Contracts

1
kequ|rements for Lhe formaLlon of a conLracL:
1. offer
2. accepLance of offer
3. accepLance of Lhe cerLalnLy of Lerms, communlcaLlon of Lhe accepLance
- lf one of Lhese ls mlsslng, Lhere ls no conLracL.
- CLher elemenLs may be requlred dependlng on Lhe [udge:
a. lnLenLlon Lo creaLe legal relaLlons
b. ConslderaLlon (sufflclency of whaL ls exchanged, adequacy ls noL relevanL)
c. Consensus (requlred ln clvll law, buL noL ln common law)

CIILk and ACCLÞ1ANCL (Cn. 2)
wheLher ln Lhe negoLlaLlons whlch have Laken place has Lhere been a deflnlLe offer by one parLy, and an equally deflnlLe
accepLance of LhaL offer by anoLher.

- 1hls can be lnferred from conducL of each of Lhe parLles
- 1hese can also be lnferred from lnacLlvlLy
1. CIILk:
= an lnLlmaLlon, by words or conducL, of a wllllngness Lo enLer lnLo a legally blndlng conLracL, and lndlcaLes LhaL lL ls Lo
become blndlng on Lhe offeror as soon as lL has been accepLed by an acL, forbearance, or reLurn promlse on Lhe parL of
Lhe person Lo whom lL ls addressed.
- A|| terms of the contract are |n the offer.

1esL for offer = ln1Ln1lCn
- usually sub[ecLlve raLher Lhan ob[ecLlve ( Lhe person's conducL bears more welghL Lhan LhaL whlch was ln Lhe persons
mlnd)
- 1hls can be deLermlned by:
l. Lvldence (wlLnesses or subsequenL acLlons)
ll. 8easonable Þerson 1esL (whaL would a reasonable person say abouL Lhe lnLenLlon)
2. INVI1A1ICN 1C 1kLA1: an lnvlLaLlon Lo a parLy Lo make an offer (eg Þrlce quoLaLlon, self-servlce sLore)
Cffer v Inv|tat|on to 1reat:
- dlsLlngulshed by an |ntent|on to be bound or creaLe legal relaLlons
- can be distinguished from an offer by certainty of terms
Cffer and Inv|tat|on to 1reat
lnvlLaLlon Lo LreaL- lnvlLlng and offer, expresslon of wllllngness Lo negoLlaLe (noL a conLracL)
cooseosos oJ lJem. Meetloq of tbe MloJs. ÞarLles musL be ln agreemenL on all Lerms aL Llme enLerlng conLracL

8aston v. 1oronto Iru|t V|negar Co., 1902,

Iacts wrlLLen exchange of lnLeresL and complex conLracL prevlous year
Issue Was Lhere an offer (and accepLance)?
keason (for) LeLLer offer, posLcard accepLance, or posLcard offer and dellvery of some cucumbers accepLance and
Lhere was a conLracL prevlous year
keason (aga|nst) leLLer and posLcard only showed general enqulry buL never became offer ºflnal arrangemenLs made
aL a laLer daLe" - Llp LhaL someLhlng furLher needs Lo be done Lo
kat|o Look aL sequence of evenLs and lnLenLlon of offeror - when you make an offer, lL has Lo be
subsLanLlal enough ln order for someone Lo say Ck. Lhe flrsL communlcaLlon ofLen lsnL enough. lf lL
ls noL really [usL a ?LS answer. Lhen lL probably wasn'L an offer
ne|d]Dec|s|on no clear offer open for accepLance
I|sher v. 8e|| (1961)
***
Iacts lllegal Lo sell ºfllck knlves" and sLore had Lhem ln dlsplay wlndow
Issue Was sLore gullLy of ºoffer Lo sell" fllck knlves by havlng Lhem so dlsplayed? ** buL no slgn Lo sell
2
keason (for) clear defendanL has lnLenLlon Lo sell
keason (aga|nst) ulsplaylng someLhlng doesn'L mean LhaL golng Lo sell Lhem
kat|o ºoffer for sale" connoLes more Lhan slmple dlsplay of lLem, only showed readlness Lo go lnLo
agreemenL. ulsplay slmply an lnvlLaLlon Lo LreaL, Lo ellclL offers Lo purchase.
ne|d]Dec|s|on ulsplay ln shop wlndow dld noL consLlLuLe an offer, only an exposure Lo sell or lnvlLaLlon Lo LreaL, so
defendanL noL gullLy
Comments Look aL Lhe word ºlnLenLlon"- was lL was clear LhaL he had lnLenLlon Lo sell
narvey v. Iacey, [1893]

Iacts A Lo 8 - ºLelegraph your lowesL prlce offered º
8 Lo A - º£900"
A Lo 8 - ºWe accepL"
Issue uld 8's response consLlLuLe an offer?
keason (for) uncondlLlonal offer saLlsfles LesL - all 8 had Lo say was ºyes"
keason (aga|nst) !usL an lnqulry as Lo prlce.
kat|o Mere sLaLemenL of prlce conLalns no lmplled conLracL [offer] Lo sell,[usL lnvlLaLlon Lo LreaL
ne|d]Dec|s|on no offer only lnvlLaLlon Lo LreaL
Comments Look aL Lhe word ºlnLenLlon"-
Canad|an Dyers Assoc|at|on Ltd. v. 8urton(1920), Cn

Iacts n sald ºsLaLe your lowesL prlce for house"
A responded º lowesL prlce LhaL l would sell ls $1630"
n asked Lo lower prlce furLher, ArepeaLed LhaL was hls besL prlce
n LreaLed lL as offer and accepLed by sendlng a cheque
ÞarLles proceeded Loward closlng, buL A called lL off alleglng no conLracL
Issue Was Lhere an offer?
keason (for) llke Parvey v. lacle only prlce quoLaLlon
keason (aga|nst) !usL an lnqulry as Lo prlce.
kat|o CourL looks aL subsequent conduct of ß,
A acLs llke Lhere ls a conLracL and never dlsavows LhaL Lhere was a conLracL
ne|d]Dec|s|on As acLlons show he regarded hls leLLer as an offer so blndlng conLracL
Comments ulfferenL approach here - uslng subsequenL conducL and ºob[ecLlve" approach raLher Lhan searchlng
for lnLenLlon as ln Parvey v. lacle
nong kong 8ank (now nS8C) v. k|chardson Greensh|e|ds [1989] Canada

Iacts Puge bond purchase ln decllnlng markeL done by employees on Lhe phone, prlce was quoLed, and
A's employee sald º1haL's done"
Issue Was Lhere offer and accepLance?
ne|d]Dec|s|on Was offer and accepLance, so slze of deal maLLered noL



Þharmaceut|ca| Soc|ety v. 8oots Cash Chem|sts, 19S3, Uk
MusL have offer and accepLance for a k
A dlsplay of prlce or goods ls an lnvlLaLlon Lo LreaL
Iacts 8ooLs had a self-serve sLore and cash desk under pharmaclsL's supervlslon.
Issue was sLore dlsplay an offer or lnvlLaLlon Lo LreaL?
keason (for) Sale occurs when cusLomer puLs ºpolson" ln baskeL, so dlsplay ls offer and chooslng ls accepLance
keason (aga|nst) dlsplay only lnvlLaLlon Lo LreaL
kat|o a dlsplay of goods ls a mere lnvlLaLlon Lo LreaL and noL an offer Lo sell
ne|d]Dec|s|on 8ooLs noL gullLy, dlsplay only lnvlLaLlon Lo LreaL as sale Look place under Lhe waLchful eye of Lhe
pharmaclsL aL Lhe cash desk
3
Comments ConLracL Lakes place aL cash desk, wlLh cusLomer offerlng Lo buy, and clerk accepLlng by Laklng money,
oLherwlse cusLomer can never declde Lo purchase anoLher and puL lL back
Chr|st|e v. ¥ork Corporat|on, [1940] S.C.k

Iacts 8lack man refused servlce aL a bar aL Lhe MonLreal lorum
Issue Pow far does freedom of conLracL go ln a clalm ln LorL? (CourL dld noL conslder 8reach of ConLracL, so
Lhls declslon ls noL parL of Lhe law of ConLracL)
keason (for)
keason (aga|nst)
kat|o CompleLe freedom of commerce - any merchanL ls free Lo deal as he may choose wlLh a member of
Lhe publlc.
ne|d]Dec|s|on
Comments under Lhe law of conLracL, you could Lechnlcally refuse servlce (even raclally eLc.)
Car|||| v. Carbo||c Smoke 8a|| Co. !"#$%& ()*
blrLh of modern consumer law
Ads are generally an lnvlLaLlon Lo LreaL, unless language lnLerpreLed as offer by reasonable person
Iacts newspaper ad £100 Lo person who caLches flu lf use ball fllled wlLh Carbollc acld for 2 weeks, placed
£1000 bank Lo show Lhe money was Lhere, Lhen n uses ball and caLches flu
Issue ls Lhere an offer?
keason (for) unllaLeral conLracL - offer made Lo whole world, Lo accepL only need Lo Lry 8all and geL flu
keason (aga|nst) 1. no way of knowlng LhaL n complled wlLh Lhe lnsLrucLlons - dlsmlssed by Lhe CourL
2. CannoL conLracL wlLh Lhe whole world - CourL sald offer Lo whole world was
3. 1o have accepLance musL be communlcaLed lnLenLlon before Lrled ball
4. no lnLenLlon Lo conLracL, mere ºpuff" - buL money was deposlLed Lo Lhe bank
3. no conslderaLlon -
6. Wager only and unenforceable - courL noLes LhaL lL ls noL a wager
7. 1oo vague -when could conLracL - 2 years laLer?
8. lnsurance conLracL - 1 llne -ºno"
kat|o Cffer Lo all world buL k only w/Lhose who accepL and perform condlLlons.
AccepLance ls conveyed by performance
ne|d]Dec|s|on lf make Lhls klnd of unllaLeral offer Lo Lhe world, expecLaLlon ls LhaL someone wlll Lake up challenge
wlLhouL noLlce Lo offeror and lf geLs flu, LhaL ls accepLance and company ls bound Lo pay
Comments WlLh unllaLeral, how could you Lell Lhe whole world LhaL you are wlLhdrawlng?


ADVLk1ISLMLN1S - noL an offer unless lnLerpreLed as so by reasonable person AdverLlsemenLs, caLalogues, prlce llsLs,
wlndow dlsplays - sLrlcLly speaklng are nC1 offers because oLherwlse Lhe shopkeeper would be obllged Lo sell Lo every
person LhaL accepLed, even when supplles ran ouL.
1kANSAC1ICNS 8¥ MACnINL - are offers, Lhe producL cannoL be easlly reLrleved from Lhe buyer's properLy.
AUC1ICN - sale ls compleLe wlLh Lhe fall of Lhe hammer, unLll Lhen a bldder may reLracL a bld. ºwlLhouL reserve" =
lnvlLaLlon Lo LreaL, bld ls offer, hammer ls accepLance, aucLloneer free Lo accepL/re[ecL blds.
buL aucLloneer can wlLhdraw goods before aucLlon commenced
CAkkIAGL CI ÞLkSCNS - a schedule saylng LhaL a cerLaln Lraln wlll run aL a cerLaln Llme has been sald Lo be an offer,
alLhough regulaLlons ln effecL provlde no conLracLual llablllLy.
Go|dthorpe v. Logan, 1943 CN CA
unllaLeral conLracLs are accepLed lnLo Canadlan law and are blndlng Lo whomever accepLs Lhem
unllaLeral conLracL accepLance occurs ln Lhe form of Lhe performance of Lhe acL requesLed ln Lhe offer
Iacts A publlshed ad ln local newspaper - ºhalrs removed .permanenLly by LLLC18CLlSlS . resulLs
guaranLeed". Þ glven Lhe same guaranLee ln Lhe offlce. LreaLmenL dld noL work
Issue was Lhere an offer (and accepLance) ln Lhls unllaLeral conLracL?
keason (for) Ad consLlLuLed an offer llke Carllll and accepL by performlng
keason (aga|nst) Ad noL an offer - only an lnvlLaLlon Lo LreaL
4
kat|o Ads are an lnvlLaLlon Lo LreaL, unless language lnLerpreLed as offer by reasonable person. Look aL
offeror's lnLenLlon, A's lnLenLlon Lo make offer Lo whole world Lo have LreaLmenL, pay, and resulLs
guaranLeed, llke Carllll, [usL had Lo submlL (and pay) Lo accepL.
CourL warns: noL golng Lo leL buslness geL away wlLh ºreckless and rash" offer
ne|d]Dec|s|on 1he ad consLlLuLed Lhe offer and submlLLlng Lo procedure Lhe accepLance.
McManus v. Nova Scot|a
AucLlon
Iacts AucLlon adverLlsed as ºwlLhouL reserve" buL ln card handed ouL Lo parLlclpanLs, Lhey were Lold LhaL
aucLloneer could refuse Lhe bld. aucLloneer Lold everyone LhaL all blds were sub[ecL Lo Lhe approval
of Lhe recelver (Lraln cars) n was only bldder, accepLed by aucLloneer sub[ecL Lo recelver's approval,
recelver refused Lo sell, Lhen sold Lo 3
rd
parLy
Issue 1.uld Lhe uefendanLs breach a conLracL wlLh Lhe ÞlalnLlff by noL approvlng hls bld.
2.lf Lhere was a breach of conLracL, whaL amounL of damages ls Lhe ÞlalnLlff enLlLled?
keason (for) lot. 1. Lhe 8ecelver exLended a 'unllaLeral conLracL offer' Lo all ln Lhe aucLlon brochure and
newspaper ad of lLs lnLenLlon Lo conducL an unreserved aucLlon. 1he Lerms of Lhe 8ecelver's
unllaLeral conLracL offer lncludlng Lhe prlnLed condlLlons of sale, buL not the Auct|oneer's verba|
announcement to the b|dders."
+,-. /* 1he ÞlalnLlff accepLed Lhe 8ecelver's offer by placlng Lhe hlghesL /only bld. 1he bld was
accepLed when he closed Lhe by sLaLlng 'sold, sub[ecL Lo Lhe 8ecelver's approval'. º1he ÞlalnLlff clalms
Lhe 8ecelver /AucLloneer had no auLhorlLy Lo amend Lhe Lerms of Lhe wrlLLen k by verbally saylng all
blds were sub[ecL Lo 8ecelver's approval.
1he condlLlon on accepLance of blds on Lhe rallroads was conLrary Lo Lhe wrlLLen Lerms of Lhe
8ecelver's unllaLeral conLracL offer."
keason (aga|nst) no unllaLeral conLracL Lo Lhe world, AucLloneer can change Lhe rules as clrcumsLances change, each
lLem aucLloned separaLe conLracL, declded on Lhe fall of Lhe hammer.
kat|o an aucLlon does noL consLlLuLe an offer Lo Lhe whole world whlch ls accepLed by cusLomers showlng
up for Lhe aucLlon. offer ls made aL LhaL momenL, and Lhe hammer falllng accepLs, whlch may be a
condlLlonal accepLance.
ne|d]Dec|s|on ºLhe bld by Lhe ÞlalnLlff was Lhe "offer" and was condlLlonally accepLed by Lhe AucLloneer. 1he bld
was noL approved by Lhe 8ecelver and accordlngly Lhere was no conLracL of sale."
1LNDLk: owner/Lenderer
- 1he lnvlLaLlon Lo Lender can be an offer whlch becomes a blndlng conLracL upon submlsslon of a Lender. 1hls conLracL ls
called ConLracL A. ConLracL 8 resulLs from Lhe submlsslon of Lenders. 1WC CCn18AC1 AnAL?SlS
- 1he Lenderer may noL wlLhdraw hls Lender. 1he owner musL LreaL all bldders falrly.
- prlvllege clause: owner may noL accepL Lhe lowesL Lender recelved and need noL accepL any for Lhe pro[ecL.
- Lhe submlsslon of Lhe Lender ls good conslderaLlon for Lhe owner's promlse, as Lhe Lender ls a beneflL Lo Lhe owner,
prepared aL cosLs Lo Lhe Lenderer.
narve|a Investments Ltd. v. koya| trust Co. of Canada (C.I.) Ltd., 1986, Uk
A vendor ls obllgaLed Lo speclfy Lhe Lype of offers, or blds, he/she/lL ls wllllng Lo accepL ln a sale
Iacts Sealed Lender blddlng process, would accepL hlghesL offer. n offered $2,173,000 and Slr Leonard
offered º$2,100,000 or $101,000 more Lhan any oLher offer"
Issue Was Lhe bld Lhe offer ln a Lender sale?
keason (for) unllke aucLlon sale, bldder, Slr L, cannoL ad[usL hls bld
keason (aga|nst) he was enLlLled Lo submlL a referenLlal bld
kat|o A referent|a| b|d ls noL valld unless lL ls clearly and unamblguously auLhorlzed ln Lhe lnvlLaLlon Lo
LreaL
ne|d]Dec|s|on no 1he lnvlLaLlon Lo Lender speclfled LhaL only flxed blds would be accepLed
k. v. kon Lng|neer|ng , 1981 SCC
A Lender lnvlLaLlon/bld ls a unllaLeral conLracL LhaL ls belng broughL lnLo effecL by Lhe submlsslon of Lhe bld
*** slgnlflcanLly reformed Lenderlng laws
Iacts Company Lrled Lo wlLhdraw consLrucLlon Lender afLer Llme for wlLhdrawal ended
Issue Can company do Lhls ln face of sLlpulaLlon ln Lender rules LhaL lL cannoL wlLhdraw?
5
keason (for) Law says LhaL offer ls always revocable before accepLance.
keason (aga|nst) 8ules were clear and LhaL Lenderer bound by Lhem.
kat|o CourL held company bound by rules as Lhere was a ºconLracL A" separaLe from Lhe consLrucLlon
ºconLracL 8", and conLracL A was a unllaLeral conLracL llke Carllll, and offer for conLracL A was Lhe
lnvlLaLlon for Lenders and Lhe Lender lLself was Lhe accepLance blndlng Lhe Lenderer Lo comply wlLh
Lhe rules.
ne|d]Dec|s|on 1enderer who Lrled Lo wlLhdraw Lender laLe breached conLracL A and losL hls deposlL
Comments 1hls case suggesLs a new Lenderlng process lnvolvlng Lwo conLracLs:
ConLracL A, lnvlLaLlon Lo Lender consLlLuLes an offer capable of accepLance by submlsslon of a Lender
bld (unllaLeral conLracL governlng Lhe Lenderlng process)
ConLracL 8, a bllaLeral conLracL, belng Lhe consLrucLlon conLracL (bllaLeral conLracL awarded Lo Lhe
wlnner of Lhe Lender)
1he Lenderlng process wlll consLlLuLe a conLracL where Lhe call for Lenders - now an offer - conLalns
sufflclenL deLall Lo lndlcaLe LhaL Lhe person who has called for lnLends Lo be bound by Lhe process
Lhey have esLabllshed.
M.I.8. Lnterpr|ses Ltd. v. Defence Construct|on, SCC , 1999
Cnly a compllanL bld may be accepLed
Iacts n Lrled Lo force defendanL Lo accepL lLs lowesL bld raLher Lhan accepLed Lender by a dlfferenL company
LhaL n alleged had a deflclenL Lender. Cwner dld have a prlvllege clause LhaL sLaLed lL would noL
necessarlly Lake Lhe lowesL bld, buL Lhen lL dld. lmplled Lerm of ConLracL A LhaL lowesL compllanL bld
musL be accepLed
Issue ls a prlvllege clause enforceable?
keason (for) 1erms of Lenderlng ConLracL A based on buslness efflcacy necesslLaLes accepLlng lowesL bld LhaL ls
compllanL. Lhey are noL bound Lo accepL Lhe lowesL bld (M!8), buL Lhey are bound Lo re[ecL Lhe non-
compllanL bld
keason (aga|nst) Þrlvllege clause was parL of ConLracL A.
kat|o 1he prlvllege cause does noL overrlde Lhe obllgaLlon Lo accepL on|y a comp||ant b|d.
1he prlvllege clause does noL requlre Lhe person calllng for Lenders Lo accepL Lhe lowesL compllanL bld
ne|d]Dec|s|on Cwner could only accepL comp||ant b|d LhaL was Lhe lowesL and Lo do oLherwlse he was breachlng
conLracL A


CCMMUNICA1ICN CI CIILk

- An offer ls noL effecLlve unLll lL ls communlcaLed Lo Lhe offeree.
- 1here can be no accepLance ln lgnorance of Lhe offer
- 1here does noL have Lo be an lnLenLlon Lo accepL Lhe offer, [usL knowledge of Lhe offer aL Lhe Llme of accepL.
2 Step 1est: 1. ls Lhere knowledge? no= end of lnqulry. 2. ?es= ls Lhere lnLenLlon? no= end of lnqulry.
?es= enLlLled Lo reward.
8|a|r v. Western Mutua| 8enef|t Assoc|at|on, 1972, 8CCA
a communlcaLed offer Lo one person cannoL necessarlly be an offer Lo anoLher
Iacts SecreLary Lranscrlbed company memo LhaL she be glven Lwo years reLlremenL pay. SecreLary Lhen
reLlred and was denled Lhls pay
Issue Was Lhe offer communlcaLed Lo her?
keason (for) Memo consLlLuLed an offer Lo pay on reLlremenL and acL of reLlremenL consLlLuLed accepLance.
Þromlse had been made Lo her and she acLed on lL.
keason (aga|nst) She was a sLenographer, offer was noL communlcaLed Lo her as employee
kat|o 1here musL be an lnLenLlon Lo make an offer and Lo communlcaLe Lhe offer.
ne|d]Dec|s|on no, Cffer never communlcaLed and no promlse was made LhaL was relled on by n
W||||ams v. Carward|ne, 1833, Uk
knowledge of Lhe offer ls requlred ln order Lo accepL. lnLenLlon of accepLance ls noL requlred.
Iacts uef. posLed reward for lnfo leadlng Lo convlcLlon of murderer of bro, n changed her sLory on her
6
deaLhbed and Lold Lhe LruLh as Lo whaL she saw afLer belng beaLen by murderer.
Issue ls she enLlLled Lo Lhe reward, lf Lhe reward was nC1 her moLlve?
keason (for) 1hls was a unllaLeral conLracL and she performed whaL was needed (glve lnfo abouL murd)
keason (aga|nst) noL communlcaLed and noL lnduced by offer
kat|o MoLlve for accepLance ls lrrelevanL (must have know|edge of offer though)
ne|d]Dec|s|on CommunlcaLlon of offer was all over Lown and she musL have known of lL.
k. v. C|arke, 1927, Austra||a
musL have knowledge of exlsLence of offer aL Lhe Llme of performlng Lhe condlLlons of Lhe offer.
Iacts reward case - Clarke gave false lnfo on !une 6, Lhen gave correcL lnfo on !une 10, Lo save hls own neck
Issue unllaLeral offer Lo be accepLed, does Lhe acL need Lo be on falLh of or ln rellance of offer?
keason (for) Þerformlng acL ls sufflclenL
keason (aga|nst) AcL of accepLance needs Lo be ln rellance of offer
kat|o Cfferee musL have knowledge of Lhe offer ln order Lo accepL
ne|d]Dec|s|on acL musL noL only be acL sLlpulaLed by offer, buL musL be done ln rellance of on falLh of offer. 1he
moLlves are noL relevanL, buL acL musL be done wlLh lnLenLlon of accepLlng Lhe offer and only
knowlngly noL sufflclenL.
Comments 1here has Lo be some connecLlon beLween Lhe offer and Lhe moLlve. 1he acLual 8LASCn doesn'L
maLLer (Lhls [usLlfles how Lhe prevlous case raLlo seems dlfferenL)

ACCLÞ1ANC L

-an offer can be accepLed once noLlce of accepLance has been glven properly even lf noLlce of accepLance has noL reached
offeror
- all of Lhe Lerms of Lhe offer musL be accepLed as ls - lf noL, a counLer offer ls made
- lf a counLer offer ls made Lhen Lhe orlglnal offer ls no longer avallable Lo be accepLed
- lf reply from offeree ls only an lnqulry, Lhe orlglnal offer ls sLlll valld (look Lo Lhe language Lo deLermlne)
C8 orlglnal offeror re[ecLs Lhe counLer-offer and shows lnLeresL ln revlvlng/sLandlng-by Lhe orlglnal offer
Stevenson v. McLean (1861),
AccepLlng and revoklng and offer, Llmlng
Iacts Cffer made SepLember 21, Lhen communlcaLlon was:
A. n Lo A 9:42am - wlll you accepL 40
8. n Lo A 1:34pm - accepLlng prevlous offer
C. A Lo n 1:46pm -"have sold all" buL A had sold all before accepLance came Lhrough
Issue Was Lhe correspondence a conLracL and was 8 accepLance ln Llme before revocaLlon C?
keason (for) A an lnqulry raLher Lhan a counLer-offer and accepLed orlglnal offer before revocaLlon
keason (aga|nst) leLLer came Loo laLe and A. consLlLuLed a counLer-offer whlch would ends Lhe orlglnal offer
8efore n accepLed offer wlLhdrawn by 8 ÞoLhler's auLhorlLy , no meeLlng of Lhe mlnds here
kat|o an offer can be accepted once not|ce of acceptance has been g|ven proper|y even |f not|ce of
acceptance has not reached offeror
CourL read A as an lnqulry only and orlglnal offer accepLed ln 8 before offer wlLhdrawn
ne|d]Dec|s|on 8 offer can be accepLed once noLlce of accepLance has been communlcaLed Lo offeror buL revocaLlon
musL have reached offeree, accepLance occurred before revocaLlon
- acLual meeLlng of Lhe mlnds noL really necessary - lL ls a Llmlng lssue only
Comments Look aL Lhe wordlng Lo declde lf lL ls a counLer offer or an lnqulry.
L|v|ngstone v. Lvans, 192S, A8 SC
CounLer-offer kllls orlglnal offer
An lnqulry abouL Lhe offer does noL klll lL
Iacts u. offer land for 1800. Þ. counLeroffer 1600. u. sald ºcannoL reduce prlce." Þ. sends 1800. u. refuses
Lo sell.
Issue uld Lhe conLracL end wlLh Lhe lnLervenlng counLeroffer?
keason (for) no lnLervenlng acLs
7
keason (aga|nst) Was lnLervenlng acLs
kat|o 1he maklng of a counLer-offer ls a re[ecLlon of Lhe orlglnal offer. 1he orlglnal offer cannoL afLerwards
be accepLed wlLhouL Lhe consenL of Lhe orlglnal offeror. A sLaLemenL LhaL Lhe offer cannoL be reduced
resurrecLs Lhe orlglnal offer.
ne|d]Dec|s|on no, Lhe conLracL was sLlll valld. u. reply Lo Þ. counLer-offer , revlved Lhe orlglnal offer.
Comments Look aL Lhe language and clrcumsLances Lo see lf Lhere ls a conLracL.
SILLNCL by offeror |nd|cates that even |f the offeree has re[ected the or|g|na| offer, |f the offeror rema|ns s||ent on the
re[ect|on, then the or|g|na| offer st||| stands.






Battle of the Iorms
• Whlch offer ls belng accepLed?
• Whlch Lerms are belng accepLed?
• MusL have a meeLlng of Lhe mlnds. - 0,1231242 56 7638
• lf Lhey cannoL be reconclled Lhen Lhe k ls concluded
Lhree approaches:
1. ºLast Shot"]Þerformance Doctr|ne - Lhe lasL unconLesLed offer ls Lhe one whlch dlcLaLes Lhe Lerms of Lhe conLracL.
Cffer + conducL = conLracL
2. I|rst 8|ow - Lhe orlglnal offer deLermlnes Lhe Lerms of Lhe agreemenL
3. Cther - puLLlng Lhe Lerms and condlLlons of boLh forms LogeLher, resolve confllcL by reasonable lmpllcaLlon, ºshoLs flred
from boLh sldes"(8otlet Mocbloe)
8ut|er Mach|ne 1oo| Co. V. Lx-ce||-o Corp., 1979, Uk
8aLLle of Lhe lorms - Lerms should be Laken as a whole and reconclled when posslble
Iacts Þ. quoLed cosL of machlnery on a form LhaL conLalned Lhe Lerm LhaL Lhe Þ. could charge Lhe cosL of
Lhe machlnery aL Lhe Llme of dellvery. u. accepLed Lhe offer on paper wlLh
dlfferenL Lerms. Þ. wanLs hlgher prlce Lo be pald.
Issue WhaL was Lhe lasL Lhlng agreed Lo? When were Lhe Lwo parLles lasL aL 0,1231242 56 7638?
keason (for) all orders sub[ecL Lo Lerms and condlLlons and buyer could noL change Lhls
keason (aga|nst) Lhere was counLer-offer, and lL was accepLed
kat|o ConLracLs need 0,1231242 56 7638
ne|d]Dec|s|on conslderlng documenLs as a whole, declslve documenL ls 8, where buyer made clear purchase on
buyer's Lerms and noL seller's Lerms, whlch dld noL lnclude a prlce varlaLlon
Comments lf confllcLlng Lerms, Lhe purchase order LhaL was lasL agreed Lo wlll be Lhe one LhaL prevalls
Þarkette Apartments Ltd. V. Masternak [196S], CN

Iacts purchaser offered 60,000 on uec 24 and presenLed Lo vendor
vendor walLed a blL, Lhen amended offer (offer 8?) aL $64,000 wlLh oLher changes
Þurchaser: lnlLlalled changes Lo offer 8, buL made one more change (offer C?)- LenanLs musL go, buL
Lhls never goL Lo vendors
vendor recelved offer from dlfferenL person for more money and accepLed
Þurchaser: sued for speclflc performance
Issue 1. ls communlcaLlon Lo Lhe purchaser's real esLaLe agenL sufflclenL?
2. ls Lhere any auLhorlLy Lo walve requlremenL of accepLance ln Lhese clrcumsLances?
3. requlremenL of Lhe SLaLuLe of lrauds -for Lhe sale of land Lo be ln wrlLlng
keason (for) 1. 8eal esLaLe agenLs are agenLs for Lhe deal and communlcaLlon Lo elLher of Lhem sufflclenL as LhaL
was Lhe sLlpulaLed meLhod.
2. As Lhe maln Lerms have been agreed Lo (noL a blg deal Lo vendor abouL LenanLs belng Lhere.
should noL affecL vendor), accepLance of flnal change unnecessary
8
3. SufflclenLly ln wrlLlng and flnal accepLance does noL have Lo be
keason (aga|nst) 1. Comm. was Lo Þ`s agenL noL comm. Lo vendor's agenL, Lhls was noL meLhod agreed Lo
2. 1he flnal change ln offer C was a slgnlf change and was never communlcaLed Lo vendor,
3. Lhere was no communlcaLlon of accepLance ln wrlLlng Lo Lhe vendor as requlred
kat|o Cffer C was counLer-offer, Lhe requlremenL for vacaLlng was an lmporLanL requlred communlcaLlon of
accepLance so offer C was a counLer-offer and noL an accepLance
Any verbal communlcaLlon offended Lhe SLaLuLe of lrauds
ne|d]Dec|s|on no unequlvocal accepLance was communlcaLed Lo Lhe v so he was aL llberLy Lo accepL anoLher offer -
clalm for speclflc performance dlsmlssed
lf Lhe parLles dlsagree on Lhe Lerms of Lhe conLracL Lhen Lhe ºoLher approach" ls used Lo declde on Lhe Lerms and
condlLlons based on lndusLry sLandards (9:;,,6)
1ywood Industr|es Ltd. V. St Anne-Nackaw|c Þu|p and Þaper Co. Ltd., 1979, CN1
ConducL of Lhe parLles lndlcaLed LhaL nelLher parLy consldered any Lerms lmporLanL oLher Lhan Lhe ones found on Lhe face
of Lhe documenLs (belng Lhe speclflcaLlons and Lhe prlce)
Iacts 8uyer 1ywood made a requesL for a quoLe wlLh Lerms LhaL dld noL conLaln an arblLraLlon before
lawsulL clause-lnvlLaLlon Lo LreaL
vendor offered Lo sell sub[ecL Lo Lerms and condlLlons one of whlch was: no modlflcaLlon allowed and
no arblLraLlon before lawsulL clause
8uyer used a ÞC LhaL had an arblLraLlon before lawsulL clause on reverse (counLer offer), whlch also
asked Lhe seller Lo slgn and reLurn accepL, whlch sellor dld noL ever do.
Coods were dellvered=accepLance
Seller Lrled Lo enforce conLracL and buyer sald have Lo go Lo arblLraLlon flrsL
Issue ls Lhe arblLraLlon clause valld? Was lL agreed Lo?
keason (for) 1hls was Lhe lasL shoL, and goods were dellvered =accepLance, arblLraLlon clause lncluded.
keason (aga|nst) Crlglnal paperwork dld noL lnclude an arblLraLlon clause, sald can'L modlfy= flrsL blow wlns
kat|o Lord uennlng's ºlasL shoL" rule. When was Lhe lasL Llme Lhe Lwo parLles agreed? Þ aL no Llme
acknowledged Lhe supremacy of u's Lerms. lf Lhere are Lerms and boLh parLles lgnore lL by Lhelr
conducL, Lhen Lhere ls no lnLenLlon Lo be bound by Lhose Lerms. Þ dld noL puL hls mlnd Lo Lhe
arblLraLlon Lerm and Lhe conducL of boLh parLles lndlcaLes LhaL nelLher one of Lhem consldered Lhe
Lerms on Lhe back.
ne|d]Dec|s|on no, no clear acknowledgemenL by Lhe seller of Lhe buyer's Lerms aL Lhe end. !udge was looklng for a
meeLlng of Lhe mlnds on Lhe parL of ºarblLraLlon" couldn'L see Lhls
Internet e-commerce law no different from how we’ve always done business
• Apply the same principles
• Accepting an offer by email is no different than accepting by letter
• Offer is in terms of licence
Three types of contract on Internet
1) Shrink wrap – accept by opening the package (package states terms inside)
2) Click wrap – must click to accept. Can’t move on without accepting.
3) Browse wrap – hyperlink to another page to read terms
o Can proceed w/o agreeing to terms
o the terms prevail only if you must perform action to agree to them and cant proceed w/o acceptance
o browse wrap not really allowed b/c you cannot bind to terms of a contract if haven’t seen the terms
ÞroCD v. 2e|denberg, 1996 USA
1he buyer can prevenL Lhe conLracL by laLer reLurnlng Lhe producL.
Iacts Þ sofLware Lerms & condlLlons lnslde shrlnk-wrap
u lnd'l user llcence, used lL commerclally. u admlLs LhaL Þ's Lerms appeared ln flash screen u clalms
accepLed Lhe absence of Lerms when boughL sofLware from Lhe sLore (Lerms noL on ouLslde). u says L
& c glven oftet boughL lL. Þ ls lmposlng Lerms he couldn'L re[ecL.
Issue Pas Lhe buyer accepLed Lhe llcense as parL of Lhe purchase?
keason (for) Lhe Lerms are parL of Lhe conLracL of sale and Lhe buyer could have re[ecLed Lhe goods once he learns
of Lhe llcense, buL once he uses Lhem, he has accepLed Lhe Lerms as well
keason (aga|nst) sofLware on Lhe shelf ls an offer LhaL Lhe buyer accepLs by paylng and leavlng Lhe sLore. Lhe llcense
9
has noL been agreed Lo aL Lhe Llme conLracL has been made. Pldden conLracL?
kat|o cusLomers can re[ecL Lhe Lerms & condlLlons by reLurn Lhe sofLware for refund. When u dldn'L reLurn
Lhe sofLware, lL ls held Lo be accepLance of Þ's Lerms by conduct.
ne|d]Dec|s|on nC, he can reLurn lL Lo Lhe sLore.
Century 21 Canada Ltd. Þartnersh|p v. kogers Commun|cat|ons 2oocasa

Iacts 8ogers used parL of C21 webpage on slLe where prospecLlve house buyers could search real esLaLe
llsLlngs by area. WebslLe flne prlnL clear Lerms forblddlng w/o C21 consenL
Issue dld Lhe A accepL Lhe n's offer LhaL lL could use Lhe lnfo on Lhe webpage only accordlng Lo lLs sLaLed
Lerms of use and has a conLracL been formed LhaL lncludes Lhe Lerms of use?
keason (for) 1he law of conLracL ls adapLable Lo lnLerneL conLracLs and Lhls case ls much llke Lhe parklng loL LlckeL
cases when Lhe Lerms on Lhe back of Lhe LlckeL are blndlng
keason (aga|nst) 1erms of use on C 21 WebslLe dld noL creaLe an enforceable agreemenL under whlch Zoocasa was
conLracLually bound noL Lo lndex Lhe CenLury 21 WebslLe.
kat|o where noLlce of Lhe 1erms of use ls esL along wlLh Lhe knowledge LhaL uslng Lhe WebslLe wlll be
agreemenL Lo Lhe 1erms of use, Lhen agreemenL ls proven. Lhe acL of proceedlng furLher lnLo Lhe
webslLe ls sufflclenL Lo communlcaLe agreemenL. Zoocasa's conducL formed a conLracL. lL ls noL a case
of a conLracL belng lmposed wlLhouL Lhelr assenL
Dawson v. ne||copter Lxp|orat|on Co., 19SS, SCC
llrsL case Lo lnLroduce accepLance Lhrough conducL.
Iacts dlscusslons Look place for n Lo show a locaLlon of mlneral deposlL and Lo help A sLake lL culmlnaLlng ln
leLLer of March 3, 1931 wlLh deLall, Lhen a poslLlve response by n, Lhen a reslllng from any conLracL by
A and explolLlng slLe wlLh someone else
Issue Was Lhere offer and accepLance?
keason (for) Lhe leLLer of march 3, was an offer and Lhe response an accepLance ln a bllaLeral conLracL
keason (aga|nst) Lo accepL Lhe offer March 3 leLLer, performance of an acL was requlred whlch Lhe n never dld
(unllaLeral conLracL)
kat|o 1. AccepLance musL be clear buL need noL Lo be expressed, raLher lL can be lmplled from Lhe language
and conducL of Lhe parLles. S||ence = abandonment of contract
2. Lendency of Lhe courL Lo LreaL offers calllng for bllaLeral conLracL raLher Lhan unllaLeral
3. ln a buslness relaLlonshlp Lhe CourL wlll sLrlve Lo flnd a bllaLeral conLracL
ne|d]Dec|s|on blndlng bllaLeral conLracL, clearly accepLed.
Ie|thouse v. 8|nd|ey, 1862,Uk
1here musL be more Lhan fallure Lo re[ecL an offer Lo have a conLracL. ConducL can communlcaLe accepLance
Iacts Lxchange of LeLLers, nephew offered 30 gulneas Lo sell hls horse Lo uncle, uncle offered 30 pounds.
uncle offered Lo spllL dlfference and sald lf hear no more, horse ls mlne. nephew wanLed Lo Lake Lhe
deal buL uncle heard no more. AucLloneer conLrary Lo nephew's lnsLrucLlons sold horse aL aucLlon.
nephew conflrms LhaL agreemenL should have been compleLed, º1he horse (meanlng Lhe one l sold
you) ls sold"
Issue uld Lhe uncle have a conLracL for Lhe horse? uld Lhe nephew sllence mean accepLance?
keason (for) AucLloneer ls lnLerferlng wlLh uncle's ownershlp rlghLs
keason (aga|nst) no conLracL was formed as no accepLance of offer Lo spllL Lhe dlfference and noL ln wrlLlng so does
noL comply wlLh Lhe Lhen SLaLuLe of lrauds whlch requlred such conLracLs Lo be ln wrlLlng, so uncle
has no LlLle Lo Lhe horse
kat|o offeror cannoL use sllence as a meLhod of accepLance and slmply an lnLenLlon Lo accepL on Lhe parL of
Lhe offeree ls noL enough, laLer leLLer Loo laLe Lo consLlLuLe accepLance.
Sllence cannoL slgnlfy accepLance, lL ls Loo vague. AccepLance musL be expllclL
ne|d]Dec|s|on no conLracL, no LlLle passed Lo uncle and no LorL commlLLed
Comments ln slLuaLlons where a company makes an offer asklng respondenL Lo reply lf Lhey do not accepL -
sllence wlll generally noL consLlLuLe accepLance slnce Lhere ls Loo much uncerLalnLy (+3<=>,423)
St. Iohn 1ugboat Co. V. Irv|ng kef|nery Ltd, 1964, SCC
10
AccepLance by conLlnulng conducL
Iacts ln a serles of leLLers, u. agreed Lo renL Lug and have lL on call for a perlod - relaLlonshlp conLlnued
pasL Lhe perlod, agreemenL never formally exLended, Lhen u. refused Lo pay
Issue uld conLlnued use beyond conLracL perlod lmpose same condlLlons as before?
keason (for) 1he respondenL conducL consLlLuLed a conLlnulng accepLance.
keason (aga|nst) Lhe orlglnal conLracL was over and respondenL had noL agreed Lo Lhe exLra charges
kat|o S||ence = acceptance 8U1 conduct can
ne|d]Dec|s|on u musL have known Lug was sLlll ºsLandlng by" so llable for exLra charges by conducL
Comments ulsLlngulshed from lelLhouse as here Lhere was CCnuuC1
L||ason v. nenshaw, 1819, USA
AccepLance musL be made ln Lhe mode sLlpulaLed by Lhe offeror, oLherwlse lL's noL valld accepLance
Iacts Cffer Lo buy flour made and offeror sLlpulaLed LhaL accepLance should be senL ºby reLurn of wagon".
Sellor accepLed by mall, buL before accepLance arrlved, offeror cancelled deal
Issue Can offeror lmpose meLhod of accepLance?
keason (for) AccepLance was dlspaLched prlor Lo wlLhdrawal of offer
keason (aga|nst) Cfferor knew and relled on exacLly Lhe amounL of Llme LhaL a reLurn by wagon should Lake so Lhls
consLlLuLed an essenLlal parL of offer
kat|o Pave Lhe rlghL Lo deLermlne how Lhe offer ls Lo be accepLed.
ne|d]Dec|s|on ?es, no obllgaLlon on offeror Lo compleLe conLracL unLll accepLance recelved as requlred
Comments C1 WhaL lf rlder arrlved before wagon? nC. bound by Lhe orlglnal offer.

CCMMUNICA1ICN CI ACCLÞ1ANCL

•
acceptance occurs at the time and place the offer was accepted
•
1he acceptance must be commun|cated. Þr|or to acceptance, an offer may be w|thdrawn. lf Lhe offer was made
Lo Lhe enLlre world, such as ln Carllll's case, Lhe revocaLlon musL Lake a form LhaL ls slmllar
•
An except|on ex|sts |n the case of un||atera| contracts, ln whlch Lhe offeror makes an offer Lo Lhe world whlch can
be accepLed by some acL. A classlc lnsLance of Lhls ls Lhe case of cotllll v ner act|ons accepted the offer - Lhere was
no need to commun|cate acceptance.
•
An offer can only be accepLed by Lhe offeree, LhaL ls, Lhe person Lo whom Lhe offer ls made.
•
An offeree ls noL usually bound lf anoLher person accepLs Lhe offer on hls behalf wlLhouL hls auLhorlsaLlon, Lhe
except|ons Lo whlch are found ln Lhe law of agency
•
lL may be lmplled from Lhe consLrucLlon of Lhe conLracL LhaL Lhe offeror has dlspensed wlLh Lhe requlremenL of
communlcaLlon of accepLance (walver of communlcaLlon - generally lmplled ln unllaLeral)
•
lf Lhe offer speclfles a meLhod of accepLance (such as by posL or fax), accepLance musL be made by Lhls.
•
Powever, accepLance may be lnferred from conducL
•
"mlrror lmage rule" lf you are Lo accepL an offer, you musL accepL an offer exoctly, lf you change Lhe offer, Lhls ls a
counLer-offer LhaL kllls Lhe orlglnal offer. A requesL for lnformaLlon ls noL a counLer-offer.
Þosta| Acceptance ku|e: lf accepLance ls Lo be made by posL (as speclfled by Lhe offeror), Lhen Lhe posL offlce acLs as an
agenL for boLh parLles and Lhe conLracL ls formed when Lhe accepLance ls posLed, noL when Lhe offeror recelves lL (unless
he expressly sLaLed LhaL he musL recelve lL)
o usually lf offeror requesLed "Not|ce |n wr|t|ng", ÞA8 doesn'L apply
o ÞA8 applles lf Lhe offeror doesn'L prescrlbe parLlcular mode of accepLance or Lhe mode ls Lhe mall > "acceptance |n
wr|t|ng"
o ÞA8 applles when leLLer of accepLance ls properly sLamped and has Lhe rlghL address
o ÞA8 does nC1 apply lf lL leads Lo absurd/lnconvenlenL resulL
nouseho|d I|re Insurance v. Grant, 1879, Uk
Malled accepLance
Iacts CranL wanLs Lo buy shares. Pousehold accepLed hls offer and malled hls conflrmaLlon whlch CranL
never recelved. CranL doesn'L geL Lhe leLLer and Lhus doesn'L know he owns shares. Pe also dldn'L
pay for Lhem. LlquldaLlon company sues for Lhe share money. he denled belng a shareholder
Issue Was Lhe accepLance communlcaLed Lo Lhe offeror?
11
keason (for) 1here was a meeLlng of Lhe mlnds aL Lhe Llme of posLlng and Lhe posL offlce ls Lhe ºagenL" of boLh
parLles, so offeree can assume LhaL lL reached lLs LargeL
keason (aga|nst) no muLual communlcaLlon - offeror had no knowledge LhaL hls offer had been accepLed
kat|o Þosta| ku|e: lf boLh parLles agree, Lhe posL offlce ls a common agenL for boLh of Lhem. lf lL ls noL
expllclL, lL musL seem reasonable Lo send lL by mall. ÞosLal rule only applles Lo accepLance. A
contract |s conc|uded where and when the |etter of acceptance |s posted.
ne|d]Dec|s|on ?es, CranL ls llable.
Comments 1hls ls a sLrlcL appllcaLlon of Lhe posLal rule. Acceptance |s st||| va||d regard|ess of whether |t's
rece|ved by offeror.
Þost|ng a |etter does not d|ffer from other attempts at commun|cat|on |n any of |ts consequences
LkCLÞ1 |t |s |rrevocab|e once |t goes |n the ma||.
Postal rule not always applicable
1. ÞosLal rule only applles when offeror does noL prescrlbe a parLlcular mode of communlcaLlon
2. Where appllcaLlon of rule would lead Lo an absurdlLy or manlfesL lnconvenlence lL wlll noL apply
3. Applles only when Lhe leLLer of accepLance ls properly sLamped and addressed
WA?S 1C CL1 A8Cunu 1PL 8uLL:
- sLaLe ln Lhe offer LhaL Lhe offer cannoL be accepLed Lhrough Lhe posL offlce
- show LhaL Lhe appllcaLlon of Lhe rule would be absurd. (ex: Polwell SecurlLles v. Pughes)
nenthorn v. Iraser soc|ety, [1892]

Iacts Serles of offers slgned by Lhe n aL Lhe offlce of Lhe socleLy, whlch were all refused
SecreLary of Lhe socleLy Lhen offered Lo sell aL £730 whlch was puL ln wrlLlng and slgned ln her offlce
ln presence of Lhe n
nexL mornlng 3Þ called and offered £760 whlch was accepLed sub[ecL Lo Lhe condlLlon LhaL Lhe
orlglnal offer could be wlLhdrawn
Sec'y of Lhe socleLy posLed a leLLer beLween 12-1pm !uly 8 Lo Lhe n wlLhdrawlng offer, whlch was
dellvered beLween 3-6pm and recelved 8pm
Cn same day Lhe n's agenL wroLe accepLlng Lhe offer and lL was posLed aL 3:30pm whlch was
dellvered aL 8:30pm and opened Lhe followlng mornlng (!uly 9)
Þ broughL acLlon
Issue Was accepLance communlcaLed before offer was wlLhdrawn?
keason (for) ÞosLal accepLance rule, so offer was accepLed aL 3:30pm when lL was posLed and wlLhdrawal of offer
was recelved Lhe nexL day
keason (aga|nst) 1here was no auLhorlLy Lo accepL by posL and ulckenson v. uodds held LhaL an offeree can make a
blndlng offer Lo sell whlle an offer ls pendlng and LhaL wlll be a wlLhdrawal of orlglnal offer
kat|o Cfferor makes offer. lf wlLhdrawal ls posLed before accepLance posLed, doesn'L maLLer. 1he
wlLhdrawal has Lo geL Lo Lhe offeree flrsL.
Cfferee lf he posLs and accepLance before Lhe wlLhdraw (revocaLlon) Lhen Lhere ls a k
ne|d]Dec|s|on ÞosLal rule applles and accepLance made before recelved noLlce of revocaLlon, so blndlng
no|we|| Secur|t|es v. nughes , 1974
Malled accepLance
Iacts Pughes lssued a granL Lo sell a properLy. ConLalned a clause sLlpulaLlng LhaL Lhere musL be noLlce ln
wrlLlng dlrecLly Lo offeror wlLhln slx monLhs ln order Lo exerclse Lhe opLlon. Polwell senL a leLLer
exerclslng Lhe opLlon, lL was losL ln Lhe mall and was never recelved by Lhe defendanL. Polwell Lrles Lo
lnvoke Lhe ÞosLal 8ule.
Issue uoes Lhe ÞosLal 8ule apply here?
keason (for) 1he posLal accepLance rule applles Lo all conLracLs, as lL ls a muLual agenL of boLh parLles
keason (aga|nst) ?,2=5< @4<3 does not app|y because boLh parLles dld noL agree Lo use posL offlce as common agenL.
8ule doesn'L apply when noLlce ls requesLed by Lhe offeree.
kat|o Lhe posLal accepLance rule cannoL apply when Lhere are express Lerms ln Lhe offer speclfylng LhaL
acceptance must reach Lhe offeror.
Char|ebo|s v. 8ar||, [1928] S.C.k
12
Many say SCC messed up ln Lhls case and should have followed PenLhorne
Iacts A. AugusL 14 offer Lo purchase properLy by A glven personally Lo n
8. AugusL 13, n accepLs by malllng leLLer Lo A, never recelved by A
C. SepLember 3, A malls wlLhdrawal of offer, recelved SepLember 6 by n
Issue Was lL necessary for accepLance Lo be recelved by offeror and whaL was Lhe effecL of Lhe subsequenL
wlLhdrawal of Lhe offer?
keason (for) ÞosLal accepLance rule so noL necessary for lL Lo be recelved only posLed
keason (aga|nst) Crlglnal offer dellvered ln person, so rule should noL apply
kat|o 1he rule has no appllcablllLy Lo a case where Lhe orlglnal offer was dellvered noL malled, so posLal
servlce was noL Lhe offeror's agenL
ne|d]Dec|s|on ÞosLal accepLance rule dld noL apply and accepLance was never recelved, so wlLhdrawal was
communlcaLed and no conLracL.
Comments Pow Lo dlfferenLlaLe wlLh PenLhorne? Þrevlous cases sald LhaL as long as posLal rule was wlLhln
conLemplaLlon of boLh parLles. why ls Lhls dlfferenL?
uon'L have Lo agree on Lhe meLhod . [usL has Lo show LhaL lL had been conLemplaLed.
Instantaneous Commun|cat|on:
Acceptance |s commun|cated when |t |s rece|ved. k ls made where and when Lhe accepLance was recelved.
Þosta| ku|e does noL apply Lo lnsLanLaneous communlcaLlon .
Canada- recelpL when addressee aware of elecLronlc doc ln sysLem and ls able of belng recelved and processed
8r|nk|bon v. Stahag Stah|, 1983, Uk
ºno unlversal rule can cover all such cases" so need Lo look aL lnLenLlon of Lhe parLles
Iacts 8rlnklbon LhaL purchased sLeel from SLahag, based ln AusLrla. 8rlnklbon senL Lhelr accepL Lo a SLahag
by 1elex. Cnly be able sue lf Lhe conLracL had been formed ln Lngland.
Issue Where was Lhe accepLance? Was Lhe k made ln uk?
keason (for) 1.1he conLracL was accepLed by Lhe Lelex from Lngland and a Lelex ls llke Lhe posL, so posLal
accepLance rule says accepLance ls compleLe on malllng, so conLracL made ln uk
2. lf lL was Lhe conducL LhaL was Lhe accepLance, Lhen Lhe conducL occurred ln London
keason (aga|nst) 1he Lelex accepLance was noL llke Lhe posL aL all - lL ls an lnsLanLaneous communlcaLlon so lL musL
acLually be communlcaLed Lo Lhe offeror- follows Lhe general rules of accepLance.
kat|o ConLracL ls formed aL Lhe place where Lhe accepLance ls recelved by Lhe offeror.
ne|d]Dec|s|on 1he accepLance by conducL Look place when Lhe leLLer was credlL was opened ln vlenna
Comments once recelved ln offeror's Lelex machlne (fax machlne) should LreaL lL as dellvered even lf noL seen by
offeror buL because offeree wlll know lf lL arrlved ºLransmlsslon Ck",

1LkMINA1ICN CI CIILk
1. kefusa|]re[ect|on (can be done w|th counter-offer)
2. kevocat|on
3. Non-occurrence of Cond|t|on
4. Death
S. Lapse of 1|me
kevocat|on: before offer ls accepLed an offeror can revoke Lhe offer
lL musL be done ln such a way as Lo desLroy any LhoughL of belng bound
knowledge of Lhe revocaLlon nulls offer - no meeLlng of Lhe mlnds --- you cannoL make accepLance on an offer you koow
has been revoked
An offer ls made lrrevocable by accepLance.
Lxcept|on - posLal rule - lf you use Lhe posL as your agenL, you're Laklng Lhe rlsk. 1he momenL lL's posLed, lL's accepLed
and L/4 can'L be revoked unless revocaLlon geLs Lo offeree before accepLance geLs back Lo you.
D|ckenson v. Dodds, 1876, Uk
8evocaLlon can be communlcaLed Lhrough a rellable Lhlrd parLy
Iacts uodds offered Lo sell properLy Lo ulckenson and sald LhaL Lhe offer was open for accepLance unLll
lrlday aL 9am. ulckenson learned LhaL uodds was negoLlaLlng wlLh Allen, so ulckenson (all before
9am lrlday) Lrled Lo accepL vla uodds' landlady (never reached uodds), 1hen ulcklnson's agenL Lrled
13
Lo glve accepLance Lo uodds aL Lhe Lraln sLaLlon, buL uodds refused Lhe offer and sald LhaL he had sold
Lo Allen.
Issue 1. Was Cfferor obllgaLed Lo keep offer open Lo 9am lrlday as promlsed?
2. uoes knowledge LhaL Cfferor has sold Lhe properLy amounL Lo a wlLhdrawal of offer?
keason (for) 1.Þromlse ls blndlng
2.no Lrue revocaLlon - only knowledge of sale
keason (aga|nst) 1. no conslderaLlon for Lhe promlse Lo keep open unLll 9am -
2. revocaLlon was communlcaLed - ulckenson knew of sale Lo 3Þ
kat|o lf offeree pays noLhlng Lo keep Lhe offer open (ºblnd Lhe offer") Lhen lL ls a NoJom loctom and
unenforceable as no conslderaLlon
noL approprlaLe Lo allow people who know LhaL properLy has been sold Lo 3Þ Lo Lry Lo accepL anyway
ne|d]Dec|s|on no conLracL as offer had been legally wlLhdrawn
Comments promlse Lo hold open Lhe offer for perlod of Llme doesn'L blnd seller, free Lo wlLhdraw
If want to keep the offer open for acceptance, g|ve "cons|derat|on" (depos|t) or have opt|on c|ause |n offer.
8yrne v. Van 1|enhoven, 1880, Uk
8evocaLlon musL be made ln Lhe same manner Lhe offer was made
Iacts As malled offer Lo sell Lln plaLes on CcLober 1, Lhen revoked by mall CcLober 8, recelved by offeree
CcLober 20
Meanwhlle n recelved offer CcLober 11, accepLed by Lelegram same day
Issue uoes a wlLhdrawal of offer have any effecL unLll lL ls communlcaLed and does posLal accepLance rule
apply for revocaLlons as well?
keason (for) 8evocaLlon never communlcaLed and accepLed before lL was, posLal accepLance rule only applles Lo
accepLances as lL ls based on muLual agency reasonlng
keason (aga|nst) need consenL, meeLlng of Lhe mlnds Lo form a conLracL and none here, and posLal accepLance
excepLlon should apply here Lo revocaLlons as well.
kat|o 8evocaLlon of an offer musL be acLually communlcaLed before lL effecLlvely revokes an offer.
ne|d]Dec|s|on revocaLlon communlcaLed afLer accepLance comm so Lhere was a blndlng conLracL.
Lrr|ngton v. Lrr|ngton and Woods, 19S2, Uk

Iacts laLher boughL house for son and daughLer -ln-law Lo llve ln, Lold Lhem lf you pay Lhe loan, Lhe house
ls yours, and as long as you pay, you can llve ln Lhe house, laLher dled and esLaLe Lrled Lo evlcL Lhem
Issue lf you have made parLlal performance and accepLance ls underway, can you revoke Lhe offer (already
ln process)?
keason (for) 1hey had a llcense, whlch ls a conLracLual rlghL Lo possess, shorL of a Lenancy and shorL of an lnLeresL
ln land , buL enforceable and Lhey were ln process of accepLlng unllaLeral offer
keason (aga|nst) 8are llcensee and Lermlnable on reasonable noLlce and noL a conLracL and offeror can wlLhdraw
unllaLeral offer
kat|o unllaLeral offer cannoL be wlLhdrawn whlle offeree ls performlng
ne|d]Dec|s|on clear unllaLeral offer whlch cannoL be wlLhdrawn whlle Lhey conLlnued Lo accepL by paylng Lhe loan.
CannoL be evlcLed and presumably enLlLled Lo a Lransfer of Lhe house when loan pald ln full.
Lapse
o lf Lhere's a speclfled Llme for accepLance, Lhen offer explres Cn Lhe speclfled Llme
o lf noL, Lhe courL wlll deLermlne wheLher a reasonable amounL of Llme has passed so LhaL Lhe offer had explred (look aL
Lhe commodlLy lLself, clrcumsLances, naLure, characLer, and usual course of buslness)
o uld Lhe offeree sLaLe LhaL Lhey were sLlll Lhlnklng abouL Lhe offer? lf Lhey dld, Lhen Lhe offer remalns open buL Lhe
offeror sLlll has Lhe opporLunlLy Lo revoke lL
o Þerlshable goods would have a shorLer perlod Lhan non-perlshable goods such as land
8arr|ck v. C|ark, 19S1, SCk
Look aL conLracL's naLure, clrcumsLances, characLer.Lo deLermlne reasonable Llme
Iacts Clark offers Lo buy house for $13C. Cn nov. 20 8arrlck counLer-offers $14,300: ºleL's seLLle Lhls
lmmedlaLely". - 1|me factor, 8u1 Clark ls on 10-day hunLlng Lrlp when leLLer arrlves. Mrs. Clark calls
14
8arrlck and Lells hlm LhaL Clark wlll reply when he comes back. Clark responds on uec 10. 8arrlck says
he sold house Lo someone else on uec. 3
Issue uld 8arrlck keep Lhe offer open for a reasonable amounL of Llme?
keason (for) Clark never recelved revocaLlon of offer, so sLlll ln exlsLence when accepLed and noL llke ulckenson v.
uodds where Clark learned of sale Lo 3Þ
keason (aga|nst) Lhe offer had lapsed as lL was noL accepLed wlLhln a reasonable Llme
kat|o Cffers can |apse after a reasonab|e per|od of t|me & w||| no |onger be ab|e to be accepted.|f no
t|me |s ment|oned
ne|d]Dec|s|on ?es, boLh parLles had agreed LhaL Llme was of Lhe essence (maglc words)

CLk1AIN1¥ CI 1LkMS (Cn. 3)-format|on of the agreement
• Beyond offer and acceptance… now deciding “what is it that they agreed to”
• Court will strain to find a contract if there is evidence to show the parties intended to create a contract
1CCL
1. uld Lhe parLles lnLend Lo conLracL? (sub[ecLlvely)
2. WhaL ls Lhe lnLenLlon of Lhe parLles as Lo Lhe wordlng used? (ob[ecLlvely- performance, pasL)
• A contract is an agreement of reciprocal obligations
• contracts will not uphold an agreement to agree
• The question is: “Are the essential (material) terms settled?
• Things don’t have to be fully agreed, but there must be sufficient certainty, a gap-filler
– i.e. a price formula.

VAGULNLSS
o lf a conLracL hasn'L formed due Lo fallure Lo agree/ascerLaln, Lhen can'L sue for damage because no breach
o lf a conLracL has been formed buL unenforceable, Lhen some damages mlghL sLlll be clalmed
Cb[ecLlvlLy ln analyzlng lnLenLlon ralses Lhe maLLer above slmply decldlng whlch parLy's verslon or lnLenLlon should be
enforced - lL ls lmposes a sLandard upon whlch a courL can ºflll ln Lhe blanks" lf lL feels LhaL Lhe parLles lnLended Lo
conLracL, buL Lhe words are unclear, buL courLs are always wary of golng Loo far, and ln LhaL way ºlmpose a conLracLual
llablllLy Lo whlch one or boLh of Lhe parLles had no lnLenLlon of belng exposed
k. v. Cae Industr|es, 1986, SCC
a courL wlll sLrlve Lo flnd a conLracL lf Lhe Lerms (vague or lncompleLe) can be meanlngfully consLrued.
Iacts Cae lndusLrles agrees Lo Lake over operaLlon of mlllLary base. Cov'L leLLer sLaLes lL wlll glve ºbesL
efforLs" Lo provlde a 40 000 man hours of work. Workload drles up. CovL argues no k
Issue 1. Was Lhe documenL an lnLended Lo become a blndlng conLracL?
2. lf so, Lhen ls Lhe conLracL Loo vague or uncerLaln?
keason (for) 1. Lhe proof of Lhe asserLlon LhaL Lhere was no lnLenLlon LhaL Lhe leLLer be blndlng ls on Lhe person
who asserLs no legal effecL and Lhe onus ls a heavy one, and slnce Lhe Lerms were belng performed
Lhere was clear evldence of lnLenLlon here, and
2. LhaL Lhe wordlng alLhough havlng somewhaL unusual sLyle ls sufflclenLly clear Lo have creaLed rlghLs
and obllgaLlons
keason (aga|nst) 1. Lhe leLLer was an arrangemenL and does noL show lnLenLlon Lo enLer lnLo a conLracL
2. 1he language used by Lhe parLles ls so vague and uncerLaln, Lhe documenL so lncompleLe as Lo
render conLracL unenforceable
kat|o When ks are too vague, Lwo sLeps for courLs exlsL:
1. ueLermlne lf Lhere was lnLenL
2. ueLermlne lf k ls sufflclenLly clear for parLles Lo perform Lhelr duLles
ne|d]Dec|s|on 1he heavy onus and parL performance shows LhaL Lhe leLLer was lnLended Lo be blndlng and 1he
wordlng used even Lhough loose wordlng can be lnLerpreLed Lo flnd obllgaLory language, and courL
should make every efforL Lo flnd a meanlng
Comments Slnce Lhe Lerms were belng performed. Lhere was clear evldence of lnLenLlon.
nobbs v. Lsqu|mau|t and Nana|mo ka||way (1899), SCk

15
kat|o CourL wlll noL apply esoLerlc meanlng held by one of Lhe parLles - can'L aLLach prlvaLe meanlng Lo
words .
kaff|es v. W|che|haus (1864), Uk

kat|o lf a courL can'L declde whlch of Lwo meanlngs ls Lhe correcL one, (Lwo shlps boLh named Þeerless)
Lhen no blndlng conLracL, CCn18AC1 lAlLS!!!
Sta|man Stee| Ltd v. Commerc|a| & nome 8u||ders Ltd (1976, CN CA

kat|o lssue was wheLher a plle of sLeel beams LhaL had been prevlously sold Lo 3Þ were lncluded ln a bulk
sale conLracL ºall sLeel ln yard excepL mechanlcal lLems".
1he courL looked aL Lhe reasonable meanlng of Lhe words, Lhe conducL and Lhe clrcumsLances
(ob[ecLlve LesL) and deLermlned LhaL Lhe conLracL was amblguous abouL Lhe sLeel beams, so conLracL
dld noL lnclude Lhese - followed 8affles
Modern Lrend : courLs wlll plck ouL Lerms LhaL Lhey Lhlnk are vague and Lhrow ouL resL of k


INCCMÞLL1L 1LkMS
• ÞarLles musL reach agreemenL esseotlol tetms, wlll depend on Lhe commerc|a| text
• cerLaln terms open for future negot|at|on lf done so ln Lhe pasL (past conduct) (nlllos)
• already started performance, Lhen Lhe courL wlll llkely Lo flnd a blndlng conLracL (closslpoe coocb)
• CLher Lhlngs Lhe courLs Lake lnLo accounL are:
A) Pas one parLy lnvesLed Llme and money? (equlLable conslderaLlon) -courL wlll Lry ºflesh ouL" a conLracL
8) Why ls one parLy argulng LhaL Lhere ls no conLracL? Why has Lhere been a breach of conLracL?
• When looklng aL an opt|on c|ause ln a conLracL, you musL ask:
A) Pow does Lhe language of Lhe opLlon clause flL lnLo Lhe conLexL of Lhe whole conLracL
8) WhaL are Lhe reasonable pracLlces of Lhe lndusLry (assessmenLs based on lndusLry sLandards - nllllos)
• WhaL ls lL LhaL ls mlsslng - lf lL ls a deLall (nllllos) Lhen Lhe courL should be able Lo resolve lL - lf lL ls an essenLlal Lerm
(Moy ooJ 8otcbet) Lhere wlll generally be no conLracL
• Sa|es of Good Act: lf no prlce has been deLermlned, courL wlll glve a reasonable prlce Lo be flxed
• noLe LhaL durat|on of a conLracL has noL been regarded as an essenLlal Lerm Lhe lack of whlch could vold a conLracL -
Lhls ls [usL a maLLer of lnLerpreLaLlon: 8apaLax.
A1B410=7,1 - a courL order LhaL sLops someone from dolng someLhlng
@3C4675=7,1 - declaraLlon LhaL one ls noL golng Lo perform a conLracL
May & 8utcher v. k, 1929]1934, Uk
An agreemenL Lo agree ls nC1 a conLracL
Iacts sale of surplus LenLs ln Lhe fuLure wlLh prlce Lo be pald lefL open ºshall be agreed upon from Llme Lo
Llme" wlLh all dlspuLes Lo be referred Lo arblLraLlon. Cov'L sald LhaL Lhey were no longer bound by Lhe
arrangemenL as Lhe prlce had never been agreed. ÞarLles falled Lo reach agreemenL on prlce, Llme of
paymenL, quanLlLy, daLes of dellvery.
Issue WheLher Lhe Lerms of Lhe conLracL are cerLaln enough Lo consLlLuLe a conLracL?
keason (for) 1. was a conLracL whlch conLalned clauses for agreemenL on prlce and lf no agreemenL should be a
reasonable prlce - relled on Lhe Sale of Coods AcL:
2. Lven lf no prlce agreed, arblLraLlon could deLermlne lL,
3. 1o end Lhe whole conLracL was wrong, because Lhere mlghL be more LenLs Lo be sold
keason (aga|nst) ConLracL lncompleLe as Lo an essenLlal Lerm mlsslng (no prlce) and Lherefore no conLracL
kat|o AgreemenL Lo agree ls noL a conLracL.
ne|d]Dec|s|on Lhen no conLracL - can'L agree Lo agree ln Lhe fuLure. lf Lhere ls no conLracL. Sale of Coods AcL nor
arblLraLlon can lmpose reasonable prlce. lf no ºagree ln fuLure" Lhen SCCA applles
n|||as v. Arcos, 1932, Uk
ÞasL performance wlll ald ln courL deLermlnlng lf Lerms are lncompleLe
16
Iacts P boughL woods from A under an agreemenL LhaL sLlpulaLes Lhere'd be anoLher purchase nexL year,
prlce Lo be 3° less Lhan presenL (1931) A refuses Lo carry ouL Lhls opLlon Lo renew and sold Lo 3Þ,
P sued for anLlclpaLory breach of conLracL

Issue Was Lhe 1931 wordlng a blndlng conLracL?
keason (for) 8oLh parLles lnLended Lo make a conLracL and even wlLh unarLlculaLed language duLy of CourLs Lo
consLrue broadly - (LaLln maxlm), and lL ls normal LhaL conLracLs whlch are Lo Lake place ln Lhe fuLure
may well be sllghLly uncerLaln as Lo prlces and dellvery Llmes
keason (aga|nst) agreemenL Lo agree, parLles dld noL lnLend lL be blndlng. Words are Loo uncerLaln CourL would have
Lo make a conLracL for Lhe parLles subblng lLs [udgmenL for lnLenLlon of parLles
kat|o courLs flnd enforceable conLracL lf LhaL ls whaL Lhe parLles lnLended. A courL wlll look aL prlor acLs of
performance beLween Lhe parLles and local cusLoms ln Lhe Lrade
ne|d]Dec|s|on ÞasL prlces/performance used by courLs Lo wlLh as sLandard of reasonableness.
+,<3: D* E<5227F43 E,50>32 G=6* !"$%H& IE*J*K
Incomplete terms can be enforceable if there is a prior legal obligation – business efficacy
Iacts l sold land Lo C on condlLlon LhaL C buy all peLrol from l aL prlce Lo be agreed upon ln wrlLlng from
Llme Lo Llme. AfLer some Llme C wanLs Lo buy from oLhers and clalm no conLracL formed.

Issue ls Lhe agreemenL blndlng desplLe lncompleLe Lerms?
keason (for) Plllas v. Arcos - Lhls case ls ºon all fours"- (facLs of one case are Lhe same as anoLher c. declslon
needs Lo be Lhe same)ÞarLles lnLended Lo enLer lnLo a conLracL, Lhe conLracL ls for Lhe fuLure, we have
prevlous years' conducL .
keason (aga|nst) May and 8uLcher - cannoL agree Lo agree ln Lhe fuLure.
kat|o If the agreement has been substant|a||y executed and |ntended to be b|nd|ng, Lhen Lhe courL wlll
LreaL Lhls agreemenL as a blndlng k.
ne|d]Dec|s|on Lhere was a conLracL, and Lhe ln[uncLlon agalnsL Lhe A ls granLed.
N|co|ene Ltd. V. S|mmonds, [19S3], Uk

Iacts Words added Lo accepLance -ºl assume LhaL Lhe usual condlLlons of accepLance apply"
kat|o a meanlngless condlLlon l a conLracL whlch ls Lhe maker's favour whlch Lhe oLher slde agrees Lo, Lhe
whole conLracL ls noL a nulllLy and Lhe meanlngless clause can be removed unless such removal would
render Lhe enLlre conLracL meanlngless (same as sLalman sLeel)
AGkLLMLN1 1C NLGC1IA1L
obllgaLlon ls noL an agreemenL of sorLs wlLh an uncerLaln slgnlflcanL Lerm such as prlce, buL an agreemenL Lo slmply
negoLlaLe a conLracL -parLles do noL wanL Lo commlL Lhemselves on prlces, dellvery daLes, eLc.
key here ls a problem wlLh Lhe process of Lhe fuLure negoLlaLlons - Lhey have usually broken down for some reason.
AgreemenLs Lo negoLlaLe may be enforced alLhough damages may be nomlnal (very low)
ºCpLlon Lo renew" doesn'L necessarlly mean agreemenL Lo negoLlaLe > words wlll be more speclflc for agreemenL Lo
negoLlaLe
Lmpress 1owers v. 8ank of NS, 1991, SCC
an ob[ecLlve benchmark LhaL lmposes an obllgaLlon Lo negoLlaLe ln good falLh on Lhe landlord
Iacts 1he u. was Lhe LenanL of Lhe Þ.,Lease had renewal clause aL ºmarkeL renL ...as muLually agreed...lf...do
noL agree...agreemenL may be LermlnaLed. 1hey falled Lo agree before Lhe lease explred and Lhen Lhe
Þ. offered a non markeL value prlce.
Issue uoes Lhe renewal clause ºmarkeL renLal raLe as muLually agreed" sufflclenL Lo deLermlne prlce w/
cerLalnLy?
keason (for) Lhere ls an obllgaLlon Lo negoLlaLe and Landlord dld noL - LreaLed process where Lhey could lmpose
Lerms such as prlce - courL can lmply Lerm LhaL Lhe landlord wlll negoLlaLe ln good falLh, as parLles
have agreed would be a renewal aL markeL renL for 3 years
keason (aga|nst) Can'L agree Lo agree (May and 8uLcher), and Lhere was a clause LhaL dealL wlLh whaL would happen lf
Lhe parLles dld noL agree - LermlnaLlon.
kat|o “Market rate” introduces a mechanism to determine price. This clause requires more than the two
17
agreeing. It implies the LL will negotiate in good faith and agreement will not be unreasonably
withheld.
ne|d]Dec|s|on ConLracL requlred good falLh and landlord had noL done Lhls, so LenanL could noL be evlcLed and
presumably courL lmposed markeL renL
Lease Agreements: AgreemenL Lo negoLlaLe ls enforceable > sub[ecL maLLer ls Lhe process of arrlvlng aL a successful
LransacLlon. 8uL Lhls doesn'L necessarlly lead Lo agreemenL on conLracLual Lerms
Cb[ecLlons Lo agreemenL Lo negoLlaLe
1. lmposslble Lo deLermlne Lhe conLenL of duLy Lo negoLlaLe. 2. no basls for damages for breach of duLy
1LS1 Lo deLermlne lf Lhere has been an enforceable lease obllgaLlon
Least Lnforceab|e
1. CpLlon Lo renew, aL renLal raLe 1.8.A. > agreemenL Lo agree
2. CpLlon Lo renew, aL markeL prevalllng raLe 18A > agreemenL Lo agree, obllgaLlon Lo negoLlaLe ln good falLh
3. CpLlon Lo renew, aL markeL prevalllng raLe > blndlng conLracL ln and of lLself
Most Lnforceab|e
4. CpLlon Lo renew, aL renLal raLe 18A, falllng whlch renLal raLe Lo be deLermlned ln accordance ArblLraLlon AcL
Pas Lhe landlord exerclsed ºgood falLh" - lf noL Lhe courL wlll Lry Lo flnd ln favour of Lhe LenanL
Mannpar v. Canada, 1999, 8CCA
courL wlll noL lmply Lerm Lo a conLracL merely because Lhe courL may Lhlnk such Lerm would be reasonable
Iacts Mannpar enLered lnLo conLracL wlLh Crown. Clause 7: ÞermlLLee wlll have Lhe opLlon Lo renew for
anoLher 3 years ºsub[ecL Lo saLlsfacLory performance" and raLes wlll be renegoLlaLed (renewal clause).
Crown refuses Lo negoLlaLe.
Issue 1. Was Lhe renewal clause uncerLaln?
2. CughL Lhe courL Lo lmply a Lerm Lo negoLlaLe ln good falLh?
keason (for) 8elylng on Lmpress, musL acL ln good falLh.
keason (aga|nst) Lhere ls no benchmark for a courL Lo seL raLe such as ºmarkeL renL"
kat|o uuLy Lo negoLlaLe ls unworkable ln Lhe absence of an ob[ecLlve benchmark Lo measure duLy.
ne|d]Dec|s|on nC, 1he Lerm ´teoeqotlote´ lmplles sLarLlng from scraLch and ´toyolty totes oot less tboo´ ls [usL a
mlnlmum and noL a real efforL Lo deLermlne prlce. courLs musL be careful noL Lo lmply dlfferenL
words LhaL were noL words ln Lhe conLracL prevlous cases are Jlstloqolsboble ,Lhls ls noL a conLlnulng
lease, buL buslness arrangemenL
Comments LlmlLs Lhe ldea of ºgood falLh"
We|||ngton C|ty Counc|| v. 8ody Corporate, 2002, (N2CA)
agreemenL Lo negoLlaLe ln good falLh was nC1 enforceable for lack of cerLalnLy.Cl ls nC1 a prlnclple of law
Iacts Councll sald ln wrlLlng LhaL lL wlll negoLlaLe ln good falLh sales for exlsLlng lessees aL noL less Lhan
currenL markeL value, whlch Lhey called Lhe process conLracL
Issue was Lhls an enforceable conLracL?
keason (for) 1hls was a unllaLeral offer Lo all lessees and accepLance was enLerlng lnLo negoLlaLlons, so had Lo do
so ln good falLh
keason (aga|nst) agreelng Lo negoLlaLe noL a blndlng conLracL and no benchmark or mechanlsm for courL
kat|o Consensus on all essenLlal Lerms ls necessary for an enforceable conLracL > good falLh alone ls noL
sufflclenL
ne|d]Dec|s|on courL lacks ob[ecLlve crlLerla Lo declde lf a parLy ls acLlng ln good falLh. some ºprocess conLracLs" are
enforceable such as Lhe Lender cases where a courL can reasonably deLermlne whaL Lhe parLles are
requlred Lo do
Comments MosL Canadlan courLs 8LSlS1 uslng ºnegoLlaLe ln good falLh". Can be used for ºperformance ln good
falLh" wlLh exlsLlng conLracLs.
AN1ICIÞA1ICN CI ICkMALI2A1ICN (Intent|on to Create Lega| ke|at|ons)
parLles negoLlaLe complex agreemenLs ln sLages. Þrellmlnary negoLlaLlons conclude wlLh a leLLer of lnLenL or a memo of
agreemenL, buL Lhere wlll be addlLlonal Lerms ln complex documenL Lo be negoLlaLed and slgned .

•

18



8aw|tko v. kerne|s Þopcorn, 1991, CN CA

Iacts CompllcaLed long-Lerm Iranch|se agreement concluded wlLh 4 Lerms, a handshake and Lhe words:
º?ou've goL a deal"
Issue uld Lhe verbal agreemenL rlse Lo a k?
keason (for) Lhe essenLlal Lerms were negoLlaLed and declded upon and Lhe formal conLracL Lo be slgned was
slmply a sLandard form and a conLracL already agreed upon
keason (aga|nst) Lhe parLles clearly conLemplaLed slgnlng a formal agreemenL and cannoL make a conLracL Lo make a
conLracL
kat|o 1h|s verba| agreement was m|ss|ng essent|a| terms such as pr|ce. A verba| agreement that has 5<< ,L
=>3 85=3-75< =3-82 |s enforceab|e.
ne|d]Dec|s|on posL-agreemenL conducL demonsLraLed parLles were noL ln agreemenL on Lhe essenLlal Lerms. need
Lo conclude parLles had enLered lnLo a compleLe conLracL on LhaL day.
MAGIC WCkDS: sub[ect to contract- means that there |s no contract yet.


1nL LNICkCLMLN1 CI ÞkCMISLS (Cn. 4) not a|| prom|ses are enforced
3 ways a promlse Lo be enforced: 1.ConLracL 2. ueed 3. LsLoppel
Cons|derat|on: Currle v. Mlsa (1873) uk def: a conslsL of some rlghL, lnLeresL, proflL, or beneflL accrulng Lo Lhe one parLy,
or some forbearance, deLrlmenL, loss or responslblllLy glven, suffered or underLaken by Lhe oLher parLy, Canada by Spruce
Crove v. ?ellowhead
ConslderaLlon can be a ºpeppercorn"
M4648 C50=48 N bare pact - no cons|derat|on
W|thout cons|derat|on, lL would [usL be a graLulLous promlse = a glfL
1here musL be conslderaLlon for each promlse wlLhln a k
ConslderaLlon musL be presenL aL Lhe Llme of accepLance
What can be cons|derat|on?
1. A promlse
2. An acL oLher Lhan a promlse (ex: swlmmlng Lhe Lngllsh Channel)
3. 1he creaLlon, modlflcaLlon, or desLrucLlon of a legal relaLlonshlp
4. A forbearance = noL dolng someLhlng
ConslderaLlon musL be d|st|ngu|shed from:
1. Mot|ve (ex: 1homas v 1homas) - Lhe reason why someone enLers lnLo Lhe k ls noL conslderaLlon
2. Adequacy of cons|derat|on
3. Ia||ure of Cons|derat|on (one of Lhe parLles falled Lo perform any of whaL he promlsed Lo do - le: ke||ance - Lhe legal
sysLem mlghL choose Lo enforce cerLaln promlses because of rellance on Lhe parL of Lhe promlsee - a person who has
acLually relled on a promlse has a parLlcularly presslng clalm for rellef

Contracts: musL have offer/accepLance/cerLalnLy of Lerms/compleLeness. Þromlse ls parL buL noL blndlng.
Þromlse musL have:
1. ltomlse most be soppotteJ by cooslJetotloo( tlt fot tot,cootts look fot ls cooslJetotloo flowloq ftom oll
slJes to eofotce)
2. ltomlsot most loteoJ to cteote leqol telotloos
J. Aqteemeot most be lo wtltloq (opplles lo cettolo coses)
O336: wrlLLen lnsLrumenL, ºslgned, sealed, and dellvered", granLor, conveys LlLle Lo Lhe granLee, slmllar Lo k
MlnuLe you see under seal. no need for conslderaLlon. lf Lhere denoLes a seal. need Lo have Lhe red sLlcker.
P2=,CC3< - tbe low bos lo o llmlteJ tooqe of coses. tewotJloq tbe ptomlsee eveo lf tbete wos oo JeeJ (seol) ot
cooslJetotloo JeslqoeJ to ptotect botm ftom befollloq tbe telloot offetee - epoltoble lo otlqlo
19
kecltol. A formal sLaLemenL appearlng ln a leqol documenL such as a deed LhaL ls prellmlnary ln naLure and provldes an
explanaLlon of Lhe reasons for Lhe LransacLlon
loJemolty: one lndlvldual Lakes on obllgaLlon Lo pay for loss or damage lncurred by anoLher lndlvldual.
ltlmo locle. jLaLln, Cn Lhe flrsL appearance.] A facL presumed Lo be Lrue unless lL ls dlsproved.
Governors of Da|hous|e Co||ege v. Lstate of 8out|||er SCC! (1934)
Lxchanges and 8argalns, A bare promlse by way of donaLlon cannoL be converLed lnLo a blndlng legal obllgaLlon unless
Lhere ls some form of conslderaLlon aLLached.
Iacts Mr. 8 pledged a donaLlon of $3000 Lo ualhousle College buL he had flnanclal dlfflculLles, so he never
pald. Mr. 8 dled and ualhousle College Lrled Lo collecL money from Lhe esLaLe
Issue was Lhere any conslderaLlon (as Lhls ls a glfL) or slmply had a conLracL Lo pay been formed?
keason (for) ConslderaLlon on face of Lhe pledge: ºln conslderaLlon of subscrlpLlon of oLhers". CLhers slgned
subscrlpLlon when saw Mr. 8's subscrlpLlon. College's obllgaLlon Lo use money for purpose (bulldlng)
ºdocLrlne of muLual promlses" ?ou promlse $$, we promlse Lo bulld.
keason (aga|nst) 1hls ls bare promlse - no conslderaLlon from Lhe promlsee - ooJem poctom
kat|o Þromlsee ls nC1 geLLlng anyLhlng ln reLurn
ne|d]Dec|s|on conslderaLlon LhaL oLhers have slgned noL good conslderaLlon. and Mr. 8 cerLalnly never relled on
such lmplled promlse Lo bulld bulldlngs, eLc. wlLh Lhe money (no wlng named afLer)
Comments ConslderaLlon has Lo be ln Lhe k. lf glven laLer Lhen lL was nC1 parL of LhaL LransacLlon
8rantford Genera| nosp|ta| v. Marqu|s Lstate (2003) (CSC)
Lxchanges and 8argalns
Iacts Mrs. Marquls pledged $1m Lo Lhe PosplLal and dled. PosplLal wanLed remalnlng $600,000.
Issue Was Lhere conslderaLlon for Lhe pledge of Lhe deceased Lo have a k?
keason (for) 1he PosplLal agreed Lo name wlng afLer her. uS CourLs wlll enforce promlse Lo pay based on lmplled
beneflL of hosplLal works supporLed by fundralslng
keason (aga|nst) namlng of Lhe wlng was PosplLal's ldea and never soughL by Mrs. Marquls and was noL a sure Lhlng,
as lL needed 8oard approval. Lngllsh cases and ualhousle held Lo Lhe conLrary
kat|o conslderaLlon musL have been agreed upon by Lhe promlsor
ne|d]Dec|s|on Mrs. Marquls never soughL namlng so cannoL be conslderaLlon
Comments Þledge can become a k lf you geL someLhlng ouL of lL.
Wood v. Lucy, Lady Duff-Gordon (1917 US)
Lxchange and 8argalns
Iacts Wood enLers lnLo a conLracL Lo markeL Lady u's deslgns buL she also endorses oLher brand. Wood
refuses Lo fulfll conLracL.
Issue Was Lhere conslderaLlon?
keason (for) Words of conLracL dld noL obllgaLe her Lo do anyLhlng.
keason (aga|nst) words of Lhe conLracL are noL deLermlnaLlve, and n could prove LhaL he markeLed As goods
kat|o Imp||ed prom|se of one parLy can be sufflclenL Lo consLlLuLe conslderaLlon for conLracL and Lo
supporL a cause of acLlon agalnsL Lhe oLher parLy for breach of conLracL.
ne|d]Dec|s|on whole wrlLlng was ºlnsLlncL wlLh an obllgaLlon" and an acLual promlse Lo markeL can be lmplled. was
conslderaLlon here and enforceable conLracL
ÞAS1 CCNSIDLkA1ICN
• nC1 enforceable lf a promlse ls made afLerwards because
1. ?ou don'L wanL Lo blnd people lnvolunLarlly
2. 1here was no barga|n for the prom|se at the t|me
Þromlse wlll only be enforceable lf new conslderaLlon ls added.
Lastwood v. kenyon, 1840, Uk
ÞasL ConslderaLlon ls no good conslderaLlon
Iacts Þ was Sarah's guardlan afLer she was orphaned as a chlld. Þ Lakes ouL a loan Lo flnance her educaLlon.
Sarah offers Lo repay and makes good on promlse for a year. u, Sarah's husband, promlses Lo Lake
over paymenLs afLer he marrles Sarah buL reneges.
Issue ls Lhere conslderaLlon by Þ. for such promlse so LhaL lL can be enforced?
20
keason (for) Sarah recelved beneflL and she can be sued when she came of age so now slnce Sarah's husband has
promlsed, conslderaLlon carrles over
keason (aga|nst) Sarah's husband has recelved no beneflL and any beneflL Lo Sarah was glven ln Lhe pasL.
kat|o A moral obllgaLlon does noL consLlLuLe good conslderaLlon
ne|d]Dec|s|on nC conLracL. CourL accepLs LhaL Sarah could be sued on her comlng of age, buL her husband cannoL as
any conslderaLlon for hls recenL promlse Lo pay was glven ln Lhe pasL - A husband was ln no way
connecLed Lo Sarah aL Lhe Llme of Lhe beneflL Lo her
Lamp|e|gh v. 8rathwa|t, 161S, Uk
8equesLed pasL conslderaLlon ls good
Iacts AfLer commlLLlng a murder, u asked Þ Lo peLlLlon klng for pardon. u promlsed Lo pay !100 Lo Þ, buL
reneged. Þ Lrles Lo obLaln pardon buL doesn'L geL lL.
Issue Can Lhls promlse be enforced as a k?
keason (for) n dld work for A even lf promlse came afLer Lhe work was done
keason (aga|nst) ns work came before Lhe promlse and was lndependenL of lL
kat|o An acL done before a promlse ls made can be good conslderaLlon where Lhe acL was
requesLed by Lhe promlsor and lL was undersLood LhaL paymenL would be made.
LxpecLaLlon of paymenL ls good conslderaLlon.
ne|d]Dec|s|on ?es lL ls a k as Þ dld work for u.
Comments 1hls case ls an excepLlon Lo LasLwood
CCNSIDLkA1ICN MUS1 8L CI VALUL IN 1nL L¥LS CI 1nL LAW
Þeppercorn ru|e
1homas (executors) v. 1homas, 1842, Uk
ConslderaLlon musL be of value
Iacts Pusband promlsed wlfe a house. AfLer hls deaLh Lhls was done and she pald a yearly renL of $1 and
remalned unmarrled. LaLer, execuLor refused Lo honor promlse.
Issue Was Lhere conslderaLlon for Lhls agreemenL?
keason (for) documenLs clearly calls for beneflL Lo Lhe promlsor from Lhe promlsee (renL and promlse Lo keep ln
good repalr)
keason (aga|nst) LxecuLors were moLlvaLed Lo carry ouL old Mr. 1homas' wlshes, and were noL moLlvaLed by £1 per
year ground renL or Lo keep ln repalr, and lf moLlve dld noL consLlLuLe onslderaLlon, Lhen no
conslderaLlon
kat|o musL flnd someLhlng of value LhaL moves ftom tbe ptomlsee, and here - peppercorn rule of $1. CourL
does noL concern lLself wlLh adequacy of Lhe conslderaLlon.
ne|d]Dec|s|on ?es a k.
Comments Saylng Mr. 1 dld noL care abouL Lhe $1 and canL be used as conslderaLlon.
Þerformance ls an lssue. Lvldence Lo prove Lhere was a good conLracL.





Loranger v. na|nes, [1921], CN CA

Iacts A declded Lo glve n some land, because he llked hlm, so n could bulld a house on lL.
Þ heslLaLed, Lhen agreed, and an agreemenL was drawn up and reclLed ºfor conslderaLlon herelnafLer
menLloned"
n had Lo pay for servlces whlch beneflLLed boLh parLles. n bullL a house on land
A refused Lo convey when relaLlonshlp waned
Issue Was Lhere conslderaLlon?
keason (for) money was spenL by promlsee on falLh of a promlse so conslderaLlon here
keason (aga|nst) no real conslderaLlon - A only galned pleasure whlch was gone
21
kat|o CourLs cannoL be concerned wlLh Lhe adequacy of Lhe conslderaLlon, lL ls commonly repeaLed ln Lhe
CourLs LhaL lL ls enough LhaL Lhe defendanL goL all he conLracLed for
ne|d]Dec|s|on Lhere was conslderaLlon here and speclflc performance, alLhough noL dlrecLly besLowed upon
promlsor: glven up deslres Lo remaln ln ueLrolL, lnduce n Lo move, lmprove land, help pay for servlces
and gave A flrsL opLlon . n clearly performed hls parL of Lhe bargaln, and A galned by havlng hls land
lmproved, so sLrong case for Lhe n
Comments uo noL confuse moLlve wlLh conslderaLlon.
8CNA IIDL CCMÞkCMISLS CI DISÞU1LD CLAIMS (Iorbearance= not su|ng)
lorbearance comes up ln Lwo slLuaLlons
o When someone de|ays the|r |ega| r|ghts of acLlon (usually Lo sue)
o When someone prom|ses not to pursue the|r |ega| r|ghts |n return for some cons|derat|on
Comprom|se agreement - lf boLh parLles belleve Lhe clalm ls valld, lL ls a booo flJe conLracL even lf lL ls noL legally
enforceable
Ca|||sher v. 8|schoffshe|m, 1870, Uk
lorbearance can be conslderaLlon.
Iacts Þ alleged LhaL cerLaln moneys were due Lo hlm from Ponduras governmenL and LhreaLened Lo Lake
legal acLlon. ln conslderaLlon of n noL sulng, A prom|sed Lo dellver some bonds Lo n. no real clalm by
n, A dldn'L dellver Lhe bonds. n sued for bonds
Issue Was Lhere conslderaLlon?
keason (for) AgreemenLs made Lo compromlse has good conslderaLlon , no real clalm does noL vlLlaLe Lhe
conslderaLlon
keason (aga|nst) no real conslderaLlon as no moneys were acLually due Lo Lhe n by Lhe Ponduras Cov'L
kat|o lorbearance of a dlspuLed clalm can be valld conslderaLlon lf
o 1he clalm ls reasonable ln lLself, and noL vexaLlous or frlvolous
o 1he clalmanL has an honesL bellef ln Lhe chances of success
o 1he clalmanL has noL concealed from Lhe oLher parLy any facL, whlch Lo Lhe clalmanL's knowledge,
mlghL have affecLed Lhe valldlLy of Lhe clalm
o ClalmanL has a serlous lnLenL Lo pursue Lhe clalm
ne|d]Dec|s|on conLracL enforceable as forbearance of prosecuLlon of clalm good conslderaLlon
Comments agreemenL noL Lo sue someone can be valld conslderaLlon for a conLracL
ÞkL-LkIS1ING LLGAL DU1¥
lf promlsee only promlses Lo do LhaL whaL he ls obllgaLed Lo do (duLy), Lhere ls no cons|derat|on.
1hls ls conslsLenL wlLh Lhe pasL ºspenL" conslderaLlon ldea
1he common law, llke equlLy Lakes LhaL Lo be done whaL oughL Lo be done
Þub||c duty:
1radlLlonal vlew - lf promlse already publlc duLy, no cons|derat|on, buL lf promlsee provlded someLhlng exLra, Lhere was
conslderaLlon: Clasbrook v. Clamorgan
Duty owed to a 3Þ:
1hls ls generally good conslderaLlon. ln Shadwell v. Shadwell nephew promlsed Lo marry whlch was a legal obllgaLlon and
Lhen uncle promlsed Lo glve hlm £130 a year lf he carrled Lhrough wlLh lL - ma[orlLy of CourL fe|t |ega||y b|nd|ng prom|se.
(mosLly seen ln famlly slLuaLlons)
Þao Cn v. Lau ¥|u Long, 1980, Uk
pre-exlsLlng legal duLy owlng Lo a 3Þ may be valld conslderaLlon
Iacts ÞC owns share ln SC, L?L owns shares ln lC,
L?L wanLs Lo acqulre a bulldlng 8 from SC
AgreemenL 1: b/w ÞC & lC > exchange of shares of SC and lC
AgreemenL 2: guaranLee of share prlce by L?L Lo ÞC
ÞC soughL of a new guaranLee before closlng of agreemenL €1 because of defecL ln flrsL guaranLee,
?L? relucLanLly agreed
AfLer closlng, prlce fell, ÞC broughL clalmed based on guaranLee, L?L refused Lo pay
Issue Can Lhe eotllet ptomlse be valld conslderaLlon for a second (lotet) agreemenL w/ a 3Þ
22

kat|o
A pte-exlstloq Joty Lo a tbltJ potty can be valld conslderaLlon ln a conLracL wlLh oootbet secooJ potty.
1he some promlse Lo two Jlffeteot parLles ln two Jlffeteot conLracLs can be valld condlLlon ln boLh.
8uL, a pre-exlsLlng duLy Lo Lhe some parLy ls noL conslderaLlon
ne|d]Dec|s|on ?es. good conslderaLlon as a promlse Lo perform or Lhe performance of a pre-exlsLlng conLracLual
obllgaLlon Lo a 3Þ can be valld conslderaLlon
Comments ÞasL conslderaLlon ls normally no conslderaLlon unless:
1. 1he acL or promlse was done or made aL Lhe promlsor's requesL,
2. 1he parLles musL have undersLood LhaL Lhe acL or promlse was Lo be remuneraLed elLher by Lhe
paymenL or confermenL of some oLher beneflL,
3. 1he paymenL, or Lhe confermenL of a beneflL, musL have been legally enforceable had lL been
promlsed ln advance.
VCCA8:
+,-03 85B4-3 - "chance occurrence, unavoldable accldenL", ls a common clause ln conLracLs LhaL essenLlally frees boLh
parLles from llablllLy or obllgaLlon when an exLraordlnary evenL or clrcumsLance beyond Lhe conLrol of Lhe parLles, such as
a war, sLrlke, rloL, crlme, or an evenL descrlbed by Lhe legal Lerm oct of CoJ
?-,8722,-: M,=3 one parLy makes an uncondlLlonal promlse ln wrlLlng Lo pay a deLermlnaLe sum of money Lo Lhe poyee,
elLher aL a flxed or deLermlnable fuLure Llme or on demand of Lhe payee, under speclflc Lerms. noL an lCu. uon'L need Lo
look for conslderaLlon.
9-7C5-=7=3 0,1=-50= - 3 way conLracL, no prlvlLy beLween 1,3 (eg owner, conLracLor, elecLrlclan)
DU1¥ CWLD 1C 1nL ÞkCMISCk
Þromlses Lo pay or provlde more
St||k v. Myr|ck (1809) Lng
ConslderaLlon: ConLracLual uuLy Cwed Lo Þromlsor
Iacts CapLaln agreed Lo pay each sallor $3, durlng Lrlp some sallors deserLed and Lhe resL asked for more
$. CapLaln agreed Lo pay, buL when Lrlp over he refused Lo pay more
Issue Was Lhere conslderaLlon for Lhe promlsee Lo pay more for whaL sallor obllged Lo do?
keason (for) Lhe shlp was noL ln perll on Lhe seas, Lhls was offered Lo Lhe crew
1he crew agreed Lo do Lhe work of Lhe Lwo deserLlng crew so Lhere was conslderaLlon
keason (aga|nst) no new conslderaLlon as Lhey agreed before Lo all emergencles no ºfresh" conslderaLlon
kat|o A promlse Lo perform a pre-exlsLlng conLracLual duLy already owed by Lhe conLracLual promlsee does
noL consLlLuLe good conslderaLlon Lo supporL anoLher promlse Lo Lhe same promlsee.
ne|d]Dec|s|on no, no economlc duress
G||bert Stee| v. Un|vers|ty Construct|on (1976) CCA
ConslderaLlon: ConLracLual uuLy Cwed Lo Þromlsor
Iacts Þ promlses Lo dellver sLeel aL an agreed prlce, buL afLer enLers k, sLeel prlces skyrockeL and Þ would
lose money. Þ and u enLer lnLo an oral agreemenL for hlgher prlces.
u accepLs sLeel, buL refuses Lo pay new prlces.
Issue u argues oral agreemenL ls noL enforceable b/c Lhere ls no oew conslderaLlon.
keason (for) 1. ConslderaLlon was found ln n's promlse Lo glve Lhe A a good prlce for sLeel ln fuLure
2. ConslderaLlon was found ln Lhe muLual abandonmenL of Lhe old conLracL - lmplled resclsslon of
Lhe old conLracL. A subsequenL agreemenL lmplledly resclnded Lhe old one, especlally slnce prlce
was an essenLlal Lerm
3. ConslderaLlon was found ln Lhe lncreased credlL allowed Lhe A ln allowlng a hlgher amounL Lo be
pald ln 60 days
4. A had acqulesced ln Lhe lncrease because lL dld noL ob[ecL Lo Lhe lncreased lnvolces
keason (aga|nst) 1. 1hls was Loo vague
2. noL a muLual abandonmenL as only one Lerm was changed
3. lncreaslng credlL ls really noL new conslderaLlon!
4. 1o say Lhls esLoppel ls belng used as a sword noL a shleld and you canL do Lhls, and furLher Lhere
was no rellance on As acqulescence by Lhe n Lo lLs deLrlmenL
kat|o When varying a contract there must be new consideration
23
ne|d]Dec|s|on noL a new k, all Lerms same excepL prlce, lf old k sLlll Lhere Lhen need fresh conslderaLlon.
Comments ÞarLles dld noL resclnd old k. Should economlc duress be an lssue here?
W||||ams v. koffey 8rothers (LngCA) 1990
ConslderaLlon: ConLracLual uuLy Cwed Lo Þromlsor
Iacts 1tlpottlte coottoct. Cwners are 3Þ. ConLracLor ls A and sub-conLracLor ls n
A and n enLered lnLo a conLracL for n Lo do carpenLry work for £20,000 Lo bulld 27 flaLs
n encounLered flnanclal dlfflculLles and A concerned LhaL ns mlghL noL flnlsh on Llme, and A
defendanLs were under flnanclal penalLy wlLh Lhe owner lf laLe
A offered n new deal Lo bulld for an exLra premlum of £373 per flaL.
Þ Lhen compleLed Lhe flaLs, buL A only made parL paymenL.
Issue Was Lhere conslderaLlon for Lhe 2
nd
conLracL?
keason (for) A recelved beneflL beyond Lhe compleLlon of Lhe flaLs whlch were Lhe sub[ecL of Lhe flrsL conLracL,
whlch were LhaL Lhe n dld noL sLop worklng, savlng Lhe penalLy for delay and avoldlng Lhe Lrouble and
expense of hlrlng a new conLracLor Lo flnlsh
keason (aga|nst) n agreed Lo do no more LhaL he had agreed Lo do ln Lhe flrsL conLracL so no new conslderaLlon, so SLllk
v. Myrlck applled, and also Lhere was economlc duress broughL abouL by Lhe n Lo geL Lhe A Lo agree
Lo a new conLracL
kat|o (confllcLs wlLh CllberL) where addlLlonal conslderaLlon can be found, such as a pracLlcal beneflL, a
courL may hold LhaL a valld conLracL exlsLs, as long as Lhere are no oLher vlLlaLlng condlLlons presenL,
l.e. fraud or economlc duress.
ne|d]Dec|s|on as long as A doubLs LhaL n wlll compleLe flrsL conLracL on Llme, and wlLhouL belng sub[ecLed Lo duress
by Lhe n, A agrees Lo a new hlgher prlce, Lhere ls conslderaLlon.
Comments SLllk v. Myrlck prlnclple ls sLlll good law, buL dlsLlngulshes as A galned an advanLage, Lhe rlgld
approach Lo conslderaLlon as ln SLllk ls noL approprlaLe any more
General Notes: Courts have developed techniques to avoid the pre-existing duty rule
1. finding consideration, albeit nominal
2. finding that circumstances have changed enough that P’s later promise is to do what he was supposed to do
before, but it is still consideration because it would reduce hardship from the D
3. Enforcing a modification of the contract if the parties have rescinded original agreement and
Greater Ireder|cton A|rport v. NAV Canada (N8CA) 2008
ConslderaLlon: ConLracLual uuLy Cwed Lo Þromlsor. 8Au case for ex
Iacts nC lnsLalled a uML and wanLed ClA Lo pay for lL. ClA dld noL wanL Lo buL, ClA slgned leLLer under
proLesL Lo pay for uML Lo make sure Lhe runway would be operaLlonal. AfLer nC lnsLalled uML,
ClA buL wanLed money back.
Issue Was Lhere conslderaLlon on Lhe parL of ClA Lo pay for Lhe uML?
keason (for) 8elles on Wllllams v. 8offey and sald LhaL here were beneflLs Lo ClAA Lo pay.
keason (aga|nst) no new conslderaLlon and SLllk, CllberL SLeel apply
kat|o no economlc duress = enforceable k. A promlse of a posL-conLracLual modlflcaLlon, even Lhough noL
supporLed by conslderaLlon, may sLlll be enforceable so long as Lhe promlse was noL procured under
economlc duress.
ne|d]Dec|s|on CourL adopLs reasonlng ln 8offey and says LhaL all LhaL ls necessary ls Lo flnd some beneflL or
advanLage golng Lhe promlsor ln maklng Lhe second conLracL - says LhaL Lhls ls only an lncremenLal
change ln Lhe law from Lhe 8ule ln SLllk
Comments even Lhough no fresh conslderaLlon, Lhe modernlzaLlon of Lhe rule ln SLllk allows a courL Lo sLlll
enforce a conLracL lf Lhere ls no economlc duress
ÞkCMISL 1C ACCLÞ1 LLSS
Accord and Sat|sfact|on:
Accord ls Lo agree Lo accepL some oLher promlsed performance Lhan whaL has been agreed upon.
?7113<Q2 -4<3 ÞaymenL of a lesser sum ln saLlsfacLlon of Lhe greaLer, cannoL be any saLlsfacLlon for Lhe whole
o unless couples wlLh a glfL and accepLed
o unless accepLed Lhrough a negoLlable lnsLrumenL (cheques)
o unless accepLed prlor Lo Lhe due daLe
24
o unless accepLed aL a dlfferenL locaLlon
Statute:
1he R46705=4-3 J0= I<5; ,L 3F47=:K has effecLlvely abrogaLed Lhe rule ln llooel and overLurns lookes v. 8eet
o ÞarL performance of an obllgaLlon elLher before/afLer a breach shall be held Lo exLlngulsh Lhe obllgaLlon
a. when expressly accepLed by a credlLor ln saLlsfacLlon, or
b. when rendered pursuanL Lo an agreemenL for LhaL purpose Lhough wlLhouL any new conslderaLlon
Ioakes v. 8eer (Uk) 1884
Þromlse Lo AccepL Less, Accord and SaLlsfacLlon
Iacts lolkes owes 8eer, lolkes pald £130 per monLh unLll [udgmenL fully pald and durlng paymenLs, 8eer
agreed noL Lo Lake any proceedlngs on Lhe [udgmenL. 8eer clalmed lnLeresL. lnLeresL was noL Lerm of
secondary agreemenL, buL lL was ln Lhe orlglnal conLracL.
Issue uoes 8eer have a rlghL Lo sue for Lhe lnLeresL?
keason (for) 1hls ls a walver of lnLeresL. 1here was accord and saLlsfacLlon. Þlnnel's Case (from 1600's)should be
overruled
keason (aga|nst) 1. WhaL lolkes recelved ln exchange for paymenLs was 8eer noL sulng on Lhe [udgmenL, and Lhere
obllgaLlon Lo pay Lhe whole debL whlch could noL be exLlngulshed
2. 1here was no accord and saLlsfacLlon paymenLs on accounL cannoL acL as a saLlsfacLlon
3. Þlnnel's Case sLlll good law
kat|o
Payment of a lesser sum in satisfaction of greater, cannot be any satisfaction for the whole
ne|d]Dec|s|on ÞarL paymenL when enLlre sum was due could noL be ln lLself good conslderaLlon as enLlre sum was all
due. no saLlsfacLlon as [usL paymenL on accounL and as long as flnal paymenL sLlll due no saLlsfacLlon


4 ways around Ioakes v 8eer:
A. ÞuL Lhe agreemenL under seal
8. SLaLuLe -ex:Law and LqulLy AcL
C. SLrucLure Lhe new arrangemenL so LhaL noL only are Lhe parLles paylng less buL someLhlng else ls dlfferenL
u. LsLoppel -cerLaln clrcumsLances you cannoL go back on your word- esLoppel can enforce a promlse
ke Se|ectmove Ltd. (LngCA) 199S
Þromlse Lo AccepL Less, Accord and SaLlsfacLlon
Iacts Cov'L offlclal agreed Lo accepL paymenL of Lax arrears ln lnsLalmenLs from SelecLmove because cash
flow problems - Cov'L offlclal sald LhaL would check wlLh hls superlors and geL back Lo company lf
problems wlLh Lhe arrangemenL. never dld LhaL.
8efore flrsL paymenL due, Cov'L demanded full paymenL, buL SelecLmove made lnsLalmenL paymenLs
whlch were accepLed and by Cov'L - noL senL back
Issue lf Lhere was accepLance by Lhe Cov'L of Lhe seLLlemenL Lhen was Lhere good conslderaLlon?
keason (for) Cov'L derlved beneflLs from lnsLallmenL arrangemenL, accepLed Lhe paymenLs whlch was easler Lhan
demandlng all and relled on Lhe prlnclple ln Wllllams v. 8offey
keason (aga|nst) Case dlrecLly on polnL wlLh loakes v. 8eer and Wllllams v. 8offey was a case concernlng bulldlng
conLracLs noL debLs
kat|o
must be a ‘practical’ benefit to the promisor to reduce repayment for it to be valid consideration
ne|d]Dec|s|on seLLlemenL agreemenL unenforceable as no conslderaLlon and follows loakes
Comments Some conslderaLlon ln oLher cases has been: LhaL pracLlcal reallLy of geLLlng money now and savlng of
Llme, efforL and expense was Lhe conslderaLlon.
Ioot v. kaw||ngs (SCC) 1963
Þromlse Lo AccepL Less, Accord and SaLlsfacLlon, !udlcaLure AcL overrules Þlnnel
Iacts A gave some ptomlssoty ootes Lo Lhe n, Lhen n offered LhaL he would reduce lnLeresL raLe lf A
followed a paymenL schedule wlLh a serles of 6 posL-daLed cheques, saylng LhaL he was dolng lL Lo
help A carry on and also allowed A prlvllege of paylng lL all off aL anyLlme
A complled wlLh Lerms, afLer cashlng one of Lhe cheques, n sued for Lhe remalnlng debL.
Issue ls Lhere conslderaLlon for Lhe agreemenL Lo forebear proceedlng on Lhe noLes?
keason (for) Cheques glven consLlLuLed a ºLhlng" and more Lhan Lhe less money whlch would be pald, ltomlssoty
25
Notes seen as dlfferenL Lhan cash, so posL-daLed cheques were dlfferenL as well
keason (aga|nst) opLlon LhaL lL could be pald ln full aL any Llme negaLed conslderaLlon as full paymenL was reserved,
and only was agreemenL Lo accepL lnsLalmenLs so, no conslderaLlon
kat|o
the acceptance of a negotiable instrument may be a satisfaction of a debt of a greater amount
ne|d]Dec|s|on cheques ln exchange for agreemenL noL Lo sue lf noL ln defaulL good conslderaLlon -cheque
(someLhlng more: peppercorn) -CourL noL look aL Lhe adequacy of conslderaLlon
Comments uk- cheque Lhe same as cash, CAnAuA cheque ls worLh more.
ÞkCMISSCk¥ LS1CÞÞLL . 1est-n|gh 1rees
LsLoppel -Law ls sLopplng you from saylng someLhlng. lf Lhere ls a promlse, you can'L lead evldence Lo say Lhere ls no
conslderaLlon. ?ou wlll be esLopped from Lrylng Lo geL ouL of Lhls promlse LhaL you made. 8efore a promlse ls blndlng
Lhere musL be conslderaLlon.
?Cu CAn CnL? llnu LS1CÞÞLL ll 1PL8L lS nC CCnSluL8A1lCn
SLrlcL crlLerla Lo Lhe use :
1. Pas Lo be an exlsLlng legal relaLlonshlp beLween Lhe parLles
2. Cne of Lhe parLles promlses Lo reduce Lhe obllgaLlon LhaL ls already owed Lo Lhem
3. 1he oLher parLles (who recelves Lhe promlse/beneflL) relles on LhaL promlse Lo Lhelr deLrlmenL
4. 1he promlse musL have been made ln good falLh and acLed upon.
5. plalnLlff cannoL use esLoppel only Lhe defendanL! J 2>73<6 516 1,= 5 2;,-6 --- lt ls o Jefeoce
WAIVLk:
a change for Lhe beneflL of one parLy and lnvolves Lhe volunLary rellnqulshmenL of a conLracLual rlghL.
1he parLy maklng Lhe walver wlll noL be able Lo lnslsL on Lhose sLrlcL legal rlghLs where Lhe oLher parLy has acLed upon Lhe walver. A
walver ls unsupporLed by conslderaLlon and can be reLracLed by glvlng reasonable noLlce
LesL
o 1. lull knowledge of Lhelr rlghL
o 2. unequlvocal lnLenLlon Lo walve Lhose rlghLs
Who Benefits
• Promissory estoppel, typically both parties are getting a benefit – i.e. High Trees – company getting some rent
rather than no rent
• Waiver is a change in the contract that is for the benefit of one party only
nughes v. Metropo||tan ka||way (Uk) 1877
Walver
Iacts Lease beLween Landlord (Pughes) and 1enanL (MeLropollLan 8allway)
CcLober, landlord gave noLlce for LenanL Lo repalr wlLhln 6 monLhs. 1enanL replled november
suggesLlng Lo defer repalrs whlle dlscusslng buy-ouL lease. Landlord never responded Lo requesL. Aprll
19, 3 days before 6 monLhs ended, LenanL sald Lhey would now do repalrs. Aprll 28, landlord served
wrlL of e[ecLmenL. ln !une, LenanL sLlll Lhere and compleLed Lhe repalrs. Landlord sLlll Lrled Lo enforce
e[ecLmenL
Issue Could landlord enforce lease uslng Lhe noLlce Lo repalr and Lhe facL LhaL repalrs were noL compleLe by
Lhe end of Lhe 6 monLhs?
keason (for) (klcklng Lhem ouL and enforclng lease) 1he lease ls clear, and no promlse made Lo defer
keason (aga|nst) 1he leLLer of november offerlng Lo suspend repalr and engage ln negoLlaLlons was accepLed by Lhe
landlord's conducL . 8lghL Lo enforce repalr clause was walved unLll negoLlaLlons were elLher
compleLed or broken, so LenanL had unLll end of !une Lo compleLe
kat|o lf parLles ln conLracL declde muLually (by acL or express consenL) Lo negoLlaLe leadlng one of Lhe
parLles Lo suppose LhaL a deadllne won'L be enforced, Lhen Lhe parLy who would enforce Lhose rlghLs
can noL
ne|d]Dec|s|on Landlord Laklng advanLage of LenanL. Agrees wlLh Lhe LenanL LhaL Lhe acLlons of Lhe landlord
amounLed Lo a walver LhaL could be enforced by a CourL of LqulLy. LqulLable Lerms, Lhey walved Lhelr
rlghLs Lo enforce Lhe lease sLrlcLly because of Lhelr behavlour
Centra| London Þroperty 1rust v. n|gh 1rees nouse (Lngk8) 1947
Þromlssory LsLoppel- esLoppel def creaLed here. (rellance an lssue)
Iacts 8ecause of low vacancy due Lo poor economlc condlLlons war ln 1940, Þ reduced renLs from !2,300 Lo
!1,230 annually. ln early 1943, Lhe flaLs were all leased, and Lhe Þ(now recelver)soughL recovery lasL 2
26
years of renL. lease was under seal
Issue varlaLlon of a deed musL be done wlLh a deed (anoLher sealed documenL), under equlLy lL ls Ck Lo
vary an agreemenL (oral or wrlLLen) as long as Lhere ls new conslderaLlon. Pere w/o seal or
conslderaLlon. ls Lhe Þ enLlLled Lo renL glven was no conslderaLlon?
keason (for) LqulLy allows lease under seal Lo be varled. 1here was an agreemenL wlLh conslderaLlon Lo accepL less
for boLh Lhe pasL and Lhe fuLure and varlaLlon had changed enLlre agreemenL
keason (aga|nst) Lease under seal cannoL be varled under Lhe common law (buL yes lL could: equlLy acL)
loakes - cannoL agree Lo accepL a smaller sum when owe a larger unless fresh conslderaLlon, noL
here. lL ls noL esLoppel as lL ls noL a mlsrepresenLaLlon of exlsLlng facL
kat|o ?es, promlssory esLoppel ceases when Lhe condlLlons for Lhe esLoppel came Lo an end
ne|d]Dec|s|on landlord made a promlse whlch was lnLended Lo be acLed upon and was acLed upon, so Lhe landlord
wlll be esLopped (even wlLh nC conslderaLlon) from enforclng lLs legal rlghLs.
Comments When Lhe clrcumsLances LhaL glve rlse Lo Lhe esLoppel end, so does Lhe esLoppel
Iohn 8urrows v. Subsurface Surveys (SCC) 1967
Þromlssory LsLoppel (lndulgence ls noL a promlse)
Iacts Þurchase and sale agreemenLs secured by promlssory noLes. Clause: lf paymenLs are more Lhan 10
days laLe credlLor can go afLer Lhe full amounL. lor 18 monLhs paymenLs were conslsLenLly 18 monLhs
laLe, buL nevermore Lhan 33 days. AfLer a dlsagreemenL, Lhe credlLor wenL afLer Lhe full amounL.
Issue Would Lhe n be esLopped from relylng on hls sLrlcL legal rlghLs Lo lnvoke Lhe acceleraLlon clause?
(because Lhey seemed Lo noL care for 19x)
keason (for) 1he n's acqulescence was an amounL Lo a represenLaLlon LhaL Lhe A was nC1 able Lo rely
keason (aga|nst) 1he paLLern of behavlour amounLed Lo a represenLaLlon whlch was relled on and acLed upon, and lL
would be lnequlLable Lo allow Lhe n Lo enforce hls sLrlcL legal rlghLs
kat|o lrlendly lndulgences are noL promlses Lo whlch Lhe docLrlne of promlssory esLoppel would apply. lor
promlssory esLoppel Lo apply, Lhere musL be a promlse by elLher words or conducL, and lLs effecL musL
be clear and unamblguous.
ne|d]Dec|s|on no lnLenLlon was Lhere Lo creaLe a nLW legal relaLlonshlp.
D & C 8u||ders v. kees (LngCA) 1966
Þromlssory LsLoppel (equlLles)
Iacts ns are a llLLle conLracLlng company and A was a cusLomer. Work was done, £480 overdue, demand
leLLers wrlLLen, no response, Lhe As wlfe, made complalnLs abouL Lhe company's work, and offered
Lhem £300 ln cash or by cheque. Mrs. 8ees knew ns were ln dlre sLralLs, made ns add words Lo
recelpL ºln compleLlon of accounL". Þs Lhen sued for Lhe balance
Issue 1. Was Lhe offer of Lhe cheque whlch ls dlfferenL Lhan cash sufflclenL conslderaLlon
2. ls Lhe Þ esLopped from collecLlng Lhe full amounL?
3. Was Lhere accord and saLlsfacLlon?
keason (for) 1he acLlons of Lhe ns flL wlLhln Lhe broad prlnclples of esLoppel, LhaL Lhelr acL lead Lhe A Lo belleve
LhaL Lhe ns sLrlcL legal rlghLs would noL be enforced
keason (aga|nst) buL prlnclple also requlres LhaL lL be lnequlLable Lo allow hlm Lo enforce Lhose rlghLs, and here Lhe As
wlfe held Lhe n Lo ransom
kat|o lf Lhere ls lnLlmldaLlon/duress Lhen you canL use promlssory esLoppel. 8ees ls lnLlmldaLlng.
Þromlssory esLoppel ls noL appllcable where Lhe promlse has been exLracLed by lnLlmldaLlon.
ne|d]Dec|s|on was noL lnequlLable Lo allow Lhe ns Lo enforce Lhelr sLrlcL legal rlghLs, and says LhaL Lhe defence of
accord and saLlsfacLlon has noL been made ouL as Lhere was no Lrue accord - ºno person can lnslsL
upon a seLLlemenL procured by lnLlmldaLlon"
D|fference 8etween Þrom|ssory Lstoppe| and Wa|ver

o Þromlssory esLoppel ls LhaL one parLy makes a promlse and Lhen reneged on lL, parLy wlll sLaLe Lhey wlll accepL cerLaln
Lhlngs Lemporarlly- lL's a suspenslon of rlghLs raLher Lhan a full exLlngulshmenLs of rlghLs . Þromlssory esLoppel ls usually
done by wotJs of promlsor
o Cenerally, you have a walver when one parLy ls ln breach of Lhe conLracL and Lhe oLher parLy does noL ob[ecL, dld Lhelr
acLlons consLlLuLe walver - wlll [usL accepL cerLaln Lhlngs - l.e. lower renL. Walver ls usually done by octloo of promlsor
27
Var|at|on - a change made by muLual agreemenL for Lhe benef|t of both part|es Lo Lhe orlglnal agreemenL and musL be
supporLed by new conslderaLlon

MAClC WC8uS: º1lML lS Cl 1PL LSSLnCL", ºSu8!LC1 1C CCn18AC1"

Saskatchewan k|ver 8unga|ows v. Mar|t|me L|fe (SCC) 1994
8eLracLlon of Walver
Iacts
Insurance terms state that if premium paid late then policy lapses
" Aug: partial payment by SRB
" Nov: demand of payment by MLI (waiver)
" Feb: policy lapse sent by MLI
" Apr: SRB learns of lapse
" July: SRB sends payment
Issue
Was there a waiver? If so was it retracted later?
keason (for) lnsurer had walved lLs rlghL Lo compel Llmely paymenL under Lhe conLracL and wordlng of november
leLLer clear - pollcy sLlll ºLechnlcally noL ln force, buL sLlll requlre paymenL" and LhaL walver was never
reLracLed as never recelved reasonable noLlce of such reLracLlon
keason (aga|nst) no walver Look place as lnsurer made lL clear LhaL reserved Lhe rlghL Lo enforce Lhe lapse provlslons. lf
walver dld Lake place lL was clearly reLracLed ln lebruary leLLer.
kat|o 1esL: Walver ls only found when Lhe parLy walvlng has
1) Lhe knowledge and 2) lnLenLlon Lo walve Lhelr rlghLs.
A walver can be reLracLed by Lhe walvlng parLy lf Lhe parLy glves reasonable noLlce
no noLlce ls requlred where Lhere has been no rellance on Lhe walver
ne|d]Dec|s|on walver Look place, buL was effecLlvely reLracLed, so pollcy lapsed
Comments Walver musL be analyzed narrowly as Lhere ls nC conslderaLlon
Landbank M|nera|s Ltd. v. Wesgeo Lnterpr|ses

Iacts sale of naLural gas lnLeresLs, clause ºLlme was Lo be of Lhe essence". 1he purchaser agreed Lo
posLpone closlng Lo a speclfled daLe, buL Lhe vendors falled Lo saLlsfy Lhe purchaser's LlLle
requlremenLs by LhaL Llme. 1he purchaser Lhen gave noLlce Lo Lhe vendors LhaL lL was LermlnaLlng Lhe
sale agreemenL. 1he vendors refused, saylng LhaL Llme had ceased Lo be of Lhe essence when Lhe Llme
for closlng was exLended. purchaser sued Lo recover deposlL
Issue uld Lhe exLenslon of closlng consLlLuLe a walver of Lhe" Llme ls of Lhe essence" provlslon?
keason (for) Cnce exLended Lhls was a clear walver, and Lo reLracL, musL glve reasonable noLlce
keason (aga|nst) noL a Lrue walver as no lnLenLlon Lo walve, only a subsLlLuLlon of new closlng daLe
kat|o an exLenslon of closlng ls noL a walver of Llme belng of Lhe essence
ne|d]Dec|s|on no walver, noL unfalr or lnequlLable for Lhe plalnLlff purchaser Lo lnslsL LhaL Llme was of Lhe essence,
so Lhe purchaser was enLlLled Lo LermlnaLe Lhe agreemenL and recover lLs deposlL
Comments lf Llme ls an essence, whaL do you do? noLe LhaL lL ls nC1 a walver or lS a walver buL Llme ls sLlll
lmporLanL. uCn'1 [usL be sllenL.
W. I. A|an & Co. V. L| Nasr Lxport and Import Co. (LngCA) 1972
Walver, deLrlmenL noL requlred
Iacts ConLracL ln kenyan shllllng, deallngs were pald ln SLerllng. AL Lhe Llme, parlLy of value. SLerllng laLer
devalued and Lhe Þ broughL acLlon for Lhe dlfference ln value ln shllllngs.
Issue Pas Lhe Þ walved hls sLrlcL legal rlghL Lo collecL ln kenyan shllllng?
keason (for) 1here was no agreemenL Lo a new conLracL ln Lngllsh currency
1he non-conflrmlng leLLer of credlL was llke dellvery of goods where one loL falls shorL or requlred
quallLy - purchaser can sLlll lnslsL upon prescrlbed quallLy for shlpmenLs
keason (aga|nst) Sellers accepLed offer of new currency by accepLlng and maklng use of leLLer of credlL
kat|o 1h|s |s a wa|ver. No need to |ook for detr|menta| re||ance
ne|d]Dec|s|on lf one parLy conducL leads anoLher Lo belleve LhaL Lhe sLrlcL rlghLs wlll noL be lnslsLed on, lnLendlng
LhaL Lhe oLher should acL on LhaL bellef and he uCLS acL on lL, Lhen Lhe flrsL parLy wlll noL be allowed
28
Lo lnslsL on Lhe sLrlcL legal rlghL
Soc|ete Ita|o-8e|ge v. Þa|m and Vegetab|e C||s 1he Þost Chaser (Lng Ç.8.) 1982
ueLrlmenL requlred for walver, no ÞL elLher
Iacts Sellers were Lo send declaraLlon ASAÞ. ueclaraLlons were a monLh laLe and on recelpL of Lhe
declaraLlon Lhe buyers made no proLesL Lo Lhe laLeness, buL Lhe sub-buyers dld. 1he 8uyers senL a
message requesLlng LhaL Lhe seller hand over Lhe docs abouL Lhe conslgnmenL Lo Lhe sub-buyers. 1he
sub-buyers re[ecLed Lhe documenLs. 2 days laLer Lhe buyers also re[ecLed Lhe doc and lnformed Lhe
sellers. 1he sellers clalmed damages.
Issue Can Lhe buyers lnslsL on enforclng Lhelr sLrlcL rlghLs?
kat|o you do noL have Lo show Jettlmeotol rellance. ?ou [usL have Lo show some rellance and an
lnconvenlence.
ne|d]Dec|s|on P’s communlcaLlon Lo S consLlLuLed walver of hls rlghL Lo re[ecL > buL Lhere musL be such rellance by S
on Lhls walver Lo render lL lnequlLable for Þ Lo enforce hls rlghL Lo re[ecL (equlLable esLoppel). S only
dldn'L suffer any deLrlmenL > Lhus Lhere's noLhlng LhaL render lL lnequlLable for Þ Lo enforce lLs legal
rlghL
Comments MuS1 flnd some form of unfalrness ln order Lo flnd promlssory esLoppel-whlle uennlng sald only
acLlon by Lhe promlsee ls requlred, and noL deLrlmenL, Coff oplned LhaL some pre[udlce ls requlred,
whlle Lord Podgson ln A[ayl requlred an alLeraLlon of poslLlon
kyan v. Moore, SCC sa|d that |n Canada, need both re||ance and detr|ment

Combe v. Combe (LngCA) 19S1
Þromlssory LsLoppel as defence (shleld) CnL? and noL cause of acLlon
Iacts
Husband promised he would pay Wife support annually after divorce
" H didn’t pay for 7 years, then W brought action to recover all the arrears
" W had more $$ than H
Issue Can ÞL be used as a sword Lo enforce a promlse?
kat|o
Estoppel may be part of a cause of action, but not the cause of the action itself (sword/shield)
ne|d]Dec|s|on no, husband's promlse w/o conslderaLlon= noL enforceable.
Þetr|d|s v Shab|nsky (CNnC) 1982
ÞL cannoL be used as a sword
Iacts Þ's lease explres on !une 30, 1981 wlLh opLlon Lo renew Lo be exerclsed by uec. 31, 1980. ln response
Lo advances by Þ, u says Lhey would geL LogeLher wrL Lhe renewal clause afLer Lhe holldays. 1hey
negoLlaLed ln wrlLlng and ln person for a perlod of Llme. Cn !une 2, 1981, Lhe u gave abrupL evlcLlon
noLlce Lo vacaLe by !uly 1, 1981. 1enanL spenL $ on buslness and couldn'L relocaLe on shorL noLlce, so
sued and declaraLlon lease renewed
Issue Was landlord esLopped from relylng on hls sLrlcL legal rlghLs Lo LermlnaLe Lhe Lenancy?
uld landlord walve lLs sLrlcL legal rlghLs Lo adhere Lo Lhe Llme llmlLs?
keason (for) LsLoppel: llLs wlLhln Lhe prlnclple, promlse made Lo conLlnue Lo negoLlaLe, lnLenLlon Lo affecL legal
relaLlons, relled on, used as a shleld sLop evlcLlon (also a sword Lo geL renewal)
walver: landlord had by lLs acLlons walved lLs sLrlcL adherence Lo Llme llmlL
keason (aga|nst) does noL flL prlnclple as promlse musL be made when legal relaLlonshlp exlsLs (opLlonor/ee) and here
LhaL relaLlonshlp had lapsed.
walver: never sald Lhls speclflcally so can'L lnfer a walver, need wrlLLen leLLer eLc
kat|o Þromlssory esLoppel ls dependenL upon subslsLence of legal rlghLs,
Walver- lf Lhere ls rellance lL ls lnequlLable Lo reLracL walver wlLhouL reasonable noLlce
ne|d]Dec|s|on noL Þromlssory esLoppel as nC legal relaLlonshlp of opLlonee/or.
Walver appllcable as enLerlng lnLo negoLlaLlons clear evldence LhaL landlord's sLrlcL legal rlghLs were
suspended, Lo be resLored on reasonable noLlce (noL reasonable here)
S45-51=,- - 1he guaranLor ls bound Lo pay Lhe debL, provlded Lhe debLor does noL. Pe ls bound only Lo Lhe exLenL LhaL Lhe
debLor ls, and any paymenL made by Lhe laLLer, or release of hlm by Lhe credlLor, wlll operaLe as a release of Lhe
guaranLor.
lf Lhe credlLor should subsLlLuLe a new agreemenL, or do any oLher acL by whlch Lhe guaranLor's slLuaLlon would be worse,
29
Lhe obllgaLlon of Lhe guaranLor would be dlscharged.
A qootootot dlffers from a sotety. CuaranLor cannoL be sued unLll a fallure on Lhe parL of Lhe prlnclpal, when sued, whlle
Lhe sureLy may be sued aL Lhe same Llme wlLh Lhe prlnclpal.
932=78,1748. LaLln: Lhe auLhenLlcaLlng clause of an lnsLrumenL (as a deed) LhaL Lyplcally beglns ºIn w|tness whereof Lhe
parLles have seL Lhelr hands and seals" and slgned and before whaL wlLnesses. lound ln conLracLs.
J==32=5=7,1. wlLnesses cerLlfy LhaL Lhe lnsLrumenL has been execuLed before Lhem. lound ln Wllls.
kob|chaud c. Ca|sse Þopu|a|re (N8CA) 1990
ÞL used as a sword where equlLy demands lL.
Iacts 8 owed C $ ln debL consolldaLlon. C agreed Lo accepL less $ lnlLlally, buL C's board of governors
re[ecLed lL. 8 sued C for noL accepLlng less $ uslng Þ/L
Issue can esLoppel be used by Lhe plalnLlff, or ls lL only a defence Lo a lawsulL?
keason (for) As long as prlnclple adhered Lo, wheLher belng used by n or A ls lrrelevanL
keason (aga|nst) can only be used as a defence by defendanL - shleld noL a sword
kat|o A debLor can use ÞL as a sword as lf he were sued by Lhe credlLor for Lhe same reason, he could Lhen
[usL use ÞL as a shleld whlch ls Lhe same Lhlng.
ne|d]Dec|s|on slnce n could use lL lf sued by Lhe Calsse, Lhen can use lL Lo enforce Lhe same agreemenL as n - Lhls ls
only oblLer as ma[orlLy held LhaL Lhere was conslderaLlon
Canad|an Court has extended prom|ssory estoppe| to say that s||ence (acqu|escence or encouragement) rather than
words or pos|t|ve conduct cou|d const|tute an estoppe|: 2e|mer v. V|ctor Þro[ects (8CCA)
M. (N.) v. A. (A.1.) (8CCA) 2003
no legal relaLlonshlp= no ÞL
Iacts 8elylng on M's promlse Lo pay her morLgage, A moved Lo Canada from uk
M lenL A $ Lo pay off house, relaLlonshlp broke down, A goL evlcLed, can'L flnd [ob
Issue Can equlLable esLoppel sLreLch Lo lnclude promlses where Lhere was no precedlng conLracLual
relaLlonshlp beLween Lhe parLles?
keason (for) 1here was rellance on Lhe promlse
keason (aga|nst) 1hese Lypes of relaLlonshlps are noL meanL Lo be legal
kat|o mln elemenL requlred Lo glve rlse Lo an esLoppel lncludes assumpLlon of legal relaLlonshlp.
ne|d]Dec|s|on Þromlses made ln romanLlc relaLlonshlps do noL generally suggesL LhaL parLles lnLend a legally blndlng
conLracL sufflclenL Lo found an equlLable esLoppel
Comments lf Lhe courL held M kepL Lo hls promlse, Lhen A would be forced Lo sLay wlLh hlm
Intent|on to Create Lega| ke|at|ons
LlablllLy ln conLracL musL be volunLarlly creaLed by Lhe parLles Lhemselves > musL have lnLenLlon Lo be llable. Aolmos
coottobeoJl (lnLenLlon Lo conLracL)4Lh crlLerla of enforceablllLy w offer, accepLance, and conslderaLlon.
ob[ecLlve LesL: reasonable person would conslder Lhere was an lnLenLlon Lo make a legally blndlng k
S|tuat|ons where there |s no |ntent|on to create |ega| re|at|ons:
ex: Soclal engagemenLs and famlly arrangemenLs cannoL be k's because Lhere ls no lnLenLlon Lo creaLe legal - 8uslness
LransacLlons where Lhe parLles exp||c|t|y state LhaL Lhey do noL lnLend Lo enLer lnLo legal obllgaLlons (ex: 8ose & lrank v.
!8 CrompLon & 8ros)
1o flnd a conLracL we need Lo make sure LhaL Lhey 8LALL? WAn1Lu a conLracL and wanLed Lhe courLs Lo enforce Lhe
conLracL. ºarms lengLh" . LC noL [usL dad promlses $3 Lo son Lo mow Lhe lawn. noL Lruly domesLlc lssues LhaL should be
declded ouL of a courL.

8a|four v. 8a|four (LngCA) 1919
lnLenLlon Lo creaLe legal relaLlons: famlly relaLlonshlps
Iacts Lngllsh couple. Pusband reLurnlng Lo Ceylon b/c of bad arLhrlLls. Wlfe sLays behlnd for a Llme. upon
deparLure, husband promlses LhaL unLll she reLurns Lo Ceylon, he'll glve her !30 a monLh. 1hey laLer
agree Lo a dlvorce.
Issue Was Lhere an lnLenL Lo creaLe legal relaLlons?
keason (for) Lhere was clear oral and wrlLLen evldence of Lhe promlse and conslderaLlon was Lhe wlfe looklng afLer
Lhe home wlLh Lhe money, so should enforce lL
keason (aga|nst) Marrled parLles llvlng ln amlLy do noL lnLend Lo creaLe conLracLs LhaL could be sued upon
30
kat|o 1here |s no |ntent|on to create a |ega| re|at|on between spouses - no |ntent to be ab|e to be sued
upon |t. Love |s not cons|derat|on.
ne|d]Dec|s|on Law does noL wanL Lo regulaLe Lhese Lypes of relaLlonshlps as conLracLs, famlly law yes
Caut|on w|th |ega| separat|ons and agreements made w|th|n them. W||| be uphe|d.

Csor|o v. Cardona (1984) Carswe||8C
lrlendly relaLlons becomes legal
Iacts ÞarLles made deal aL Lhe horse races LhaL lf A's horses won, he would share 20° wlLh Lhe n, and lf n's
horses won n would share 30° of wlnnlngs wlLh A. A's horse won, buL A refused Lo pay 20°.
ulscussed seLLlemenL, A pressure puL on n Lo accepL less by cheque
Issue was Lhere an lnLenLlon Lo creaLe legal relaLlons? ?es. Was Lhere a blndlng agreemenL Lo Lake less?
keason (for) ÞarLles clearly lnLended for arrangemenL Lo be blndlng and no conslderaLlon Lo Lake less - was
lnLlmldaLlon presenL?
keason (aga|nst) A never lnLended agreemenL Lo be blndlng and lf Lhere was a conLracL Lhere was a clear new
agreemenL Lo Lake less - accord and saLlsfacLlon
kat|o 1he parLles' behavlour looked aL ob[ecLlvely showed a clear lnLenLlon Lo be bound by Lhe orlglnal
agreemenL
ne|d]Dec|s|on Lhe agreemenL Lo Lake less ls noL blndlng as lL flL wlLhln Lhe LesL ln u & C 8ullders v. 8ees LhaL
lnLlmldaLlon and unfalrness of Lhe negoLlaLlons negates the ex|stence of an accord
kose and Irank v. Ik Crompton (LngCA) 1923
Commerclal arrangemenL
Iacts agreemenL b/w parLles expressly seL ouL lnLenLlon noL Lo be legally bound by ºhonorable pledge". !8
defaulLed, and 8l sued
Issue Can parLles Lo a buslness conLracL creaLe non legally blndlng obllgaLlons lf LhaL conLracL expressly says
LhaL lL does noL glve rlse Lo legal relaLlons?
keason (aga|nst) Lhls sLaLemenL ls repugnanL Lo Lhe resL of Lhe agreemenL and agalnsL publlc pollcy (we don'L wanL
people Lo do Lhls and end up on Lhe ºduelllng flelds" we wanL Lhe courLs Lo be open. CLherwlse, who
knows whaL people wlll do.
kat|o lf lnLenLlon noL Lo be legally bound ls expressly seL ouL ln agreemenL, Lhen such lnLenLlon should be
honored and glven effecL
ne|d]Dec|s|on parLles can expressly say LhaL Lhey are noL lnLendlng Lo creaLe legal relaLlons, so Courts w||| fo||ow the
part|es' w|shes and w||| not enforce such a contract.
1D 8ank v. Le|gh Instruments
A leLLer of comforL ls noL a guaranLee buL lL does have more welghL Lhan a ºmoLherhood" sLaLemenL.
A leLLer of comforL ls lnLended Lo glve some reassurance Lo Lhe credlLor wlLhouL Lhe parenL company havlng Lo be legally
bound Lo lLs reassurance

Iorma||ty: Þrom|se Under Sea|
• Þromlse under seal ls known as deed > enforceable even wlLhouL conslderaLlon
• Þresence of seal provldes clear evldence LhaL Lhe promlsor lnLended Lo creaLe a legal obllgaLlon
• WheLher a promlse ls under seal or noL ls a quesLlon of facL > look Lo Lhe evldence of formallLy
koya| 8ank v. k|ska (CCA) 1967
lnLenLlon Lo creaLe legal relaLlons: commerclal
Iacts ‚ bank sued A who was a qootootot. (because of seal lssue, no need Lo flnd conslderaLlon) 8u1 no
wafer seal was aLLached, buL Lhe word ºseal" was prlnLed on Lhe documenL, nexL Lo space where A
slgned and above Lhe slgnaLure was reclLed Lhe words: ºClven under seal aL." and Slgned, Sealed and
uellvered ln Lhe presence of."
Issue Was Lhe guaranLee enforceable as lL was under seal and conslderaLlon noL requlred?
keason (for) Words above slgnaLure show lnLenL and exlsLence of prlnLed word ºseal" was sufflclenL
keason (aga|nst) PlsLorlcally formal deeds requ|red actua| wax sea| and some cont|nued forma||ty |s necessary Lo
ensure LhaL parLles puL Lhelr mlnds Lo Lhe formal seallng process of Lhe b|nd|ng nature of the prom|se
31
wh|ch wou|d be enforced w|thout cons|derat|on
kat|o 1he presence of words such as ºglven under seal" are merely anLlclpaLory of formallLy, whlch musL be
observed and noL subsLlLuLlve for a formal seal
• SlgnaLure alone ls noL sufflclenL > musL be under formal seal Lo be enforceable.
ne|d]Dec|s|on 1hey dld flnd conslderaLlon Lhus awarded Lhe conLracL. 8uL noL on lssue of seal.
Iorma||ty: 1he kequ|rement of Wr|t|ng (Statute of Iraud)
Cn Lop of conslderaLlon, some conLracLs need Lo be ln wrlLlng:
o conveyance of land
o guaranLor/co-slgnors for loans.
o ConLracLs LhaL lasL more Lhan a year
• 5totote of ltooJs 1677 was enacLed Lo requlre documenLaLlon for ma[or LransacLlons b/c Lhe courLs dldn'L LrusL
wlLnesses Lo be rellable or honesL
• ln LransacLlons Lo conveyance land look for three Þs (part|es, property, pr|ce- or mechan|sm):
• excepLlons Lo Lhe wrlLlng requlremenL - go Lo falrness (excepLlons ln equlLy)
o ÞarL performance LhaL ls unequlvocally Lled Lo exlsLence of Lhe conLracL
o buyer has Laken possesslon and pald Lhe full purchase prlce
o buyer has accepLed a deed (under seal) from seller
o Lhe aggrleved parLy relled on Lhe conLracL Lo lLs deLrlmenL - alLered Lhelr poslLlon some how
o Lhe parLy agalnsL whom enforcemenL ls belng soughL admlLs LhaL such a conLracL was made.
• 1o saLlsfy Lhe 5totote of ltooJs, Lhe courL looks for:
1) A memorandum ln wrlLlng LhaL has
2) a slgnaLure of parLy agalnsL whom enforcemenL ls belng soughL
3) (3 Þ's)
! Can [o|n d|fferent documents Lo consLlLuLe one memo
o Lhere musL be some evldence Lhey were connecLed aL Lhe Llme of slgnlng
o Lhere ls an expressly or lmpllclLly reference Lo Lhe exlsLence of oLher documenL
o expllclL or lmpllclL reference ln a slgned documenL Lo a LransacLlon (le, Lhe memo on a cheque)
o (or) Lhe orlglnal memo has been losL or desLroyed
• SlgnaLure 8equlremenL - only need one- usually Lhe slgnaLure of Lhe person Lrylng Lo deny Lhe conLracL ls good
evldence. 1he slgnaLure has Lo have been placed Lhere wlLh Lhe lnLenL Lo auLhenLlcaLe Lhe conLenLs
• 1hree requlremenLs regardlng slgnaLure:
o memo (has all Lhe essenLlal Lerms) needs Lo have been slgned by Lhe parLy ln defence
o 1he slgnaLure musL have been for Lhe lnLenLlon of auLhenLlcaLlng Lhe enLlre documenL - l.e you couldn'L ask
Lhe oLher parLy Lo slgn a blank sheeL Lo paper afLer whlch you flll ln Lhe deLalls.
• T5<3 ,L S,,62 J0=
o lf you sell anyLhlng for more Lhan $30 you need a conLracL - generally (eg a recelpL wlll sufflce)
o LxcepLlon: lf Lhe buyer has already Laken possesslon or puL down a down paymenL
Spec|f|c performance: lnsLead of geLLlng money Lo saLlsfy ln lleu of Lhe breach of conLracL, one's asklng for Lhe
performance of Lhe breached conLracL > en equlLable remedy
o 1here ls conslderaLlon > wlLhouL conslderaLlon Lhe lssue would be Þromlssory LsLoppel
o AcLs LhaL lncrease Lhe value of properLy wlll be more llkely Lo be consldered for parL performance
Was Lhe defendanL enrlched aL Lhe expense of Lhe plalnLlff. no compensaLlon for servlces by Lhe plalnLlff
Doctr|ne of Spec|f|c Þerformance: lnsLead of damage, Lhe courL wlll order compleLlon of conLracL lnsLead

ºno acLlon can be broughL" means LhaL Lhe conLracL ls noL vold, buL lL cannoL be sued upon - Lhls ls seen as procedural
only, whlch renders a conLracL unenforceable
Can use non wrlLLen conLracL as a defence, as you would noL be brlnglng an acLlon, so for example ln an acLlon by a
purchaser Lo recover a deposlL ln an oral agreemenL of purchase and sale of land, A could rely on oral conLracL. An oral
amendmenL Lo a land conLracL could also be relled on by a defendanL, buL noL a plalnLlff
32
Dynam|c 1ransport v. C.k. Deta|||ng (SCC) 1978
SLaLuLe of lrauds
Iacts vendor wanLed Lo sell a properLy excludlng Lhe bulldlngs on lL. WhaL was problemaLlc was whaL areas
around Lhe land and rlghLs of way Lo Lhe bulldlngs was provlded
Issue uld Lhe k saLlsfy Lhe sLaLuLe of frauds?
kat|o Where Lhe vendor's lnLenLlon are lll-moLlvaLed, Lhe courL wlll look favourably upon Lhe purchaser
Lrylng Lo enforce Lhe bargaln
ne|d]Dec|s|on CourL sald descrlpLlon was too vague Lo be enforceable and Lo ldenLlfy exacLly whaL land LhaL vendor
was Lo reLaln and purchaser was Lo buy
Moo|[e|sky v. kexnord Canada (A|taÇ8) 1989, courL held LhaL an offlcer of a company's Lenderlng deparLmenL who dld
noL have slgnlng auLhorlLy, made an lnLernal memo - Lhls was sufflclenL for Lhe SLaLuLe of lrauds
k|g|d|ty overcome by equ|ty - doctr|ne of part performance
SpecLrum parL performance (sLrlcLesL Lo leasL sLrlcL): uelgman, 1hompson ! ! Lensen ! ! SLeadman
Deg|man v. Guarantee 1rust (SCC) 19S4
SLaLuLe of lrauds
Iacts nephew clalms aunL promlsed Lo leave hlm house lf he was good Lo her durlng her llfe. Þromlse was
made whlle he llved wlLh hls aunL. Pe dld chores around Lhe houses whlle llvlng Lhere. drove her
around. AunL dled lnLesLaLe -- no Lransfer of land ln wrlLlng.
Issue Was Lhere parL performance?
keason (for) nephew performed servlces fully and unequlvocally = parL performance
keason (aga|nst) exacLly Lhe klnd of case LhaL Lhe SLaLuLe wanLs Lo proLecL agalnsL. Loose arrangemenL.
kat|o 1he acts must be unequ|voca||y t|ed to the |and.
ne|d]Dec|s|on AcLs could have been done as a good nephew. no proof Lhey weren'L done graLulLously.
Comments Ooootom Metolt - recovery compensaLlon for servlces rendered. 8ecelved essenLlally pay for hls
Llme, even Lhough Lhere was no enforceable conLracL. LsLabllshed a resLlLuLlon remedy ln Canada -
compensaLlon for servlces based noL on conLracL buL on resLlLuLlon or un[usL enrlchmenL. Couldn'L use
ÞL as sLaLuLe Lrumps. ÞL would have been a sword.
1hompson v. Guarantee 1rust (SCC) 1974
SLaLuLe of lrauds
Iacts Cus worked for ulck as for abouL 30 years. AL Lhe end of hls llfe, ln fronL of wlLnesses, ulck says he'll
glve everyLhlng Lo Cus. slmllar Lo ueglman, buL here Lhere enhancemenL of Lhe lands, ulck obLalned a
lawyer and had lL noL been for an lnepL noLary who drafLed a lowet of Attotoey raLher Lhan a wlll
Issue Pas Lhere been parL performance Lo enforce oral conLracL Lo Lransfer esLaLe of land, Lo Lake Lhe case
ouL of Lhe SLaLuLe of lrauds?
keason (for) all acLs of Lhe clalmanL clear and unequlvocal reference Lo conLracL Lo Lransfer esLaLe aL deaLh - very
sLrong case here and much sLronger Lhan ueglman facLs
keason (aga|nst) case llke ueglman and cannoL say LhaL acLs unequlvocal - dld recelve some paymenL over Lhe years,
only flxed exlsLlng sLrucLures.
kat|o acLs of parL performance LhaL's unequlvocally referable Lo some lnLeresL/conLracL ln land render Lhe
conLracL enforceable desplLe Lhe Sol
ne|d]Dec|s|on ?es Lo k, due Lo parL performance.
Lensen v. Lensen, 11984, Sask
SLaLuLe of lrauds
Iacts laLher and son had a farm. Son worked Lhe farm for seven years wlLh Lhe undersLandlng lL would go
Lo hlm. Pe forgoes opporLunlLles Lo buy oLher farms. 1here ls noLhlng ln wrlLlng and Lhe son geLs
noLhlng.
Issue uoes parL performance Lake Lhe case ouL of Sol?
kat|o 1he acLs relled upon musL be unequlvocally referable ln Lhelr naLure Lo some deallng wlLh Lhe land.
1he son saLlsfled Lhe doctr|ne of past performance
ne|d]Dec|s|on ?es, parL performance
On exam try to meet the test in Deglman and Thompson --- but then note that Lenson says there may be a more
relaxed test where written requirement is not necessary where actions are consistent with verbal
33

ÞkIVI1¥ CI CCN1kAC1 Cn. S
8as|c prem|se - only parLles Lo a conLracL can enforce lL. a Lhlrd parLy beneflclary cannoL sue on Lhe conLracL - Lhey are
barred by Lhe docLrlne of prlvlLy
Lƒ a manufacLurer sells a producL Lo a dlsLrlbuLor, Lhe dlsLrlbuLor sells Lhe producL Lo a reLaller. 1he reLaller Lhen sells Lhe
producL Lo a consumer. no prlvlLy of conLracL b/w manufacLurer and consumer.
3rd party benef|c|ary - ºLhe person ldenLlfled and lnLended by Lhe promlsor and promlsee Lo recelve all or parL of Lhe
beneflL of Lhe agreed upon performance" CAnnC1 enforce any parL of Lhe conLracL
kat|ona|e -
1. conLracLs are ºprlvaLe" arrangemenLs and only Lhose who have slgned and glven conslderaLlon should be able Lo Lake
advanLage of Lhem
2. Lack of reclproclLy - lf 3Þ beneflclary cannoL be sued on conLracL because he ls noL a parLy, Lhen she should noL be able
Lo sue on lL
3. ÞarLles could vary or resclnd lL aL wlll
some except|ons
o 1rusL - esLaLes
o Agency *
o LmploymenL *
* 8eLLer Lo Lhlnk of agency and employmenL as conslsLenL wlLh docLrlne of prlvlLy because Lhey are sLandlng ln Lhe
persons shoes
• Statutory except|ons are lnsurance and consumer proLecLlon
1,8715< 6585U32. breach of conLracL buL cannoL flnd any damages or loss of money. CourL wlll award nomlnal damages
(acLual zero dollars) when Lhey flnd a breach of conLracL, buL no acLual loss Lo n.
T4V-,U5=7,1. used ln a credlL/lnsurance slLuaLlon. Legal rlghL Lo collecL debL/damage. 1he assumpLlon by a Lhlrd parLy
(lnsurance company) of anoLher's legal rlghL Lo collecL a debL or damages. Lƒ: lnsurance co. pays you for Lhe fallen Lree
from Lhe nelghbour's properLy. 1hen lnsurance co sues nelghbour on your behalf. 1hey geL Lhe $ as Lhey already pald you
ouL.
Dun|op 1yre v. Se|fr|dge (LngnL) 191S
ÞrlvlLy, hlsLory of docLrlne of prlvlLy
Iacts uunlop manufacLurer sells Lo wholesalers, uew, buL Lells Lhem Lhey musL lnslsL reLallers sell accordlng
Lo prlce llsL. uew sells Lo Selfrldge who Lhen sold Lhe Llres aL a prlce under llsL prlce Lo lLs cusLomers.
uunlop Lrled Lo enforce ls conLracL wlLh uew agalnsL Selfrldge by geLLlng an ln[uncLlon agalnsL Lhem.
Issue Can person who ls noL a conLracLlng parLy ln a second conLracL enforce lLs flrsL conLracL wlLh one of
Lhe parLles Lo LhaL second conLracL?
keason (for) As uunlop supplled Lhe Lyres, Lhey should be able Lo lnslsL LhaL uew followed lLs rules.
keason (aga|nst) uunlop ls noL a parLy Lo conLracL beLween uew and Selfrldge's and Lhere was no conslderaLlon flowlng
from uunlop ln Lhe second conLracL.
kat|o only a parLy Lo conLracL who has glven conslderaLlon can sue on lL, so uunlop a sLranger Lo second
conLracL.
now can a 3Þ acqu|re a benef|t?
8y SLaLuLe -beneflclarles under llfe lnsurance pollcles can enforce lnsurance conLracL when beneflclary ls noL a parLy,
CnLarlo losotooce Act,
ÞrlvlLy can also be avolded lf Lhe promlsee ls able and wllllng Lo brlng an acLlon for speclflc performance of Lhe promlse
8esw|ck v. 8esw|ck, 1966, Uk
ÞrlvlLy, Speclflc performance
Iacts nephew promlses uncle he would pay a weekly sum for buslness Lo hlm Llll deaLh Lhen a smaller sum
Lo hls wldow when he dles . nephew doesn'L pay Lhe wldow. Wldow sues ln 2 capaclLles: personal
and as admlnlsLraLor of Lhe esLaLe
Issue Could wldow who was 3Þ Lo conLracL enforce conLracL as admlnlsLraLrlx or as beneflclary
keason (for) As admlnlsLraLrlx she can enforce as parLy and can use equlLable remedy of speclflc performance Lo
ensure wldow ln personal capaclLy recelves beneflL.
34
keason (aga|nst) admlnlsLraLrlx' clalm llmlLed Lo damages whlch would be nomlnal and can'L sue ln own rlghL as no
conslderaLlon, no prlvlLy. LsLaLe lsnL ouL any $.
kat|o Where a Lhlrd parLy can show a sufflclenL lnLeresL ln Lhe conLracL (such as belng Lhe execuLor), Lhen
Lhe 3Þ can sue ln LhaL capaclLy for speclflc performance of Lhe conLracL.
ne|d]Dec|s|on Lhe remedy of speclflc performance may be useful or clrcumvenLlng Lhe docLrlne of prlvlLy
where a 3rd parLy can show sufflclenL lnLeresL ln Lhe conLracL, such as Lhe admlnlsLraLor, Lhen LhaL
person can sue ln LhaL capaclLy and seek remedy of speclflc performance
House of Lords: not allowed to sue as a personal third party because lack of consideration
But does allow her to sue as administrator of the estate (administratrix) – stands in the shoes
of the husband
Comments When a conLracL ls made for Lhe beneflL of a 3Þ who has a leglLlmaLe lnLeresL Lo enforce lL, lL can be
enforced by Lhe 3Þ ln Lhe name of Lhe conLracLlng parLy or [olnLly wlLh hlm or, lf he refuses Lo [oln, by
addlng hlm as a defendanL

London Drugs v. kuene & Nage| (SCC) 1992
ÞrlvlLy: LmploymenL
Iacts kuehne enLer lnLo a conLracL w/ London drugs. London urugs dellverlng a large machlne for sLorage.
LlmlLed llablllLy clause = $40. kuene employees break Lhe machlne - use forkllfL w/o proper brackeLs
causlng $33C ln damage --- clearly negllgenL .
Issue Can Lhe employees rely on Lhe llmlLaLlon of llablllLy clause?
keason (for) 1hls ls 3Þ beneflclary and Lhey are noL parLles - need to f|nd trust or agency re|at|onsh|p, wh|ch |s
not present here (relaLlonshlp of employee/er, noL prlnclpal/agenL ln performlng servlces - no
auLhorlLy glven by employees Lo employer Lo conLracL ln Lhelr name
keason (aga|nst) ke|ax the doctr|ne of pr|v|ty |n cases such as these where emp|oyees are be|ng sued, as lL ls radlcally
ouL of sLep wlLh commerclal reallLy
kat|o 1LS1 lf employee may obLaln beneflL of llmlLaLlon llablllLy clause:
1. LlmlLaLlon of llablllLy clause musL elLher exLend lLs beneflL Lo Lhe employees
2. Lmployee clause musL have acLed ln Lhe course of Lhelr employmenL
ne|d]Dec|s|on ?es, Lmployees were 3
rd
parLles Lo Lhe conLracL 8u1 commerc|a| rea||ty suggesL employees be
lncluded --- docLrlne of prlvlLy ls relaxed
Ldgeworth Construct|on v. N.D. Lea & Assoc|ates (SCC) 1993
ÞrlvlLy: LmploymenL
Iacts afLer Lenderlng, n enLered lnLo conLracL wlLh Þrovlnce of 8C Lo bulld a secLlon of Plghway
Alleged LhaL lL losL money because of poor drawlngs made by consulLlng englneers hlred by 8C, so
sued Lhose englneers. Sued for a LorL called neg. mlsrepresenLaLlon.
Issue Could englneers Lake advanLage of Lhe llmlLaLlon of llablllLy (lol) clause?
keason (for) englneers geLLlng beneflL of lol clause: AlLhough Lhey were noL prlvy Lo Lenderlng conLracL, Lhey were
employees, so flL wlLhln Lhe excepLlon
keason (aga|nst) englneers were noL Lrue employees as deflned ln London urugs
kat|o 1) 1he employmenL excepLlon creaLed ln looJoo utoqs ls dependenL on Lhe acLual lnLenLlon of Lhe
parLles, noL slmply on Lhe sLaLus of a worker.
2) lL wlll be more dlfflculL Lo exLend beneflLs of a llmlLaLlon of llablllLy clause Lo an lndependenL
conLracLor, as lL would be more dlfflculL Lo esLabllsh Lhe necessary lnLenLlon.
ne|d]Dec|s|on englneers were noL employees as ln London urugs, who were powerless, and could have Laken sLeps
Lo proLecL Lhemselves wlLh dlsclalmer clauses ln reporLs, speclal lnsurance, and clause lLself musL
elLher expressly or by lmpllcaLlon suggesL LhaL englneers were exempL
Iraser k|ver Þ||e v. Can-Dr|ve (SCC) 1999
ÞrlvlLy: SubrogaLlon- 2 parLles canL change a conLracL ln Lhe mlddle lf a 3
rd
parLy relles upon Lhe orlglnal k
Iacts lraser 8lver's barge sunk, whlle Can-ulve had charLered lL ouL from Lhem. lraser 8lver made
lnsurance clalm, and lnsurance pollcy had clause LhaL dlsallowed Lhe lnsurer Lo sobtoqote agalnsL Lhe
aL faulL parLy. lraser 8lver walved clause, lnsurers sued Can-ulve
Issue can Cu clalm Lhe proLecLlon of Lhe subrogaLlon clause even lf lL was noL prlvy Lo Lhe conLracL, based
35
on Lhe reasonlng of London urugs
keason (for) llLs wlLhln Lhe London urugs prlnclple as lL was Lhe lnLenLlon of Lhe parLles, Lhe 3Þ beneflclary was
performlng Lhe essenLlal acLlvlLles ln Lhe conLracL, and ls an excepLlon
keason (aga|nst) ÞarLles can always change conLracL, noL employer/ee slLuaLlon
kat|o Are Lhe acLlvlLles performed by Lhe 3Þ seeklng Lo rely on Lhe conLracLual provlslon Lhe very acLlvlLles
conLemplaLed as comlng wlLhln Lhe scope of Lhe conLracL ln general, or Lhe provlslon ln parLlcular,
agaln as deLermlned by reference Lo Lhe lnLenLlons of Lhe parLles?
ne|d]Dec|s|on Applles London urugs prlnclples and flnds boLh Lhe lnLenLlon and LhaL 3Þ beneflclary was performlng
essenLlal acLlvlLles, even Lhough noL dlrecLly as ln London urugs


To prove economic duress 4 Criteria:
o did the parties under economic duress protest,
o was there any other course of action that the party under duress could have taken,
o did they have legal advice when they made the decision to sign off, (if no then leans towards E.D)
o after the fact did they take timely legal action