the clause
      • duration of the covenant
      • extent of restricted activity
    • Courts will not rewrite overly broad clauses; unreasonable clauses are unenforceable, placing the burden of drafting clear terms on employers.

    Non-Compete Clauses in Ontario

    • Ontario recently banned most non-compete clauses, aiming to protect employees from unfair disadvantages.
    • Exceptions remain for senior executive agreements and business sale scenarios.
    • The legislation does not restrict non-disclosure agreements.

    The Negligence Standard vs. Strict Liability

    • Strict liability holds individuals accountable regardless of negligence.
    • Strict liability has a limited scope, primarily covering:
      • vicarious liability
      • liability for fires, dangerous animals, and dangerous substance escapes
      • contractual liability

    Strict Liability in the EU and the US

    • Some EU jurisdictions and areas in the US employ a strict liability standard in defective-product liability cases.
    • Manufacturers can be held liable for unsafe products even without negligence.
    • A product is defective if it lacks the safety expected considering its presentation, intended use, and time of circulation.

    Occupiers' Liability

    • Occupiers have some control over properties, including buildings.
    • Tort actions commonly arise when occupiers harm individuals on their property.

    Common Law Occupiers' Liability

    • Liability is determined by classifying visitors as:
      • trespasser
      • licensee
      • invitee
      • contractual entrant
    • Each visitor class is subject to a different standard of care, with trespassers receiving the least protection and contractual entrants the most.

    Nuisance

    • Nuisance involves property activities unreasonably and substantially interfering with a neighbor's property enjoyment.
    • The test focuses on whether the activity unreasonably and significantly hinders land use and enjoyment.

    Guidelines for Determining Nuisance

    • Interference should be substantial and unreasonable.
    • Temporary interference generally isn't considered nuisance.
    • Not all interests are protected by nuisance (e.g., sunlight).
    • Courts weigh competing interests, potentially ruling against nuisance claims if the noise is reasonable and serves the public good.

    Protection of Privacy

    • The law has traditionally safeguarded privacy through torts like:

      • defamation
      • trespass
      • nuisance
      • assault
      • battery
      • false imprisonment

    • The Ontario Court of Appeal recognized a tort, "intrusion upon seclusion," allowing suits for privacy invasion.

    • Parliament safeguards privacy through legislation governing how organizations collect, use, and disclose personal information during commercial activities.

    • Some provinces have enacted legislation establishing the tort of breach of privacy.

    Agency

    • Agency involves one party (the agent) representing another (the principal) in legal matters.
    • Agents are authorized to act on behalf of principals.

    Examples of Agency Relationships

    • Sports agents negotiate contracts for athletes.
    • Insurance agents sell policies for insurance companies.
    • Travel agents book travel arrangements for clients.

    Relationships in Agency

    • Key relationships in an agency situation include:
      • agent-principal relationship
      • outsider-principal relationship (the principal and the party with whom the agent conducts business)

    Punitive Damages

    • Juries are more likely to award large punitive damages than judges.
    • Supreme Court of Canada has expressed concern about the potential for excessive punitive damages and insists that they should be exceptional, rationally related to the incident, and no greater than necessary to punish, deter, and denounce the defendant's behavior.
    • American courts have also scrutinized extreme punitive damages, with some cases suggesting they should not exceed compensatory damages.

    Aggravated Damages

    • Aggravated damages compensate plaintiffs for intangible injuries such as distress and humiliation caused by the defendant's reprehensible conduct.
    • Unlike punitive damages, aggravated damages aim to compensate for the emotional consequences of the defendant's poor behavior.

    Steve Moore's Tort Action Against Todd Bertuzzi

    • Steve Moore was injured during an NHL game when Todd Bertuzzi sucker-punched him.
    • The injuries ended Moore's NHL career.
    • Bertuzzi pleaded guilty to assault and was sued by Moore for 35millioninpecuniarydamages,35 million in pecuniary damages, 35millioninpecuniarydamages,1 million in aggravated damages, and $2 million in punitive damages.
    • Moore also sued Bertuzzi's hockey team for vicarious liability and for allegedly encouraging the attack.
    • The lawsuit was eventually settled for an undisclosed sum.

    Tort Law and Contract

    • Some situations can lead to liability in both tort and contract law.
    • For example, if a lawyer is negligent and a client suffers a loss, the client can sue in either tort or contract.
    • The plaintiff can choose the claim that offers the highest payout.

    What is Negligence?

    • Negligence is a careless act that causes harm to another.
    • In law, negligence refers to a failure to exhibit the care that a reasonable person would have shown in a similar situation.
    • The plaintiff does not need to prove that the defendant intended to cause the damage or acted deliberately.
    • The law of negligence aims to compensate victims while discouraging illegitimate activity and unreasonable standards.

    Occupiers' Liability

    • Occupiers have different legal duties to different classes of entrants based on their relationship with the property.
    • Occupiers owe a higher duty of care to contractual entrants and invitees, ensuring the premises are as safe as reasonably possible.
    • Occupiers must warn invitees of any unusual dangers.
    • Occupiers are responsible to licensees for any unusual danger they are aware of or should have known about.
    • Occupiers owe the least duty to trespassers, but are liable for deliberate harm or reckless disregard for the trespasser's presence.
    • The duty owed to child trespassers is often interpreted generously to mitigate the harshness of the general rule.

    Alberta, British Columbia, Manitoba, Nova Scotia, Ontario, and Prince Edward Island have enacted occupiers' liability legislation.

    • These statutes generally impose a high standard of care on occupiers toward those with express or implied permission.
    • Occupiers are prohibited from intentionally harming or endangering trespassers.
    • Alberta has special provisions for child trespassers.

    Case 12.1: Martin v AGO, 2022 ONSC 1923

    • Martin was injured when he slipped and fell on water in the Hamilton courthouse.
    • The court found that the courthouse was not liable for this incident because it had taken reasonable steps to prevent the formation of ice and it was not foreseeable that a puddle would form.

    Case 12.2: TMS Lighting Ltd v KJS Transport Inc

    • KJS Transport Inc's dust and noise pollution from its operations significantly interfered with TMS Lighting's operations.
    • The court determined that the interference was substantial and unreasonable, finding KJS liable for nuisance.
    • A further trial was ordered to determine the appropriate amount of damages.

    Trespass

    • Trespass to land occurs when someone wrongfully interferes with another person's possession of land.
    • Trespass can occur in different ways:
      • Entering the property without permission
      • Entering the property with permission but refusing to leave when asked - Leaving an object on the property without permission.
    • Trespass is actionable without proof of harm or damage, and injunctive relief is typically sought.
    • Legislation in some provinces imposes fines for trespass.

    Case 12.3: TMS Lighting Ltd v KJS Transport Inc (continued from Case 12.2)

    • KJS's large trucks repeatedly trespassed on TMS's property by driving onto their driveway.
    • TMS attempted to prevent the trespass by installing barriers, but KJS trucks continued to drive over them.
    • The court concluded that the trucks' repeated intrusions constituted trespass.

    Torts from Business Operations

    • Security personnel may commit torts of assault and battery when apprehending suspected shoplifters or ejecting patrons.
    • False imprisonment occurs when someone is unlawfully detained or restrained either physically or through psychological coercion.
    • Retailers and their employees must demonstrate legal authority to detain suspected shoplifters under section 494 of the Criminal Code.
    • Store personnel must promptly contact the police if they detain someone.

    Deceit or Fraud

    • Deception or fraud involves a false representation made intentionally or recklessly, leading to harm to another person.
    • In contract law, victims are also entitled to be released from the contract.

    Passing Off

    • Passing off occurs when someone presents another person's goods or services as their own.
    • This tort can be intentional or accidental.
    • Remedies for passing off include damages and/or an injunction.
    • The Trademarks Act also contains a statutory action resembling the tort of passing off.

    Case 12.4: Ciba-Geigy Canada Ltd v Apotex Inc

    • Ciba-Geigy Canada Ltd sued Apotex for passing off, claiming that Apotex's packaging and pill design were too similar to Ciba-Geigy's, confusing consumers.
    • The Supreme Court of Canada ruled that competing companies should avoid marketing drugs with a similar "getup" that could confuse consumers.
    • The court outlined three elements to prove passing off:
      • The existence of goodwill
        • Deception of the public or likely creation of confusion
      • Actual or potential damage to the plaintiff.

    Torts from Business Operations (continued)

    • Interference with contractual relations occurs when someone induces another person to breach a contractual obligation owed to a third party.
    • An example is poaching an employee and enticing them to break their contract with their existing employer.

    Defamation

    • Defamation involves the public utterance of a false statement of fact or opinion that harms someone's reputation.
    • Key elements of defamation:
      • The words have the potential to lower the plaintiff's reputation in the eyes of a reasonable person.
      • The statement refers to the plaintiff.
      • The words are communicated to at least one other person beyond the plaintiff.

    Defences to Defamation

    • Justification: The defamatory statement was substantially true.
    • Qualified Privilege: The defamatory statement was relevant, communicated without malice, and shared only with a party having a legitimate interest in receiving it.
    • Fair Comment: The plaintiff cannot prove malice, and the defendant establishes that the comment was about a matter of public interest, factually based, and expressing a view that could honestly be held by anyone.
    • Absolute Privilege: For parliamentary or judicial proceedings.

    Technology and the Law: E-Torts: Defamation on the Internet

    • Negative reviews can have a significant impact on businesses.
    • Customers have a right to raise concerns about the quality of goods or services received.
    • In Premier Finance Ltd v Ginther, an individual was ordered to pay $90,000 in damages for making false statements in an online review that accused a business of fraud and deceit.

    Torts from Business Operations (continued)

    • Injurious or malicious falsehood: A statement about another's goods or services that is false and harmful to their reputation.

    Contract Enforcements

    • Contracts are generally enforceable, but there are exceptions
    • Exceptions to enforceability are categorized by:
      • Unequal relationships
      • Misrepresentation or mistakes
      • Defects in contract
    • Voidable contracts allow an aggrieved party to choose whether to keep the contract in force or end it.
    • Void contracts are nullified due to substantial defects.
    • Individuals and organizations are presumed to have the legal capacity to form contracts.
    • Children and those with mental incapacities have legal protections.
    • Age of majority is the legal age at which a person becomes an adult.
    • Minors are not legally obligated by contracts, but can choose to fulfill them.

    Minors and Contracts

    • Contracts with minors are usually voidable at the minor's option, not the adult's.
    • Minors are obligated to pay a reasonable price for "necessaries" lacking in their supply.
    • Minors are bound by beneficial service contracts (apprenticeship or livelihood-related).

    Mistake in Contracts

    • Common mistake is when both parties share a fundamental misconception.
    • It is rarely proven, but if successful, the contract may be set aside.
    • A single party's oversight or error isn't a legal mistake, unless significantly impactful.
    • Courts can rectify errors, but only in limited cases of common mistake in recording an agreement.

    Rectification

    • Rectification is a legal remedy for when parties mistakenly record their agreement.
    • It establishes the specific terms actually agreed upon.
    • Carelessness in signing a document without attention to its contents or consequences does not invalidate the agreement.

    Ron Engineering Case

    • Company submitted a tender with an error.
    • The tender was deemed irrevocable after the official closing time and the company couldn't withdraw it.
    • The case established a preliminary contract (contract A) for tendering, separate from the main contract (contract B).

    Illegality in Contracts

    • Illegal contracts are unenforceable because they violate legislation or public policy.
    • Examples include contracts exceeding interest rate limits or those violating competition laws.

    Damages

    • There are pecuniary (financial) and non-pecuniary damages (loss of enjoyment, emotional distress).
    • Non-pecuniary damages are rarely awarded.
    • An exception is when the contract's purpose is to secure psychological benefits and the mental suffering is substantial.

    Damages Remoteness Test

    • Damages must be reasonably foreseeable to be recoverable.
    • This involves proving that the damages were a natural consequence of the breach or were specifically communicated to the defendant during contract formation.

    Sunwing Charter Case

    • Passengers on a chartered flight engaged in conduct violating aviation and public health regulations.
    • Sunwing canceled the return flight and passengers were fined.
    • This case highlights the importance of respecting regulations within contracts and potential consequences of breaches.

    Tort

    • Tort law focuses on harm caused by one party to another.
    • Negligence is a careless act that causes harm.
    • It involves failing to exercise the care a reasonable person would in a similar situation.

    Occupiers' Liability

    • Occupiers, including owners and tenants, have responsibilities regarding harm caused on their property.
    • Different classifications of visitors (trespasser, licensee, invitee, contractual entrant) correlate to varying standards of care.

    Strict Liability

    • Imposes liability regardless of proof of negligence.
    • It applies mainly to vicarious liability, dangerous substances, and dangerous animals.
    • Liability in contract is also considered strict liability.

    International Perspective on Strict Liability

    • The European Union and parts of the U.S. adopt a strict liability standard for defective products.
    • Manufacturers can be held liable even without negligence, if the product fails to meet expected safety standards.

    Electronic Signatures

    • Electronic signatures in Canada are governed by provincial legislation
    • An email with the sender’s name can be sufficient as a signature
    • Electronic signatures must identify the signatory, confirm the document's authenticity, and show approval of the content

    Contracts for the Sale of Goods

    • Contracts for the sale of goods above $30 must be in writing
    • Some jurisdictions require contracts to be in writing for the sale of goods above $50

    Internet Contracts

    • Canadian governments have enacted protections for internet contracts
    • Merchants must provide a copy of their online contract and other sale details
    • Consumers have the right to cancel contracts if the merchant does not comply with these requirements

    Termination of Contracts

    • Contracts can end through performance, agreement, frustration, or breach
    • Performance occurs when both parties fulfill their obligations
    • Agreement involves the parties voluntarily ending the contract
    • Frustration arises when an unforeseen event disrupts the contract after its formation
    • Breach allows the innocent party to end the contract if the breach is serious

    Termination Through Performance

    • Complete performance occurs when all contractual promises are met, both implied and express
    • Performance does not necessarily end the relationship between parties
    • Parties can continue business through new contract agreements

    Liability in Tort

    • Primary liability arises from a person's own wrongdoing
    • Vicarious liability occurs when an employer is held responsible for their employee's tortious acts
    • Vicarious liability generally applies to authorized acts or unauthorized acts connected to the authorized acts
    • Employers can also be held vicariously liable for intentional wrongful conduct

    Joint Tort-Feasors

    • A tort-feasor is a person who commits a tort
    • Joint tort-feasors are multiple individuals held responsible for the plaintiff's injuries
    • Plaintiffs can sue any or all joint tort-feasors, with fault apportioned according to their responsibility
    • Plaintiffs can recover the full amount of the judgment from any joint tort-feasor

    Contributory Negligence

    • Contributory negligence is a defense where the plaintiff is partially responsible for their harm
    • The plaintiff's damages are reduced proportionally to their level of responsibility

    Damages in Tort

    • The primary goal of tort remedies is monetary compensation for the victim
    • Sundance Northwest Resorts Ltd. was found liable for damages when they failed to prevent an intoxicated skier from participating in a race

    Negligent Misstatement

    • Negligent misstatement, also known as negligent misrepresentation, is an incorrect statement made carelessly
    • It can cause pure economic loss, which is financial loss without property or personal injury damage
    • Negligent misstatement is often committed by professionals, such as accountants, lawyers, and engineers

    Protection of Privacy

    • Common law protects privacy through torts like defamation, trespass, and false imprisonment
    • The Ontario Court of Appeal recognized the tort of intrusion upon seclusion, allowing for invasion-of-privacy lawsuits
    • Government protects privacy through legislation governing the collection, use, and disclosure of personal information

    The Nature of Agency

    • Agency is a relationship where one party (the agent) acts on behalf of another (the principal)
    • The agent represents the principal in legal matters, while the principal is the party being represented
    • Agency relationships are governed by the law of agency

    Examples of Agency Relationships

    • Sports agents negotiate contracts for athletes
    • Insurance agents sell insurance for companies
    • Travel agents sell tickets and vacation packages on behalf of carriers and hotels

    Relationships in Agency

    • The key relationships in agency include the agent–principal relationship and the outsider–principal relationship
    • The outsider is the third party who deals with the agent on behalf of the principal

    Agency by Estoppel

    • Agency by estoppel arises when:
      • An agent exceeds their authority but acts within apparent authority
      • The principal indicates another is their agent when no such relationship exists
      • An agency relationship is terminated but the agent continues to act

    Case 13.1: Rockland Industries Inc v Amerada Minerals Corporation of Canada

    • Rockland Industries sued Amerada Minerals for breach of contract after a sales manager exceeded his authority
    • The court found that Amerada was liable because it had represented to Rockland that the manager had the authority to negotiate

    Agency by Ratification

    • Agency by ratification occurs when a principal adopts a contract entered into by an agent without actual or apparent authority
    • The principal is not forced to adopt the contract, unlike agency by estoppel

    Contractual Obligation vs Performance

    • A contract is created by a business entity, but an individual, not a party to the contract, may perform the work.
    • That individual cannot sue on the contract or be sued for breach of contract, although a tort claim may exist.
    • The business is liable for the negligence of its employees (vicarious liability.)

    ### Termination of a Contract by Agreement

    • Parties might wish to cancel a contract because it is no longer beneficial for one or both parties.
    • Novation: Replacing an existing contract with a new contract.
    • Variation of Terms: Changing terms of the contract requires fresh consideration in most jurisdictions.
    • Both parties may agree to end a contract entirely.
    • Transfer of Rights: One party can transfer their rights to another party, this is not a termination, just a change to the original party's role.
    • Transfer of rights is called an assignment.

    ### Assignment of Rights

    • Rights can be assigned, duties cannot.
    • To be effective, the debtor must be notified of the assignment.
    • First assignee to give notice has priority to collect.
    • Rights of the assignee are limited by the rights of the assignor.

    Termination by Frustration

    • Frustration: A contract becomes impossible to perform due to an unforeseeable event outside of the parties' control like, natural disasters, wars, or government regulations.
    • Frustration contrasts with mistake as it arises after the contract is formed.
    • Proving frustration in court is difficult.

    Workers' Compensation Legislation

    • Provides no-fault compensation to injured workers, eliminating their ability to sue in tort.

    Damages in Tort

    • Non-Pecuniary Damages (General Damages): Compensation for pain and suffering, loss of enjoyment of life, and loss of life expectancy.
    • Maximum amount for general damages is ~$445,000 in 2023.
    • Pecuniary Damages: Compensation for out-of-pocket expenses, loss of future income, and cost of future care.
    • Suited to provide injured individuals with necessary care and assistance.
    • Special Damages: Out-of-pocket expenses, such as ambulance and medication costs, may be repaid to provincial health insurers through subrogation.
    • Punitive Damages (Exemplary Damages): Compensation awarded to punish the defendant for egregious conduct - intended to deter similar behaviour.

    Agency by Estoppel

    • Three situations can create an agency relationship by estoppel:
      • An agent exceeds their actual authority but acts within their apparent authority.
      • A principal indicates someone is their agent when no agency relationship exists, and the principal cannot avoid the contract by denying the agency.
      • An agency relationship has been terminated or an agent's authority has been curtailed.

    Agency by Ratification

    • An agency relationship is created by ratification when one party adopts a contract entered into on their behalf by another who lacked actual or apparent authority.
    • The principal is not forced to adopt the contract, unlike agency by estoppel.

    Breach of Contract

    • Innominate term: A term that cannot be easily classified as a condition or warranty, reviewed by the court.
    • Parties can classify terms explicitly as warranties or conditions.
    • Exemption and limitation of liability clauses: Parties can limit or exclude liability for breach.
      • Clause must apply to the situation.
      • Clause must not be unconscionable.
      • There must be no overriding public policy concerns.

    Ethics of Contract Breach

    • Contract law compensates the innocent party, not punishing the breaker.
    • The “bad man” theory states that contract breakers may choose to breach and pay compensation, especially when compensation is less than continuing the contract.
    • Critics of the "bad man" theory argue that businesses recognize the obligation to keep promises and will be moral in their dealings.

    Timing of Contract Breach

    • Anticipatory breach: A breach that occurs before the performance date.
      • Actionable, allowing the innocent party to sue immediately.
      • Innocent party is entitled to damages.
      • Innocent party is entitled to terminate the contract if the breach is serious.

    Entitlement to a Remedy

    • Plaintiff must satisfy the court they are entitled to damages.
    • Damages: Monetary compensation awarded for breach of contract or other actionable wrong.

    Measure of Damages

    • Expectation damages: Most common form of damages; provide the plaintiff with the monetary equivalent of contractual performance.
    • Punitive damages: A rare award to punish the defendant for malicious, oppressive, or high-handed conduct.

    Pecuniary Damages

    • These damages are for financial loss.

    Non-Pecuniary Damages

    • These damages are for loss of enjoyment, mental distress, etc.
    • Recovery is unusual, for example, pain and suffering is typically not considered a consequence of contract breach.
    • Exception: Fidler v Sun Life case, where the contract's objective was to secure a psychological benefit and the degree of mental suffering warranted compensation.

    Remoteness Test for Damages

    • A claim for damages must pass a remoteness test, requiring the plaintiff to prove:
      • Damages "arisen naturally" from the breach or are reasonably foreseeable.
      • The unusual circumstances were communicated to the defendant when the contract was formed, even if difficult to anticipate ordinarily.

    Business Application of Contract Law

    • Sunwing Charter to Cancun: Passengers contravened aviation and health regulations, resulting in fines and cancellation of the return flight.
      • The plaintiff is entitled to be put into the position they were in before the tort was committed.
      • Equitable remedies like injunctions can be ordered if money is not sufficient.

    Workers' Compensation Legislation

    • Provides no-fault compensation for injured employees, replacing their right to sue in tort.

    Pecuniary Damages

    • Compensation for out-of-pocket expenses, loss of future income, and cost of future care.
      • Injured person is entitled to an award to cover necessary care and assistance.
      • Courts may award past loss of income up to the trial date and value diminished earning capacity, usually with input from experts.

    Non-Pecuniary Damages

    • Compensation for pain and suffering, loss of enjoyment of life, and loss of life expectancy.
      • Also known as general damages.
      • Current ceiling for general pain and suffering is approximately $445,000.

    Special Damages

    • Out-of-pocket expenses resulting from the injury-causing event, such as ambulance and medication costs.
      • May be repaid to provincial health insurers under subrogation.

    Punitive Damages

    • Also known as exemplary damages, intended to punish the defendant for outrageous, antisocial, or illegal behavior.
      • For example, intentional property defacement may attract punitive damages.

    Negligent Misrepresentation and Auditors

    • Livent case: Auditors found liable for negligent misrepresentation relating to their audit, but not liable for financial losses arising from using the audit to solicit investment.

    Negligence and Product Liability

    • Liability relating to the design, manufacture, or sale of a product.
    • Elements of proving negligence apply to claims against a manufacturer.

    Negligence and the Service of Alcohol

    • Commercial establishments serving alcohol owe a duty of care to impaired patrons and the public who may be injured by intoxicated patrons.

    Case: McIntyre v Grigg, 2006

    • McMaster University student struck by a vehicle driven by Grigg, who had been drinking at a student union venue.
      • The court concluded that there were visible signs of intoxication.
      • Both Grigg and the McMaster Students Union were sued.

    Case: TMS Lighting Ltd v KJS Transport Inc, 2014

    • KJS Transport blocked the driveway of TMS Lighting, requiring TMS to reposition the blocking materials.
      • KJS's interference was found to be unreasonable, and TMS was granted an injunction.

    Torts Relating to the Environment

    • Negligence: Plaintiff must establish carelessness leading to environmental damage.
    • Trespass: Proof of direct intrusion of pollutants onto the plaintiff's land without permission.
    • Rylands v Fletcher: Proof that something from the defendant's land escaped onto the plaintiff's land due to the defendant's dangerous use of their land.
    • Nuisance: Proof that the defendant's pollutants unreasonably interfered with the plaintiff's enjoyment of their property.

    Torts from Business Operations

    • Assault: Threat of imminent physical harm by disturbing someone's sense of security.
    • Battery: Intentional infliction of harmful or offensive physical contact.

    Enforcing Contracts

    • The law aims to maintain the integrity, reliability, and predictability of contracts.
    • Contracts can be voided or voided in certain circumstances.
    • Voided contracts are considered to be of no force or effect.
    • Voidable contracts allow an aggrieved party to choose whether to keep the contract in force or end it.

    Unequal Relationships in Contracts

    • Individuals and organizations are presumed to have the legal capacity to form contracts.
    • Minors and those with mental incapacities are afforded special legal protection.
    • Minors are not obligated by most contracts but can choose to fulfill them and may enforce a contract against the other party.
    • Minors are generally required to pay a reasonable price for necessities they lack.
    • Minor's can be bound by beneficial contracts of service, such as apprenticeships.

    Termination by Frustration

    • An unforeseen event not caused by either party, unaddressed in the contract, and significantly altering the original contract's nature may lead to frustration.
    • Both parties are excused from the contract if frustration is established.
    • Neither party is liable for breach.

    Force Majeure Clauses

    • Force majeure clauses define events that constitute frustration, relieving or suspending performance.
    • Force majeure clauses often displace the doctrine of frustration.

    Enforcement of Contracts

    • Breach of contract subjects the party to a lawsuit.
    • To sue for breach of contract, the plaintiff must demonstrate:
      • Privity of contract: Only parties to the contract can enforce it.
      • Breach of the contract: Prove the other party failed to uphold their promises.
      • Entitlement to a remedy: Demonstrate entitlement to the remedy claimed.

    Breach of Contract

    • Condition: A significant clause; breach allows termination and damages.
    • Warranty: A minor clause; breach allows damages only.
    • Injunctions may be ordered when monetary remedies are insufficient.

    Workers' Compensation Legislation

    • Provides no-fault compensation for injured employees, replacing their right to sue in tort.

    Damages

    • Non-pecuniary damages (general damages) compensate for pain and suffering, loss of enjoyment of life, and loss of life expectancy.
    • Pecuniary Damages (specific damages) compensate for out-of-pocket expenses, loss of future income, and cost of future care.
    • Special Damages refer to out-of-pocket expenses resulting from an injury-causing event.
    • Punitive or Exemplary Damages are intended to punish the defendant for outrageous, antisocial, or illegal behavior.

    Defences

    • Contributory Negligence: The plaintiff and defendant share responsibility for causing the injury.
    • Voluntary Assumption of Risk: The plaintiff knowingly accepted the risks associated with the activity.

    Agency

    • An agency relationship is typically established through a contract.
    • When an agent acts within their authority, the principal is bound by the agreement.
    • Actual Authority: Stems from express or implied agreement, including express authority granted by the principal.
    • Implied Authority: arises from the agent's position, the necessity to carry out express authority, or industry customs.
    • Apparent Authority: Arises when an agent appears to have authority due to the principal's conduct or statements.

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    Description

    This quiz covers the concepts of misrepresentation, including its categories, actionable misrepresentation, and the effects of mistakes in contract law. Additionally, it discusses contract termination by frustration due to unforeseen events. Test your knowledge of these key legal principles!

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