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What is a requirement for a statement to be considered a misrepresentation?
What is a requirement for a statement to be considered a misrepresentation?
What are the remedies available for negligent misrepresentation?
What are the remedies available for negligent misrepresentation?
Which type of misrepresentation involves a deliberate intent to mislead?
Which type of misrepresentation involves a deliberate intent to mislead?
What must be true about the statement for it to induce the aggrieved party to enter into the contract?
What must be true about the statement for it to induce the aggrieved party to enter into the contract?
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Under what condition can rescission of a contract occur?
Under what condition can rescission of a contract occur?
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When a party actively conceals the truth, this is an example of which type of behavior?
When a party actively conceals the truth, this is an example of which type of behavior?
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What is a common characteristic of a mistake in a contract?
What is a common characteristic of a mistake in a contract?
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What indicates a positive obligation to disclose information in a contractual relationship?
What indicates a positive obligation to disclose information in a contractual relationship?
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What are pecuniary damages primarily concerned with?
What are pecuniary damages primarily concerned with?
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Which of the following statements regarding non-pecuniary damages is true?
Which of the following statements regarding non-pecuniary damages is true?
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What must a claim for damages establish in order to satisfy the remoteness test?
What must a claim for damages establish in order to satisfy the remoteness test?
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In the breach of contract case involving Gabriella Nagy, what was a direct consequence of Rogers' actions?
In the breach of contract case involving Gabriella Nagy, what was a direct consequence of Rogers' actions?
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What rationale can be used to argue against the recovery of non-pecuniary damages in contract breaches?
What rationale can be used to argue against the recovery of non-pecuniary damages in contract breaches?
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Which statement about recovery of pecuniary damages is accurate?
Which statement about recovery of pecuniary damages is accurate?
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Who has the burden of proof in a civil action?
Who has the burden of proof in a civil action?
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Under what circumstances can an employer be held vicariously liable?
Under what circumstances can an employer be held vicariously liable?
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Which of the following statements about joint tort-feasors is correct?
Which of the following statements about joint tort-feasors is correct?
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What is contributory negligence?
What is contributory negligence?
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What is the primary goal of a tort remedy?
What is the primary goal of a tort remedy?
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In what situation are employers NOT vicariously liable?
In what situation are employers NOT vicariously liable?
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When can the damages awarded to a plaintiff be reduced?
When can the damages awarded to a plaintiff be reduced?
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What distinguishes primary liability from vicarious liability?
What distinguishes primary liability from vicarious liability?
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What is the primary purpose of a statutory audit conducted by accountants?
What is the primary purpose of a statutory audit conducted by accountants?
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In the case of Deloitte & Touche v Livent Inc, what was a significant contributing factor to Livent's bankruptcy?
In the case of Deloitte & Touche v Livent Inc, what was a significant contributing factor to Livent's bankruptcy?
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What did the Supreme Court rule regarding auditors' liability for the use of audits beyond their intended purpose?
What did the Supreme Court rule regarding auditors' liability for the use of audits beyond their intended purpose?
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What determines the auditor's duty of care according to the Supreme Court's ruling?
What determines the auditor's duty of care according to the Supreme Court's ruling?
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What resulted from Livent relying on the audit conducted by Deloitte & Touche?
What resulted from Livent relying on the audit conducted by Deloitte & Touche?
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Which of the following aspects influenced the auditors' liability in the Livent case?
Which of the following aspects influenced the auditors' liability in the Livent case?
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What was one of the primary results of the Supreme Court's decision in the Livent case?
What was one of the primary results of the Supreme Court's decision in the Livent case?
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What is a secondary reason for which audits might be relied upon, according to the content provided?
What is a secondary reason for which audits might be relied upon, according to the content provided?
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What was the decision of the Supreme Court of Canada regarding the duty of care in Mustapha v Culligan of Canada Ltd?
What was the decision of the Supreme Court of Canada regarding the duty of care in Mustapha v Culligan of Canada Ltd?
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What type of negligence is recognized when both the defendant and the plaintiff are at fault?
What type of negligence is recognized when both the defendant and the plaintiff are at fault?
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In Kralik v Mount Seymour Resorts, what was the court's finding regarding Kralik's actions?
In Kralik v Mount Seymour Resorts, what was the court's finding regarding Kralik's actions?
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What is a result of proving voluntary assumption of risk in a negligence case?
What is a result of proving voluntary assumption of risk in a negligence case?
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In which case did a participant fail to read a waiver and was subsequently injured?
In which case did a participant fail to read a waiver and was subsequently injured?
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What psychological damage resulted from the breach of duty in Mustapha v Culligan?
What psychological damage resulted from the breach of duty in Mustapha v Culligan?
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What is required for compensatory damages for mental injury to be awarded?
What is required for compensatory damages for mental injury to be awarded?
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What was the total amount awarded to Mustapha for emotional upset and economic loss?
What was the total amount awarded to Mustapha for emotional upset and economic loss?
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What is meant by an innominate term in a contract?
What is meant by an innominate term in a contract?
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Under what condition can an exemption clause in a contract be unenforceable?
Under what condition can an exemption clause in a contract be unenforceable?
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What is an anticipatory breach?
What is an anticipatory breach?
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What are expectation damages intended to provide?
What are expectation damages intended to provide?
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Which statement reflects the 'bad man' theory in contract law?
Which statement reflects the 'bad man' theory in contract law?
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What must a plaintiff demonstrate to be entitled to damages in a breach of contract case?
What must a plaintiff demonstrate to be entitled to damages in a breach of contract case?
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What is the primary purpose of damages in contract law?
What is the primary purpose of damages in contract law?
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What type of damages is awarded to punish a defendant for malicious conduct?
What type of damages is awarded to punish a defendant for malicious conduct?
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What was the outcome of Martin's claim against Ontario Infrastructure and Land Corporation?
What was the outcome of Martin's claim against Ontario Infrastructure and Land Corporation?
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Which of the following is NOT a guideline established by courts regarding nuisance?
Which of the following is NOT a guideline established by courts regarding nuisance?
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In TMS Lighting Ltd v KJS Transport Inc, what was the primary issue for TMS regarding KJS?
In TMS Lighting Ltd v KJS Transport Inc, what was the primary issue for TMS regarding KJS?
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What aspect of the defendants' actions contributed to the dismissal of Martin's claim?
What aspect of the defendants' actions contributed to the dismissal of Martin's claim?
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Which type of interference is not protected under the tort of nuisance?
Which type of interference is not protected under the tort of nuisance?
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What was a major cause of Livent's bankruptcy?
What was a major cause of Livent's bankruptcy?
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According to the Supreme Court's ruling, what determines the auditor's liability?
According to the Supreme Court's ruling, what determines the auditor's liability?
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What was Livent's primary reliance on the audit's outcome?
What was Livent's primary reliance on the audit's outcome?
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What aspect of duty of care did the Supreme Court emphasize in its ruling?
What aspect of duty of care did the Supreme Court emphasize in its ruling?
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In the context of Livent, who were the primary individuals responsible for the fraud?
In the context of Livent, who were the primary individuals responsible for the fraud?
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What type of audit were accountants hired to perform for Livent?
What type of audit were accountants hired to perform for Livent?
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What secondary reason did Livent have for relying on the audit?
What secondary reason did Livent have for relying on the audit?
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Which statement describes the relationship between negligent words and actions, as ruled by the Supreme Court?
Which statement describes the relationship between negligent words and actions, as ruled by the Supreme Court?
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What led the receivers to sue the auditor in the Livent case?
What led the receivers to sue the auditor in the Livent case?
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What legal outcome did the Supreme Court determine regarding the scope of auditor liability?
What legal outcome did the Supreme Court determine regarding the scope of auditor liability?
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What was the Supreme Court's ruling regarding the duty of care in Mustapha v Culligan of Canada Ltd?
What was the Supreme Court's ruling regarding the duty of care in Mustapha v Culligan of Canada Ltd?
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In Kralik v Mount Seymour Resorts, what percentage of fault was attributed to Kralik?
In Kralik v Mount Seymour Resorts, what percentage of fault was attributed to Kralik?
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What does the defense of voluntary assumption of risk imply in a negligence case?
What does the defense of voluntary assumption of risk imply in a negligence case?
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What was the total amount awarded to Mustapha for emotional upset and economic loss?
What was the total amount awarded to Mustapha for emotional upset and economic loss?
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What are the two main categories of torts?
What are the two main categories of torts?
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What was the primary cause of Kralik's injuries in the case against Mount Seymour Resorts?
What was the primary cause of Kralik's injuries in the case against Mount Seymour Resorts?
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What justification was cited by the Supreme Court in determining the recoverability of mental injury damages?
What justification was cited by the Supreme Court in determining the recoverability of mental injury damages?
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What distinguishes tort law from criminal law?
What distinguishes tort law from criminal law?
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What must the defendant demonstrate in order to establish the defense of voluntary assumption of risk?
What must the defendant demonstrate in order to establish the defense of voluntary assumption of risk?
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In a criminal action, what is the burden of proof for the Crown?
In a criminal action, what is the burden of proof for the Crown?
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What role does a plaintiff play in tort law?
What role does a plaintiff play in tort law?
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In the case of Crocker v Sundance Northwest Resorts Ltd, what critical action did Crocker fail to take?
In the case of Crocker v Sundance Northwest Resorts Ltd, what critical action did Crocker fail to take?
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Which of the following is an example of an intentional tort?
Which of the following is an example of an intentional tort?
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What was a key finding regarding the lift operator's responsibility in Kralik's case?
What was a key finding regarding the lift operator's responsibility in Kralik's case?
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What is the key distinction in the legal roles of the accused and complainant in criminal law?
What is the key distinction in the legal roles of the accused and complainant in criminal law?
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What is a common legal outcome for a conviction in criminal law?
What is a common legal outcome for a conviction in criminal law?
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How are torts generally committed?
How are torts generally committed?
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What must be established for a tort of negligence to be proven?
What must be established for a tort of negligence to be proven?
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What legal action initiates a tort claim?
What legal action initiates a tort claim?
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Study Notes
Misrepresentation of Relevant Facts
- Parties may have a duty to disclose information without being prompted.
- Partial information provided by one party can be considered misrepresentation.
- Actively concealing the truth, like hiding a foundation crack, is misrepresentation.
- Failing to correct an earlier true statement that is no longer valid is misrepresentation.
- Relationships requiring utmost good faith, like insurance applications, necessitate full disclosure.
- Statutes may impose a positive obligation to disclose information.
Rescission Due to Misrepresentation
- Parties can have a contract cancelled if they relied on a misrepresentation.
- Rescission returns parties to their pre-contractual positions.
- Prompt action is required to seek rescission.
- Courts provide monetary compensation when rescission is not possible.
Ingredients of an Actionable Misrepresentation
- A statement must be proven false, clear, and unambiguous.
- The statement must be material to the contract, influencing the decision to enter.
- The statement must induce the aggrieved party to enter the contract.
- The statement must be about a fact, not an opinion, unless the speaker claims expertise.
Categories of Actionable Misrepresentations
- Fraudulent misrepresentation: deliberate intent to mislead or reckless statements.
- Remedy: Rescission or tort damages
- Negligent misrepresentation: careless or negligent statements.
- Remedy: Rescission or tort damages
- Innocent misrepresentation: non-fraudulent or negligent misrepresentation of a fact.
- Remedy: Rescission
Mistake
- A mistake is an error by one or both parties undermining the contract.
Damages: Pecuniary and Non-Pecuniary
- Pecuniary damages compensate for financial loss.
- Non-pecuniary damages compensate for loss of enjoyment, mental distress, etc.
- Non-pecuniary damages are rarely awarded for contract breach.
- Pain and suffering are typically not considered a consequence of contract breach.
Recovery of Pecuniary Damages
- Monetary losses are recoverable unless limited or fixed by a clause.
Recovery of Non-Pecuniary Damages
- Traditionally, non-pecuniary damages are not recoverable for contract breach.
- Exception: Fidler v Sun Life
- The contract's purpose was to secure psychological benefit.
- The mental suffering was severe enough to warrant compensation.
Damages Must Not Be Too Remote
- Damages must pass a remoteness test.
- Plaintiff must prove that the damages:
- Arose naturally from the breach.
- Were reasonably foreseeable due to communicated unusual circumstances during contract formation.
Breach of Contract and Reasonable Foreseeability
- Gabriella Nagy sued Rogers for breach of contract.
- Rogers changed her account without permission, which led to her husband discovering an affair.
- Nagy experienced emotional distress and lost her job.
Sunwing Charter to Cancun
- Sunwing flight passengers violated Canadian Aviation and public health regulations by not masking, vaping, drinking excessively, and dancing on seats.
- Sunwing cancelled the return flight.
- Passengers filed a civil action.
- Plaintiff must establish that the defendant committed the tort.
- A successful action leads to the defendant paying damages.
Liability in Tort: Primary and Vicarious Liability
- Primary liability arises from personal wrongdoing.
- Vicarious liability holds an employer responsible for an employee's tortious acts within the scope of employment.
- Employers are typically liable for:
- Acts authorized by the employer.
- Unauthorized acts connected to authorized acts.
Liability and Joint Tort-Feasors
- Tort-feasor: a person committing a tort.
- Joint tort-feasors: multiple individuals held responsible for the plaintiff's loss or injuries.
- Legislation dictates:
- Multiple negligent parties can be sued, and fault is apportioned.
- The plaintiff can recover 100% from any joint tort-feasor.
Liability and Contributory Negligence
- Contributory negligence: the plaintiff partially responsible for the harm.
- The plaintiff's damages are reduced proportionally to their fault.
Damages in Tort
- Tort remedies primarily aim to compensate the victim, usually through a money judgment.
- Mustapha v Culligan of Canada Ltd:
- Culligan breached its duty of care by providing contaminated water.
- The breach caused significant psychological damage to Mustapha.
- Damages are only recoverable if the mental injury would occur in a person of ordinary mental fortitude.
Defences
- Contributory negligence: reduces the plaintiff's award based on their proportion of fault.
- Voluntary assumption of risk: a complete defence where the plaintiff knowingly accepted the risk.
- Defendant must prove the plaintiff knew the risk and waived their right to sue.
Kralik v Mount Seymour Resorts
- Kralik, an experienced skier, was injured when he tried to clear snow from a chairlift and fell.
- The lift operator was initially held 100% at fault for failing to stop the lift.
- On appeal, Kralik was found 50% contributorily negligent for not letting the chair pass.
Crocker v Sundance Northwest Resorts Ltd
- Crocker entered an inner-tube race despite signing a waiver without reading it.
- He was injured during the race.
- The court found that Crocker had voluntarily assumed the risk by signing the waiver, even though it was not read.
Negligent Misrepresentation and Auditors
- Accountants conduct statutory audits primarily to allow shareholders to evaluate management.
- Audits are sometimes relied upon for secondary purposes, like attracting investors.
- Deloitte & Touche v Livent Inc:
- Auditors failed to detect financial fraud, allowing Livent to operate with fraudsters.
- Livent's receivers sued the auditors for losses resulting from reliance on the audit for investment purposes.
- The Supreme Court ruled that the duty of care assessment is the same for negligent words and actions.
- Auditors are liable for losses arising from the intended purpose of the audit, which was to evaluate management.
Breach of Contract
- A term that cannot easily be classified as either a condition or a warranty is an innominate term.
- The court will review the circumstances to decide whether a term is a condition or a warranty.
- Parties are free to expressly classify terms as warranties or conditions.
Exemption and Limitation of Liability Clauses
- Parties can include clauses in their contract that limit or exclude liability for breach.
- For an exemption clause to be enforceable, the clause needs to apply to the situation, it should not be unconscionable (especially if there is unequal bargaining power), and it should not over-ride public policy concerns.
Ethical Considerations
- The "bad man" theory suggests that contract breakers can decide to breach and pay compensation, especially if it's less than continuing the contract.
- Critics of the "bad man" theory believe businesses are generally moral and recognize the obligation to keep promises.
Timing of the Breach
- An anticipatory breach occurs before the date for performance.
- The innocent party can sue immediately.
- The innocent party is entitled to damages.
- The innocent party can treat the contract as terminated if the breach is serious.
Entitlement to a Remedy
- The plaintiff must satisfy the court that they are entitled to damages.
- Damages are monetary compensation for breach of contract or other actionable wrong.
The Measure of Damages
- Expectation damages are the most common way to award damages. These damages give the plaintiff the monetary equivalent of contractual performance.
- Punitive damages, awarded to punish the defendant for malicious, oppressive, and high-handed conduct, are extremely rare.
How Torts Are Categorized
- Torts are generally classified as intentional torts or negligence torts.
- Intentional torts are harmful acts committed deliberately or on purpose.
- Examples of intentional torts include false imprisonment (unlawful detention or physical restraint or coercion by psychological means), and battery (intentional infliction of harmful or offensive physical contact).
- When someone is negligent, they are liable for damages even if they did not intentionally cause the event.
Tort Law and Criminal Law
- The same event can result in both a tort law consequence and a criminal law consequence.
- For example, an impaired driver who injures a pedestrian in a crosswalk may have committed a criminal offense and may also be liable for the tort of negligence.
- The purpose of criminal law is to censure behaviour, and the prosecution of the crime is carried out by the government, usually without compensation to the victim.
- The purpose of tort law is to require the wrongdoer to compensate the victim.
- In criminal law, the legal action is called a prosecution and is brought by Crown prosecutors.
- The wrongdoer is the "accused," and the victim is the "complainant.”
- In tort law, the injured party sues in a civil action.
- The injured person is the “plaintiff,” and the wrongdoer is the “defendant.”
Proving The Actions
- In a criminal action, the Crown must prove the crime “beyond a reasonable doubt.”
- For conviction in criminal court, guilt must be a logical deduction from the evidence; it is not sufficient that the jury or judge believed the accused “probably” committed the act.
- Conviction may result in imprisonment.
Defences to Negligence
- Contributory negligence, a defense where both the defendant and the plaintiff may have been negligent, may result in the plaintiff's award being reduced.
- Voluntary assumption of risk, a complete defence, occurs when the plaintiff agreed to accept the risk inherent in the activity.
Business Application of the Law: Negligent Misrepresentation and Auditors
- Accountants are often retained by corporations to perform a statutory audit.
- Although the audit's primary purpose is to allow shareholders to evaluate the performance of management, audits may also be relied upon for secondary reasons (such as to attract new investors or get a loan).
- Auditors may be liable for losses arising from such secondary uses of the audit.
- In Deloitte & Touche v Livent Inc (Receiver of), the Supreme Court of Canada ruled that the duty of care assessment is essentially the same whether the loss in question is caused by negligent words or negligent actions.
- The auditor will not be liable for the use of the audit beyond the scope of what was undertaken to do.
- Auditors are liable for losses when the statutory audit was used for its intended purpose (e.g., to oversee and evaluate management performance).
The Tort of Nuisance
- Nuisance is any activity on an occupier's property that unreasonably and substantially interferes with a neighbour's rights to enjoyment of their own property.
- The general test is whether the impugned activity has resulted in an unreasonable and substantial interference with the use and enjoyment of land.
- Interference must be substantial and unreasonable; nuisance typically does not arise where the interference is only temporary.
- Not all interests are protected by the tort of nuisance (e.g., the right to sunlight).
- Courts will consider tradeoffs in interest (e.g., when the noise in question is reasonable and for the public good, the action in nuisance may fail).
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Description
Test your knowledge on the principles of misrepresentation, including the duty to disclose, how rescission works, and the elements of actionable misrepresentation. This quiz covers essential concepts that are crucial in understanding legal agreements and the implications of false statements in contracts.