Canadian Business Law I

1
Canadian Business Law I

• Lecture 5
• October 11, 2007

2
Contracts How do they come to an end?

• Completion or discharge by performance
• Discharge by means other than performance
• Breach

3
Performance

• Nature and extent of performance
• Deficient performance inadequate Farnel v.
  Main Outboard Centre (1987)
• Tender of payment
• Conditional tender inadequate Blanco v. Nugent
  (1949)
• Tender of performance
• Perform at the appointed time and place, and
  according to agreed specifications

4
Discharge other than by Performance

• Termination as a right
• External events
• Condition precedent
• Operation of law
• Agreement

5
External Events

• Express terms or conditions subsequent force
  majeure
• Implied terms act of god, war
• Doctrine of frustration KBK v. Safeway (2000)
• Non-culpable dismissal
• Frustrated Contracts Acts attempt to apportion
  the loss in a more equitable manner

6
External Events (contd.)

• Condition precedent Turney et al. v. Zhilka
  (1959)
• Operation of law Bankruptcy and Insolvency Act
  laches or limitation
• Agreement
• Waiver
• Novation, accord and satisfaction
• Material alteration of terms
• Fresh agreement

7
Breach of Contract

• Express repudiation substantial performance
  Bolton v. Mahadeva (1972)
• Implied repudiation
• Fundamental breach Borg-Warner Acceptance
  Canada Ltd. v. Wyonzek (1981)
• Condition and warranty distinction difference
  in consequences
• Figure 14-1, p. 243
• Exemption clauses Cain et al. v. Bird
  Chevrolet-Oldsmobile (1976)

8
Remedies

• The concept of compensation for loss
• Restitutio in integrum as applied in equity, as
  applied now
• Quantum meruit
• Types of damages
• General damages
• Special damages

9
Damages (contd.)

• Extent of liability rule of reasonable
  foreseeability Hadley v. Baxendale (1854)
• Special cases Vorvis v. Insurance Corp. of B.C.
  (1989)
• Duty to mitigate loss Asamera Oil Corp. v. Sea
  Oil General Corp. (1978)
• Liquidated damages Stevenson v. Colonial Homes
  (1961)
• Punitive damages

10
Remedies for Particular Situations

• Specific performance equitable remedy
• Injunction also equitable e.g. non-compete
  covenant
• Quantum meruit proportionate compensation
• Figure 14-2 p. 251