Issues in Pharmacy Practice: Contracts

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Issues in Pharmacy PracticeContracts

• Contract An agreement between parties
  consisting of offer, consideration, acceptance
• Consideration The price for which the promise
  of another is bought
• Gratuitous Promise made without bargaining for
  or accepting anything else in return

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The Offer

• Legal issues
• Caveat emptor
• False promises, fraud, criminal intent or
  behaviour
• Advertising as free speech, not an offer

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Adequacy of Consideration

• Requires personal value judgment
• Not the role of law (usually)
• Motive cannot change a gratuitous promise into a
  contract
• Assumed equality of parties entering into a
  contract

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Case 1

• The SS Myrik hit an iceberg and began to sink.
  In an effort to stem the desertion of the crew of
  the ship, the Captain offered to double their pay
  if they stayed with the ship. The ship
  eventually sank, and the Captain refused to pay
  the crew.
• Relationship between existing legal duty and
  consideration

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Case 2

• Eastwood, Keynons guardian, borrowed money to
  finance Kenyons education. On coming of age,
  Kenyons husband promised (in writing) to pay
  Eastwood back but failed to do so. Eastwood sued
  Kenyon.
• Consideration and moral cause

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Case 3

• A owes B a large sum of money (principal
  interest) but cannot pay. A verbally promises,
  and B verbally agrees to accept payment of
  principal only in regular installments. Once A
  has completely paid back principal, B sues A for
  the remainder of the interest.
• Consideration makes a promise binding

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Injurious Reliance(Equitable Estoppel)

• Loss or harm suffered by a promissee who, to
  his/her detriment, relied reasonably on a
  gratuitous promise

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Case 4

• A purchases a business from X in premises owned
  by B. Upon moving in, A wants to dispose of
  furnishings. B states the furnishings came with
  the store and were As to do with as A pleased.
  A disposed of the furnishings. Later, X appears
  wishing to claim the furnishings back, which
  rightly belong to her.
• Estoppel based on fact

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Case 5

• Alexei Yashin made a 1 million donation to the
  NAC. After paying 200K, he withdrew his pledge.
  It was revealed that AY had made a deal with NAC
  to have NAC pay AYs parents to act as
  translators, in violation of NACs rules.
• Injurious reliance
• Charitable Donation (Promise of a Gift)

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Services

• Quantum Meruit the amount a person merits to be
  paid for goods or services provided to the person
  requesting them
• When one person requests services from another
  and the other performs these services, the law
  implies an obligation to pay. Obligation is
  implied between strangers, friends, and family.

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Case 6

• A asks B for technical assistance. B assists.
  Afterwards, A asks B what her fee is. B suggests
  an amount. A refuses to pay it.
• Existing obligations and quantum meruit

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Capacity to Contract

• Competence required to bind oneself
• Age of majority
• Capacity
• Corporations
• Enemy Aliens
• First Nations Peoples living on Crown lands

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Grounds upon which a contract may be impeached

• Case 7
• Cecil has land to sell. Cecil refuses Websters
  initial offer of 2000. Later, Cecil writes to
  Webster mistakenly offering the land for 1250.
  After the letter is mailed, Cecil realizes his
  error, and sent a second letter stating the price
  should be 2250, but the second letter arrives
  after Webster posts back acceptance.
• Mistake about terms/Words used inadvertently

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Grounds upon which a contract may be impeached

• Case 8
• L signs a 5-year lease to rent a shop from Y on a
  busy street. L misread the bus map and thought a
  bus route ran close to the shop. Y was unaware of
  Ls erroneous belief. What if Y was aware of Ls
  erroneous beliefs but did nothing to correct
  them?
• Mistake in assumptions
• Injurious Reliance

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Discharge of Contract

• Discharge by Performance
• Discharge by Agreement
• Discharge by Frustration
• Discharge by Self-Induced Frustration
• Discharge by Operation of Law

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Case 9

• X is a concert producer who signs a contract to
  rent out Ys hall. Before the concert, the hall
  burns down due to a lightening strike. X is
  forced to cancel the show and refund tickets, and
  would like to sue Y for his losses. What if Y
  had been an arsonist and burned down his own
  hall?

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The Effect of Breach

• Either party to a contract may break it
• By expressly repudiating its liabilities
• By acting in a way that makes its promise
  impossible to perform
• By failing to perform at all
• By tendering a performance that falls short of
  its promise

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Case 10

• Y is a pharmacist whose contract contained a
  clause stating she would not work in competition
  with her employer X for two years after
  termination. X dismissed Y without cause. Y
  recovered back salary for wrongful dismissal, and
  then began to work in competition with X. Having
  paid back salary already, X sought an injunction
  to prevent Y from working.

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Case 11

• B is a pharmacist hired by A to work as a
  designated manager. A has had difficulty finding
  a DM and cannot operate without one. Now with B,
  A can finally take a long-planned two-month
  vacation. B finds the job very stressful and
  decides to quit. In anger, B announces on Friday
  that he will leave on Monday. What if B
  announces on Friday he will leave in two weeks?
• Doctrine of substantial performance

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Case 12

• Purolator contracted to deliver Cathcarts bid to
  Ontario Hydro. The Contract contained a
  disclaimer clause related to non-performance.
  Purolator lost the bid. Purolator acknowledged
  that, had the bid been delivered, Cathcart would
  likely have won 37 000 business, but claimed
  that the disclaimer clause exempted them from
  liability.
• Doctrine of Fundamental Breach

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Remedies for Breaches

• Damages
• Equitable remedies (specific performance)
• Quantum Meruit

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The Contract of Employment

• Employer-Employee
• Relationship established by contract that gives
  one party (employer) authority to direct/control
  work of the other party (employee).
• Employer is liable for employee

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The Contract of Employment

• Employer-Contractor
• Contractor not subject to supervision by
  employer contract is to produce specified result
  by whatever means are selected
• Liabilities undertaken by contractors are
  entirely their own

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Employer-Employee Relationship Liability

• Case 13
• Adair is employed by Magnum Computers. While in
  the course of routine business, he uses a Magnum
  product that has a bug, resulting in deletion of
  a customers files. What if this were not in the
  course of routine business?
• Principle of Vicarious Liability

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Employer-Employee Relationship Termination

• Reasonable notice period
• Wrongful Dismissal
• Grounds for dismissal without notice
• Dismissal for cause
• Misconduct
• Disobedience
• Incompetence
• Illness
• Adverse economic conditions

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Case 14

• Y is a 4th year student who signs a contract to
  accept 10 000 from A in exchange for an
  agreement to work in As pharmacy for a minimum
  of 2 years. 1 year later, Y falls in love and
  wishes to move away. Y provides 1 months notice
  to A.

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Case 15

• X is a 4th year pharmacy student who signs a
  contract to accept 10 000 from B in exchange for
  working in one of Bs pharmacies (all of which
  are currently in the GTA) for two years. Next
  week, B opens a pharmacy in Yellowknife and wants
  X to move there. What if X were a pharmacist
  with several years experience?

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Case 16

• Z is a 4th year pharmacy student who signs a
  contract to accept 10 000 from C in exchange for
  working in Cs pharmacy for 2 years. Cs
  pharmacy is very busy and C refuses to hire a
  technician. Z complains about the working
  conditions and threatens to quit. What if Z
  found out about the working conditions in Cs
  pharmacy before actually spending the money, and
  Z then returned it (with interest)?

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Case 17

• G is a 4th year pharmacy student who verbally
  accepts a contract of employment from M for a
  salary of 60K/yr. Two days later, P offers G
  75 000/yr to work in Ps pharmacy. What if G
  had actually signed a contract with M?

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Case 18

• L is an IPG who contracts to work at Vs pharmacy
  for 30 000/yr for at least two years, based on
  Vs statement that this is the going rate for
  pharmacists. A month later, Ls friend indicates
  that most pharmacists make twice that amount, and
  encourages L to quit and work at another
  pharmacy, despite the fact that L signed a
  contract with V.