Commerce 393: Answer Guide to Sample Midterm Questions

Commerce 393: Answer Guide to Sample Midterm Questions

*These are not model answers and are only intended to point you in the right direction with respect to the issues and law.

#1

Does Biff have a contract with Muffy's?

Muffy's made Biff an offer by mail, which Biff received Feb. 9th. Biff accepted Muffy's proposal by mail on Mar. 10th. The postal acceptance rule applies because it was reasonable to accept by mail (the offer was by mail) and so acceptance was effective when sent (Mar. 10th).  One might argue that in their letter Muffy's said the proposal had to be delivered, which would mean that acceptance was not effective till Mar. 13th, but it really makes no difference in this scenario (as, in either case, there is a contract with Muffy).

Did revocation precede acceptance?

Revocation is effective when communicated to the offeree, even if communication is through a third party.  Revocation was therefore effective on Mar. 14th, when Biff learned through his competitor about Muffy's contract with Skip. That was after Muffy’s acceptance (dated either Mar.10th or Mar.13th depending on how you answered the above question).

If Muffy's does not award the contract to Biff, they will be in breach of contract and will be liable for damages. Specific performance is not available as the contract involves personal service.

#2

This is not an accurate statement of law.  In order to be enforceable contracts must generally have consideration or be signed under seal.  Consideration is the mutual exchange of promises or a promise in exchange for an act or service. The promise might be to pay something or do something or may be a promise not to do something (forbearance).  In Caliguiri v. Tumillo in return for Tumillo agreeing to be bound by the promissory note, Mrs. Caliguiri agreed to forebear from exercising rights to call her loan back from her son’s company. Consideration need not flow to the promisor, as long as it flows to a third party at the promisor's request.

#3

The non-discrimination provisions in s.15 of the Charter apply to all vulnerable groups including non-citizens (under s.15 there is a right to equal protection and benefit of the law without discrimination, with “national origin” being a specifically named ground in s.15):

It is not “any discrimination in Canada” that is caught; the Charter only applies to government action. (Liebmann v. Canada)

It is also not an absolute “prohibition”:

• The non-discrimination provision is subject to s.1 of the Charter (the “notwithstanding provision”) - it only goes so far as can be demonstrably justified in a free and democratic society; and

• The federal or provincial governments can override s. 15 by using their powers under s.33 of the Charter.

#4

a) Megan would claim that Alf made a misrepresentation. He would need to show that there was a false statement of a material fact which induced him to enter into the contract. The misrepresentation can be made either innocently (where the maker of the statement honestly believes the statement is true), negligently (where there is a special relationship between the parties giving rise to s duty of care in tort law) and fraudulently, where the statement is made to deliberately mislead the plaintiff to enter the contract. Here, the misrepresentation (Alf’s assurances that the truck bed would not leak) was intentionally made and amounts to fraud. The remedy for fraudulent misrepresentation is either damages (in tort) or rescission of the contract. It appears that Megan is suing for damages to fix the hole in the truck bed and not rescission of the contract. She will likely be successful. (Collins v. Dodge City, Weinman v. Brinkman)

b) If Megan were 18 at the time the contract was made, she would have been an infant under B.C. law.

According to B.C. law, a contract made with an infant is unenforceable against the infant, but enforceable by the infant against the adult.  The fact that Megan was 18 at the time the contract was made will not affect her rights, because Alf was presumably an adult, and so she can enforce the contract against him.

#5

a) Will Tuna be able to evict Ann's because Ann's did not give notice according to the terms of

its lease?

Generally a gratuitous promise is unenforceable. However, Equity will enforce a gratuitous promise if certain conditions are met. The parties must have a pre-existing contract which is being modified by a gratuitous promise(which can be implied by conduct) being made by one party to the other. This promise is relied upon and the promisee would suffer a great hardship if the promise were not lived up to. If this argument is being used as a defence by the promisee to some claim being made by the promisor (as a shield and not as a sword), then Equity will enforce the gratuitous promise. In other words the promisor is estopped (prevented) from denying the promise.

By entering into communications regarding larger space, Tuna was, by conduct, modifying the existing contract with an implied promise. Knowing that Ann’s intended to renew, it would be reasonable for Ann's to think that there was no immediate necessity to give notice of its intention to renew showing her reliance on the promise and her altered action.  If it had known that Tuna was going to rely on the strict terms, it would have given written notice. If Tuna had intended to insist on timely notice, it could always have reminded Ann's. By reneging on its promise, hardship is created for Ann’s.  It is unlikely that Tuna would be able to rely on Anns' forgetting to give notice as a ground for evicting Ann's.

b) Does Ann's have an enforceable right of renewal?

The essential terms of a contract must have been agreed to, or there is no contract to be enforced.  While the Courts favour enforcing contracts, they will not make a contract for the parties.  Tuna would have good grounds to say that Ann's does not have an enforceable right of renewal; it is just an agreement to agree because no renewal rent is set.  If the parties do not agree, then there is no right of renewal.