Broadcasting Law: Enforcing Contractual Obligations PDF

BROADCASTING LAW: WELCOME! Enforcing Contractual Obligations  2. Lecture Overview 1. Introduction 2. Story So Far … 3. Factors Influencing Enforcing a CT Mistake Misrepresentation Duress Undue Influence 4. Defining Privity + Assignment 5. Termination...

BROADCASTING LAW: WELCOME! Enforcing Contractual Obligations  2. Lecture Overview 1. Introduction 2. Story So Far … 3. Factors Influencing Enforcing a CT Mistake Misrepresentation Duress Undue Influence 4. Defining Privity + Assignment 5. Termination of CT  3. Contractual “CT” Disputes Valid + enforceable CT must comply with 5/6 elements ❖Factors influencing ability to enforce CT ❖ Any of 4 factors present prior/ at time CT was concluded will influence ability to enforce CT 1.Mistake: ‘Misunderstanding’ re quality/type of product 2.Misrepresentation: ‘Lied’ about product: Innocent or Intentional or Negligent 3.Duress: ‘Pressured’ / ‘Threatened’ to conclude contract  4. One-Sided Mistake (Unilateral: 1 Party Only) Type 1: Mistake - One-sided Mistake: 1 CP’s Mistake E.g.: B thinks he is executive producer of movie; turns out he misread CT: B is one of 3 assistant producers. Type of mistake & effect? ⮚ One-sided/Unilateral Mistake E.g.: Also e.g.: concluded CT because ‘misjudged’ value of item CT is Valid + Enforceable ‘Caveat Emptor’ applies: ‘Caveat Emptor’: Let Buyer Beware Law does not protect negligent/ careless buyer/CT Party who fails  5. One-Sided Mistake ‘ MisT’: Defence is ‘NEF’ Rare! Non Est Factum (NEF): ‘It’s not my Act’ Used as ‘defence’ to Void CT Mistake re nature of signed doc? CT Void Void if MisT is about nature of doc not just terms BUT Negligence? Failed to read CT properly is not an excuse E.g.: A is not careless told to sign receipt for money received (but signed check in favour of secretary): Use NEF E.g.: A is not careless but co-signed CT as Buyer of Property (but signed loan agreement as guarantee): Use NEF E.g.: A is in hurry. Signed CT. Misread monthly increment to repay  6. Shared / Common Mistake Type 2: Shared Mistake: Both CPs Made Common Error ⮚ Neither party at fault but effect is no consensus ⮚ If serious e.g. object destroyed/ no longer available? No Contract: CT is Void because no consensus E.g.: Sale of camera (Both CP unaware camera has been stolen after concluding CT) E.g.: Lease vessel as to shoot movie scene (Both CP unaware vessel sank after CT conclude while on route )  7. Shared Mistake: Recording of Contract ‘CT’ Re: Mistake/ Error in Writing Down CT’s Terms ⮚ Re: Price /Quantity /Year /Model /Date of Delivery E.g.: Assistant/ Typist Error /‘Typo’: CT reads: price is $100K instead of $700K ⮚ Court will correct common mistake via rectification Court will Rectify CT when: ✔ Both CP’s (contractual parties) agree about terms, but written doc failed to reflect their agreement accurately ✔ Rectification?  8. Mutual Mistake (Misunderstanding) Type 3 Mistake: Misunderstanding between CPs Both CP’s have different understanding re terms of CT Contract is not necessarily void Remedy: Judge will apply: *Most Reasonable Interpretation of CT Judge unable to choose between 2 possible interpretations? If both equally reasonable + serious mistake? CT Void  9. Interpretation of Contract (CT) When interpreting a CT judge will: (Not study) – Give terms and words “reasonable meaning” – Terms clear + no ambiguity? Court give words literal meaning: ⮚Literal meaning? Consider industry usage for special or technical terms Parol evidence rule (STUDY def.)  10. Misrepresentation “MisRep”: Define False + misleading statements that induced CT party to conclude CT MisRep key term of CT? Innocent party may sue for breach of CT Must be statement of fact Fact? ‘Product causes weightloss’ / ‘Car has only 50K miles’ Statement of opinion only actionable if made by expert: E.g.: Mechanic: ‘I believe/ In my opinion’ car was not in accident (meanwhile the car was in serious accident); Actionable? Yes Silence is generally not misrepresentation unless duty to disclose  11. Innocent Misrepresentation (1) Misleading another without fault/ knowing truth / being careless Only remedy is rescission not damages E.g.: Informed shoes are Waterproof (Reality: Only in drizzle) Remedy is unavailable when (not study): ⮚ CT Affirmed By Plaintiff/Buyer ⮚ Impossible to Restore Pre-CT Position  12. Fraudulent Misrepresentation ‘FM’ (2) False statement: 1 CP ‘lied’ FM has 2 Elements (1) False Stmt + (2) Knowingly not true/Couldn’t care less if not true (careless): CT voidable (Victim decides) E.g.: S lied about qualifications required for job: Employment CT may be terminated Not defence to say: ‘Didn’t mean to lie/was misunderstanding/needed the job …’  13. Negligent Misrepresentation (3) CP made careless statement that turned out to be false Must establish elements of negligence When? If CP knew other CP would rely on info ⮚ Duty of Care + Breached Std. + Damages + Causation E.g.: A is Expert. Inspect production set. A confirms: no problems with wiring + issued certificate. Production commences. Production “extra” seriously injured following electrical shock. Claim of negligent misrep. Claimant has choice: If Misrep is term of CT? Sue for breach of contract or sue for tort of negligence (Fraudulent/Neg. Misrep) ⮚  14. Duress: Voidable Contract (CT) Concluding a CT because of coercion Threats may be of violence/ financial/ economic pressure E.g.: Threats of violence re person or goods / Disclosure sensitive info E.g.: A tells B: Give me the role or I’ll disclose your tax evasion E.g.: A tells B: Give me a glowing reference or I’ll ruin your career via … Threat may come from non-party to CT May be against you, family, property or business Contract is usually voidable + may also be crime  15. Undue Influence: Voidable CT Abuse of trust relationship CT voidable Undue influence: Presumed in certain relationships – Lawyers, doctors, trustees, guardians, religious advisors, adult children with aging parents – Re Lawyers doing business with client: Advice client/family to obtain indept. advice – Presumption may be rebutted by evidence Prove? 1 CP has Close Rel. +Vulnerable + Other CP is Dominant  16. Unconscionability (UnC): Voidable CT Taking advantage of vulnerable person’s situation E.g.: poverty, mental impairment (short of incapacity) Bargaining positions of parties unequal/ CT grossly unfair to victim Judge may set aside or modify CT ▪ UnC if: CPs Unequal + 1 CP in position to dominate + Taken advantage of + Unfair consideration received E.g.: A has No credit history + Unable to buy fridge via monthly increments; B Prepared to ‘help’ but A must pay $5K @ 24 months for 5y fridge valued at $500. CT concluded: A paid $250 p/m +  17. Privity of Contract “CT” Only the parties to a CT are bound to it/ may enforce it E.g.: A’s partner concluded CT with Delicious Foods to provide catering on movie. Delicious Foods showed up for one week; never to return. Partner must pursue CT remedies, not A Exceptions (Not Study) – Interests in land bind subsequent owners of the property – Trusts: Beneficiaries may enforce  18. Assignment (Study Def. Only) Transferring a benefit under a contract to a third party  19. Performance Once parties have performed as required under the CT, it is discharged or Comply with major (important) terms/ condition of CT (1) Condition? ‘Material/Key Term/Reason for concluding CT’ ⮚ Breaching material term/condition? ⮚ CT ends if innocent party wants to end it (2) Warranties? Minor Terms of CT ⮚ “Would have concluded CT but with ‘adjustments’”  20. Performance ‘PerF’: Examples PerF Less than Exact re Minor Term (‘Warranty’)? Other CP must still perform BUT is entitled to claim damages if losses incurred E.g.: Ordered of 20 props; 15 delivered. Pay for 15 only PerF Less than Exact re Major Term (‘Condition’)? CT Discharged + Other CP not required to PerF + may claim Damages E.g.: Ordered 10 ‘real human hair’ wigs for movie; 10 silk  21. Breach of Contract ‘BOC’ BOC is: Non-performance / Refusal to Perform CT Duties or could be incomplete performance Is Material/ Significant when CP fails to perform at all or performance is incomplete re Essential Term of CT Re Material BOC: ⮚ Breached CT Condition (material/essential term of CT) E.g.: Ordered X goods but got Y goods ⮚ Innocent CP not required to Perform: May discharge  22. Minor Breach of Contract Re Minor BOC: E.g.: Ordered 50X but got 20X Usually about quantity / time of performance if time not essential term of the contract Breached ‘warranty’ of contract CT is not discharged Innocent party is entitled to:  23. Anticipatory Breach of Contract ‘BOC’ Is an Advance Notice that 1 CP unable to Comply with CT Innocent CP 2 has Options BUT Bound by Choice: (1) Immediately treat CT as breached + refuse to perform + regard CT Discharged (Terminated) + Sue ⮚ Only if important term + other CP’s refusal to perform clear or (2) Wait for performance under CT + sue later ⮚ If Innocent Party demands performance, Innocent CP must be ready to perform too  24. Frustration: Unforeseen “Supervening Impossibility” Frustration? Performance of CT becomes impossible Supervening event rendered performance impossible or CT’s purpose /substance no longer possible/has been fundamentally changed E.g.: Concert Hall burns down prior to Concert / Field of Tulips flooded after CT concluded as to provide Whole Foods with Pink Tulips E.g.: Rezoning of ground by Govt. after CT concluded development of golf estate E.g.: Actor killed in accident before movie completed / Concluded employment CT as cook but restaurant closed due to mandatory COVID-19 restrictions  25. Self-Induced Frustration Self-Induced Frustration? Does Not Discharge CT: Must find a solution; otherwise, it is BOC E.g.: Negligence of 1 of Contracting Parties caused frustration E.g.: Increased Difficulty to Perform: must make a plan! Delivery Truck breaks down. Seller Must Find Alternative Truck. CT will not be discharged by self-induced frustration E.g.: Increased Interest Rate so More Expensive to Buy House ⮚ Legislation in BC: If Frustration, both parties equally share costs ⮚ Sale of Goods: Goods have perished (fire/flood). Risk  26. Agreement Agreed-upon Method to Terminate CT is Effective to End CT 1 of CPs may Rescind or both CPs via Mutual Agreement Mutual Rescission: Must conclude New CT E.g.: A bought Canon production camera from AV Shop; Receipt: Camera must be returned within 30 days. A used camera during pre- shooting exercise; Too complicated to figure out. A entitled to rescind sales contract? Yes Rescind: Both parties placed in Pre-Contractual Position  27 Agreement: Inclusion of Contractual Conditions CT may contain conditions for beginning of CT or changing CT’s terms or ending obligations – Condition precedent “prerequisite for CT” Contract begins only when conditions are met E.g.: Will order props from Acme Prop Shop in Vancouver, provided funding for documentary is approved – Condition subsequent “terminates CT if happens” Terms in contract specify that ‘happening’ of event will end continuing obligations under CT  28. Contractual Remedies: Breach of CT “BOC” (1) Rescission – Returning parties to original position pre-contract (2) Damages – Most prevalent remedy for BOC – Damages attempt to put victim in position he/she would have been in if contract properly performed E.g.: Ordered $20K’s clothing for movie to be delivered on Jan. 3; Only delivered Jan. 17: 14 days delay in production of movie. May sue seller for costs caused by each day’s delay. – Sometimes includes emotional stress or pain  29. Remedies for Breach of CT Mitigation dfined: Duty to limit your Damages pending Trial Re Damages: Must be reasonably foreseeable at time CT was concluded E.g.: BOC re Tenant’s occupation date. Damages only re losses incurred due to inability to occupy flat, excl. e.g., storage of stuff/ alternative accommodation Equitable remedies  30. Equitable Remedies for Breach of CT 1. Specific performance Requires breaching party to perform contract Only if subject matter of contract unique E.g.: Antique jewellery / paintings / house with view 2. Injunction Requires a person to stop doing something ‘Stop Order’ 3. Accounting Disclose financial records and dealings: Pay profits of wrongdoing to victim  31. Final Thoughts “They're certainly entitled to think that, and they're entitled to full respect for their opinions... but before I can live with other folks, I’ve got to live with myself. The one thing that doesn't abide by majority rule is a person's conscience.” - Harper Lee: To Kill a Mockingbird