1. 402 Contracts (Ilg) W2012 - Rolfe Case Table

7/26/2019 1. 402 Contracts (Ilg) W2012 - Rolfe Case Table

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CASE CAN RATIO

Hughes When A agrees not to enforce their strict rights against B, A should not

be allowed to retract that proise as far as it would be ine!uitable to

do so"High Trees

A proise intended to be binding, intended to be acted on and in fact

acted on, is binding so far as its ters properl# appl#" If the $ariation is intended to be teporar# or conditional, it a# e%pire

John

Burrows

If a contract includes an ongoing schee of pa#ents and the pa#ents

are defaulted on but the contract re& breach is not enforced, then the

parties a# not rel# on an# indulgences ade re& breach to enforce a

defence of e!uitable estoppel

'or e!uitable protection, need A(s intention to alter legal relationship and

B(s reasonable reliance on appearances of rela%ed enforceent

D. & C.

Builders

Creditor is barred fro legal rights onl# when it would be ine!uitable for

hi to insist on theo Where there has been true accord, under which the creditor voluntarily

agrees to accept a lesser sum in satisfaction, and the debtor acts on that

accord by paying the lesser sum and the creditor accepts, then it is

inequitable for the creditor afterwards to insist on the balance

)eneral rule of estoppel& relief fro strict enforceent of *

o Exception: variations to terms brought about under duress

The foral eleents of estoppel don(t alwa#s atter + it is a ore

e%ible, conte%tual approach based on -fairness. concerned with the

euitable balance between the parties

!as"atche

wan #iver

TEST& The waiving part$ must%

o /a$e full 0nowledge of their rights, ando 1eonstrate an une!ui$ocal and conscious intention to abandon

those rights

Wai$er occurs where one part# to * foregoes reliance on soe 0nown

right or defect in perforance of other part#

Wai$er a# be re$o0ed b# gi$ing reasonable notice to the part# in whose

fa$our the wai$er was gi$en 2unless no reliance3

nternation

al 'nitwear

If a part# wai$es a right under *, then to resue the right the# ust

pro$ide reasonable noticeo allow parties to prepare (or return to original terms o( the contract

When ters are wai$ed, parties are estopped fro going bac0 and

claiing what is wai$ed 2no arrears3The )ost

Chaser

If 4art# A wai$es their rights under contract and 4art# B relies on that

wai$er but not in such a wa# that pre5udices the, then 4art# B can(t

raise a defense of estoppel to pre$ent 4art# A fro re$o0ing their

wai$er

Reliance on the wai$er ust be to the part#(s detriento If the# rel# on it, but the#(re not pre5udiced, then the wai$er

becoes irrele$ant





CASE CAN RATIO

Combe If a proise is ade without consideration, then e!uit# a# not be

used to enforce that proise

E!uit# can(t be used to create a *6legal relationship e!uitable

doctrines onl# appl# to alread# fored contracts

Robichau

d

If the purpose of raising an estoppel arguent is to enforce a

contract that has been relied upon, then estoppel a# be raised

whether the part# is the 4 or 1 to an action

Kornerup

If 4art# A a0es a unilateral o7er and then subse!uentl# withdraw

it without gi$ing e%plicit notice, then 4art# B a# not enforce the

o7er if 4art# B(s consideration for the unilateral o7er is the sae

as the consideration in place for a separate agreeent

8ariations onl# cr#stalli9e if there(s consideration

Waltons

Stores

*nconscionable conduct that induced detrimental reliance a# gi$

rise to proissor# estoppel to enforce a gratuitous promise o Sword to give rise to new legal relations/cause of action"

Test to establish e!uitable estoppel&

1) Party A assumed/epected that a legal relationship eists and that Part

! is not free to withdraw

") Party ! has induced Party A to adopt that assumption

#) Party A acts or abstains from acting in reliance of that assumption

$) Party ! %new or intended for Party A to do so

&) Party A's action will occasion detriment if the assumption isn't ful(lled

) Party ! has failed to act to avoid that detriment

:nconscionabilit# is %ey

*+-. 0S0 has adopted this approach epectations enforced if that's the

only way to avoid in2ustice) this has not been adopted in 3anada ssee

M.(N.) case)

M. (N.)

If no e$idence is presented to deonstrate that either part#

intended for the proise to create legal relations, then the

proise will not be enforced

'or proissor# estoppel to be applied, there ust be reliance on

proise

Re5ection of +alton,s principles no conteplation of creating leg

relationso *ote the very di4erent factual circumstances in this case 5 perhaps

Walton’s is still open for application in the right fact scenario

es!ic"

)eneral rule ;rd parties to a * can(t bring an action"

If the result would be grossl# un5ust to the part# who is not pri$#,

speci<c perforance can be ordered

#ac"son

Where a *is ade with A for the bene<t of B, A can sue for the

bene<t of B, and reco$er all that B could ha$e reco$ered if the *



had been ade with B hiself

If a* is substantiall# for the bene<t of a ;rd part#, the contractor

a# sue for lost bene<t of the ;rd part#CASE CAN RATIO

Wimpey

4ri$it# rules aren(t altered + there are speci<c narrow e%ceptions f

third parties in certain 0inds of *s"

Can onl# sue on behalf of ;rd parties if&o * gi$es such righto 'iduciar# relationship e%ists between contracting part# and

part# 2i"e" agent or trustee3, or principal part# to contracto Contracting part# su7ered loss

N.$.

Shipping

TEST& An Agenc# relationship e%ists if 2=ord Reid3&

>3 6 ma%es clear that the agent is intended to be protected by the eclu

provisions

?3 6 ma%es clear that the contracting party, in addition to contracting fo

provisions on his own behalf, is also contracting as agent for the Age

and that these provisions should apply to the Agent0

;3 he contracting party has authority from the Agent to contract on its

behalf

@3 Agent provided some consideration. eclusionary clause is a unilater

and any of who step in to perform the 6 are acceptors and bring

themselves into the clause0 7Performance of service is for the bene(t

shipper'

If * is in place to carr# out an acti$it# and there is iunit# fro

liabilit# written into the contract, then the iunit# will e%tend t

an# ;rd part# that carries out that acti$it#o 6 must cover the activity rather than the parties contracting to hav

activity performed

%ondon

&rugs

TEST& Eplo#ees are able to use their eplo#ers liitation of liabclause as a shield if the following re!uireents are et&

>3 he limitation of liability clause must, either epressly or impliedly, ete

bene(t to the employees see%ing to rely on it8

?3 9ust have been acting in the course of their employment8 and

;3 9ust have been performing the services provided for in 6 when the loss

occurred

If A has contracted with B and has included a liited liabilit# claus

and B sustains a loss due to the negligence of the eplo#ees of A

but that negligence was done during the course of the acti$ities

contracted for, then the eplo#ees will also be co$ered under thliited liabilit# clause"

'dge!ort

h

Application of =ondon 1rugs

If A contracts with B and the parties rel# on the wor0 of a ; rd part#

and neither A nor B guarantee the wor0 or assue the ris0 of err

b# C, then C will be found liable for an# negligent wor0 done

The ;rd part# ust ha$e been clearl# conteplated in * to be co$e



b# a liitation clause

=oo0 at the circustances of the case cobined with the wording

the e%clusion clause when appl#ing the eplo#ent e%ception

CASE CAN RATIO

Can&ive

4ri$it# e%ceptions now rest upon&o Intention to include ;rd part#o ;rd part#(s perforance conteplated in generalo 4olic# considerations

/a$ing contracted in fa$our of ;rd part# as within the class of

potential ;rd part# bene<ciaries, contracting parties cannot

re$o0e unilaterall# the ;rd part#(s right once the# ha$e

de$eloped into an actual bene<t"

odi<ed TEST 2=ondon 1rugs3&

>3 :id the parties to the contract intend to etend the bene(t inquestion to the third party see%ing to rely on the contractual

provision;

?3 Are the activities performed by the third party see%ing to rely on

the contractual provision the very activities contemplated as coming

within the scope of the contract in general, or the provision in

particular, again as determined by reference to the intentions of the

parties0

Machtinge

r

* ters can be iplied&o B# 'act&

What were the intentions of the parties;

* the parties had been a!are o* they !ould have included in

K +ave the parties acted as i* this term !as included in K,

*ecessary to give business e<cacy to a 60

o B# =aw& =egal incidents of a particular class or %ind of 6> by statute or

3= s the term -necessary *or the very e/istence o* K,

A matter of practical necessity to ensure fair functioning of 6,

given the relationship between the partieso B# Custo Or :sage&

Parties to a 6 would have understood such a custom or usage

to be applicable Presumed intention based on o<cious bystander

/ow do #ou <nd the iplied tero ?+<cious bystander@ test would they have thought term part

of 6;

Statute D Contract D Coon =aw

+a!rish 4arol E$idence Rule &



o A collateral agreement cannot be established where it is

inconsistent with or contradicts the written agreement0

If there is an unambiguous written *, oral e$idence that $aries

or contradicts the written ters is not allowed

0allen

Warrant# $s" collateral * o Warrant# I proise good6ser$iceF has characteristic6!ualit#F

o Collateral * If #ou bu# good6ser$iceF, I proise toG

4arole rule is not absolute

4resuption in that written * is coplete 2rebuttable3

Eleents for rela%ation of strong presuption&o Oral and written ters are not in contradictiono Speci<c oral addition6warrant# against a general written

e%clusiono Standard for agreeent

CASE CAN RATIO

1hone

If the oral agreeent doesn(t contradict the written agreeent,

then it will be accepted as a collateral agreeent to the written

agreeent

Where it contradicts, written * pre$ails+eilbrut Collateral *&

o P has high onus to prove collateral 6 eist

o P must prove terms of 6 intention to contract of all of the parties

6

Warrant#&o Statements or assurances that go into future

o An a<rmation at the time of sale is a warranty, provided it was so

intended

Innocent isrepresentations&o : not liable

o Bepresentations insu<cient to ma%e collateral 6. mere statements

facts to questions, representation prior to 6 relating to sub2ect mattmista%en belief

1aages a$ailable when isrepresentation is fraudulent or

rec0less

Intention of parties deduced fro totalit# of e$idence

&ic"

entley

Intention of Warrant# 2ob5ecti$e test3o :epends on conduct of parties words and behaviour) >> o<cious

bystander test

)rima -acie Warrant#&1) Bepresentation made to induce other party into deal and the other par

WAS induced o<cious bystander)

") :id they intend to be bound by representation; +eilbrut )

1 can rebut prima (acie warrant# b# showing innocent

isrepresentation

+ong

Kong 2ir

TEST 'OR RE4:1IATION& 1oes the breach depri$e the innocent par

of substantiall# the whole bene<t of *o =oo% at surrounding circumstances of 6 and breach

o Cf Des, two remedies available.



Becission repudiate cease performance under 6)

3ontinue the deal and collect damages at the end0

When the e$ent occurs as a result of the default of neither part#,

each can repudiate

4art# in default cannot rel# on their own default to get out of dealo 4ossible election to end the deal is for the innocent part# on

Kra!chu" Clari<es Hong 'ong -ir TEST for Repudiation&>3 Is the * a condition, a warrant# or an innoinate ter Determ

gravit$ o( breacho Cf condition continue with the 6 and sue for damages or repudia

o Cf warranty damages only

o Cf innominate intermediate) term court has discretion

party can elect to rescission +B continue and receive damages

Determine b$ loo"ing at ' in light o( the surrounding circumstintention o( the parties

?3 If unable to deterine warrant# or condition does the eventthe innocent part$ o( substantiall$ the whole benet/ 0breach

o( deal2o Cf no, damages only0

o Cf yes, can elect to rescind or continue and receive damages0

CASE CAN RATIO

EAS:RE O' 1AA)ESMcRae

:ncertaint# will not be bar to daages

E%pectation daages is the default reed#" o !urden on P

o Cf good is non>eistent/value can't be assessed, cannot show

damages0 Where #ou cannot assess $alue of -e%pectation,. daages will be

based on -relianceH 2 prima (acie case if 4 relied to their

detrient3o!lay

=osing * 1aages will onl# be awarded for losses accruing fro

the breach itself

Court will not put parties in a position that * copletion would not

ha$e pro$idedo The onus is on 1 to show that * copletion would ha$e

resulted in loss for 4

Where 1(s breach causes greater daage 2-but (or the breach I

would ha$e lost less.3 the di7erence would be copensable

If the e%pected outcoe is deterinable, use as a basis for

daages o$er reliance3eevyhou

se

1iinution in 8alue $s" Cost of 4erforanceo No person can recover greater amount in damages *or breach than

he !ould have gained by *ull per*ormance.

Courts will usuall# enforce Cost of 4erforance unless&o !reach was incidental and

o -conomic bene(t of performance of wor% is grossly disproportionat

to cost of performance social waste)

NuWest

If breach is not -tri$ial and innocent. 4 is entitled to act



reasonabl# in itigating e7ect of breach and can clai daages

if reasonable and not disproportionate6social waste"

1isproportionate reactions will not be copensatedo P cannot epect perfection from : should accept innocent trivial

deviations)

*ot all responses of P will be held against : P 2ust have to act reasonably)CERTAINT 3oss o( a ChanceChaplin

+ic"s

Can Reco$er for =oss of Chance 2as long as not tri$ial3 don,t need proo(

on balance o( probabilities to allow recover$

The fact that daages cannot be assessed with certaint# does not relie$e

the wrongJdoer of pa#ing daages for breach 2or causing the loss of a

chance3"

REOTENESS O' 1AA)E+adley 1aages for breach are liited to those conse!uences that&

2>3 arise naturall# in the usual course of things for such a 6 and its breach),or Cn the reasonable conteplation of both parties at the time 6 was

formed at formation)8 oriplicit, ob5ecti$e conte%tual

") if special circustances were counicated to the other party and bothparties 0now that the in2ury from breach would follow under specialcircumstances more serious)0 Cf special circumstances are un%nown, can onlycalculate generally0

Speci<c and e%plicit

4ictoria

%aundry

-reasonable conteplation. depends on 0nowledge possessed b#

parties, or part# who coitted the breacho 'nowledge 4 imputed or actual

o Based on reasonable person5 6serious possibilit$ or real

danger7

5he +eron

4 can reco$er daages for breach of * that causes loss of a 0ind

that 1, when he ade the *, ought to ha$e reali9ed was not

unli0el# to result fro a breach

Serious possibilit#K not unli0el# 2probabl# DLM chance3o : is not responsible for A== foreseeable loss

o 9ust be reasonably foreseeable E reasonably li%ely

CASE CAN RATIO

INTAN)IB=E =OSSES #arvis

If the core of *is intangible6sub5ecti$e, daages for breach of * ca

e%tend to intangible losses 2i"e" e%pectation and anticipation3

2idler TEST Intangible =oss can be copensated when&1) hat an ob2ect of the contract was such that it brings intangible los

upon breach within the reasonable conteplation of the partiesand

") degree of intangible loss caused by the breach was not tri$ial

'or puniti$e daages to be awarded, need to have an additional

breach usually good faith)ITI)ATION

1samara

An innocent part# ust ta0e steps to itigate his or her losses"



When there is a reasonable replaceent dut$ to mitigate

When a reasonable person wouldn(t ha$e itigated b# reJentering

the ar0etplace or 4(s particular circustances pre$ent the fro

itigating dut$ to litigate

A part# who fails to itigate or litigate will not be able to reco$er

proportion of his or her losses which itigation6 swift legal

resolution would ha$e pre$ented

1o not need to ta0e all possible steps, depends on circustance

2reasonable person3

E:ITAB=E REE1IES!)EC-C )E#-8#9;CE

#ohn

&odge

Speci<c 4erforance is a$ailable when 4 shows that the sub5ect o

is uni!ueo :ni!ue !ualit# a0es it particularl# suitable for 4(s intende

purpose at time o( breach

1ut# to itigate doesn(t arise if the innocent party is entitled to speci(

performance)E#!8;3 !E#<CEWarner

ros

Negati$e Co$enants in personal ser$ice * will be enforced through

in5unction pro$ided that it does NOT aount to&

a) Positive covenant> 3an't force someone to be wor% for another

b) 3hoice of idleness doing nothing) or performance of the positivcovenants

> 3an't stop from someone from doing any wor%

In5unction onl# a$ailable when daages are not an appropriate

reed#"o :iscretionary Bemedy

o 3ourt is limited to what it considers reasonable in the circumstance

@" STAN1AR1 'OR CONTRACTS AN1 EPC=:SION C=A:SESINCOR4ORATION*;!=;ED D8C*9E;T!

5hornton

Custoers a# assue that condition2s3 are general Q don(t ta0e

awa# rightsActual 0nowledge of condition(s content is ne$er re!uired, 5ust its

e%istence

E%tree6:nusual 2esp" reg" rights3 conditions re!uire ore e%plicit

notice Conditions listed elsewhere are binding ON= if&

>3 Acceptor 0nows there is writing on the tic0et and thewriting contained conditions, or

?3 Acceptor 0new that there was writing on the tic0et and hreasonable notice that the writing contained conditions"

CASE CAN RATIO

nter*oto Where a condition is particularl# onerous or unusual the part#

see0ing to enforce it ust show that other part# had fair

notice



When is additional notice re!uireent triggeredo Cndustry norm is less onerous than the condition

o Would a reasonable person %now that there is a condition li%e this

in the deal

What is the appropriate reed# for this t#pe of situationo 3ould replace onerous terms with industry norms if acceptor fails

to show that there was reasonable notice

McCutche

on

4ast dealings will not act in place of notice"

Ters can be included without notice based on past dealings

ON= when 4 can deonstrate the part# had 0nowledge of the

ters, actual and not constructi$e and assent to the" !=;ED D8C*9E;T!

5ilden

If part# see0ing to enforce * 0new or had reason to 0now that

the other part# did not ha$e 0nowledge6assent to all of the

ters, * not enforced

doption o( Thorton (or !igned standard (orm ' Enforcingpart# ust ta0e reasonable easures to draw attention to

particular stringent or onerous pro$isions 2especiall# if ade in

haste, or ade to discourage reading3

Karroll =(Estrange still applies& !inding unless fraud, misrep0 or non est factumact

To bring it into real of Thorton 2draw attention to onerous3 4 upro$e&1) A reasonable person would have %nown that P did not intend to agree

term in these circumstances8 and") : failed to ta%e reasonable steps to bring the content of the release to

attention

'actors to consider 2open3&o -4ect of the clause contrary to deal)

o =ength/format of contract

o time available to read haste)

Cornell Situations where reliance on other part# is 5usti<ed&10 Past course of dealing"0 -plicit assumption of advisory responsibilities#0 Belative positions of the parties, particularly in their access to

information and in their understanding of the possible demands of the dealing

$0 he manner in which parties were brought together and the

epectation that could be created in the relying party&0 Whether trust or con(dence has %nowingly reposed by one partyon the other

'ailure to read * before signing it is not legall# acceptable basis

for refusing to abide b# it, nor is the fact that the clause was

not sub5ect to negotiations

The more coercial a transaction, the less notice is re!uired of

onerous ters



':N1AENTA= BREAC/+unter

'ngineeri

ng

5ercon ; Stage TEST&>3 1oes e%clusionar# clause e$en appl# to the t#pe of loss6facts?3 Is an applicable clause the product of unconscionabilit#;3 4ublic 4olic# o$errides 2Strong 4resuption against itJfreedo of *3

CASE CAN RATIO

L" CONTRACTS IN1:CE1 B ISRE4RESENTATIONRedgrave

In e!uit#, a aterial representation intended to induce a part# into

if later found to be untrue, entitles the induced part# to rescind

If representation rele$ant Q signi<cant to * foration presue

induced * o !ub>ect to D showing that ) didn,t actuall$ rel$ on

representation

Carelessness is not a bar to recissiono Induced part# doesn(t /A8E to a0e further in!uiries if 1

pro$ides inforation, as long as it is reasonable for 4 to ha$

relied

( the induced part$ does investigate and nd out the truth? there

no reliance on D,s misrepresentation D not liable

Smith

%and

If the facts aren(t e!uall# 0nown to both parties, then stateents

ade b# one of the parties will be ta0en as fact and, if the# are

isleading, a# be the basis for a clai in isrepresentation"

aterialit# induceent opinion about info" onl# 0nown b# > pa

K isrepresentation if ob5ecti$el# false6unreasonable

REE1IESWhittingto

n

Reedies for innocent isrepresentation&o No coon law reedies"o E!uitable reedies&

RescissionCosts under ' can be collected 2indenit#3

NOT costs b$ reason o( '

4 can onl# choose either rescission 2rewind *3 or daages 2continu

with * but get daages3 can(t ha$e bothBARS TO RESCISSION

--#9T8; @ 3)!E 8- T9E%ea* Issues of !ualit# of a good @ potential le$els of disappointent

>3 ista0e -the good was not as proised.o For mista%e o* 6uality recission available until eecution

o For recission to be available for a mista%e, must have a ?di4erence in %ind@

goes to the core of the deal i0e0 good is something completely di4erent tha

promised)



?3 * conditiono For conditions, recission is available at 3= if.

3ondition goes to the core of the deal

!efore eecution or a ?reasonable time@ after eecution

o Cf beyond reasonable time, option to rescind epires limited to damages

;3 * warrant#o * !arranty recission unavailable, can only get damages

@3 E!uit#Cf mista%e of quality was innocent misrepresentation recission +B indemnity

#E!TT*T8; 9)8!!B3E If rescission is ipractical or ine!uitable e!uitable daages NOT rescis

o ime passed

o Cnvolvement of #rd party

o Alterations to property

1efences to rescission a# e%ist, despite isrepresentationo Doctrine o( 3aches:

Cf you want to eercise an equitable remedy e0g0 rescission) you must

delay or through doctrine of latches you will lose out0 7ou must not sit on your rights.

o De(ense o( Election 0Armation2:

:id the person who %new there was fraud elect to continue w/ 6 anywa

'lection may be implied (i* so8 no rescission).

No rescission for innocent isrepresentation 2 no going bac0 once * is

e%ecuted3

CASE CAN RATIO

EEC*TED C8;T#CT 'nnis v

Klassen

If 4art# A is induced to purchase b# an innocent isrepresentation

and e%ecutes *, then rescission a# be still be a$ailable postJ

e%ecution if&o Ite is a chattelgood

o nnocent isrepresentationo 4art# A hasn,t implied election 2reasonable tie period

allowed for inspection3o isrepresentation was at core o( deal 2not !ualit#3

'or land, rescission is onl# a$ailable until e%ecution

" CONTRACTS CONC=:1E1 :N1ER ISTA*ECOON =AWell v.

%ever

8oido 9ista%e negates consent to 6 from the outset

o 6 never formed so no lingering enforceability

8oidableo Goid after formation

o Something results in 6 being unenforceable0

If there is a utual ista0e and one part# is depri$ed of essentiallthe whole of *

ISTA*E * is $oid

If there is a utual ista0e that eans one part# can(t enforce * * is $oidable 2breach of condition or warrant#3

If there is a ista0e about !ualit# Condition6Warrant# *

cannot be $oided



McRae

Cannot rel# on utual ista0e when&o ista0e is not based on reasonable groundso ista0e is used to induce other part# into *

E:IT Solle v

utcher

Results for ista0e&

>3 8oid no *

?3 8oidable ha$e *, but unenforceable due to ista0e

• 9ista%e is material

• Parties both ma%e same mista%e about facts or their

relative/respective rights

• Party see%ing to set it aside was not at fault

• Would not do in2ustice to #rd parties

;3 2NEW3 A$oidable + between the two parties the * is

o7ensi$e, it can reain but is a$oidable

• ppl$ when it would be unconscientious (or it to b

void

•

!oth parties ma%e same mista%e about facts or about

their relative and respective rights•

9ista%e was fundamental

•

he party see%ing to set it aside was not himself at fault

Documents

1. 402 Contracts (Ilg) W2012 - Rolfe Case Table