Legal Aspects of Business Questionnaire

A reasonable person to the law is a standard applied by the courts in cases of occurrence of harm out of carelessness or unintentionally. When the courts assess the plaintiffs, they determine whether the defendants have caused harm and whether the plaintiffs are entitled to compensation packages as a result of the suffered injuries.The reasonable person standard has many benefits to the law. It helps reduce reasonably, the foreseeable risks. As per the courts, reasonable people will carefully avoid causing foreseeable injury risks to others. It helps determine the severity and likelihood of damages. Reasonable people will often tend to take great care and precaution when the severity and possibilities of damages are robust, unlike when they are negligible. It helps in consideration of liability prevention costs by determination of negligence. The courts can balance the damages severity and likelihood with the cost measures considerations required to neutralize and reduce risks. In the course material, the reasonable person plays several roles in various suits subjected to the courts. The Wilde v. Cambie Malone- Corporation employs the reasonable person where the courts determined that the restaurant neglected its duty and failed to protect the plaintiff sufficiently. Here, a lady was hit by an umbrella belonging to the restaurant that was airlifted by the wind. In Bolton vs Stone case where an individual standing on the road next to a cricket pitch was hit by the cricket ball. The court ruled that the club did not neglect its duty because there was minimal injury occurrence in the previous number of years. In Moule vs. The New Brunswick- Electric- Power Commission, the power company was not held liable when the young boy fell and came in contact will electric wires because they had taken caution by having the cables installed above the ground with the removal of tree branches. The court ruled that the trees get removed to reduce the occurrence of young boys climbing on them

Answer Key
1. AB Chic offers home furnishings on its website. The order form includes Terms and
Conditions about the item, billing and shipping information, and an additional box for
the customer to type in “Comments”. The order form states that delivery will be made
via bonded courier to the address of the purchaser within 21 days of the placement of
the order. In the Terms and Conditions, there is a section called “Shipping” which states
that AB Chic shall not be responsible for any damage or loss to products that occurs
during shipping and handling.
On October 1st, Connie Customer placed an order for Monogrammed towels that she is
planning to give as a wedding gift. In the comment area she types, “I only want these
towels if they can be delivered by October 14”
Connie clicks on a box indicating that she has agreed to all of the terms and conditions
related to orders placed on the company website. She submits payment via the secure
transaction site, and places the order.
a. Do the parties have a legally enforceable contract? Why or why not?
b. Assuming a contract has been formed, will Connie have a right to sue if the towels
are delivered on the 20th day following the placement of the order? Explain your
answer.
c. The towels are delivered on October 13th by Canada Post. The packaging is ripped
and the towels are irreparably stained. Evidence shows that the staining occurred
during shipping and were not the fault of AB Chic. What, if any, remedy does Connie
have in this situation?
a) A complete answer will evaluate whether or not there is a contract between the parties by
reviewing the essential elements of a contract…..is there a meeting of the minds, is the offer and
acceptance, and is there consideration flowing between the parties. Before we ask whether or
not Connie’s comments regarding delivery time amount to a counter offer, it should be clear
that there is not a meeting of the minds on the essential elements of the contract because time
is always vital in any contract. It should also be noted that this would be a unilateral contract,
that comes into existence when performance is completed in accordance with the specifications
of the offer (Carlill v Carbolic Smoke Ball)
But this is not the end of the issue because Connie has effectively made a counter offer. Your
answer should identify that a counter offer effectively terminates an offer. Has the counter offer
been effectively communicated? If it has, then AB Chic is bound to deliver in accordance with
the revised delivery date. If it has not, then there is no contract. How do we ascertain whether
the Counter Offer was properly delivered? Remember the case of Lyoto and Fabiola? We need
to make mention of Electronic commerce, and of standard form agreements. If AB Chic has
utilized an electronic communication system capable of receiving communications, then AB Chic
has effective notice of the counter offer and must clearly and unequivocally indicate its
acceptance. Silence is not acceptance. A complete answer should question this aspect in
assessing whether or not a contract was formed on terms stipulated in Connie’s counter offer. It
should also be noted that Connie was clear she would only accept if delivery could be made by
the 14th, and so the offer is terminated and her subsequent payment is of no consequence.
b) If we assume a contract had been formed, we can only answer this question if we know on
which terms the contract had been formed. The time of delivery is ambiguous, so we can follow
the Parol Evidence Rule to admit additional evidence to settle the ambiguity. This evidence will
disclose one of two things….that the contract was formed on terms established by AB Chic, or
that it was formed on terms established by Connie. We could assess what is reasonable in the
circumstances….ie….what would the reasonable person in similar circumstances assume in
relation to the contract. The additional evidence would be similar to the factors discussed in
answer A above. You may also argue that AB Chic had a duty to notify Connie that her counter
offer was rejected because they controlled the information system and were in receipt of her
payment. This would earn points, although it would be technically incorrect.
c) While on its face it would appear that AB Chic can avoid liability to Connie by virtue of the
exclusion clause in the Terms and Conditions, we have to ask whether the clause was effective.
Did AB Chic do enough to bring the clause to the attention of customers, such that a reasonable
person would believe that the party had clear notice of the provision? Reference Tilden v
Clendenning…..It is not enough to say that they are not responsible because the damage
occurred during shipping. Evidence may disclose that their packaging was inadequate. To be
certain, we need to ascertain whether they can rely on the exclusion clause.
IF you said that Connie can sue the shipping company then you may be technically correct but
not in terms of our course material to date. Connie has no contract with the shipper. There is
not privity of contract and so she has no right of recovery against the shipper in contract law.
She may have a tort remedy but we have not covered that yet. Take note of the ongoing
obligations of AB Chic in relation to the concept of Vicarious Performance (pg 203 text)
2. News-on-the-Net is an online news service that sends email summaries of news stories to
subscribers. In order to subscribe, a person must view the News-on-the-Net web page, click on
subscription and enter their personal details. The service charges a small monthly fee, but it is
mostly paid for by third party advertisers. At the bottom of the web page, there is a link to a
page entitled Terms of Use. There is a also a space to indicate that the subscriber has read and
agreed to the Terms of Use, although it is not actually necessary to link to the Terms of Use.
The Terms of Use is a 20 page document that contains numerous terms regarding copyright
matters, cancellation procedures, a privacy policy and more. Also included is an exclusion clause
that states that the subscribers can not hold News-on-the-Net liable for any possible damages
that the site may cause to the subscriber. The exclusion clause was in bold red font.
When Scott subscribed, he did link to and review the terms in some detail, including some that
were in a bold font, but he did not read the exclusion clause.
Due to a problem with their virus detection software, News-on-the-Net sent a computer virus to
all of its subscribers that reviewed a particular news article. The virus disabled Scott’s computer
and caused him to miss an important contract deadline, for which he paid a penalty.
Scott sues News-on-the-Net for recovery of his loss. News-on-the-Net relies on the exclusion
clause to excuse themselves from liability.
a) Who will be successful and briefly explain why.
b) Would your answer be different if the virus originated from one of the advertisers on
the News-on-the-Net feed?
c) Finally, what if it was revealed that News-on-the-Net had been aware for several
months before they offered their news service that they had a problem with their
virus detection software?
a) At the outset, you must undertake an analysis of whether or not there is a contract
between Scott and News. Has there ben a meeting of the minds? Is there Offer and
Acceptance? Is there consideration flowing between the parties? While this may seem
apparent, we should never assume. Remember that Electronic contracts are different in
terms of how they are formed. We have a click wrap agreement that stipulates all of the
Terms and Conditions, so we have to assess whether there was a problem in formation
of the contract. In the facts it is apparent that the essential elements did in fact exist,
and as such a proper conclusion is that the contract was formed.
Having determined that a contract exists, you must decide who you feel would be
successful. I will accept either party as long as you are able to support your position.
If you feel that News is successful, then you must state that they were able to rely on
the exclusion clause. Scott did click on the Terms and while he read some he did not
read the exclusion clause. Would a reasonable person have noticed the clause? Did
News provide sufficient notice (Bold Red Font) of the exclusion? Does the fact that Scott
did not read it change anything in light of the law on exclusion clauses?
If Scott is successful then you must argue that News did not do enough to bring the
exclusion clause to the notice of its customers. The notice was buried in 20 pages. It was
not actually necessary to link to the Terms and Conditions. Does the fact that Scott did
link change whether a reasonable person in similar circumstances would have had
notice?
b) While you may be inclined to suggest that News should not be accountable (liable) for a
problem that originated with its advertisers, the fact remains that News is responsible
for content that it provides via its subscription service. While the doctrine of Privity
precludes Scott from suing the advertisers in contract, the notion of Vicarious
Performance tells us that News is ultimately accountable to its subscribers.
You may note that if Scott were to sue News, that News has a contract with the
advertisers and would likely be able to recover from the advertisers.
c) This raises issues with the formation of the contract. News makes (or fails to make)
statements about existing facts during the formation of the contract. Subscribers rely on
these statements (or omissions) and enter into the contract. This is a misrepresentation.
We have to assess the nature of the misrepresentation in order to determine how it
affects the contract. A misrepresentation can be one of innocent, negligent or
fraudulent. Since News knew of the problem, they have made a fraudulent
misrepresentation (false statement or misleading silence made without honest belief in
its truth, made with intent to induce contract). A fraudulent misrepresentation gives rise
to a right to rescind the contract and seek damages.
Class Notes – Day 1
May 6, 2019
Introduction – Scott Lytle
– Background (lawyer, semi retired, litigator
…..what does that all mean?
– Where I am from…..
– Not a teacher but a coach, a mentor. Soccer,
kids…..
– Instructor in Zhuhai China and during the fall
term at SMU
I want to thank you all for welcoming me here. I truly feel
blessed to be here.
I want to talk a little about what you can expect from this
course, and from me. Before we do that, a couple of
administrative matters. There are copies of the course outline
and I encourage you to read and understand it. We are going to
go through some of the most important points.
We are here to provide you with a broad sweep of the
Canadian Legal System. What it is. How it works. Where it
comes from.
Canadian Law is what we call a Common Law system. This is an
important point because it is what distinguishes Canadian Law
from so many other legal systems the world over, including
China’s, most of Europe, and even the Province of Quebec.
I will go into greater detail about the Common Law system in a
moment. For now, I want you to know how I will be teaching.
Bear in mind that this is a realtively new undertaking for me.
For that reason I ask your tolerance if I do not instruct with the
same kind of “style” that you have become accustomed to. My
style, for a couple of reasons, will be a lecture based style. The
first reason is that we have a lot of material to cover, and in
order to get through everything, I will need to maintain a
particular pace. That is not to say that I do not welcome your
participation. Quite the opposite. Canadian jurisprudence is
nuanced, and it is always more interesting to have everyone
engaged. Different ideas…different interpretations that are
based on sound reasoning and judgment are at the core of the
common law system so if you have an idea that differs from
that presented in a case we are reviewing, then please feel free
to share that idea. Our legal system is not, paradoxically, based
on right and wrong, but on what the most sound arguments say
is right or wrong. It is based on what judges and juries interpret
and assess to be right or wrong based on the cases presented
to them by lawyers acting zealously on behalf of their clients.
So for that reason, we will not judge your ideas if you choose to
share them with us. Consider this an open forum for idea
sharing. So we think about where law comes from…..lets
consider this….. In fact, lets start there….lets consider a
scenario (slide 4)
This scenario demonstrates a clear distinction between law and
ethics. As a fisher, you may have a moral obligation to attempt
a rescue, but you do not have a legal obligation. If buddy
drowns, and you sat thirty feet away trolling for trout you
cannot be held responsible. The law does not recognize a moral
responsibility as legally enforceable. SAMARITAN RULES
Think about this in a business setting. You are a multinational
manufacturer. You have an obligation to your shareholders to
maximize profits and in order to do so you recognize that you
should produce some of your product in a country that has no
restrictions on workers ages, or worker protections. There are
no environmental protection legislations and so the factory
spews effluent into local watersources.
DISCUSS……
The second reason that I will engage in more of a lecture style is
more practical reason, and that is that….candidly….I don’t know
how to approach this material in any other way. As I have said,
this is a new experience for me, so the use of visual aids and
the like will be kept to a minimum. Too likely to throw me off.
Besides, in my experience heavy use of visual aids like
powerpoint, if not properly used, can be a distraction for the
audience. And I don’t want you to feel distracted….I want you
to feel engaged…interested. We will review cases. Real legal
cases that form the substance of the law in Canada. It is my
hope that you will question the outcomes in many of these
cases, and feel free to offer your thoughts and views. I want
you to feel free to engage because the law is so vibrant. It
benefits from open discourse and debate and it affects
everything we do everyday.
This course will be divided into about four sections. We are
going to start by learning the why and how of the law. Why we
need rules to govern behaviour in a commercial context, and
how the law applies to shape and guide the conduct of
commerce.
We will then learn about contracts. This will be the largest
component of the course as we learn how contracts are
formed, how they function to regulate the behaviour of the
parties, and so on.
We will then shift our attention to Tort Law. Tort Law is largely
remedial in nature….what do we do to address things that have
gone wrong. What are those wrongs and how does the law
work to put things back in order.
Finally, we will spend some time learning about the application
of law in some specific situations. We will look at four concepts,
time permitting. We will look at law in the context of
employment….what are the rights and responsibilities of
employers and employees in the work setting. We will look at
how the law deals with the Sale of Goods….what are the rights
and responsibilities of consumers and those who offer goods
for sale. We will take a brief look at how transactions in real
property….land, houses, and the like….are governed by the law.
And finally we will look at how business is structured. What
form of organization should your business take….what those
forms are and how they differ.
OK with that being said, lets talk expectations. I want to stress
that in law there are seldom right and wrong answers. This may
be a little counter intuitive for a system that is designed to
govern right and wrong, to adjudicate situations when persons
feel aggrieved and to set matters right. But as I alluded to
earlier, we are discussing the Common Law system in this
course. So what does that mean?
The common law has its origins in England, and as a result of
the pervasiveness of English imperialism during the 17th to 19th
centuries, it is the system of law in jurisdictions throughout the
world. As an English colony originally, Canada has employed the
Common law as its dominant legal system.
The common law is often referred to as judge made law. That is
because the rules that we are bound to derive from precedents
established in a court of law. The decisions rendered by our
judges become legally binding. As those decisions are reviewed
by superior courts, the strength of the precedent becomes
stronger. So in Canada as an example, if I as a lawyer have a
case that I am arguing in court, I will look to similar matters that
have already been decided in the Supreme Court of Canada,
and in The Appeals Courts of the various provinces. These
courts consider matters that have already been decided in
lower courts when there is a pressing reason to do so. We do
not need to get into matters like Leave to Appeal, or Appeal by
right. Suffice it to say that when matters are brought to these
courts the decisions that either affirm or overturn the decisions
of lower courts establish a stronger legal precedent.
In this court we will often consider cases that were heard in
Courts such as the House of Lords in England. That is because
the rulings that were made in these old cases stand as good law
today. What I mean by that is that, in contrast to Civil Law
jurisdictions where the rules are written down and are there for
all to see (and hopefully abide by), in a common law system the
rule as established by the precedent is always subject to
interpretation and re-interpretation. It is a living thing, growing
and changing with the times. So a judge, presented with a
carefully crafted argument, may decide that a precedent should
be varied so that it accords better with a changing world. Or he
or she may decide that the precedent ought to be amended to
consider new factual underpinnings. But in some cases, such as
the old House of Lords cases, the law remains the law because
the rationales on which those cases were decided remain
pervasive and unshaken today.
Either way, clever lawyers will attend in court with arguments
that cite precedents. They will either use the precedent to
bolster and support the case they are making because the facts
of their case are similar to the facts in the precedent, or they
will use the slight differences in the facts to distinguish their
case from the precedent. The result, you might note, is that
regardless of the facts of your case, the clever lawyer will craft
arguments that support an outcome in their favour, no matter
the side of the argument they are on. There is no right or wrong
answer, just more persuasive arguments. Law is a creative
artform in the hands of the very best, and while the vast
majority of the material we will cover in this course deals with
long established precedent, understand that when we review
certain cases, and the outcomes strike you as confusing, or
perplexing, or even contrary to what you believe the rules are,
it is because a clever lawyer made a clever argument on some
issue within the case.
So why Law? What does that have to do with the course you
are in? The answer is really quite simple. Businesses, like
people, must operate in a system that defines and confines
their behaviour. This provides a degree of certainty with
respect to decision making. Certainty is an ideal that many
decision makers strive for. Even in uncertain circumstances, you
can plan contingencies to avoid the worst possible downside
outcomes, and to provide the greatest possible opportunity for
a positive outcome. This is called risk management, and it is at
the core of a large amount of what we will cover in this course.
When we look at a fact scenario, or at a case, the challenge for
you as students will be to identify the issues. Are the issues
legal issues with possible legal outcomes, or are they moral
issues. For example, if I were to fail to attend class one day,
have I broken a moral obligation because I promised you that I
would be here to instruct, or have I broken a legal obligation
because I am here on behalf of Saint Mary’s University? Would
it make a difference if I volunteered or if I am paid? What
questions about the issues can you answer based on the
information before you, and which questions are you
answering based on assumptions you are making. This is key.
Assumptions in law can be very dangerous to the substance of
your arguments, because if your assumption proves incorrect,
then your entire position becomes untenable. As lawyers, we
can never make assumptions about things on behalf of our
clients.
Once you have identified the issues, you must evaluate those
issues and decide a course of action. This evaluation is
essentially the process of assessing the relative risk associated
with various decisions. If you are reviewing a case in this class,
for example on an exam or assignment, you should break your
analysis down into issue identification, and then evaluate each
issue carefully. The evaluation or the strength and merit of the
evaluation will be essential in assessing the value of your
response. Your response is essentially your answer. What, in
the scenario given, would you do.
Ok…..you have heard me use the term risk a few times. In
business we are asked to make decisions all the time. If you are
selling products, you have to make decisions regarding the
manufacture of those products…decisions related to cost, to
durability, to packaging…you name it. Maybe you are at the
design stage, and you need to make decisions related to
competitors who are already in the marketplace. Maybe a
product that you market has caused people to fall sick, and you
need to generate an appropriate response. Maybe your stock
prices are falling in the wake of these illnesses and you have to
balance the need for fiscal responsibility with your moral
responsibility. There are tradeoffs to be made and there are
associated risks with each decision.
How companies deal with risk can be broadly characterized as
one of Risk Avoidance, Risk Reduction, Risk Shifting, or Risk
Acceptance.
Lets consider these separately. BLUE CLIP.
It is important to bear in mind that notwithstanding how risk
averse an organization might be, risk is inherently situational.
So a company that likes to avoid risk at all costs may find itself
accepting certain risks if the potential financial cost of doing so
is outweighed by the potential for profits. However, it is this
type of behaviour that can backfire. ie Volkswagen….diesel
engine emission tests.
When a company fails to do an effective job of properly
evaluating risk, it can bear a significant problem. Consider
Boeing for example…..the company thought they were doing all
the right things in establishing the training protocols for
operating their new Max 8 aircraft, except that they failed to
ensure that those training protocols were properly
administered by the airlines that purchased the aircraft. So
pilots with years of service, when faced with an aircraft that
was telling them to do the opposite of what their years of
experience had taught them ended up in peril. Now airlines the
world over have grounded the Max 8 and Boeing is suffering
massively because they failed to ensure that the operators of
the aircraft had the proper training.
Let’s consider another example….Donker mines operates a coal
mining operation in northern Nova Scotia. Demand for coal has
been steadily declining for decades and the mining operation is
experiencing financial challenges. After laying off a significant
portion of its work force, the community has been up in arms
over the what they perceive as the company has not provided
adequate severance and compensation to its former
employees. Several executives feel that this situation ought to
be addressed because “this is the same community where we
live and breathe” However, the company has complied with its
statutory obligations. Some executives feel that they should go
beyond their statutory obligations because a new strategic
initiative might mean that a full work force is required again
and they don’t want the bad blood to exist between the
company and its workforce. However, a recent federal
inspection of the operation has revealed stress fractures in the
mine that could result in cave ins. Engineers have assessed the
risk as low, and the government report based on the inspection
provides for a non obligatory recommendation that the ceilings
be shored up for safety. The dilemma that the company is now
faced with is that they cannot do both. Financially, there is no
possibility to both redress the former employees, and to effect
the repairs in the mine.
We are going to move in a bit of a different direction here for a
bit. We have talked already about the common law and its
origins. When we speak of the common law we are talking
about judge made law. We are talking about the how rules are
applied based on how the judiciary has interpreted them. But
some laws have clearly defined rules….these are said to be
codified. When the rules are considered by our government to
be important enough to apply to everyone, the government will
draft legislation, and pass these statutes into law. Statutory law
is public law, in that applies to everyone at all times. Contracts
and Torts, on the other hand are considered private laws, in
that they only apply as between the parties affected.
DRAW THE DIAGRAM ON PAGE 8
Discuss briefly the operation of each.
Constitutional Law pg12 The Canadian Constitution is the
supreme law in Canada. It governs everything. For example,
section 52 of the Constitution states “The Constitution of
Canada is the supreme law of Canada, and any law that is
inconsistent with the provisions of the Constitution is, to the
extent of the inconsistency, of no force or effect”
One of the most significant functions of the constitution is the
division of powers. Canada is a federal state, inasmuch as we
have levels of government that deal with distinct aspects of life.
Draw diagram on page 13 discuss
Also note federal residual power which has allowed it to take
on matters such as air travel and telecommunications. Note
Paramountcy…….
So this is a good point at which to provide a bit of a recap.
Remember that Canada is largely a common law state. I
mentioned that this means we derive our rules from judges
who have interpreted the issues before them. But this is not
the entirety of the story, as this is but one source of law in
Canada. We have just talked about the Constitution and how it
is the supreme law in Canada. We have also talked about the
division or powers. We know from our discussion of public law
a moment ago that our governments, whether federal or
provincial or even municipal can create laws within their
jurisdiction and these laws become part of the public law
domain. This public law domain, the collection of federal and
provincial statutes, and even local municipal bylaws are
intended to govern conduct within a given jurisdiction. These
statutes are the second source of law in Canada. The final
source is the Court. It is the judges who interpret the other
sources. In so doing they provide us with guidance as to how a
statute or the Constitution is to be considered. This is the
common law. I should stop to create a bit of a disctinction
here…
The term common law applies to characterize a
system….Canada is a common law system. But the term also
describes the rules that derive from judicial interpretation.
Most of the rules we will discuss throughout this course that
apply to contracts and torts are common law rules. So it is fair
to say that there can be a common law interpretation of a
statute, or there can be a common law rule relating to the
elements of a contract for example. This point will become
clearer as we delve more into contracts.
As mentioned this course will focus predominantly on private
law. Most often, private law deals with private matters
between persons. In the eyes of the law, a person can be a
corporation as well as an individual. It is important to note as
well that the government can also be subject to private law
obligations. This is called the Rule of Law, and in Canada it is
how we keep our elected officials in check. No one is above the
law, including the government, and if the government fails to
act in accordance with the law, it to can be held accountable.
To borrow an example from the text….
The government enacts a statute called the National Building
Code of Canada (the NBCC) It is a set of rules as to how
structures are to be built and private contractors must
conform with the code. The government conducts inspections
of building sites to ensure conformity, and they sign off at
various permitting stages. The Code exists to ensure that
structures are habitable. It governs the type of materials, how
electrical and plumbing should be installed, etc. It is very
comprehensive, and it is an excellent example of public law.
Tell story of Scott Stewart…..government did not comply with
their own rules regarding the installation of wheelchair ramps
at a post office building. Later when the government sold the
building as surplus they attempted to have my client install a
ramp at his considerable expense before they would approve
his commercial license.
This is a good example of the Rule of Law, inasmuch as the
government must also be held accountable.
Lets consider another example….and remember that these
examples are open for discussion. I invite you to offer your
thoughts…..
A company has developed plans to build new docks in the port
in Halifax. The Halifax Port Authority, created under a federal
statute called the Canada Marine Act has provided approval for
the project. The HPA is charged with ensuring that aspects of
the shipping industry worked effectively with the Halifax
Harbour. However, local interest groups have opposed the
development. One group sates that the plan was not approved
by the City Planning department, and that such approval is
normally required before developments in the city are
undertaken. A second group is an indigenous peoples group
suggesting that the lands to be developed are lands formerly
used for sacred rites, and that as such, the lands and adjacent
waters properly belong to them.
Lecture Notes – Sept 12, 2019
The Law of Contracts is a significant portion of this course. And
that makes sense because we enter into contracts every day,
whether we know it or not. When you make a purchase at a
store you create a contract. Your attendance at this university.
If you ride the bus. These examples are all contractual
relationships. Today we will look at the essential elements of a
contract.
The very first thing that must exist in order for a contract to
exist is a meeting of the minds…..an intention to create legal
relations. Secondly, there must be a clear offer, and an
unequivocal acceptance. And finally, there must be some
consideration given by the parties….some value that must
exchange hands.
An Intention to Create Legal Relations – the parties must have
intended to create a legally enforceable agreement. When
courts are asked to assess whether there was a mutual
intention, they will use an objective standard. They will ask
themselves, would a reasonable person have believed that the
parties intended to create a legally binding relationship. This is
not a case of what the parties actually thought, but what a
reasonable third party might have thought when presented
with all the facts.
An intention to form legal relations is generally presumed in
commercial settings, but not between family members or close
friends. However, in a legal sense, these presumptions can be
rebutted. In other words, that clever lawyer that we talked
about the first day might craft an argument that even though it
was a family matter, that a contract was formed. Let’s say your
mum promised to buy you a car when you graduate, but then
backs out of that promise. You want to sue your mother to
keep her promise but the court will usually determine that this
was a family matter and there was no intention to create legal
relations. But what if you also had to work in the family store
for free during your time in school? Does that change anything?
If there is an intention to create legal relations, then there are
several further elements that must be present in order for a
contract to be created. The first of these is an Offer. Essentially,
and offer is made when one party indicates to another that it is
willing to enter into a contract on certain terms. Lets say I want
to sell my laptop. If I say to you…..you can buy my laptop for
500 dollars, I have made an offer. I am the offeror. The person
to whom I make my offer is called the offeree.
But what if I put up an ad on a bulletin board, with my phone
number and the same offer to sell my laptop for $500? Later
when I check my messages I see I have 3 people that want to
buy it. Am I obligated to sell my laptop to 3 different people?
Have I created three different contacts?
In order to solve this dilemma, the courts have deemed my
bulletin not to be an offer, but an Invitation to Treat. An
invitation to treat is not an offer but an indication of a
willingness to receive offers from others. So now I have three
offers to buy my laptop and a decision as to which offer I will
accept. This is a clear example….some are not so clear. Consider
the case of Carlill v Carbolic Smoke Ball Co. This is an old case
from 1893 in which the company advertised that its product
would cure influenza. If someone used the product as directed
and it did not work the company would pay them $100 which
was a massive sum of money in those days. The company put
the money aside in a bank account. Carlill used the smoke ball
and was not cured, and when they tried to claim their money
from the company they were told that this was not a genuine
offer, but merely an invitation to treat. After all, just like my
bulletin about my laptop, they just advertised to the general
public right. IN this case however, the judge determined that
because the money was already set aside, and the requirement
that there be specific performance by the offeree, that a
contract did exist. These are important considerations. If I
changed my bulletin to say laptop for sale….one laptop only
$500 first come first served then it could certainly be said that I
was making a specific offer rather than an invitation to treat.
An offer must be communicated in a manner that is understood
to be an offer. The example in the text refers to a board of
directors deciding to pay a long serving employee a large bonus
when they leave the company. Later, the employee is asked to
draft the minutes of the meeting. The employee sees the
decision and tenders their resignation in anticipation of
receiving the bonus, but the board does not pay. The decision
was not put to the employee as an offer, but as a work
assignment and as such it could not be said that there was a
meeting of the minds between the parties.
Offers do not last forever. Offers cease due to
•
•
•
•
•
Revocation
Lapse of time
Death or insanity
Rejection
Counteroffer
Revocation is, quite simply, the offeror withdrawing the offer.
They can do so at any time. However, the revocation must be
clear and unequivocal.
For example there is an old case from 1880 called Byrne v Van
Tienhoven:
Oct 1 van Tienhoven in Cardiff Wales wrote to Byrne in
New York and offered to sell him 1000 boxes of tin plates
Oct 8 van Tienhoven wrote again to Byrne to revoke his
offer
Oct 11 Byrne received the first letter and immediately
telegrammed van Tienhoven that he would accept the plates
Oct 20 Byrne receives the Oct 8 revocation.
Byrne sued to have the plates delivered in accordance with the
original offer. Because the revocation had not been
communicated prior to the acceptance, a contract had been
formed.
A special situation that occurs in business all the time should be
discussed. That is the tendering process. Let’s say that Saint
Marys University wants a new library built on its campus. It
wants to get the best price but it also wants to establish exactly
what it expects from the potential builders. They would likely
put out what we call a tender, which is a specific kind of
request for companies to bid for the work. The tender offer can
be accepted by companies who submit their bids for contract A,
which is the right to be considered for the work. But this is also
an invitation to treat to enter into contract B, the actual
contract for construction. This is important because if the
tender was only an invitation to treat, then the companies
could revoke their offers and the process would fall apart. Saint
Marys needs the certainty that the bidders will not pull their
offers so in a tendering process there are as many contract A as
there are bidders, but there always only one contract b.
An offer may lapse. The offeror may state the time period that
the offer is open. However this is not always the case and the
specific facts will determine whether an offer has lapsed. For
example if I am a butcher and I offer that I have three fresh
never frozen lambs for sale first come first served, I only sell
two and then several weeks later someone comes in asking for
the third lamb it can be said that the offer lapsed because the
subject matter of the contract would not longer be fresh.
An offer ceases if either potential party goes insane or dies. This
goes to the capacity of the parties to enter into a contract.
Capacity is essentially the ability of the parties to have a
meeting of the minds. Many jurisdictions also state that youth
do not have capacity to enter a contract. The age is usually 18
but can certainly vary.
Rejection of an offer terminates the offer. So if offer my laptop
for $500 and you say no way, the offer is dead. So you cant
change your mind and then bind me to my offer.
Likewise, if you counter offer to buy it for $400 then my original
offer ceases to exist. You now become the offeror and I am the
offeree. It is open for me to accept this new offer.
The next component of a contract is the acceptance. The
acceptance must be clearly and unequivocally communicated
to the offeror. The acceptance must match the offer or it will be
deemed a counter offer. It also must be communicated in the
form stipulated by the offeror. For example if I say that I will
sell my laptop to the first person who calls me on my cell, and
you show up at my house, I am not obliged to sell you my
computer.
If no method of acceptance is communicated, then acceptance
can occur in several ways. The most common is by word. It will
suffice to form legal relations if you call, fax, email…..the key is
that you communicate your acceptance to the offeror on the
same terms that they have offered.
Generally speaking, you cannot accept an offer by remaining
silent. In Canada, we had a situation not too many years ago
where a broadcasting company suddenly changed their
consumers channel offerings via their cable television
distribution. Customers received a notification that unless they
advised the company that they did not want the new service
within 30 days they would be assumed to have accepted the
service and would be charged accordingly. If a customer
notified the company within the 30 day timeframe that they did
not want the upgrade, then their service would be reset to their
original programming. A great many customers failed to note
the requirement of 30 days notice, and when their bills were
suddenly higher than before they got upset. They took the
company to court and were successful because it was
determined that there was no contract between the cable
company and the customers because the customers could not
accept the service though their silence. This is the same as
some marketers who would drop products at homes with a
note to try it free for 30 days. If you don’t like it return it in the
prepaid envelope. The court determined that those people that
did not return the products were entitled to keep them anyway
without paying because a company cannot expect acceptance
of an unsolicited good or service.
Practically speaking, we know that the conduct of business
does not occur face to face. So in some situations it may be
difficult to determine if and when a contract has been formed.
For example, what happens if you mail your signed contract of
insurance to your insurance company but it gets lost in the
mail? Are you covered for losses that may arise because the
insurance company never received your signed acceptance?
What if you communicate via email? A company offers you a
job and will hold it open for to accept if you email by the end of
the day. You send your email at the end of the day, but there is
a problem with the employer’s servers and they don’t get the
email until late the next day, by which time they have already
hired someone else. Should that be your job?
These are important questions that judges have ruled on . The
general rules are these:
If the communication is instantaneous (face to face,
telephone, fax) then the acceptance is effective when it is
received by the offeror. So the contract is formed in the
jurisdiction of the offeror.
If the communication is not instantaneous, such as the post or
couriers, then the acceptance is effective when and where it is
sent. So if I drop a letter in the mailbox, or a courier package to
the courier driver with my acceptance the contract is formed.
This is called the Postal Rule. It was developed many years ago
to create a degree of certainty in the conduct of business. So
consider again the case of Byrne v Van Tienhoven we discussed
a moment ago. The contract was formed when Byrne, unaware
that Van Tienhoven had changed his mind about shipping the
tin plates, sent his acceptance by telegram.
Companies will get around the postal rule by formulating their
offer in such a way that makes it clear, for example, that
acceptance is only effective when it is actually received in the
mail, which means that lost mail won’t count against them. And
remember, the Postal Rule only applies to acceptance, not to
offers or revocations.
Another manner of acceptance is acceptance by performance.
So remember we talked about Carlill v Carbolic Smoke Ball? In
that case, the company made an offer to pay anyone who used
the product and still contracted influenza 100 dollars. But there
was no communication of acceptance right? Carlill uses the
smoke ball, still gets sick and then looks to collect the money.
Carbolic refuses to pay. So you might say there was no clearly
communicated acceptance, so the company does not have to
pay. But remember that the offeror can stipulate the method of
acceptance, and in this case it was to actually use the product
and still get sick. This is an example of acceptance by complete
performance. Let’s consider another example. Let’s say I lose
my cellphone. I post a bulletin all around the campus that says I
will pay $100 to whoever finds and returns my cellphone to me
at my apartment. So you look for my phone, you find it, and
you bring it to me. You have completely performed the terms
of the offer, and you are entitled to the reward. But what if you
simply found my phone and brought it to me in the classroom,
unaware that there was a bulletin posted. If I don’t give you the
reward and then someone tells you about the bulletin, you are
not entitled to the reward because you did not perform as
asked. You were being kind, but there was not a meeting of the
minds that is required to form a contract.
Consider a couple of examples:
#3……#7
Frustration is
a)
An event that the parties thought could occur, so they included a term in
their contract called a Force Majeure clause.
b) an outcome when an event, which is beyond the control of the parties, makes
performance of a contract impossible.
c) a contract that is automatically terminated because of changing market
conditions.
d) what a consumer will experience when faced with standard form contracts.Walter is an experienced and highly successful gambler. He is most successful
when betting on horse races. Until recently, he frequently placed bets at the
Scarborough Downs Race Track. The track’s manager, however, ordered her
employees to deny Walter entry to the premises. The manager decided that Walter
was winning too much money. Which of the following statements is TRUE?
a) If Walter sneaks into the premises, the race track can remove him using
whatever force is required to accomplish the task.
b) The race track has no right to exclude Walter from its premises.
If Walter is told not to enter the premises and continues to sneak into the
race track, a judge might award an injunction against him.
d)
As long as it is owned by a private company, the race track has the right to
exclude Walter from its premises, even if it does so because it objects to the
colour of his skin.Question 3 (1 point)
Marco was secretly in love with Kylie, who is his roommate. Each night as she slept,
he gently kissed her once on her lips. Kylie became very upset when she learned
about Marco’s behaviour. She had always regarded him as a good friend, but
nothing more. Which of the following statements is TRUE?
a) Marco has not committed any tort because Kylie was his roommate and
because his actions therefore were merely normal social interaction.
b) Marco has not committed the tort of battery because Kylie was asleep when
he kissed her.
c)
Marco has committed the tort of battery even though Kylie was asleep when
he kissed her.
d) Marco has not committed the tort of battery because Kylie did not suffer any
physical injury as a result of being kissed.Question 4 (1 point)
Which of the following situations would allow Dudley to successfully sue Inga for the
tort of false imprisonment?
a) Inga, who works as a police officer, detained Dudley after she reasonably, but
incorrectly, suspected him of shoplifting.
b) Inga, who works as a security guard in a store, physically detained Dudley
after she caught him shoplifting and Dudley consented to that detention.
Inga, who works as a security guard in a store, verbally coerced Dudley, who
thought he had no option, into remaining in a back room after she reasonably,
but incorrectly, suspected him of shoplifting.
d) Inga, a bus driver, refused to make an unscheduled stop for Dudley, even
though she easily could have done so.Question 5 (1 point)
Which of the following statements is TRUE with respect to the tort of interference
with contractual relations?
a) Liability will never be imposed unless the defendant intended to hurt the
plaintiff.
b) If the defendant is held liable for the tort, it will always be held liable for
breach of contract as well.
Liability will never be imposed unless the defendant’s actions actually caused
a breach of contract.
d) Liability will never be imposed unless the defendant was a party to the
contract in question.Question 6 (1 point)
Chuck was interested in a stereo system that he saw at Nikita’s garage sale. She
asked if he wanted to take it inside to her basement to test it out, but he said “no”
because he felt uncomfortable with the idea of listening to music in a stranger’s
house. He nevertheless bought it for $100. When he got it home, however, he
noticed three problems. First, there are several small scratches in the stereo’s
exterior finish. Second, he was disappointed to discover that the stereo does not
have a radio. Nikita had not said anything about a radio, but he assumed that one
was included in the unit. And third, Chuck is very upset that the CD player skips
badly. Which of the following statements is TRUE with respect to the implied term of
merchantable quality?
a) Chuck cannot sue Nikita unless he relied upon her advice when he decided to
buy the stereo.
b)
Chuck cannot sue Nikita because the implied term of merchantable quality
does not apply to used goods.
c)
Chuck cannot sue Nikita because he would have noticed all of the defects if
he if he had reasonably inspected the stereo unit before buying it.
d) Chuck cannot sue Nikita unless she normally is in the business of selling
stereos.Question 7 (1 point)
Basra was very seriously injured in a car accident primarily caused by a drunk
driver who swerved over the centre line into the path of Basra’s car. Doctors have
said that Basra may never walk again. When Basra sued the drunk driver for
negligence, the defendant’s lawyer discovered that cell-phone records indicate that
Basra was sending a text message when the cars collided. If the case goes to court
a) A judge could reduce the quantity of damages payable to Basra by the
defendant because of Basra’s contributory negligence.
b) Basra will lose the case because of equitable principles.
c) The defendant will be able to use Basra’s careless actions to avoid any
financial responsibility for the accident.
d) A judge would ignore Basra’s carelessness because impaired driving is a
crime.Question 8 (1 point)
Which of the following statements is TRUE?
a) Property never passes under a sale of goods until the buyer has paid the
price.
b)
The passing of property is important for the purposes of insurance because
risk usually passes with property.
c) The Sale of Goods Act does not apply until property has passed from the
seller to the buyer.
d) Property in goods is always held by the person who has possession of the
goods.Question 9 (1 point)
The notion of bad faith is relevant to wrongful dismissal in that a court will use it to
a) reinstate the employee in his or her former position.
b) award damages to an employee, whether or not the employee has actual
proof of mental distress.
c) lengthen the period of notice required of an employer.
d) determine that wrongful conduct caused foreseeable mental distress and the
employee suffered actual psychological damages (if the employee can show
the employer acted in bad faith in the dismissal process)Question 10 (1 point)
During an argument in a nightclub, Marie deliberately slapped Caesar’s face. She
had done so many times before, with few consequences. On this occasion,
however, the slap caused Caesar to suffer a blood clot that led to a serious injury.
The medical evidence indicates that Caesar had always suffered from a rare
condition that made him unusually vulnerable to such complications. Neither Caesar
nor Marie had any way of knowing about that pre-existing condition. Which of the
following statements is TRUE?
a)
An injury is never considered to be too remote if the parties were married or
closely related to each other.
b) Because she committed an intentional tort, Marie cannot avoid liability on the
basis of the general doctrine of remoteness.
c)
The doctrine of remoteness is based on the court’s desire to award
compensatory damages even if the parties are not joined together by a
contract.
d) Caesar will probably receive an injunction.Question 11 (1 point)
Sam and Jemma each owned a 50 percent interest in an office building. Which of
the following is a factor that would support a conclusion that their relationship is
NOT a partnership?
a) Sam and Jemma are actively involved in the management of the building.
b)
Sam and Jemma are jointly responsible for all expenses associated with the
building.
Sam lent the money to Jenna for the office building and he has a 50 percent
interest as security for the loan. Sam takes no active part in the business, its
profits, or its losses.
d) Sam takes responsibility for finding tenants and Jemma collects the rents.Question 12 (1 point)
Pishoy recently graduated from medical school and established a general practice
in a small town. Unfortunately, one of his patients, named Rick, has been diagnosed
with late-stage colon cancer. Pishoy could have discovered that condition much
earlier by instructing Rick to undergo a colonoscopy. In accordance with standard
practice, however, Pishoy generally instructs his male patients to undergo that type
of test only after they turn 40. Rick has sued Pishoy for negligence. Which of the
following statements is most likely to be TRUE?
Because Pishoy is a relatively new physician, the court will lower the standard
of care.
in applying the standard of care, the court will be influenced by the quality of
the medical school that Pishoy attended.
Pishoy will be held liable because did not act as a reasonable professional
would have acted.
d) Rick’s claim will fail because Pishoy acted as a reasonable general practitioner
would have acted.Question 13 (1 point)
Conor is a notoriously angry and violent man. He recently became involved in a
disagreement with his neighbours regarding loud, drunken parties that he frequently
hosts in his house. During an argument about that issue, Joanna, who lives next
door to Conor, cracked the back of his head with a gardening tool. As a result,
Conor has sued Joanna for the tort of battery. Which of the following statements is
most likely to be TRUE?
a) If the court decides that Conor provoked Joanna, his claim must fail entirely.
b)
If Joanna successfully argues self-defence, the court will award damages
against her after it apportions blame between her and Conor.
c) Joanna will be protected by the defence of legal authority as long as Conor
was on her property and she had previously asked him to leave.
d) Joanna may have a complete defence if she honestly, but mistakenly, believed
that Conor was about to injure her husband.Question 14 (1 point)
Ella is a partner in a law firm operating as a general partnership. One of the firm’s
clients deposited $1 million in the firm account to be used by Ella to complete a real
estate purchase. Ella negligently bungled the transaction with the result that the
client lost the $1 million. Which of the following is TRUE?
a)
The partnership is not liable for Ella’s negligence because negligence may be a
criminal act as well as a tort.
b) The partnership is not liable for Ella’s negligence because it did not authorize
Ella to commit negligence.
c) Liability for Ella’s negligence falls upon the partnership and upon each of the
partners individually.
d)
The partnership is not liable for Ella’s negligence because Ella breached her
fiduciary duty to act in the best interests of the partnership.Question 15 (1 point)
During an argument, Sylvia became very angry and hit her friend lan in the head
with a baseball bat. Which of the following statements is TRUE?
a) Sylvia breached a public obligation that she owed to lan personally.
b) Sylvia probably has committed both a tort and a crime.
c) Sylvia breached a civil obligation that she owed to society as a whole.
d) In the normal course of events, lan could prosecute Sylvia for her crime.Question 16 (1 point)
Rachi is a wealthy business person with substantial personal assets. One of the
businesses she carries on is a health club. She has carried on this business as a
sole proprietorship, but she has decided to incorporate a corporation under the
Canada Business Corporations Act to carry it on. She will be the sole shareholder
and director. If you were a client of the health club, which of the following would be
a legitimate concern based on the change in the legal status of the health club
business?
a) Management personnel will change.
b) The risk that any claim you might have against the business will not be paid
will likely increase.
c) Prices for annual memberships will go up.
d)
It will be no use to you to complain to Rachi about any problems you have
with the operation of the health club.Question 17 (1 point)
Percy seems to lack the basic skills necessary to do her job. Which of the following
is true?
a)
To increase profitability, she should be moved into an easier job-even if that
means promoting her.
b)
To prove incompetence, her employer need only show that her job could have
been done better.
To manage risk, her employer should tell her that her work is substandard,
develop a process for improvement, and tell her that she will be fired if she is
unable to improve.
To claim this as the ground for summary dismissal, her employer must
demonstrate that she once had the skill.Question 18 (1 point)
Chloe sued Vincent for negligence. He has relied on the defence of contributory
negligence. That defence may be successful only if the evidence proves that
a) Chloe’s carelessness created one injury and Vincent’s carelessness caused a
different injury.
b)
it was reasonably foreseeable that a careless act by Chloe might inflict a loss
upon Vincent.
c) Chloe failed to act like a reasonable person would have acted in her
circumstances.
d)
Chloe and Vincent cooperated in creating the actual accident that injured
Chloe.Question 19 (1 point)
Which of the following statements is TRUE?
a) Punitive damages cannot be awarded in addition to compensatory damages.
b) Punitive damages are only available for unintentional torts.
c) Punitive damages are only available for intentional torts.
d) Punitive damages may be awarded even if the defendant is not guilty of a
crime.Question 20 (1 point)
Emily was involved in a business dispute with Jacob. During a private conversation
with Jacob, Emily threatened to spread a rumour that he was having an affair with
her unless he agreed to sign a certain document. She knew that that rumour was
entirely untrue, but she also knew that Jacob was afraid of upsetting his wife, who is
very jealous. On the basis of those facts alone, which of the following statements is
TRUE?
a) Emily is liable to Jacob for the tort of interference with contractual relations.
b) Emily is liable to Jacob for the tort of defamation.
c) Emily is not liable to Jacob.
d) Emily is liable to Jacob for the tort of deceit.Question 21 (1 point)
Juan entered into a contract with Makayla, under which he promised to add a
solarium on to her house for $25 000. After starting the project, he threatened to
abandon the job unless she agreed to pay him an additional $5000. Makayla did not
agree to pay the additional $5000. Juan did not finish the work. Makayla wants to
sue Juan for the tort of intimidation. Which of the following statements is TRUE?
a)
That claim will probably fail because Makayla did not give into the
intimidation. Makayla should sue for breach of contract.
b)
If that claim is successful, Makayla will probably receive an injunction that
would force Juan to complete the job in exchange for the additional price.
c) That claim will probably fail because the tort of intimidation is recognized in
England but not in Canada.
d) If that claim is successful, Makayla will actually receive damages in both tort
and contract.Question 22 (1 point)
Bryce consistently commits the tort of nuisance against Aaliyah. She wants an
injunction to stop him from doing so. Which of the following statements is TRUE?
a) Aaliyah has an absolute right to an injunction if Bryce’s nuisance causes
physical damage to her property.
b) A court will grant an injunction only if Bryce’s nuisance is intrusive.
c) A court may grant an injunction, but is a discretionary remedy
d) An injunction is never available with respect to a nuisance.Question 23 (1 point)
Lucy sells bulk foods to restaurants. Jean-Paul visited her warehouse and indicated
that he wanted to buy a barrel of peanuts for use at his diner, the Healthy Nut. Lucy
went into a back room and returned with a small bag of unsalted peanuts. Jean-
Paul agreed to buy a barrel of the same. Lucy went to a back room again and
returned with a sealed barrel of peanuts. She asked Jean-Paul if he wanted to
inspect the goods, but he said, “No, I’m in too much of a hurry. Just have them
delivered to my restaurant this afternoon.” The barrel was delivered, but when Jean-
Paul opened it, he discovered that the peanuts were salted. He therefore insists that
he is entitled to reject them. Which of the following statements is TRUE?
a) Jean-Paul is entitled to reject the barrel because the goods are
unmerchantable.
b) Jean-Paul cannot reject the barrel because property passed to him when the
contract was created.
c) Jean-Paul cannot reject the barrel because he failed to use a reasonable
opportunity to inspect the goods at Lucy’s store.
d) Jean-Paul is entitled to reject the barrel because the goods do not
correspond to the sample.Question 24 (1 point)
The concept of a crumbling skull
a) does not exist in Canadian law.
b)
allows the plaintiff to recover damages for the full extent of a loss, as long as
it was reasonably foreseeable that the defendant’s carelessness would cause
a normal person to suffer some injury.
allows the plaintiff to recover some damages when the defendant’s
carelessness hastens the occurrence of a loss that the plaintiff eventually
would have suffered in any event.
d) is exactly the same as the concept of a thin skull.Question 25 (1 point)
Fenna bought a specific good from Maurice. The total price was $1000. She paid
$400 immediately and promised to pay the remainder within one month. Since the
item was a floor model, Maurice agreed to clean and lubricate it for Fenna within
one week. Under the terms of the contract, once he had done so, he would leave
the item behind his store and call her to pick it up. The item was stolen before
Fenna acquired possession of it. Which of the following statements is TRUE?
a) If property passed to Fenna, Maurice should use the remedy of repossession
to demand payment of the remainder of the price.
b) Even if property passed to Fenna, the risk of loss must have remained with
Maurice until Fenna actually took possession of the item.
c) Fenna will bear the burden of the loss if the theft occurred after Maurice had
cleaned and lubricated the item, and after he called her to collect the widget.
d) Property could not have passed to Fenna as she did not pay the full price to
Maurice before the theft occurred.Question 26 (25 points)
Section B – Short Answer. PICK ONE (1) OF THE FOLLOWING THREE QUESTIONS
TO ANSWER ONLY. Answer in the space below. Please write clearly and legibly. 25
points.
1. Briefly, in a paragraph, describe the importance of the Reasonable Person to
the law. Who is this person and how do they assist the legal process. Also
provide 4 examples from our course materials where the Reasonable Person
plays an important role.
2. Newcastle Construction Ltd. hired Alan, who is an architect and a
construction manager, to build a new soccer stadium. Alan and Newcastle
arranged a fixed fee for the services, and agreed that Alan would be
responsible for hiring the workers and the purchasing of all materials. Those
costs were included in the fee. The supervision of the workers that Alan hired
would be done by Newcastle, under the direction of Mr. Benitez, Newcastle’s
chief architect and construction engineer. Mr. Benitez also provided day to
day instruction to Alan, and other construction managers involved in the
project. After receiving specific instructions from Mr. Benitez, Alan designed
and oversaw the installation of a giant aluminum soccer ball on the outside of
the stadium. Media and fans were invited to attend the grand opening of the
stadium, and just as they were proceeding inside, the giant soccer ball fell and
killed Mr. Ashley, a local businessman. Mr. Ashley’s wife is now seeking
damages from both Alan and Newcastle.
Briefly discuss who might be liable for Mr. Ashley’s death and why. Use
specific references to legal principles we discussed in class.specific references to legal principles we discussed in class.
3. Trout Point Lodge, a wilderness hotel in Nova Scotia brought an action for
defamation against Richard Handshoe, an online blogger. The defamatory
comments originated with a news story written by Handshoe, which was
published in the Times newspaper about a man named Aaron Broussard, being
involved in a political corruption scandal. The plaintiffs were wrongly
identified as being connected with Mr. Broussard in a business venture and
Mr. Broussard was named in error as owning Trout Point Lodge. The
allegations in the article against Broussard are kickback schemes, money
laundering and fraud. The defamatory comments later included claims that
Trout Point Lodge had misled a funding agency that supplied capital for the
construction of the Lodge. The defamation continued with statements that
Trout Point Lodge was losing business or going bankrupt because of the
investigation of Mr. Broussard and his inability to continue to support it. Also,
there were claims that Charles Leary and Vaughn Perret, directors at Trout
Point Lodge, had been involved in a series of businesses which failed and that
they are con men. The statements also contained anti-gay rhetoric and
homophobic comments directed at Leary and Perret. After the original story
was retracted by the Louisiana newspaper that published it, Mr. Handshoe
made blog statements that Mr. Leary and Mr. Perret had improperly
influenced the newspaper to retract the story. He also said that Mr. Leary and
Mr. Perret were improperly using the legal system by commencing the
defamation action.
Discuss all the Defences that might be available to Mr. Handshoe against the
allegations by Trout Point Lodge. Explain why you think they will succeed or
fail.