Midterm Practice Questions

Issue 1. Is Jake, a minor, bound by the participation agreement?

Rule. In Ontario a minor is a person under 18. A minor's contract is voidable at the minor's election, not automatically void: the minor may affirm it (keep it) or avoid it (cancel it), and may affirm a voidable contract on reaching the age of majority. A minor is bound only by contracts for necessaries, meaning goods or services needed for basic existence such as food, clothing and shelter. Entertainment contracts are not necessaries.

Application. Jake is 17 and a television participation agreement is not a necessary, so the contract is voidable at his election. He has two options. If he avoids the contract he loses the contractual basis for his claim to more money. If he affirms it he can use it to argue he is owed more than $15,000. Since he wants more money he should affirm it and argue it on its merits. His age also strengthens his argument against the arbitration clause.

Issue 2. (Beyond this midterm.) Does the arbitration clause stop Jake from suing in court?

Rule. An exclusion or limitation clause in a standard form contract is enforceable only if (a) it was brought sufficiently to the other party's attention (reasonable notice, Tilden Rent-A-Car, unless the term was naturally expected) and (b) it is not unconscionable. A term is unconscionable if there is a significant inequality of bargaining power and the term is improvident or unduly one-sided. A contract may also be voidable for duress, including economic duress, where one party is pressured into signing by an illegitimate threat that leaves no reasonable alternative.

Application. Duress: Jake was told he "must" sign, with five minutes before filming and no chance to read, negotiate or take advice, which looks like economic duress, but duress is very hard to prove. Unconscionability is the better argument. There is a large inequality of bargaining power between a 17-year-old aspiring influencer with no legal sophistication and a sophisticated production company. The clause is improvident because it demands about CAD $25,000 upfront whatever the outcome and requires arbitration in London, which is inaccessible and effectively denies Jake access to justice. Keith's key compares it to Uber v Heller. Jake very likely has a strong argument that the clause is unenforceable, so he can sue in an Ontario court.

Issue 3. How much is Jake owed under the contract?

Rule. A contract must have terms certain enough to enforce, and a bare agreement to agree on a term such as price later is not enforceable. A promise made before signing can be a collateral contract if it was meant to induce the signature, and a false statement of fact that induces a contract is a misrepresentation.

Application. Written term: "to be determined based on how far the contestant advances" is vague, but it clearly contemplates more money for going further, and $15,000 (only $5,000 above the base) for finishing in the final five of 23 looks inconsistent with it, so Jake can argue he is owed much more. The company will answer that the term is too uncertain to enforce because it is an agreement to agree. Keith's key also credits contra proferentem (a standard form is read against the party that drafted it), but that is an interpretation rule and is beyond this midterm. Oral promise: Jake can argue that the "$50,000 to $200,000" statement was a collateral contract (a separate promise that induced him to sign) or a misrepresentation that induced him to enter the contract. The company will say the range is also too vague to enforce, another agreement to agree.

Conclusion. Jake has strong arguments that the arbitration clause is unenforceable, so he can sue in court. The contract is voidable because he is a minor, but he should affirm it to claim more. He is likely owed more than the $15,000 offered under the written contract, and possibly under the oral promise, although there is a real risk that the payment term is held void as an agreement to agree. His damages would be the amount owed above the $15,000.

Issue. Can Eric and David succeed in negligence against Highland Safety Services Ltd and/or the production company?

Rule. On a balance of probabilities the plaintiff must prove (a) a duty of care: it was reasonably foreseeable that the defendant's carelessness could harm the plaintiff; (b) breach of the standard of care: the defendant fell below what a reasonable person with the same expertise would have done in the circumstances; (c) causation: applying the "but for" test, the breach caused the harm, and the defendant need not be the only cause; and (d) damages: general damages for pain and suffering and special damages for quantifiable losses. Contributory negligence is a partial defence that reduces damages where the plaintiff contributed to their own harm.

Application. Against Highland Safety. Duty: it was hired specifically to certify the area as safe, so it was foreseeable that a careless inspection could hurt anyone in the area, contestants and crew alike, and the duty is owed to both Eric and David. Standard: the inspector spent 15 minutes instead of the two-hour audit and skipped the check for rotted trees, a clear breach of the standard of a competent safety inspector (professional negligence). Causation is where Highland's liability is limited. David's tree had no rot and fell purely because of the wind, so Highland's failure to find rot did not cause his injury and his claim against Highland probably fails. Eric's claim is stronger because his tree had rotted roots that a proper inspection would have found and condemned. Even so, a healthy tree also fell, which shows the wind could knock down sound trees, so a court could find that the tree would have fallen anyway and the rot was not the but-for cause of Eric's injury. That is the weakest point of Eric's claim against Highland, and it will turn on expert evidence about whether the rot made it materially more likely that the tree fell on him.

Against the production company. Duty: the same, owed to everyone in the filming area. Standard: its own safety advisor warned that strong winds could cause debris that injures contestants and crew, and a reasonable production company would have halted filming; carrying on because of the schedule, with only an instruction to "look out for any debris", is a breach. Causation is stronger and the same for both plaintiffs: but for the decision to go ahead, neither would have been in harm's way. The fact that one tree was rotted and one was not is irrelevant to the company's liability, because the warning was about wind-driven debris in general and both injuries were a foreseeable result. The company is likely liable to both and can seek contribution from Highland for Eric's injury.

Damages. Eric has general damages for pain and suffering (concussion and broken arm) and special damages for medical costs and lost income. David's partial paralysis is far more serious: substantial general damages (pain and suffering, loss of enjoyment of life) and very large special damages (future care costs, medical expenses and loss of earning capacity over his career).

Defences. Contributory negligence reduces each plaintiff's damages. Eric chose an elaborate shirt that restricted his movement for an outdoor physical challenge and so could not shield his face although he saw the tree fall, which a court would likely call careless. David saw the tree falling and failed to react because he was "too in the moment", and a reasonable camera operator who sees a falling tree would take evasive action. Each finding reduces that plaintiff's damages in proportion to their fault but does not remove them.

Conclusion. Both plaintiffs have strong claims against the production company, which ignored a direct and specific warning. They also have claims against Highland Safety, whose strength depends on causation: weak for David and arguable for Eric. Both face a contributory-negligence reduction.

Issue. Has Lisa breached a fiduciary duty to Dorinda, and what remedies are available?

Rule. A fiduciary relationship exists where one party accepts a duty to act in the best interests of another and the other places trust, confidence and reliance in the fiduciary. Keith's three-part test asks whether (a) the fiduciary has scope for the exercise of some power or discretion; (b) the power or discretion can be exercised unilaterally so as to affect the beneficiary's legal or practical interests; and (c) the beneficiary is peculiarly vulnerable to the exercise of that discretion or power. A fiduciary must (a) act solely in the beneficiary's best interests, (b) avoid conflicts of interest, (c) not profit personally from the position without the beneficiary's informed consent, and (d) disclose all material information and opportunities relevant to the beneficiary's interests. The remedies for breach are an account of profits (the fiduciary hands over any gain made from the breach) and/or equitable compensation for the beneficiary's losses.

Application. Relationship: Lisa had full discretionary authority over the portfolio (part a), she could act without asking and so change Dorinda's financial position (part b), and Dorinda, who knew little about investing, relied entirely on Lisa's expertise and loyalty (part c). Lisa accepted the role and promised to "look after your money like it was my own", which is the kind of relationship that exists between an investment manager and a client, so a fiduciary relationship is very likely. Breach: Lisa put her own interest above Dorinda's by buying GlowUp for herself, failed to disclose the opportunity, and made a secret $1,000,000 profit from an opportunity that arose within her role. Her excuse, that she did not want to reveal she was a Traitor, is not a legal justification for breaching her duty.

Remedies. Dorinda is entitled to an account of profits: Lisa must give up the $1,000,000, which is the main remedy for breach of fiduciary duty. My addition: equitable compensation is the alternative, but Dorinda's portfolio lost nothing (it stayed flat), so the account of profits is the natural remedy.

Conclusion. Dorinda has a very strong claim for breach of fiduciary duty and is entitled to an account of Lisa's $1,000,000 profit.

Issue. Can Netflix succeed against Sarah Williams and Peacock for inducing Natalie's breach of contract and/or for unlawful interference with economic relations?

Rule. Inducing breach of contract: the plaintiff must show (a) the defendant knew of the existing contract, (b) the defendant, by some act or inducement, caused the other party to breach it, and (c) the breach caused the plaintiff damage. Unlawful interference with economic relations: the plaintiff must show (a) the defendant committed an unlawful act (one that is actionable by a third party, or would be if that third party had suffered the resulting loss), (b) directed against a third party (here Natalie), (c) with the intent to cause economic harm to the plaintiff, and (d) which did cause economic harm.

Application. Inducing breach. Knowledge: Sarah "knows about the Netflix contract", so knowledge is clear. Inducement: she told Natalie's agent that Netflix would cancel the show, which was false, and Natalie signed with Peacock and so breached her Netflix exclusivity clause. Peacock and Sarah may argue that Natalie was going to leave anyway, so the statement did not induce the breach, but Natalie's own statement that the information "ultimately convinced her" is likely enough. Damage: Natalie's departure forces Netflix to replace her or delay production. Peacock's liability: Sarah made the statements as a Peacock executive, so Peacock is vicariously liable for her tort as her employer, and it benefits directly from the breach.

Unlawful interference. Sarah's statement about inside information was a false statement made to get Natalie to act, which could ground deceit against Natalie and is therefore an unlawful act. It was directed at a third party (Natalie), made to deprive Netflix of her services, and it did cause Netflix economic harm, so all four elements appear to be met.

Conclusion. Netflix has strong claims against both Sarah Williams and Peacock for inducing Natalie's breach of contract, supported by a claim for unlawful interference with economic relations. Peacock is vicariously liable for Sarah. Netflix can claim damages, including the cost of replacing Natalie and any losses from the delay or alteration of Wilderness Wars.

Issue. Can Ron succeed in a claim of defamation against Michael Rapaport?

Rule. The plaintiff must prove, on a balance of probabilities, that (a) the words were defamatory, meaning they would tend to lower the plaintiff's reputation in the eyes of a reasonable person; (b) the words referred to the plaintiff; and (c) the words were communicated to at least one person other than the plaintiff. The defendant may then rely on defences including truth, qualified privilege (a statement made in good faith on an occasion of duty or common interest) and responsible communication on a matter of public interest.

Application. Defamatory words: split the statements. "Ron is a Traitor" was said in a game show where being a Traitor is part of the gameplay, so a reasonable viewer would take it as a game allegation, not an attack on Ron's real character, and it is arguably not defamatory, although the wide broadcast and the more serious allegations made with it complicate that. "His comedy career is built on stealing other people's jokes" and "everyone in Hollywood knows he's a fraud" go far beyond the game: they attack his professional integrity, would lower a reasonable person's opinion of him as a comedian, and are clearly defamatory. Reference: Michael named Ron. Communication: the Round Table was broadcast to millions of viewers on Peacock, which is far more than one other person. My addition: a broadcast is a permanent form, so the claim is in libel rather than slander.

Defences. Truth fails: the joke-stealing claim was completely made up and Michael cannot prove it. Qualified privilege: the Round Table may give some game-related privilege for discussing who is a Traitor, but privilege is lost where the statement is made with malice, and Michael invented the joke-stealing claim to turn people against Ron; a broadcast to millions also goes far beyond any protected occasion. Responsible communication on a matter of public interest: a fabricated claim made to manipulate a game cannot qualify.

Damages. Ron lost a major comedy tour sponsorship and received thousands of hateful messages, which is concrete evidence of damage to his reputation. He can claim general damages for harm to his professional reputation and special damages for the lost sponsorship.

Conclusion. Ron has a very strong defamation claim, especially for the joke-stealing and fraud statements. All three elements are met and no defence is likely to succeed, so he can expect general and special damages.

Conclusion. (b). Johnny and Mark were at cross purposes about which cloak was being sold, each meaning a different one, so there was no true agreement on the subject matter and the contract is void for mutual mistake (the Raffles v Wichelhaus pattern, where two ships had the same name). Johnny can therefore get his money back. (a) is wrong because the parties never agreed on which cloak. (c) is wrong because unilateral mistake needs only one party to be mistaken (and the other to know), but both were mistaken. (d) is wrong because Mark made no false statement and was equally mistaken. (e) is wrong because the cloak existed; the problem is that the parties meant different cloaks.

Issue. Can Stephen rescind the contract and/or recover damages for misrepresentation?

Rule. A misrepresentation is a false statement of existing fact (not mere opinion) that induces a party to enter a contract. There are three types. Fraudulent: made knowingly, without belief in its truth, or recklessly without caring whether it is true, which entitles the innocent party to rescission and damages in the tort of deceit. Negligent: made carelessly, without reasonable grounds for believing it to be true, which entitles the innocent party to rescission and damages. Innocent: made honestly and on reasonable grounds, which generally entitles the innocent party to rescission but not damages. Keith's test: (a) a statement of fact is made; (b) it is false (negligent: a special relationship, that is a duty of care, and falling below the standard; fraudulent: the speaker knows it is false; innocent: neither); (c) the hearer reasonably acted on the statement; and (d) the hearer suffered a loss caused by relying on it.

Application. Misrepresentation: "profitable every year since it opened" and "averaged about $200,000 in annual profits over the past three years" were false, because the restaurant had lost money for two years, and they are statements of existing fact about the business's financial condition, not opinion. My addition: "I wouldn't sell you something that wasn't a good investment" is opinion and is not by itself actionable, but the statements about profits are. Type: fraudulent is possible because Kristen received monthly statements for two years and never really looked at them, and confident statements about profit made while ignoring readily available figures can be reckless, but her manager told her the restaurant was profitable, which suggests a genuine, if careless, belief, so fraud is uncertain. Negligent misrepresentation is the stronger claim: she made positive statements about financial health to a person she knew was considering buying her stake, a reasonable person with monthly statements would have read them first, and she had no reasonable grounds for believing the restaurant had been profitable for three years. Inducement: Stephen agreed to buy, and transferred $1,000,000, directly because of those statements.

Counter-argument: Kristen will say Stephen never asked to see the books and the truth would have appeared if he had. Caveat emptor (buyer beware) applies mainly where the seller makes no representation; once a seller makes a positive statement of fact the seller cannot escape by saying the buyer could have found out. This argument is unlikely to defeat the claim fully, although it may affect the extent of liability.

Remedies. Stephen can rescind: return the stake and recover his $1,000,000, which is his primary remedy and is available because the misrepresentation was a material inducement. For negligent misrepresentation he may also claim damages for consequential losses, such as professional fees or lost opportunities.

Conclusion. Stephen has a strong claim in negligent misrepresentation (and possibly fraudulent misrepresentation). A false statement of fact, made carelessly, induced him to buy. He will likely succeed in rescinding the contract and recovering his $1,000,000, and the caveat emptor argument is unlikely to defeat him.

Issue 1. Does the production company have a valid, enforceable contract with Lord MacTavish?

Rule. A contract needs offer, acceptance and consideration. Under Ontario's Statute of Frauds contracts for the sale or lease of land generally must be evidenced in writing to be enforceable. The equitable doctrine of part performance is an exception: an oral contract concerning land may be enforced if (a) there was an oral contract concerning land, (b) the party partly performed under it, and (c) the acts of performance are referable to, and inextricably linked to, the land contract, so that it would be fraudulent to ignore them.

Application. A valid contract was formed: the final phone call was a clear offer and acceptance on definite terms (exclusive use from January 1 to February 15, 2027, for £500,000 in two installments) with consideration (the fee). Because it was oral and concerns a lease of land, Lord MacTavish may rely on the lack of writing, but part performance applies: the production company entered the castle two weeks early and began modifying it with his permission, acts of possession and modification that are inextricably linked to the land and are unmistakable evidence of the contract. So the contract is enforceable in equity despite the writing requirement.

Issue 2. Can Lord MacTavish sign the Netflix agreement, and what are the risks?

Application. If the contract with the production company is enforceable, as it is, Lord MacTavish cannot sign with Netflix for the same period without breaching it, because Netflix's proposed use directly conflicts with the production company's exclusive rights. My addition, not in Keith's key: the practical risks include a damages claim (and possibly an order to stop him from giving the castle to Netflix) by the production company, and, if Netflix knows about the existing contract, a claim against Netflix for inducing breach of contract as in Q4.

Conclusion. The production company has a valid, enforceable contract with Lord MacTavish: it was supported by consideration and made enforceable by the crew's part performance. Lord MacTavish cannot lawfully sign with Netflix for the same period without breaching his agreement.

Issue. Can the U.S. government choose another builder because it has no contract with Builder X?

Rule. For a contract to be formed there must be (a) an offer, which must be capable of being accepted; (b) acceptance, which must be communicated to the offeror and takes effect when received by the offeror (the exception is the postal acceptance rule); and (c) consideration, the agreement of the parties to exchange value. The terms must also be certain and not too ambiguous to be enforceable, and a contract cannot be illegal or it is void for illegality.

Application. It is unlikely a contract was formed, because there was no acceptance, the terms are likely too ambiguous to enforce, and part or all of the contract may be void for illegality. Offer: the offer was made in the parties' discussion and then formalized in the letter that Builder X mailed. Acceptance: there was none. Builder X may argue that the handshake accepted the deal because shaking hands is a trade usage in New Mexico, but Stimson did not know of that usage, so it is unlikely to have signified acceptance. It may also argue that the signed agreement was "accepted" under the postal acceptance rule when it was mailed, but this is not a case where someone received a detailed offer and accepted it by mail: Builder X wrote and signed the document itself and sent it for the government to accept, which the government never did, so the letter is likely just another offer. Consideration: there is consideration, the building of the project on one side and "a minimum of $10 million" on the other. Certainty: the price has not been set. Builder X will argue that "a minimum of $10 million" guides the court, but there is no objective measure the court could use to fix the final price, so it is likely a mere agreement to agree and unenforceable. Illegality: the agreement contemplates not following the building code, so it may be void for illegality or against public policy, although a court may strike only that term rather than the whole contract.

Conclusion. Stimson's best position is that there is no contract: (a) it was not accepted, (b) it is too uncertain, and (c) it may be void in whole or in part for illegality or public policy.

Conclusion. (d). The promise to use kiln dried wood was made after the contract was formed, and the written contract does not mention wood, so (a) is wrong. Stimson gave nothing new in return for the builder's promise to take on a more expensive material: he was already bound to pay the contract price, so the promise has no consideration and is not enforceable. Options (b) and (c) are wrong because the exchange of words was an offer (a request and an assurance) and an acceptance; the problem is missing value, not missing agreement. Option (e) is wrong because consideration is exactly what is missing. My addition: had Stimson agreed to pay the extra cost, there would have been fresh consideration.

Conclusion. (d). A minor's contract is voidable at the minor's election unless it is for necessaries (food, clothing and shelter) or is a beneficial contract of service such as employment. The lease for his house is shelter, a necessary, so it binds him. The employment agreement is a beneficial contract of service, so it binds him. The custom furniture is neither a necessary nor employment, so only that contract is voidable at his election. Option (b) is wrong because it ignores the exceptions, and (a) and (e) are wrong because the furniture contract can be avoided.

Issue. Can the injured parties bring a claim in negligence against Feynman and/or the parachute manufacturer?

Rule. To succeed in negligence the plaintiff must show (a) the defendant owed the plaintiff a duty of care; (b) the defendant fell below the standard of care; (c) the plaintiff suffered damages or injuries; and (d) the damages were caused by the breach of the standard of care.

Application. Duty of care: the plaintiff must show a sufficient relationship of proximity such that it was reasonably foreseeable to the defendant that carelessness could harm the plaintiff. Feynman: it was foreseeable to a person in his position that any misstep during the test of an atom bomb could injure anyone near the site, so he owed a duty to everyone around it. Parachute maker: the parachute was a safety device designed to avoid harm if the mission was aborted, so it was foreseeable that mistakes in making it could injure anyone near the bomb. Standard of care: the defendant is held to the standard of a reasonable person with the same expertise. Feynman is held to the standard of a physicist with special knowledge of the bomb, and a reasonable physicist would not interfere with a bomb test, so he very likely breached it. The maker is held to the standard of a reasonable parachute manufacturer, and using the wrong material and sizing is not what a reasonable manufacturer would do, so it very likely breached too.

Causation: the plaintiff must show that "but for" the breach the damages would not have occurred. Feynman: but for the prank the test would not have been aborted and the injuries would not have happened. He may argue that the faulty parachute, not his prank, caused the harm, because a proper parachute would have landed the bomb safely. That argument is unlikely to succeed, because a defendant does not need to be the sole cause, only a cause. Manufacturer: but for the wrong material and size the bomb would likely have landed softly and not exploded. The maker may argue that the wind was the main cause. If the evidence shows the bomb would have exploded even with a proper parachute, the maker may succeed in showing there was no causation.

Damages. General damages (pain and suffering, loss of enjoyment of life) and pecuniary or special damages (out-of-pocket costs such as hospital bills and lost wages) for everyone injured. In a rare case a court may award punitive damages to punish and deter, and a prank during the test of such a dangerous bomb may be egregious enough to justify them against Feynman.

Defences. The parachute maker can argue contributory negligence against Feynman's own claim: although the maker contributed to his injury, Feynman contributed to his own harm by placing the dummy that caused the late abort. This is not a full defence and only reduces the maker's liability to Feynman. There are unlikely to be defences to the other claims. My addition: because the parachute was a defective product, this is also a product liability claim against its manufacturer for a manufacturing defect, which rests on the same duty of care.

Conclusion. The negligence claim is likely to succeed against one or both defendants, and the maker may raise contributory negligence against Feynman's own claim. Keith's marking notes accept a mention of a class action and accept a conclusion of no negligence if the analysis is sound.

Issue. Can Bohr and Feynman succeed against each other in battery, and can the other physicists succeed against Bohr in assault?

Rule. Battery: the defendant touched the plaintiff without the plaintiff's consent (intentional application of force). Assault: the defendant uttered a threat of imminent harm that caused the plaintiff to reasonably fear harm. Two defences matter here. Incapacity: a defendant who lacks capacity cannot form the intent an intentional tort requires. Self-defence: the force must be necessary, the defendant must reasonably believe there is a risk of harm, and the force must be proportionate to the harm being deterred.

Application. Battery: both men applied force to the other without consent (Bohr attacked Feynman and Feynman stabbed Bohr), so the elements are likely met on both sides. Feynman's claim against Bohr: Bohr would likely succeed in the defence of incapacity, because he blacked out and so lost the capacity to form the intent for battery. Bohr's claim against Feynman: Feynman was protecting himself against an attack and used reasonable force, so self-defence is likely to succeed. Bohr may argue the force was not proportionate, but it was a pocketknife and Bohr survived, so a court would likely find it a reasonable response to a rage attack. Assault: all the other physicists can likely prove the elements. Bohr's words "I am going to kill everyone in this room", said right after attacking Feynman, would reasonably make everyone fear for their lives and are a threat of imminent harm. But Bohr's defence of incapacity succeeds again, for the same reasons.

Conclusion. The elements of battery and assault are likely met, but all the claims are likely to fail because of the defences of incapacity and/or self-defence. Keith's marking notes: intentional infliction of mental distress may be used for the bystanders instead of or as well as assault, and a student who finds no assault or battery can still earn full marks on the analysis.

Issue. Can Feynman succeed in a claim against Stimson under the Occupiers' Liability Act?

Rule. Under the Occupiers' Liability Act an occupier owes a duty of care to people who come onto the property (s. 3(1)). To a trespasser the occupier owes only the duty not to deliberately cause harm, and not to act with reckless disregard for the trespasser's presence (s. 4). To succeed, Feynman must show that (a) Stimson, as occupier, owed him a duty of care, (b) the duty owed to a trespasser is not to deliberately cause harm, (c) Stimson caused him harm in breach of that duty, and (d) he suffered damages.

Application. Feynman would very likely succeed. Duty: Stimson was the occupier of the house, and occupiers owe a duty to anyone who comes onto the property. Standard: because Feynman was a trespasser, Stimson only had to avoid deliberately causing him harm. The most common way an occupier deliberately harms someone is by setting a trap, which is exactly what Stimson did. Damages: Feynman suffered a broken leg and is entitled to general damages (pain and suffering, loss of enjoyment of life) and pecuniary damages (bills and out-of-pocket expenses, and lost wages if he cannot work). Causation: but for the trap he would not have broken his leg. My addition, not in Keith's answer: Stimson may argue that Feynman's own wrongdoing, a break-in at night, should reduce or defeat his recovery, but on Keith's analysis the trap decides the case.

Conclusion. Feynman is likely to succeed against Stimson under the Occupiers' Liability Act.

Issue. Can Oppenheimer succeed in defamation against the witness?

Rule. The plaintiff must show that the defendant (a) made a statement that identified the plaintiff; (b) communicated it to at least one other person; and (c) the statement was defamatory, meaning it would lower the plaintiff's reputation in the minds of reasonable people. These elements are a low bar, and most defamation claims are won or lost on the defences. One defence is privilege. Keith's note says the course taught absolute and qualified privilege as a single concept: it applies where the defendant had an obligation to make the statement and the recipients had a corresponding interest in receiving it, and the most common example is experts and witnesses giving evidence in court, at tribunals or at commissions. Malice is an exception to privilege.

Application. Elements: Strauss identified the plaintiff when he said "Mr. Oppenheimer is a communist"; he communicated it to everyone at the hearing, which is more than one other person; and the statement was defamatory because, at the height of McCarthyism, supporting communism would lower a reasonable person's opinion of someone. So Oppenheimer likely makes out the elements. Defence: the claim would likely fail on privilege, because Strauss made the statement as a witness at the commission's proceedings. However, the allegation was patently false, so Strauss may have been motivated by malice, which defeats privilege. If malice can be proven the defence fails, but if it cannot be shown the defence likely prevails, and at this stage it is hard to say which is more likely.

Conclusion. The case largely turns on malice. If malice can be shown, Oppenheimer's claim is likely to succeed and he would be entitled to general damages for the loss of reputation and pecuniary damages for out-of-pocket losses, such as lost wages, caused by the statement. If it cannot be shown, the claim is likely to fail.

Issue. Can Bang Up rescind the purchase or recover damages from Machine Art Inc. for a misrepresentation made by Stewart about the hoist?

Rule. A misrepresentation is a false statement of existing fact, not mere opinion or sales puffery, that induces a party to enter a contract. It is fraudulent if made knowingly or recklessly, negligent if made carelessly without reasonable grounds and where the speaker owed a duty of care, and innocent if neither. An opinion is not a statement of fact, but an opinion or recommendation from someone with special knowledge who knows the buyer's purpose is treated as implying facts the speaker should know, and a duty of care arises from that special relationship of reliance (Hercules Managements v Ernst & Young). An employer is vicariously liable for the torts of an employee acting in the course of employment. Remedies are rescission (and the return of the price) and, for negligent or fraudulent misrepresentation, damages.

Application. Statement: "best in the industry" is puffery and is not actionable by itself. The real statement is the recommendation. Leonard told Stewart the job (lift the larger SUVs and trucks), and Stewart, presenting himself as an "Art Specialist" at a commercial equipment supplier, recommended the Hoist-a-Matic as the answer, which implies that it can lift them. That statement was false. Type: nothing suggests Stewart knew it was false, so fraud is unlikely, but a specialist who is told the purpose and recommends equipment without checking its capacity falls below the standard of a careful equipment specialist, so negligent misrepresentation is the best fit. Duty: Stewart knew the purpose, held himself out as an expert and invited reliance. Inducement and reliance: Penny signed the purchase order and paid because of the recommendation, and it was reasonable for a repair shop to rely on its supplier's specialist. Loss: Bang Up paid for a hoist that does not do the job. Machine Art's likely defences are that the statement was only opinion, that Bang Up should have checked the load rating (caveat emptor, but that does not help a seller who gave a positive recommendation), that the purchase order may contain a clause excluding warranties (check the document), and that the hoist works. Bang Up acted within a week, so it has not lost the right to rescind through delay. Vicarious liability: Stewart made the recommendation as Machine Art's employee in the course of his work, so Machine Art is liable for it.

Remedies. Bang Up can rescind: return the hoist and recover its payment, then buy a suitable one. Or it can keep the hoist and claim damages for negligent misrepresentation, such as the extra cost of a hoist that can do the job and the work it lost meanwhile. Bang Up's own obligation is to act promptly and to mitigate its loss.

Conclusion. Bang Up will likely succeed against Machine Art for negligent misrepresentation based on Stewart's recommendation, and can rescind or claim damages. The "best in the industry" remark alone would not support a claim. My addition: the Sale of Goods Act has an implied condition that goods are fit for a purpose the buyer made known, which would be a second route, but it is beyond this midterm.

Issue 1. Is there a binding contract to lease the premises, and what happens to the $3,500?

Rule. A contract needs offer, acceptance, consideration, intention to create legal relations, capacity, legality and certainty of terms. A corporation acts through agents, and an agent with authority binds the corporation. Terms that are too vague, or that are only an agreement to agree, cannot be enforced. A deposit paid for a contract the other side then refuses to perform must be returned.

Application. Authority: the board approved the lease if Penny secured a good price, so she had actual authority to make the deal and Bang Up is bound by it. Offer and acceptance: Penny and Wyatt negotiated and agreed on the premises, the monthly price, a five-year term and a start date, and shook hands, so there was an offer and an acceptance. Consideration: rent in exchange for the use of the premises. Intention: this was a business negotiation, so legal relations are presumed. Certainty: price, term, parties and start date are certain; the renewal terms may be too vague, but the five-year term stands without them. So a contract was formed, and Wyatt's call on March 1 repudiates it. Bang Up can claim damages for breach (the cost of finding a comparable property, any higher rent over the term, and wasted costs) and must be refunded its $3,500, because Wyatt cannot keep a deposit for a lease he will not give. Wyatt will argue that nothing was signed, which leads to the next issue.

Issue 2. (Beyond this midterm.) Does it matter that nothing was signed, and does the answer change if Bang Up took possession in February?

Rule. Under the Statute of Frauds a contract concerning an interest in land, such as a lease of this length, generally must be evidenced in writing signed by the party to be charged, here Wyatt. Without writing the contract is unenforceable, not void, so money paid can be recovered. The exception is part performance: an oral contract concerning land, the party partly performed, and the acts of performance are referable to and inextricably linked to the land contract.

Application. On the facts as given, Wyatt signed nothing, so he can refuse to go ahead and Bang Up cannot force the lease, although it can recover its $3,500. If Bang Up had taken possession in February and begun renovating with Wyatt's permission, those acts are inextricably linked to the land and unmistakably point to the lease, so part performance would likely make the oral lease enforceable and Bang Up could seek specific performance or damages. So the answer does change.

Conclusion. A contract was formed on the negotiation and handshake, and Wyatt is in breach. Without writing or possession Bang Up probably recovers only its $3,500, but with possession and renovations the lease is likely enforceable.

Issue. Can Denise sue Bernadette and/or Bang Up in negligence, how does Bernadette's position against Bang Up work, and how do the defences change the result?

Rule. Negligence needs a duty of care, breach of the standard of care (that of a reasonable person in the circumstances), causation (but for) and damages. Contributory negligence reduces damages in proportion to the plaintiff's own fault. Voluntary assumption of risk is a defence only where the plaintiff expressly or impliedly agreed to give up the right to sue. An employer is vicariously liable for an employee's negligence in the course of employment. Under the Occupiers' Liability Act s. 3(1) an occupier must take reasonable care to see that people entering the premises are reasonably safe.

Application. Denise against Bernadette. Duty: a driver owes a duty to people in the path of the car, which is plainly foreseeable. Breach: a reasonable driver creeping into a workshop where staff are standing in front of the car keeps a foot over the brake and watches the person ahead; stepping on the gas instead of the brake, with eyes on the door instead of on Denise, falls below the standard. Bernadette will say she panicked when Barry startled her, but a sudden surprise in a workshop is foreseeable and does not lower the reasonable-person standard. Causation: but for the acceleration Denise would not have been run over, and Barry's entrance was a foreseeable trigger, not a break in the chain. Damages: general damages for pain and suffering and loss of enjoyment of life, and special damages for medical costs, lost income and future care. Defences: Denise's own contributory negligence is likely, because she stood in front of a moving car to guide it and waved a customer under a half-open door when she did not know how to run the door, and her damages would be reduced. Voluntary assumption of risk is unlikely, because she did not agree to give up a claim.

Bang Up. It is the occupier, and Bernadette is an invited customer. A door that opens only halfway, with only an untrained mechanic present, and an employee waving a customer through it, falls below reasonable care, and Bang Up answers for Denise's carelessness as her employer and also for its own failure to train and supervise. Barry's entry from the office is probably not careless, since he was walking into his own workplace. Denise's own claim against her employer is likely to be limited, because workers injured on the job usually go through workers' compensation (my addition, not taught in the course as far as I know), but Bernadette, if sued, can claim against Bang Up for a share of the blame. Bernadette's own contributory negligence is also arguable: she was unsure whether to drive in and went in anyway, keeping her eyes on the door.

Conclusion. Denise will likely succeed against Bernadette, with her damages reduced for her own fault. Bang Up is likely partly responsible through Denise's carelessness and its own failure to train staff and make the door safe, so the loss would be shared among Bernadette, Bang Up and Denise.

Conclusion. (a), as my reading; Keith will confirm at the review. Penny oversees the whole business and was a director, so she had authority to hire, and Leonard's disapproval does not undo that. Penny's offer of a job, Mike's acceptance by turning up each day, and the exchange of work for cash (consideration) formed an employment contract. The favour does not remove the intention to create legal relations, because the setting is commercial: Mike was to work for pay and did. Leonard ending the job without notice, because of horseplay in the second week, is then a possible breach (wrongful dismissal), subject to the argument that breaking the hoist was misconduct. Option (b) is the tempting trap: it treats "a favour" and Leonard's doubts as stopping a contract, but they do not.

Conclusion. (c). The posts accuse Leonard of dishonesty and overcharging, which lowers a reasonable person's opinion of him as a businessman, they name him, and they were communicated to others, so the elements of defamation are likely met. Social media posts are written and permanent, so the claim is in libel, not slander (b), which is spoken. "Product defamation" (a) is not the tort here, since the statements are about Leonard, not a product. Deceit (d) and fraudulent misrepresentation (e) concern false statements that induce someone to enter a deal, and nobody was induced to do anything. Mike's best defence would be truth (if Leonard did overcharge), and Leonard would claim general damages for harm to his reputation and special damages for any lost customers.

A civil action is between two private parties and is named Plaintiff v Defendant (Jane v John). The plaintiff seeks compensation for harm. The standard is a balance of probabilities (more likely than not, about 50% plus). Most civil causes of action, such as negligence and breach of contract, come from the common law. A criminal prosecution is between the state and the accused and is named R v John. The state seeks to punish on behalf of the public. The standard is proof beyond a reasonable doubt (near certainty). Most criminal law comes from the Criminal Code. The same incident, such as a bar fight, can lead to both a prosecution and a civil tort claim.

An action is a lawsuit started in the normal course. A cause of action is the legal rule the plaintiff relies on to say they were wronged (negligence, battery, breach of contract). The plaintiff is the person suing and the defendant is the person being sued. Damages are the monetary compensation for the harm the plaintiff suffered as a result of the defendant's wrong. Prima facie means "on the face of it": a claim that looks established unless the other side answers it. Example: "The customer, as plaintiff, sued the store, as defendant, for damages under the cause of action of negligence."

The sources are the Constitution, legislation (federal and provincial statutes, such as the Criminal Code, the Sale of Goods Act and the Occupiers' Liability Act), common law (judge-made law that follows precedent), equity (fairness principles that supplement the common law, such as promissory estoppel and rectification) and, in Quebec, civil law rather than common law. The Constitution is supreme (constitutional supremacy), so every law must comply with it. Within the Constitution, legislatures have broad power to pass statutes (legislative supremacy), and a valid statute overrides inconsistent common law. Common law follows stare decisis, which means courts follow precedents set by higher courts.

Federal (s. 91): banking, copyright, postal service. Provincial (s. 92): incorporating a company with provincial objects, hospitals and health care, and property and civil rights in the province. It matters because a business must check which government's statute governs it. For example, the Sale of Goods Act, Statute of Frauds, Negligence Act, Occupiers' Liability Act, Employment Standards Act and Partnerships Act are provincial, while the Criminal Code, Income Tax Act, Copyright Act, Patent Act and Bankruptcy and Insolvency Act are federal.

They are all common-law precedents, meaning judge-made rules. Under stare decisis a court follows the earlier decision of a higher court on similar facts, so lawyers argue by analogy to these cases. This is why, in an IRAC answer, you cite the case that supplies the test and then compare your facts to it.

The legislative branch (elected members who debate and make laws), the executive branch (the Crown, prime minister or premier and Cabinet, who operate and enforce the laws) and the judiciary (judges who interpret and apply the laws). Disputes are resolved through the courts, alternative dispute resolution (mediation or arbitration) and administrative tribunals (such as the Human Rights Tribunal or the Ontario Securities Commission).

Constitutional supremacy means every law must comply with the Constitution, so a statute that breaks the Constitution can be struck down. Legislative supremacy means a legislature has wide discretion to make any law so long as it is constitutional. If they conflict, constitutional supremacy prevails.

The goals are (1) to assess potential legal risks in a business career, (2) to reduce legal risk through preventive measures, and (3) to devise strategies to cope with legal issues when they arise. The method is Issue (identify the legal risk), Rule (explain the governing principle), Application (apply it to the facts with strengths and weaknesses) and Conclusion (predict the outcome and recommend a course of action that minimises risk). The conclusion must follow logically from the application.

Tort risks include negligence (a customer slips on a wet floor or is burned by hot coffee; the owner owes a duty of care and is an occupier under the Occupiers' Liability Act, which requires reasonable care to see that entrants are reasonably safe), product liability (contaminated food, failure to warn about allergens), vicarious liability for staff torts in the course of employment, and misrepresentation (false claims about ingredients). Contract risks include invitation-to-treat wording on menus and signs, unclear supply terms, and verbal promises that are not enforceable. Preventive steps are written safety procedures and staff training, warning signs, allergen labelling, insurance, written standard-form terms with onerous clauses clearly drawn to the customer's attention (Tilden), and written supplier contracts reviewed before signing. If something goes wrong, document the incident, report to the insurer and settle early where the risk of losing is high.

Laws are the rules a society uses to maintain order; ethics are the moral principles that guide how people choose to act, and conduct can be legal but unethical. Without attention to both, a company risks financial and reputational loss. Incrementalism is sliding into unethical behaviour through small steps that each seem harmless but together amount to a serious moral compromise (for example, an accountant who first rounds a figure, then hides a small error, then backdates a document). Overconfidence bias is overestimating your own knowledge, ability or ethics, so you take more risk and do not guard against mistakes (for example, an owner who is sure nothing will go wrong and skips a safety inspection).

A tort is a wrongful act done to the person, property or rights of another that is recognised in law and causes harm. A tort claim is between private parties and its purpose is compensation, putting the injured party back in the position they would have been in without the tort, usually through money damages. The standard of proof is a balance of probabilities. A crime is an offence against the state, punished and proved beyond a reasonable doubt. The conduct scale runs from accidental, to negligent (careless), to intentional. Intentional torts such as battery and trespass are actionable per se, meaning the plaintiff can sue even without loss, but may receive only nominal damages (for example $1). Negligence is not actionable per se: no damage, no negligence.

Assault requires (1) an intentional (2) threat that is (3) likely to cause a reasonable apprehension of imminent physical harm (4) against a person or an identifiable group. No contact is needed. Battery requires (1) an intentional (2) application of unlawful force (3) without consent. A person who raises a fist and swings but misses commits assault; if the fist lands, battery is also committed.

Issue. Is Dana liable to Eli for assault, and is Eli liable to Dana for battery?

Rule. Assault: intentional threat likely to cause reasonable apprehension of imminent harm. Battery: intentional application of unlawful force without consent. Self-defence: the defendant must show that force was necessary, that he reasonably believed there was a risk of harm or immediate danger, and that the force was commensurate with the harm being deterred (no excessive force).

Application. Dana's words and the swing were intentional and would cause a reasonable person to fear imminent harm, so assault is made out (and battery only if she had hit him). Eli's shove was an intentional application of force without Dana's consent, so prima facie battery. Eli will argue self-defence: a bottle swung at his head created an immediate danger and a shove is a proportionate response. Dana will argue that he could have stepped back, and that breaking her wrist was excessive. A court is likely to accept that a shove is a reasonable response to a bottle attack, though the injury shows the force needs scrutiny.

Conclusion. Dana is likely liable for assault; Eli's battery is probably excused by self-defence. Business risk lesson: bar owners should train staff on de-escalation and not serve patrons to the point of aggression.

Trespass requires (1) an intentional (2) entry onto the property of another (3) without consent. The owner can sue even without damage and can recover for any damage caused. Example: a delivery driver walks through a restricted construction site after being told not to enter.

Issue. Is the supervisor liable for intentional infliction of mental suffering?

Rule. From Boucher v Wal-Mart Canada Corp., 2014 ONCA 419: (1) the defendant's conduct was flagrant and outrageous; (2) the conduct was calculated to harm the plaintiff; (3) the conduct caused the plaintiff to suffer a visible and provable illness. The defendant must intend to cause harm, though not necessarily the exact harm that follows.

Application. Telling a parent his child has died as punishment is flagrant and outrageous. It was done deliberately to cause distress, so it was calculated to harm. A physician's diagnosis of a serious anxiety disorder is a visible and provable illness, and the false news caused it. The supervisor may argue it was a joke, but the stated purpose was punishment, which shows intent.

Conclusion. The worker will likely succeed. The employer is likely vicariously liable too if the supervisor acted in the course of employment, and should discipline the supervisor and train managers.

Issue. Can the customer sue the store and guard for false imprisonment?

Rule. From Collis v Toronto Police Services Board, 2007 CanLII 36634: (1) an intentional (2) total confinement of a person against her will (3) without lawful justification. Confinement may be psychological as well as physical. A defendant who acted with legal authority has a defence, and it is not false imprisonment if police lay charges after an independent decision.

Application. The guard intended to hold her, and a locked room is a total confinement against her will. The store will rely on legal authority or reasonable suspicion, but the facts show the goods were not found and there was no lawful basis beyond suspicion. The 40 minutes before police arrived is the key period: the independent decision by the police did not begin until they arrived.

Conclusion. The customer will likely succeed for the time she was held before the police acted unless the store can prove a lawful justification. Risk-management advice: train guards on the limits of their authority, call police promptly rather than detaining, and keep incident records. The employer is vicariously liable for the guard's act in the course of employment.

Rule. From Curley v Taafe, 2019 ONCA 368: (1) the proceeding was initiated by the defendant; (2) it terminated in favour of the plaintiff; (3) it was undertaken without reasonable and probable cause; (4) it was motivated by malice or a primary purpose other than carrying the law into effect.

Application. (1) The competitor supplied the false information and presumably withheld exculpatory facts, so the competitor initiated the proceeding rather than the police acting independently. (2) The withdrawal of the charges is a termination in the rival's favour. (3) The competitor knew the claim was false, so there was no reasonable and probable cause. (4) The goal was to hurt a business rival, which is an improper purpose. Conclusion. The rival will likely succeed.

Issue. Is the company liable in defamation to Sam?

Rule. Defamation is the publication of untrue statements that injure a person's reputation; spoken is slander and written is libel. The plaintiff must show (1) the material is defamatory, meaning it would lower his reputation in the eyes of a reasonable person; (2) it refers to him; and (3) it was communicated to at least one other person. Defences are truth (justification), qualified or absolute privilege (for example evidence in court, or an employment reference given without malice), and responsible communication on matters of public interest (Grant v Torstar Corp., 2009 SCC 61).

Application. Calling Sam a thief lowers his reputation, the email names him, and it was sent to 50 people, so all three elements are met and, being written, it is libel. Truth is a complete defence, but the statement is false, so it fails. Qualified privilege protects statements made without malice on a proper occasion, such as a reference to a prospective employer, but telling the whole staff goes beyond any need to know. Responsible communication on a matter of public interest does not fit an internal staff email about a former till worker.

Conclusion. Sam will likely succeed. Risk-management advice: never make accusations in mass emails; check facts first; keep personnel matters confidential.

Consent: if the plaintiff consented, there is no tort, but the consent must be informed and a person cannot consent to death or severe bodily harm. Self-defence: reasonable protection of oneself, a third party or property, available only if the defendant reasonably believed there was a risk of harm or immediate danger and used no more force than was proportionate. Necessity: there was no other option but to commit the tort, for example pulling down a building to stop a fire spreading. Involuntariness: intentional torts must be voluntary, so a reflex or seizure is not a tort. Incapacity: an intentional tort needs the mental capacity to form intent. Legal authority: the act was authorised by law, for example a police arrest that would otherwise be false imprisonment.

The bouncer is directly liable for battery. The bar, as employer, is generally jointly and severally liable for torts committed by an employee in the course of employment, so the patron can sue both. The bouncer's job was to control patrons, so the act is closely connected to his work. The bar may also be negligent if it failed to train or supervise him. The employee may in turn be liable to the employer.

Negligence is the careless causing of harm to the person or property of another. The plaintiff must prove on a balance of probabilities that (1) the defendant owed the plaintiff a duty of care, (2) the defendant breached that duty by falling below the standard of care, (3) the defendant's breach caused the plaintiff's loss (causation, both factual and legal), and (4) the plaintiff suffered damage. Donoghue v Stevenson is the foundation case. Negligence is not actionable per se: without proven loss there is no claim.

In Donoghue v Stevenson, [1932] A.C. 562, Lord Atkin said you must take reasonable care to avoid acts or omissions you can reasonably foresee would be likely to injure your neighbour, meaning persons so closely and directly affected that you ought reasonably to have them in contemplation. That statement is a guiding idea, not the test. The test in the course is City of Kamloops v Nielsen, [1984] 2 S.C.R. 2: (1) is there a sufficiently close relationship between the parties that, in the reasonable contemplation of the defendant, carelessness on its part might cause damage to that person (reasonable foreseeability and proximity); and (2) if so, are there considerations that ought to negative or limit (a) the scope of the duty, (b) the class of persons to whom it is owed or (c) the damages to which a breach may give rise (policy considerations). Textbook note, not on MyLS: Cooper v Hobart (2001 SCC) restates the same two stages as foreseeability plus proximity, then residual policy considerations. Analogy case: Menow v Honsberger and Jordan House, where an innkeeper who ejected an intoxicated customer later struck by a car owed him a duty.

The general standard is that of the reasonable ordinary person. A professional (doctor, lawyer, accountant) is held to the standard of a reasonable and competent member of that profession, and professionals must also avoid conflicts of interest. A specialist is held to a higher standard than a generalist, for example a heart surgeon compared with a family doctor performing heart surgery. A child is measured against a reasonable child of the same age, unless the child is engaged in an adult activity. Foreseeability of the harm and the cost of precautions are weighed in deciding whether the standard was breached.

Factual causation asks whether the damage was in fact caused by the breach. The but-for test is whether the injury would have occurred but for the defendant's conduct; if not, the conduct is a cause. The defendant need not be the sole cause, it is enough to be a cause. Where proof is hard (for example in manufacturing cases) the plaintiff can use circumstantial evidence or res ipsa loquitur. Legal causation, or remoteness, asks whether the harm was too far removed from the conduct: the fact that harm of this kind could occur, though not the exact damage, must have been foreseeable at the time of the tort (Overseas Tankship v Morts Dock, The Wagon Mound, [1961] A.C. 388). Textbook note: Mustapha v Culligan (2008 SCC) applies foreseeability to psychological injury in a person of ordinary fortitude.

Special damages are quantifiable pecuniary losses (lost sales, medical bills). General damages are not easily quantifiable, such as pain and suffering. Punitive damages are rare and punish egregious conduct rather than compensate.

Issue. Should the bar and its staff be liable in negligence to the customer?

Rule. The plaintiff must show on a balance of probabilities that (a) the defendant owed a duty of care, (b) it breached the standard of care, (c) the breach caused the harm, and (d) actual damage occurred.

Application. Duty: a restaurant or bar owes a duty of care to its customers; in Menow v Honsberger and Jordan House the Supreme Court held that an innkeeper who ejected an intoxicated customer later hit by a motorist owed him a duty. Standard: it was foreseeable that ejecting a customer shortly after ejecting four aggressors was likely to expose him to harm, so the bar probably fell below the standard of care. The bar will argue that it also owed a duty to other patrons and that ejecting him may have been necessary if he was a risk, but there is no evidence he caused the fight. Causation: but for the ejection into that situation, he was unlikely to have been harmed. Damages: serious physical injuries.

Conclusion. The bar and its employees are likely liable, and the bar is vicariously liable for staff acting in the course of their employment, as in Murphy v Little Memphis Cabaret (ONCA). The bar should adopt safer ejection procedures: call a taxi or police, escort patrons, and keep records.

Contributory negligence is a partial defence where the plaintiff contributed to her own injury. It arises when the plaintiff (a) contributed to the incident that caused the injury, (b) exposed herself to a risk of injury, or (c) failed to take reasonable steps to minimise the injury after it happened (mitigation). Here the store likely breached its duty by leaving the spill, but the shopper's inattention contributed to the fall. The court does not dismiss the claim; it apportions fault, so her damages are reduced by her share of responsibility, for example 30%.

Voluntary assumption of risk is a full defence (like consent in intentional torts). The defendant must show the plaintiff engaged in an inherently risky activity, knew of the risks and voluntarily assumed those specific risks. It can be shown through (1) an express contract exempting the defendant from legal responsibility (a waiver), (2) express consent to run the risk without a contract, or (3) consent inferred from the facts. The park will point to the waiver, but jumping on a trampoline is risky only in the ordinary way; a defective frame is a different risk that the customer did not know about and did not assume, so the defence probably fails (and the waiver may not clearly cover it). The park should therefore inspect and maintain equipment, and draw the key risks clearly to customers' attention.

Ex turpi causa bars a plaintiff from recovering if the injury occurred while the plaintiff was engaged in an illegal activity. The lecture slides say it is rare and not to be counted on, so raise it only as a secondary argument where the facts show the plaintiff was committing a crime when hurt.

Issue. Is the driver, and are the driver's employer, liable in negligence to the cyclist?

Rule. The four negligence elements (duty, breach of the standard of care, causation by the but-for test and remoteness, damages). An employer is generally jointly and severally liable for the torts of an employee committed in the course of employment. Contributory negligence, including failure to mitigate, reduces damages in proportion to the plaintiff's fault.

Application. Duty: a driver owes a duty to other road users, including cyclists, whose presence is foreseeable. Breach: a reasonable driver does not text while driving, so the driver fell below the standard. Causation: but for the distraction the collision would likely not have happened, and head injuries are a foreseeable type of harm. Damages: medical costs and lost income (special damages) and pain and suffering (general damages). The driver was on a delivery, so the employer is vicariously liable and the driver also remains personally liable. The employer might argue the driver was on a personal detour, but a delivery job makes this unlikely. Contributory negligence: the missing helmet did not cause the collision but may have worsened the injury, which is a failure to take reasonable steps to minimise harm, so a court may reduce damages by a share of responsibility.

Conclusion. The cyclist will likely succeed against the driver and the employer, with damages possibly reduced for the helmet. The employer should adopt and enforce a no-phone policy, review its insurance, and settle early.

The plaintiff must prove each element of the tort. Once the plaintiff has shown all the elements in evidence, the burden shifts to the defendant to prove it did not commit the tort or that it has a valid defence. A plaintiff may meet the burden with circumstantial evidence, which is any evidence other than eyewitness testimony to the material fact from which the court may infer a fact in issue (R v Gordon, 2017 ONSC 169). It is enough to show that the defendant's negligence was the most likely cause of the injury. Res ipsa loquitur ("the thing speaks for itself") is the doctrine often used in manufacturing cases where the cause is hard to prove directly.

An occupier is a person who has control over the property, whether owner or tenant. Under the Occupiers' Liability Act, s. 3(1), an occupier owes a duty to take such care as is reasonable in all the circumstances to see that persons entering the premises, and their property, are reasonably safe while on the premises. A trespasser is owed a duty of general humanity: the occupier must not deliberately harm the trespasser or set traps, but otherwise the standard of care is minimal. Under s. 4, where the use of land is to encourage an activity and the entrant willingly assumes its risks, the s. 3 duty does not apply to those risks, but the occupier still must not create a danger with deliberate intent to do harm and must not act with reckless disregard for the entrant's presence (Schneider v St. Clair Region Conservation Authority, [2009] O.J. No. 3667 (C.A.), the course's key case for s. 4).

Issue. Is the store liable to the customer under occupiers' liability and negligence for her fall?

Rule. An occupier (a person in control of the property, owner or tenant) owes people entering the premises a duty to take reasonable care to see that they are reasonably safe (Occupiers' Liability Act, s. 3(1)). Negligence requires duty, breach of the standard of care, causation and damages. Contributory negligence reduces damages in proportion to the plaintiff's fault.

Application. The corporation is the occupier because it controls the premises as tenant, and the customer was an invitee, so a duty is owed. A reasonable occupier foresees that rain makes entrances slippery and puts down mats, mops or warning signs; failing to do so likely breached the standard. But for the unprotected wet floor, she would probably not have fallen, and injury from a slip is a foreseeable type of harm. The store will argue that she was distracted, which is contributory negligence and could reduce her damages, but it does not remove the store's breach. If an employee was supposed to mop and did not, the store is also vicariously liable.

Conclusion. She will likely succeed, with damages possibly reduced for her inattention. The store should adopt an inspection and cleaning schedule, put out mats and warning signs, and keep logs to prove it took reasonable care.

Issue. Does s. 4 of the Occupiers' Liability Act relieve the occupier of its duty?

Rule. Where land is used to encourage an activity, the entrant willingly assumes the risks of that activity and the s. 3 duty does not apply to them, but the occupier must not create a danger with deliberate intent to do harm and must not act with reckless disregard of the entrant's presence (s. 4; Schneider).

Application. The risk the visitor accepted was the ordinary risk of swinging and falling into a lake. A frayed rope is a hidden defect in the equipment that the occupier controls and knew or should have known about, not a risk he knowingly accepted. If the occupier ignored earlier warnings or complaints about the rope, that suggests reckless disregard, which s. 4 does not protect. The sign is not a complete shield.

Conclusion. The occupier probably cannot rely on s. 4 and is likely liable, unless it can show it inspected the rope and had no notice of the fraying. It should inspect equipment regularly and remove unsafe features.

A trespasser is owed only a duty of general humanity: the occupier must not deliberately harm the person or set traps; otherwise the standard of care is minimal. The owner did not intend the pit to injure anyone, and the site was closed and fenced, so a claim in negligence is unlikely to succeed. The teenager would have to show that the owner acted with deliberate intent or reckless disregard of the presence of trespassers (for example, if the owner knew teenagers regularly climbed the fence and did nothing). The owner should still fence, cover and mark hazards because courts look at what the occupier knew about intruders.

Product liability is based on negligence, so the plaintiff must prove duty, breach, causation and damage; it is not a separate cause of action. Donoghue v Stevenson (the snail in the ginger beer) established that a manufacturer owes a duty of care to the ultimate consumer. The three basic types are negligent design, negligent manufacture and failure to warn. The plaintiff must show that the product, as designed, manufactured or labelled, fell short of reasonable standards and that this made it dangerous and caused the harm. A manufacturer has an ongoing duty to warn about dangers, including defects discovered after sale and risks revealed by scientific or technological advances.

Issue. Is the bakery liable in negligence (product liability) for the daughter's injury?

Rule. Product liability is negligence applied to a product (Donoghue v Stevenson): duty of care to the consumer, breach by negligent design, manufacture or failure to warn, causation by the but-for test, and damage. A plaintiff may rely on circumstantial evidence or res ipsa loquitur where direct proof is hard.

Application. The bakery made a food product intended for consumers, so it owed the daughter a duty as the foreseeable ultimate consumer (Kamloops: sufficiently close relationship and foreseeable harm; no policy reason to limit it). A reasonable bakery inspects and maintains its equipment and checks food for foreign objects; a worn blade shedding metal suggests it fell below the standard (negligent manufacture). But for the metal in the donut her tooth would not have chipped. The bakery will say the metal could have come from elsewhere, but circumstantial evidence (the worn blade, the type of metal) makes the bakery the most likely source. Damages: dental costs and pain (special and general). The mother's purchase is irrelevant to the daughter's tort claim because she need not be a party to a contract.

Conclusion. The daughter will likely succeed. The bakery should inspect equipment, keep maintenance records and carry product liability insurance.

The company owes a duty to consumers. Once it learned of the risk it had an ongoing duty to warn about discovered defects and new scientific knowledge. Failing to update the label fell below the standard of a reasonable manufacturer, and but for the missing warning the patient could have avoided the risk or sought other treatment. The company is likely liable in negligence for failure to warn.

Professionals are measured against the reasonable and competent member of the profession in that specialty, and specialists are held to a higher standard than generalists (a heart surgeon has a higher standard than a family doctor doing the same operation). A person who holds out as able to do specialised work will be judged by the specialist standard. The doctor who undertakes heart surgery without the skill is likely in breach. Professionals must also avoid conflicts of interest, and a professional who breaches the standard of care and also acts in conflict may face separate claims for negligence and for breach of fiduciary duty.

Issue. Is the competitor liable for inducing breach of contract?

Rule. From 1670002 Ontario Ltd v Redtree Contract Carriers Ltd, 2014 ONCA 501: (1) the defendant knew of the contract between the plaintiff and a third party, (2) the defendant intended to procure a breach, (3) the defendant's conduct caused the third party to breach, and (4) the plaintiff suffered damages.

Application. The competitor must have known of the exclusive contract (the facts must show actual knowledge, for example it was told or it saw the contract). An offer of a higher price to make the supplier switch shows intention to procure a breach, and the supplier did breach because of the offer, so causation is met. The client's lost sales are damages. The competitor may argue it merely competed fairly, but intentionally causing a breach of a known contract is not fair competition.

Conclusion. The client will likely succeed if it can prove the competitor knew of the contract. The client should keep records proving the competitor's knowledge and claim damages from both the supplier (breach of contract) and the competitor.

The tort of unlawful interference with economic relations applies where the defendant commits an actionable wrong against a third party that intentionally causes the plaintiff economic harm (A.I. Enterprises Ltd v Bram Enterprises Ltd, 2014 SCC 12). Conduct is unlawful if it is actionable by the third party, or would be if the third party suffered loss. If the letters threaten customers with unlawful action (or the rumours are defamatory to them) and the rival intended to injure the client's business, the elements are likely met and the client can claim economic damages.

Passing off is representing one's own goods or business as another's. The plaintiff must show (1) goodwill in its name or product, (2) deception of the public caused by the defendant's misrepresentation, and (3) actual or likely damage (Kaastra o/a Arbor-Aide v Arbor Aid Ltd, 2019 ONSC 4590). The established café's reputation is its goodwill, the near-identical name and logo mislead customers, and diverted customers cause lost sales, so passing off is likely made out.

A misrepresentation is a statement, written, verbal or by action, made during negotiation that turns out to be false and on which the other party reasonably relies to their detriment.

Opinions are not statements of fact, except that an expert's opinion is treated as fact. A silence or omission is not misrepresentation unless a duty of good faith or disclosure is owed (a fiduciary, a director to the corporation, a partner, an insured to the insurer) or there is a latent defect; otherwise the rule is caveat emptor (buyer beware).

Issue. Is the accounting firm liable to the bank for negligent misrepresentation?

Rule. In negligence a plaintiff generally cannot recover pure economic loss, but negligent misrepresentation was developed to allow recovery (Hedley Byrne & Co v Heller & Partners, [1964] A.C. 465). The test from Hercules Management Ltd v Ernst & Young (1997), 146 D.L.R. (4th) 577 is: (1) a statement was made; (2) it was false; (3) the maker owed the hearer a duty of care, subject to policy considerations that may limit liability, one of which is indeterminate liability (Deloitte & Touche v Livent Inc., 2017 SCC 63: temporal, claimant and value indeterminacy); (4) the hearer reasonably acted on the statement; (5) the statement fell below the standard of care; and (6) the hearer suffered a loss as a result.

Application. The financial statements contained a false statement, and the firm was careless in preparing them (below the standard of a reasonable accountant). A duty of care is likely owed because the firm knew the specific bank and the specific purpose, so the liability is not indeterminate: the claimant is known, the use is known and the amount at risk is limited to the loan. The bank reasonably relied on professionally prepared statements and lost money because of it. The firm may say that it prepared the statements for its client, not for the bank, and that the bank should have done its own checks, which could support a contributory-negligence argument.

Conclusion. The bank will likely succeed. Accountants should state in writing who may rely on their work and for what purpose, and carry professional liability insurance.

(1) a statement was made; (2) it was false; (3) the defendant knew it was false (or was reckless as to its truth); (4) the hearer reasonably acted on it; and (5) the hearer suffered a loss as a result. The plaintiff can claim full damages in the tort of deceit, rescind the contract, and in a suitable case obtain punitive damages. No special relationship or duty of care is needed because anyone who lies to induce a contract commits the tort.

This is innocent misrepresentation: the statement was false but the seller honestly believed it and was not careless. The remedy is rescission (cancelling the contract and returning the parties to their pre-contract positions), not damages. If the seller had been careless in checking, the claim would be negligent misrepresentation (damages plus option to rescind), and if he knew it was false, fraudulent misrepresentation (full damages and possibly punitive damages).

The purpose is compensation, to put the plaintiff in the position she would have been in without the tort. Special damages are quantifiable losses (lost sales), general damages are not quantifiable (pain and suffering), and punitive damages punish egregious conduct and are rare. An intentional tort such as battery or trespass is actionable per se, meaning the plaintiff can sue without proof of loss but may receive only nominal damages (for example $1). Negligence is not actionable per se.

Issue. Is the owner liable for the bite under strict liability?

Rule. Strict liability means a defendant is liable if the wrongful act occurs regardless of fault, usually under statute. Under s. 2 of Ontario's Dog Owners' Liability Act the owner of a dog is liable for damages from a bite or attack on another person; where there is more than one owner, they are jointly and severally liable; and liability does not depend on knowledge of the dog's propensity or on fault or negligence by the owner, but the court must reduce damages in proportion to the plaintiff's fault or negligence.

Application. The dog bit another person, so the owner is liable even though the dog had no history. The delivery person's teasing contributed to the attack, so damages will be reduced in proportion to his fault.

Conclusion. The owner is liable, with damages reduced for the teasing. Other strict-liability torts include nuisance (private nuisance is interference with an occupier's use and enjoyment of land; public nuisance interferes with lawful use of public lands) and the rule in Rylands v Fletcher, under which a person is liable when something inherently dangerous escapes from their property.

A fiduciary is someone in a special relationship of trust to another, such as a parent, a doctor, a trustee or a director. A fiduciary must (1) put the beneficiary's interest ahead of their own and (2) avoid conflicts of interest. The duty can arise categorically, in relationships where it always exists (lawyer to client, doctor to patient, director to corporation), or ad hoc, where all three parts of the test in Frame v Smith, [1987] SCR 99 are met: (1) the fiduciary has scope for the exercise of some discretion or power; (2) the fiduciary can unilaterally exercise that power so as to affect the beneficiary's legal or practical interests; and (3) the beneficiary is peculiarly vulnerable to, or at the mercy of, the fiduciary. A breach of fiduciary duty is separate from negligence, so a professional can be liable for either or both.

Issue. Did Kristen breach her fiduciary duty, and can the lease be undone?

Rule. A director owes the corporation a fiduciary duty (Ontario Business Corporations Act, s. 134(1)) to put the corporation's interest first and to avoid conflicts of interest. A fiduciary who profits from a conflict must disgorge the profits.

Application. A director is a categorical fiduciary. Kristen recommended a lease on her own property without disclosing her personal interest or obtaining approval, so she acted in a conflict of interest and not in the corporation's best interest. Jim and Ashley form a quorum of the board and could vote to rescind the lease.

Conclusion. Kristen breached her fiduciary duty. The lease can likely be rescinded and she is liable for any expenses or profits she earned (disgorgement).

Issue. Did Slater breach his fiduciary duty by taking a corporate opportunity?

Rule. A director or officer cannot take a corporate opportunity for himself; it does not matter whether the company would have taken it, or whether he came across it in his capacity as director; the duty can survive for a reasonable time after leaving the company; a breaching fiduciary must disgorge profits.

Application. The gravel pit is the kind of property Lockley was seeking, so it was a corporate opportunity. Slater had a duty to disclose it to the board and, if directed, to try to acquire it for Lockley. By keeping it secret and buying it himself he put himself in a conflict of interest. His best counter-argument is that the pit was in a different line of business, but the facts say the company was looking for this kind of property.

Conclusion. Slater likely breached his fiduciary duty. The minority shareholder can bring a derivative action on behalf of the corporation, and the corporation is likely entitled to disgorgement of Slater's profits.

Incrementalism is the tendency to slide into unethical conduct through small steps that individually seem harmless but together amount to a serious moral compromise. The manager's gradual progression from rounding up to approving her own claims to a false claim is a textbook example, because each step normalised the next. Overconfidence bias is overestimating your own abilities, knowledge or chances of success, which leads to risk-taking and poor decisions. Her certainty that she will not be caught is overconfidence. Both increase legal risk, because the false claim may amount to fraud or breach of a fiduciary or employment duty. Law and ethics differ: some of her earlier steps may have been lawful but still unethical. A preventive step is clear rules with independent approval of claims and regular audits.

A contract is a promise, or set of promises, that the law will enforce, which distinguishes it from a mere promise or gift. Three core elements create a contract: (1) offer, (2) acceptance and (3) consideration. Four additional matters are considered in deciding whether a contract was formed and should be enforced: (4) intention to create legal relations, (5) capacity, (6) legality and (7) certainty of terms. A contract that fails to form is void (it never existed); a contract that exists but can be undone by one party is voidable.

An offer is a tentative promise made by one party, subject to a condition or containing a request of the other, that is definite and certain, communicated to the intended recipient and intended to be binding as soon as it is accepted. An invitation to treat is only an invitation for others to make an offer. Typical invitations to treat are "for sale" signs, store advertisements and flyers, and items on shelves with prices. It matters because the party making the offer is the one who can be bound by acceptance; with an invitation to treat, the customer makes the offer at the cash and the store decides whether to accept. (Textbook note, not on MyLS: Pharmaceutical Society v Boots is the classic case on shelf displays.)

Issue. Was a contract formed at $104?

Rule. A contract needs offer, acceptance and consideration. A shelf display with a price is an invitation to treat, so the customer makes the offer at the till and the store may accept or reject it.

Application. The shelf tag invited offers; it was not an offer. The customer's request to buy at $104 was the offer, and the cashier rejected it, so there was no acceptance and no contract. The customer may argue the store is bound by its price, but that would turn every display into a binding offer, which the law does not do. The price is also an obvious typographical error that a reasonable bystander would recognise, which gives the store a second argument that any contract could be set aside for mistake (see the setting-aside section).

Conclusion. No contract. The store should correct its price tags and train staff on pricing errors.

Issue. Can the buyer still accept the original offer?

Rule. Acceptance must be final and unqualified consent to the terms of the offer. A reply that changes the terms is a counter-offer, which rejects the original offer and creates a new offer that the first party can accept or reject.

Application. The $9,000 reply changed the price, so it was a counter-offer. It rejected the $10,000 offer, which therefore no longer existed. The buyer's later "I accept" was a new offer to buy at $10,000, which the seller is free to accept or refuse.

Conclusion. There is no contract unless the seller now accepts the buyer's new offer.

Issue. Is a thumbs-up emoji a valid acceptance?

Rule. Acceptance is final, unqualified consent to the offer's terms, and it must be communicated to the offeror by words or conduct. A thumbs-up emoji can be a valid acceptance (South West Terminal Ltd v Achter Land, 2023 SKKB 116).

Application. The farmer's text was a definite and certain offer with quantity and price. The buyer's emoji, in the context of an ongoing exchange, communicated agreement to the terms and was a way the offeror would reasonably understand acceptance. The farmer may argue that an emoji is ambiguous, but the court looked at what a reasonable person would take from the exchange.

Conclusion. A contract was likely formed. Business advice: confirm deals in clear words, and do not use emojis for anything you do not mean to be binding.

Issue. Was the offer still open when Raj accepted?

Rule. An offeror may revoke an offer at any time before acceptance, unless the offeree paid for the offer to be kept open (an option contract) or it was made under seal. An offer also lapses at the end of any time limit it sets. Revocation must be communicated to the offeree to be effective.

Application. Nothing shows that Raj paid to keep the offer open, so the Friday deadline did not stop Ana from revoking it. Ana communicated the revocation at 9 am Thursday, and Raj read it at 10 am, so the offer ended before his acceptance at 8 pm. Raj may argue that the offer said it was open until Friday, but a deadline is only the latest the offer can last; it does not stop the offeror from revoking earlier. If Raj had accepted before the revocation reached him, a contract would exist, because acceptance would have come first.

Conclusion. On the facts given, the offer was revoked before acceptance and there is no contract, so Raj cannot sue. If Raj had paid even a small sum to keep the offer open, the result would change.

Issue. When is a contract formed by mail, and does a lost letter matter?

Rule. Acceptance is normally effective when received, but for mail and telegrams only, acceptance takes effect when it is put in the mailbox (the postal rule, Adams v Lindsell [1818]). It applies even if the letter is lost or delayed, provided proper mailing can be proved (Household Fire Insurance v Grant [1879]). It does not apply to instantaneous communication such as phone, fax or email, where the offeror must actually receive the acceptance.

Application. Cleo posted the letter on Monday, so a contract was formed on Monday, before Ben sold to someone else. The loss of the letter does not matter if Cleo can prove it was properly addressed and posted. Ben is therefore in breach when he sells the goods elsewhere. By email, the postal rule would not apply; acceptance would take effect only when Ben received it, and if it never arrived there would be no contract.

Conclusion. A contract was formed on Monday by mail. Parties can avoid the rule by stating in the offer that acceptance is effective only on receipt.

Issue. Was a contract formed between Aristo and Heilman?

Rule. A contract requires an offer, an acceptance and consideration. An offer must be definite and certain and communicated to the offeree, and terms must be sufficiently certain and complete or the contract is void for uncertainty.

Application. The essential terms (down payment and financing) had not yet reached Heilman when he "accepted", so there was nothing complete and certain for him to accept. At best the exchange was an agreement to agree, which is unenforceable. Heilman might argue the price and the unit were enough, but the missing terms were fundamental to a condominium purchase.

Conclusion. A court is unlikely to find a contract formed.

Standard-form (adhesion) contracts are "take it or leave it" offers. They are efficient but create unequal bargaining power. Under Tilden Rent-A-Car Co v Clendenning, 1978 CanLII 1446 (ONCA), where a standard form contains onerous terms that the signing party is unaware of, the party relying on them must take reasonable measures to bring them to the other party's attention. Ambiguous terms are interpreted against the party who drafted them (contra proferentem). If the company did nothing to highlight the clause and a customer would not expect it, the court will likely refuse to enforce it. The company should highlight onerous terms and obtain separate initials.

A unilateral contract is a special offer that can be accepted only by performance, here returning the dog. The notice is a promise to pay a reward in exchange for performance, so acceptance occurs when the dog is returned. Whether the neighbour knew of the reward beforehand is a separate question: acting in knowledge of the offer is normally required for acceptance. (Textbook note, not on MyLS: Carlill v Carbolic Smoke Ball is the classic case on offers made by advertisement and acceptance by performance.)

The place where acceptance occurs is where the contract is formed, and that place helps determine which courts have jurisdiction. Under the Ontario Consumer Protection Act, ss. 7(2) and 8, Ontario consumers cannot waive their right to seek relief in Ontario courts, so the clause cannot stop her from suing in Ontario for a consumer transaction. (Compare Uber Technologies v Heller in the setting-aside section.)

Consideration is the price agreed to be paid for a promise, what each party gives up to get something in return. It is the agreed exchange, not the actual payment, which is performance. It is usually money but can be services, goods, or a promise to do or not do something. Courts do not examine adequacy: if some consideration exists, its value is irrelevant. A gratuitous promise (a gift) has no consideration and is not enforceable. Past consideration is no consideration, because consideration must be given in exchange for the promise and not for something already done (Roscorla v Thomas [1842]). Performing an existing legal duty is not new consideration. Alternatives: a promise made under seal needs no consideration, and equitable (promissory) estoppel can prevent a party from going back on a promise.

Issue. Is Marc's promise enforceable?

Rule. A promise is enforceable only if supported by consideration. Consideration must be given in exchange for the promise, and past consideration (something already done) is no consideration (Roscorla v Thomas [1842]).

Application. Lena's payment was made on Monday, and the sale was complete before Marc made the promise. She gave nothing new in exchange for the two-year promise, so her payment is past consideration. Lena might argue the promise was part of the original deal, but the facts say the sale was complete first, and the email came the next day. She might also have a claim under implied terms in the Sale of Goods Act or for misrepresentation, which are separate.

Conclusion. The promise is unenforceable for lack of consideration. She should have asked for the warranty in writing before paying.

Issue. Can the creditor go back on the settlement?

Rule. At common law a creditor's promise to accept less than the full debt is not binding because the debtor gives no new consideration (Foakes v Beer). In Ontario the Mercantile Law Amendment Act, R.S.O. 1990, c. M.10, s. 16, changes this: where the creditor accepts part payment in settlement and the debtor actually pays the reduced amount, the entire debt is extinguished.

Application. At common law the debtor gave nothing new for the promise, so the creditor could sue for the balance. But here the creditor agreed to accept $7,000 in settlement and the debtor actually paid it, which satisfies s. 16. A promise to take less that has not yet been paid would not be covered.

Conclusion. The debtor wins; the debt is fully discharged. Creditors should not agree to partial settlements unless they mean them.

Issue. Is the landlord prevented from claiming the full rent by promissory estoppel?

Rule. Equitable (promissory) estoppel allows a court to prevent a party from denying a promise even without consideration. It is a shield, not a sword: it can be used as a defence but not as a basis to start a lawsuit. The three requirements (Frito-Lay Canada Ltd v Milk & Bread Drivers [1976]) are: (1) a legal relationship already exists; (2) one party promises, even by implication, to release the other from some or all legal duties; and (3) the other party reasonably relies on the promise, alters its position and would suffer hardship if the promisor went back on it.

Application. A lease already exists, so a legal relationship exists. The written promise to halve the rent released the tenant from part of its duty. The tenant relied on it by staying and keeping the business open during construction, and would suffer hardship if forced to pay full rent. The landlord might argue the promise was only temporary or gratuitous, but the tenant's reliance was reasonable.

Conclusion. If the landlord sues for the full rent, the tenant can use estoppel as a defence and the landlord is likely prevented from claiming the reduced amount. If the tenant had already paid the full rent, estoppel could not be used to start an action to recover the difference, because it is a shield and not a sword.

A promise properly made under the seal of the promisor does not require consideration. It is an old formal alternative that lets a gift or other one-sided promise be enforceable, and in the course it also appears as a way to keep an offer open without payment.

A contract requires that the parties intended to create legal obligations. The court asks whether, judged by the parties' outward conduct, a reasonable bystander would think they seriously intended to be bound (the reasonable bystander test). A negotiated and signed supply agreement between two businesses shows serious intention. A salesperson's exaggeration, such as "best coffee in the world", is mere puffery, which is not meant to be binding and is not a promise.

Issue. Is Sam bound by the car contract?

Rule. Minors are persons under 18. A contract with a minor is voidable at the minor's option only: the minor can back out but can enforce the contract if the minor chooses. The exceptions are contracts for necessaries (necessary goods and services, recovering only a reasonable value, quantum meruit) and beneficial contracts of service such as employment or apprenticeship. On reaching majority a minor can either repudiate immediately (this is the last chance to void, especially for instalment contracts) or expressly or impliedly ratify, which removes the right to void; paying after turning 18 is ratification.

Application. A car for ordinary use is probably not a necessary, and the seller cannot enforce an instalment contract against a minor who repudiates. If Sam stops paying while still 17, he is exercising his right to void. If he continues after turning 18 without repudiating promptly, he risks ratifying. He may need to return the car, but the seller cannot recover the full price. The seller might argue the car was needed to get to work (necessary), but the facts do not say so.

Conclusion. Sam can likely void the contract, and should repudiate immediately and clearly in writing, either before or immediately after turning 18. Sellers dealing with minors should ask for a guarantee from an adult.

Mentally incompetent persons are treated like minors (the contract is voidable at their option). A corporation is a separate legal entity with capacity to contract (a statutory corporation may be limited by ultra vires, acts beyond its powers). Labour unions, associations and other organisations are not separate legal entities, so they sue and are sued through representative actions. Aboriginal bands are special unincorporated associations with a representative capacity like labour unions. An undischarged bankrupt is under certain contractual disabilities, except for necessaries, until discharged.

Issue. Will a court enforce the agreement?

Rule. The object of a contract must be legal. A contract is unenforceable (void) if it violates a statute, such as the Criminal Code, the Income Tax Act (contracts to avoid taxes), the Competition Act (unreasonable restraint of trade) or the Law Society Act (unauthorised practice of law), or if it violates the common law or public policy (for example indemnifying a person for committing torts, with insurance excepted, or contracts that are immoral, pervert justice or harm the Canadian public interest).

Application. A deal built to avoid reporting income for tax is a contract to avoid taxes, so it violates the Income Tax Act. A court is unlikely to help either party enforce it.

Conclusion. The contractor will likely be unable to enforce the agreement. Always reduce deals to lawful written terms.

A contract must have sufficiently certain and complete terms or it is void for uncertainty, which means no contract was ever formed. "Fair value" with no method of working it out is vague, and missing essential terms such as price, what is being sold and time for performance make it incomplete. A court is unlikely to enforce the deal. The parties should agree on a price or on a defined valuation method and a closing date.

A void contract never existed, for example a contract with an illegal object, or one where the parties made a common mistake about the existence of the subject matter. A voidable contract exists and binds the parties unless one of them chooses to set it aside, for example a contract made by a minor (voidable at the minor's option) or one induced by undue influence or duress (voidable at the victim's option).

Rescission is setting aside a contract because of a defect affecting its formation (mistake, misrepresentation, duress, undue influence); it puts the parties as close as possible to their pre-contract positions, not to the position they expected. Repudiation is one party's failure to perform an essential term; the other may treat the contract as ended and sue for damages, or affirm it and continue, staying ready and willing to perform. Rectification is the rare remedy in which a court fixes a mistake in the written contract. The four main grounds for rescission are mistake, misrepresentation, undue influence (including unconscionability) and duress.

Issue. Should the contract be rescinded for misrepresentation?

Rule. The plaintiff must show (a) a representation was made, (b) it was made fraudulently, negligently or innocently, and (c) the plaintiff reasonably relied on it to his detriment. A representation must be a statement of fact; omissions are not misrepresentations unless there is a duty to disclose, which arises in special relationships of trust such as a fiduciary relationship; otherwise caveat emptor applies.

Application. The contract says nothing about the number of games, so no representation was made, and it allows trades to the west where 16 games is standard, which makes the term a matter the player could have asked about. There is no sign of a special relationship that would require the team to disclose. It was the player's responsibility to inform himself, and his failure to do so is his own mistake.

Conclusion. A court is unlikely to rescind the contract for misrepresentation. Practical advice: get all assumptions written into the contract before signing.

Issue. Can the buyer set aside the contract or recover damages for misrepresentation?

Rule. Misrepresentation requires (1) a statement of fact (not opinion) made before the contract, (2) the statement was false, (3) the buyer reasonably relied on it, and (4) the reliance caused harm. If the statement was made knowingly or with reckless disregard it is fraudulent; if made carelessly where a duty of care is owed it is negligent; if neither, it is innocent.

Application. "Never been in an accident" is a statement of fact, not a sales opinion. It was false, the buyer relied on it in deciding to buy, and he paid for a car worth less than he thought. The dealer did not check, so he was at least careless, which makes it negligent misrepresentation by a seller with expertise (compare Esso Petroleum v Mardon [1976], where Esso's inaccurate throughput estimate was a negligent misrepresentation). If the dealer knew about the accident or was reckless as to the truth, it is fraudulent and the buyer may also claim punitive damages. If he honestly believed it and was not careless, it is innocent and rescission is the only remedy.

Conclusion. The buyer can likely rescind the contract and also claim damages for negligent (or fraudulent) misrepresentation. Dealers should check vehicle histories and give accurate disclosures in writing.

(a) common mistake, where both parties share the same mistaken belief: void (the subject matter did not exist). (b) mutual mistake, where the parties are at cross-purposes about what is being contracted for: void if two equally reasonable meanings exist (Raffles v Wichelhaus (1864), the ship Peerless). (c) unilateral mistake, where only one party is mistaken and the other knows: the contract may be rescinded. (d) mistake in reducing the agreement to writing: rectification may be ordered.

Issue. Can the retailer avoid the contract because of its pricing mistake?

Rule. For a mistake in terms such as a typographical error, the test is whether a reasonable bystander, looking at the term objectively, would recognise it as a mistake. If so, the contract is voidable at the option of the party that made the mistake.

Application. A laptop normally worth around $1,200 priced at $12 is an obvious error that a reasonable bystander would recognise. The customer will argue the website was an offer that he accepted, but the retailer is the one who made the error and can set the contract aside. If he had actually paid $12 and the retailer promptly cancelled and refunded, there is no loss to compensate.

Conclusion. The retailer can likely cancel. The retailer should act promptly, refund, and use checks to catch price errors.

A mistake about the existence of the subject matter makes the contract void. A mistake about value does not usually matter: the court intervenes only if the mistake was present at the outset and so substantial that it changed the quality of the subject matter, not for later market fluctuations. In Hyrsky v Smith (1969) the buyer bought land for development that was significantly smaller than believed, which changed the quality of what was bought, and rescission was granted.

A court may order rectification where there was a mutual mistake in recording the actual agreement (both parties meant the same thing but wrote it wrongly). For a unilateral mistake it is very rare and needs an otherwise complete agreement, no further negotiations, possibly fraud (not required), proof that when the document was signed the defendant knew or should have known of the mistake and the plaintiff did not, and that enforcing the inaccurate document would be equivalent to fraud. Because both parties here agreed orally on $500,000 and neither noticed the typing error, a court is likely to rectify the price to the agreed $500,000.

When a fraudster assumes the identity of a real person or company, the contract is void (Cundy v Lindsay): there was no contract, title never passed to the fraudster, so the goods must be returned to the original seller and the innocent purchaser loses. When the identity is completely fabricated, the contract is voidable (King's Norton Metal Co v Edridge): it exists until it is voided, so title passed to the fraudster, who could pass good title to an innocent purchaser for value without notice, and the third party keeps the goods. The subsequent purchaser must be a bona fide purchaser for value.

Non est factum is a historical defence from when many people could not read, which allows a person to say that the document she signed is not the contract she agreed to. The legal test, on a balance of probabilities, requires that (a) the party was mistaken about the nature of the document, (b) the mistake resulted from a misrepresentation by the other party, and (c) the party was not careless in signing. Here she believed she was signing a receipt, the manager's false statement caused the mistake, and her carefulness depends on the facts (she was elderly and relied on a trusted bank manager, but she did not read the page). The defence rarely applies, but it could succeed, and her facts also point to misrepresentation and undue influence.

Issue. Was the transfer obtained by undue influence?

Rule. Undue influence is domination of one party over the mind of another so as to deprive that person of the will to make an independent decision; the contract is voidable at the option of the victim. The plaintiff must show on a balance of probabilities (1) domination by the other party, shown by (a) a special relationship, (b) desperate circumstances at formation, (c) a threat of prosecution, or (d) an unconscionable contract; and (2) the contract is unfair or disadvantageous to the weaker party.

Application. A caregiver child and a dependent, elderly father are in a special relationship of trust and dependence, which suggests domination. The father signed without independent legal advice (ILA), which is the usual protection in such relationships. Selling for much less than the house is worth is plainly disadvantageous to him. The child will argue the father made the choice freely, but the combination of dependence, no ILA and a bad bargain points toward domination.

Conclusion. The father (or his representative) can likely set the transfer aside. Where a deal is between people in a special relationship, the stronger party should insist that the weaker party gets independent legal advice.

Unconscionability is a basis for reversing contracts that has a special meaning in relation to inequality of bargaining power, distinct from the everyday sense of unfairness. In Uber Technologies Inc v Heller (SCC 2020) Uber's arbitration clause required drivers to arbitrate disputes in the Netherlands and pay US$14,500 in upfront fees. The clause arose from a standard form with unequal bargaining power and was held unconscionable.

Duress is actual or threatened violence or imprisonment used to coerce a party into a contract, and the contract is voidable at the victim's option. Keith's slides also give the broader test: pressure that the law does not regard as legitimate, applied to such a degree as to amount to coercion of the will, or leaving the party no realistic alternative but to submit. A threat to burn a warehouse is violence and illegitimate pressure, so the client can avoid the contract and should promptly say so and involve the police.

Void contracts (common or mutual mistake, illegality) never existed, so there is nothing to enforce and benefits conferred are returned. Voidable contracts (unilateral mistake, misrepresentation, undue influence, duress, minors) exist until the innocent party elects to set them aside by rescission. Misrepresentation also gives damages when negligent or fraudulent, and punitive damages may follow for fraud. Rectification applies to mistakes in writing. Third parties who buy in good faith without notice are protected where the contract was voidable but not where it was void.

The Statute of Frauds (an English statute of 1677 that still exists in Ontario) requires writing for: (1) a promise by an executor to pay a debt of the estate personally; (2) guarantees (key); (3) a promise to answer for the miscarriage (tort) of another; (4) contracts made in consideration of marriage (key); (5) ratification of a minor's contract; (6) agreements not to be performed by either party within one year (key); and (7) contracts concerning land (key). A contract that does not comply is unenforceable, not void: courts will not enforce it, but it exists and the parties may voluntarily perform. The defendant must plead the Statute.

Issue. Is Maya's oral promise to the bank enforceable?

Rule. A guarantee is a conditional promise to pay the debt of another if the debtor defaults, and it must be in writing to be enforceable under the Statute of Frauds. An indemnity is a promise to pay on behalf of a third party as long as the other party performs (for example co-signing, not conditional on default), and does not need to be in writing (except in British Columbia).

Application. The promise to the bank is conditional on the brother's default, so it is a guarantee and was oral, which makes it unenforceable. The promise to the supplier is a promise to pay for goods the supplier delivers, not conditional on a default, so it is an indemnity and need not be in writing, although proof is difficult. The bank may argue Maya's promise was a primary obligation, but the conditional wording suggests a guarantee.

Conclusion. The guarantee is unenforceable without writing; the indemnity may be enforceable. Lenders should always get guarantees in signed writing.

Issue. Is the oral land contract enforceable despite the Statute of Frauds?

Rule. Any contract concerning land must be in writing. The equitable doctrine of part performance allows enforcement of an oral contract where the plaintiff has partly performed. The test is (a) the contract concerns land; (b) the plaintiff's acts clearly indicate the existence of a contract about that land (acts inextricably linked to the land); and (c) the acts were performed by the plaintiff. Keith's slides add that the plaintiff changed position or spent money in reliance so that it would be unfair to cancel, and that the other party knew and allowed it without objection.

Application. The contract concerns land. Moving equipment onto the land and building a fence are acts that point to a contract about that land, and Dan, the plaintiff, did them. He spent money in reliance, and Ella knew and let him proceed without objection. Ella may argue the deposit and fence are consistent with a lease or a trial period, so they do not prove a sale, but the fence and possession point more to ownership. Ella's sale to another buyer is the breach.

Conclusion. Dan can likely rely on part performance and enforce the contract. Land buyers should always get a written agreement, and Dan should seek an order of specific performance or damages quickly.

An agreement not to be performed within one year must be in writing. A fixed 18-month engagement is, on its face, within the rule, so the oral deal is unenforceable. The exceptions are an indefinite term in the contract (a standing agreement that might end sooner) and where one party is expected to perform within the year though the other is not, in which case the Statute does not apply. If the consultant has already worked 5 months and been paid, the company cannot keep the benefit without paying; the consultant can recover a reasonable price (quantum meruit).

No specific form is needed, only enough to show certainty of terms. The writing can be spread over several documents, but you cannot link them with oral promises. Electronic writing and e-signatures are acceptable. The writing must contain the essential terms: the parties' names, the subject matter, the consideration (except for guarantees), payment details and the signature of the party to be charged (the party being sued). An exchange of emails that contains all of this, with a typed name or e-signature, can suffice.

The Statute can be used as a defence by the seller if the buyer sues to enforce the sale, but a person who received a deposit cannot both refuse to perform and keep the deposit. The buyer can recover the deposit, since a contract that is unenforceable can still be used to justify keeping a deposit only if the other party refuses to perform. Anyone who has provided goods or services under an unenforceable contract can claim quantum meruit (a reasonable price). A later written agreement or memorandum signed before the lawsuit is enough, and an oral contract may vary a written contract.

In every province except British Columbia and Ontario, a contract for the sale of goods (usually over $50) must be evidenced by a note or memorandum signed by the party to be charged, or it is unenforceable. Substitutes for writing are acceptance (conduct of the buyer recognising a contract), part payment and earnest (a token given to seal the bargain). In Ontario this writing requirement does not apply, so the seller cannot use it as a defence; the buyer would still have to prove the oral agreement. If the dispute is in a province where the rule applies, the buyer's lack of any payment, acceptance or earnest would leave the contract unenforceable.

The Consumer Protection Act applies only to business-to-consumer contracts, not business-to-business. Direct agreements (such as door-to-door sales) over $50 must be in writing and the writing must contain a detailed description of the goods or services, an itemised purchase price, the vendor's name, address and contact information, and a notice of the consumer's statutory cancellation rights; a copy must be given to the consumer. A salesperson who gave no paperwork breaches the Act, and the consumer can likely cancel.

Issue. How should the court interpret the delivery clause?

Rule. In Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53, the court begins with the plain meaning of the words, then considers trade usage and customs, and then the factual matrix (the surrounding circumstances when the contract was formed). Courts make every effort to enforce the contract and prefer a commercially reasonable interpretation. If there are two reasonable interpretations, contra proferentem favours the interpretation sought by the party that did not write the contract (if it is a standard form). The parol evidence rule, which kept outside evidence out, is now almost non-existent.

Application. "As soon as reasonably possible" has no fixed number of days, so the court looks to usage in the industry and to the circumstances: how quickly the supplier delivered to others, what the buyer said about needing the goods, and what is commercially reasonable. If the buyer wrote the contract, the clause may be read against the buyer. A court will not void the deal for uncertainty because it can fill the gap.

Conclusion. The court will likely choose a reasonable period based on trade practice and the matrix, probably closer to what suppliers in that industry typically do. Parties should state numbers ("within 14 days") to avoid disputes.

Issue. Did the supplier breach the duty of good faith?

Rule. Every contract in Canada has an implied duty of good faith between the contracting parties (Bhasin v Hrynew, 2014 SCC 71). Textbook detail: Bhasin recognised an organising principle of good faith and a duty of honest performance, which means parties must not lie to or knowingly mislead each other about matters directly linked to performance.

Application. The supplier knowingly misled the distributor about renewal, which is directly linked to the performance of the agreement, while planning the opposite. The supplier may argue that it had no obligation to renew, which is true, but the breach is the dishonesty in how it dealt with the distributor, not the decision not to renew.

Conclusion. The distributor likely succeeds on breach of the duty of honest performance and can claim damages for the loss caused by its reliance on the false statements. Businesses should be truthful in all dealings about contract performance and renewals.

Issue. Is there an implied condition that the ladder was fit for its purpose?

Rule. Under the Sale of Goods Act, R.S.O. 1990, c. S.1, s. 15, there is no implied warranty or condition about quality or fitness for any particular purpose (caveat emptor), except: (a) where the buyer relies on the seller's skill or judgment for a particular purpose, there is an implied condition of fitness for that purpose; (b) where goods are bought by description from a dealer in such goods, there is an implied condition of merchantable quality; (c) usage of trade may add an implied term; and (d) an express warranty does not remove an implied one unless inconsistent.

Application. The buyer stated her purpose and relied on the dealer's expertise, so the implied condition of fitness for that purpose applies. The ladder collapsed in ordinary use, so it was not fit. It was also bought from a dealer in ladders, so it should have been of merchantable quality. The dealer may argue she did not rely on its judgment, but the facts say she told it her purpose.

Conclusion. The buyer can likely claim breach of an implied condition and recover her loss, including any injury damages, and may be able to reject the ladder. Sellers should describe products accurately and may disclaim only where the law permits.

An implied term is a term not expressly included but that the parties, as reasonable people, would have included had they put their minds to it. The duty of good faith (Bhasin) is a general implied duty in every contract. The slides also cite Nickel Developments Ltd as an example of an implied term (no details were given). Implied terms are different from the Sale of Goods Act's implied conditions, which are set by statute.

Issue. Is Green Thumb Ltd liable to Priya in negligence (and under the Occupiers' Liability Act) for her injury; is it responsible for Jordan's act; and does Priya's own conduct reduce what she can recover?

Rule. In negligence Priya must prove, on a balance of probabilities, (1) a duty of care, (2) breach of the standard of care, (3) causation (but-for, then remoteness under The Wagon Mound), and (4) damage. Duty comes from Donoghue v Stevenson (the neighbour principle) and the Kamloops v Nielsen two-step: a sufficiently close relationship so that harm from carelessness is reasonably foreseeable, then any policy reasons to negate or limit the duty. The Occupiers' Liability Act s. 3(1) adds a statutory duty on the occupier to take the care that is reasonable in all the circumstances to see that people entering are reasonably safe. An employer is vicariously liable for torts its employees commit in the course of employment. Contributory negligence reduces damages in proportion to the plaintiff's fault (Negligence Act); voluntary assumption of risk is a full defence but needs knowledge and acceptance of the risk (Schneider; OLA s. 4).

Application. Duty: Green Thumb Ltd is the occupier and Priya is a paying customer who was invited in, so the relationship is as close as it gets and a wet floor injuring a shopper is plainly foreseeable. No policy reason negates the duty, and s. 3(1) confirms it. Standard of care: a reasonable store owner would clean up a spill at once, or at least mark and block it until it is cleaned. Jordan left a hazard in a high-traffic aisle with no warning at all, and the sign was in the storeroom. Green Thumb's best counter is that three minutes is a reasonable time to respond to a spill. That helps only if the store had a working system, and here the system existed on paper but was never enforced. Breach is very likely. Causation: but for the unmarked spill Priya would not have fallen, and a broken wrist from a slip is exactly the type of harm that was foreseeable, so remoteness is no obstacle. Damage: she can claim special damages for medical costs and six weeks of lost income (she must prove the figures) and general damages for pain and suffering.

Vicarious liability: Jordan is an employee, and handling a spill during a shift is part of the job, so Green Thumb Ltd answers for Jordan's carelessness. It is also directly at fault for failing to enforce its own signage policy, which strengthens the claim.

Defences: contributory negligence is Green Thumb's real argument. A reasonable adult watches where she walks and does not wear flip-flops while looking at a phone, and the liquid was clear. A court could find Priya partly at fault and reduce damages (a reduction in the range of 20 to 30 percent would be plausible), but it would not bar the claim because the store created the hazard and gave no warning. Voluntary assumption of risk fails: Priya did not know about the spill, so she could not have willingly accepted that risk (Schneider).

Conclusion. Priya will most likely succeed against Green Thumb Ltd, with damages reduced for her contributory negligence.

Ethics. Overconfidence bias: Ms. Rao's belief that "nothing has ever happened here" overestimates how safe the store is and caused her to skip checks. Incrementalism: skipping a sign once did no harm, so staff skipped it again, until not using signs became normal. Neither bias is a defence, and both are the kind of conduct a court treats as unreasonable. Risk management: stock signs in every aisle, adopt a "stay with the spill" rule, train and audit staff, and keep liability insurance.

Short on time: duty (Donoghue + Kamloops + OLA s. 3(1)), breach (no warning), causation, damage, employer vicariously liable, contributory negligence reduces damages, conclusion, one line naming both biases.

Issue. Did a contract form between Dana and Marcus before Dana withdrew, which depends on (1) whether Dana made an offer, (2) whether Marcus's Tuesday email ended it, (3) whether Dana could revoke despite saying the offer stayed open until Friday, and (4) when Marcus's acceptance took effect.

Rule. A contract needs offer, acceptance and consideration (plus intention to create legal relations, capacity and legality). An offer is a definite promise to be bound on stated terms; an invitation to treat only invites offers. A counter-offer rejects the original offer and ends it, while a mere inquiry about whether the other side will negotiate does not. An offer may be revoked at any time before acceptance if the revocation is communicated, and a promise to keep an offer open is not binding unless the offeree gave consideration for it. Acceptance normally takes effect when it is communicated to the offeror. The postal rule is an exception: acceptance by mail is effective when posted (Adams v Lindsell), even if the letter is delayed or lost (Household Fire Insurance v Grant), where mail is a reasonable way to accept in the circumstances.

Application. Offer: Dana's Monday email is an offer. It names the thing, the price and a person, and it says "I will sell you," which shows an intention to be bound, so it is not an invitation to treat. Marcus's Tuesday email: "Would you consider $3,500?" is best read as an inquiry. It does not say Marcus will buy at $3,500 and it does not reject $4,000, so the offer survived. Even if a court treated it as a counter-offer, Dana's reply "$4,000 is my price" would be a fresh offer on the same terms, so an offer for $4,000 was open on Wednesday morning either way. Revocation: Dana promised to keep the offer open until Friday, but Marcus gave nothing in return for that promise, so there is no option contract and Dana was free to revoke at any time before acceptance. A revocation takes effect when it is communicated, and her email arrived Wednesday at 4 PM, so the question is whether Marcus accepted before then.

Acceptance is the key issue. If the postal rule applies, Marcus accepted on Wednesday at 9 AM when he posted the letter, so a contract was formed before the 4 PM withdrawal, and Dana's later email is too late (it would not matter that the letter did not arrive until Friday). Marcus will argue that Dana's offer did not limit the method of acceptance and that a posted signed acceptance is a recognized method. Dana's reply is that the postal rule is a special exception that applies only where mail is a reasonable or contemplated way to accept, and an offer made by email, a near-instant medium, does not contemplate it. Marcus could have emailed back in seconds. If the postal rule does not apply, acceptance takes effect only on receipt, which is Friday, after the withdrawal had been communicated on Wednesday, and no contract exists. Consideration and intention are not an issue: $4,000 for the machine is real consideration between businesspeople.

Conclusion. The better view is that the postal rule does not apply to an acceptance by letter in reply to an email offer, so Marcus's acceptance came too late and no contract exists, although a court that applies the postal rule would find a contract formed Wednesday morning. Exam tip: Keith's notes state the postal rule simply as applying to mail and telegrams, so a marker working from his notes may expect a contract formed Wednesday at 9 AM; either conclusion can earn full marks if you state the rule, argue both sides and commit to one. Advice: always accept in the same medium the offer used and confirm receipt, and pay a small amount to turn a promise to hold an offer open into a binding option.

Short on time: offer (not an invitation), inquiry not counter-offer, no consideration for "open until Friday" so revocable, postal rule applies or not (argue both, pick one), conclusion.

Issue. Can Luis set aside the sale for misrepresentation (and claim damages), given Karen's statements about members and income, her statement about the lease, and her silence about the demolition notice?

Rule. A misrepresentation is a false statement of fact, made by one party to the other, that induces the other to enter the contract. Statements of opinion or sales puffery are not facts, unless the speaker is an expert or does not honestly hold the opinion. There are three types: innocent (honest and non-negligent), negligent (careless; Hercules Management v Ernst & Young for the tort, including reasonable reliance) and fraudulent (knowingly false, or reckless as to truth). Silence is generally not misrepresentation (caveat emptor), but there is a duty to disclose where a half-truth is misleading, where there is a latent defect, where there is active concealment, or in a special relationship. The contract is voidable, and the remedies are rescission (the parties are returned to their pre-contract positions, promptly, if third-party rights have not intervened) and, for negligent or fraudulent misrepresentation, damages.

Application. Statement (a): membership and monthly revenue are verifiable facts, they were false, they are material to the price of a business, and Luis relied on them to pay $180,000. Karen ran the studio, so she knew the real numbers and the misrepresentation is fraudulent. Karen will say Luis could have checked the books and "should have informed himself," the reasoning in Re Gabriel and Hamilton Tiger-Cats. That argument is much stronger against a claim of negligent misrepresentation (reasonable reliance is an element) than against fraud, where a victim's carelessness is generally not a defence. Statement (b): "I'm sure he will renew" looks like an opinion or prediction about a third party's future decision, so on its own it is not a misrepresentation of fact. Karen, though, knew that the landlord had said the building would be demolished, so she did not honestly hold that opinion, which makes the statement a misrepresentation about her own state of mind. Silence about the demolition notice: normally there is no duty to disclose, but she did not simply stay silent, because she gave a positive assurance about renewal while holding information that made it false. A half-truth of this kind is misleading by omission, and the notice is a defect in the heart of the business that Luis could not discover by looking at the premises, so a duty to disclose arose.

The "no other representations" clause is Karen's other defence. Courts read these clauses but will not let a party use one to protect itself from its own fraud, and a clause that Luis signed without negotiating, in a standard-form closing document, is a weak shield against knowing falsehoods. Remedies: Luis acted within six weeks of closing, which is prompt, and he can seek rescission and return of the purchase price if he can return the studio substantially as received (restitutio in integrum). Because the fraud was deliberate he can also sue in deceit for damages, which for a business purchase is usually the difference between what he paid and what the business was worth, plus consequential losses. He must choose carefully: if he keeps operating the studio after discovering the facts, Karen will argue he affirmed the contract.

Conclusion. Luis will probably succeed. Statement (a) is a fraudulent misrepresentation of fact that induced the contract, and the half-truth about the lease supports rescission, a refund and damages.

Short on time: fact vs opinion, four elements, three types, half-truth about the lease, entire-agreement clause does not protect fraud, rescission (prompt, restitution) and damages, conclusion.

Issue. (1) Can Tom enforce Nadia's oral promise to sell land, or does the Statute of Frauds defeat him? (2) Is Omar bound by his oral promise to pay the contractor?

Rule. Under the Statute of Frauds certain contracts must be evidenced in writing and signed by the party to be charged: contracts for the sale of an interest in land, guarantees, contracts that cannot be performed within a year, and promises made in consideration of marriage. A contract with no writing is not void but unenforceable by court action, so money already paid can be recovered. The writing needs the essential terms (parties, subject matter, price) and the signature of the person being sued. The equitable doctrine of part performance allows enforcement of an oral land contract where the plaintiff has done acts that are unequivocally referable to the contract and it would be a fraud on the plaintiff to let the defendant rely on the statute. A guarantee is a promise to answer for another's debt if that person defaults (the promisor's liability is secondary); an indemnity is a primary promise to pay regardless of whether the other person is liable, and needs no writing.

Application (1). A contract for the sale of land falls squarely in the Statute of Frauds. Nadia is the party to be charged and she signed nothing, so on its face the contract is unenforceable against her. Tom's e-transfer memo is his own words and carries no signature or acknowledgement from Nadia, so it cannot be the required writing. Tom's claim rests on part performance. Paying a deposit alone is generally not enough, because money can be paid for many reasons and so is not unequivocally referable to a land sale. Clearing the lot and building a driveway, with Nadia's knowledge and approval, is different: a person does not spend $15,000 improving land that he does not believe he is buying, so these acts point unmistakably to a sale, and combined with the deposit they make it unfair for Nadia to hide behind the statute after she encouraged him. Nadia will argue the work could be explained as a gesture in anticipation of a deal, and that the improvements are compensable in money. Even if part performance fails, the contract is unenforceable, not void, so Tom can recover his $20,000 deposit and compensation for the improvements, because Nadia cannot keep both the money and the land.

Application (2). Omar's promise is to pay only if Tom does not. Tom stays the primary debtor and Omar's liability is secondary, so it is a guarantee, and a guarantee must be in writing signed by the guarantor. Omar signed nothing, so the contractor cannot enforce the promise against him, although the contractor can still sue Tom for the debt. If Omar had instead said, "Do the job and I will pay you, whatever happens," he would have taken on a primary obligation, which is an indemnity needing no writing, and he could be held to it. The exact words matter.

Conclusion. Tom has a good chance of enforcing the sale (specific performance) through part performance and, at minimum, can recover his deposit and the value of his improvements. Omar's oral guarantee is unenforceable, but the contractor can pursue Tom.

Short on time: land and guarantees are both in the Statute of Frauds, no signed writing so unenforceable (not void), part performance (acts unequivocally referable, deposit alone is weak, possession and improvements are strong), guarantee vs indemnity, conclusion.

Issue. In each case, is the contract binding, void, voidable or rectifiable, and can Greg get his guitar or his price back?

Rule. Mistake can prevent a contract from forming or allow it to be set aside. Mutual mistake: if the parties' words support two equally reasonable meanings and each understood a different one, there is no consensus and the contract is void (Raffles v Wichelhaus, the two ships named Peerless). Courts first interpret the words objectively using the factual matrix (Sattva), and find a contract if a reasonable person would prefer one meaning. A mistake so fundamental that it changes the nature or quality of the subject matter permits rescission (Hyrsky v Smith). Unilateral mistake: if one party makes a mistake about a term and the other knows or ought to know of it, the contract can be set aside, or rectified so that the document matches the real agreement, which needs clear proof of the prior agreement. Mistaken identity by a fraudster: if the fraudster impersonates a real person or firm that the other party intended to deal with, the contract is void and no title passes (Cundy v Lindsay); if the fraudster invents a fictitious person or company, the seller intended to deal with the writer of the letters, so the contract is voidable and title passes until it is avoided, which protects a good-faith buyer who bought first (King's Norton Metal v Edridge).

Application (a). "My Fender" fits two guitars, and each party held a different, reasonable understanding, so on a Raffles analysis the parties were not ad idem and there is no contract. A court will first try to settle the matter objectively. If the 1962 Stratocaster is worth many times $6,000, a reasonable person would think that $6,000 points to the 1978 Telecaster and the court would enforce the deal on Greg's terms, so Fatima's belief was not reasonable. If both guitars are worth around $6,000 and nothing else favours one reading, Raffles applies and the agreement is void for mutual mistake, with each party free to walk away.

Application (b). Greg is mistaken about the price in the document and Fatima knows it, since she knew the real price from the phone call. A party cannot take advantage of an error she knows about. Greg can ask the court to rectify the written contract to read $12,000, using the phone agreement and her own knowledge as proof, or he can have the contract set aside and return her deposit. Fatima's argument that Greg is bound by what he signed does not help someone who knew the document was wrong.

Application (c). The deciding fact is whether the fraudster used the name of a real firm that Greg knew and meant to deal with. That is the case here, since "Patel Music Ltd" is a real shop Greg had dealt with and wanted as his buyer. As in Cundy v Lindsay, Greg's mistake about who he was contracting with was fundamental, so the contract was void and no title passed to the fraudster, who therefore could not pass title to Hannah. Hannah, though innocent, will probably have to return the guitar, and she can pursue the fraudster for her $3,000 if he can be found. If the fraudster had instead invented a company that does not exist, the result would flip under King's Norton: the contract would be voidable only, title would pass, and Hannah would keep the guitar if she bought before Greg avoided the contract.

Conclusion. (a) Probably a contract for the 1978 Telecaster if the price points that way, otherwise void under Raffles; (b) rectification to $12,000, or rescission, because Fatima knew of the error; (c) the contract is void under Cundy v Lindsay, so Greg can recover the guitar from Hannah.

Short on time: (a) Raffles, objective test first, (b) unilateral mistake known to the other side so rectify or rescind, (c) real firm means void (Cundy), fictitious firm means voidable (King's Norton), conclusion on each.

Issue. Did Colin owe Beatrice a fiduciary duty and breach it; did he also make a negligent misrepresentation; who is liable; and what remedies does Beatrice have?

Rule. A fiduciary relationship may be recognized by category (trustee, director under OBCA s. 134(1)) or ad hoc on the facts. Frame v Smith asks whether (1) the alleged fiduciary has scope for the exercise of some discretion or power, (2) can unilaterally exercise it so as to affect the beneficiary's legal or practical interests, and (3) the beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary. A fiduciary owes a duty of loyalty and good faith: avoid conflicts of interest, make no secret profit, and disclose. For negligent misrepresentation (Hercules Management v Ernst & Young) the plaintiff must show a false statement, a duty of care (with policy limits such as indeterminate liability under Deloitte v Livent), reasonable reliance, a breach of the standard of care, and loss. An employer is vicariously liable for an employee's torts in the course of employment.

Application. Fiduciary status: Colin had full discretion over the account (part 1), he could move her money unilaterally and so change her financial position (part 2), and Beatrice, elderly, newly widowed, long dependent on him and with no investing expertise, was peculiarly vulnerable (part 3). All three parts are met, so he was an ad hoc fiduciary. Breach: placing client money in his brother-in-law's company is a conflict of interest, he took a $20,000 referral fee that he kept secret, and he never disclosed either fact, so he preferred his own interest over hers. Colin will argue that the loss was a business risk and that Sunrise's collapse was not his fault, and that he sincerely believed in it. Neither is a defence to breach of loyalty, because the wrong lies in the conflict and the concealment, not in whether the investment would have succeeded.

Negligent misrepresentation: "guaranteed and safer than your bonds" is a statement of fact about the nature of the investment (it is not an opinion), it was false, he held himself out as an expert and she relied on him, so a duty of care arose and reliance was reasonable. A single known client means that indeterminate liability (Livent) is not a concern. He fell below the standard of a careful adviser, and she lost $160,000. This claim stands as an alternative if the fiduciary claim fails. Responsibility: Colin acted in the course of his employment, so Lakeshore Wealth Ltd is vicariously liable, and it may also be directly liable for failing to supervise. Remedies: Beatrice can claim that Colin account for the $20,000 secret fee, compensation for her losses, and, in an appropriate case, a constructive trust over any proceeds he holds (these equitable remedies are textbook rather than slide material, so keep the line short). Her own fault is slight, since she was entitled to trust him.

Conclusion. Beatrice will very likely succeed against Colin and Lakeshore Wealth Ltd for breach of fiduciary duty and, alternatively, for negligent misrepresentation.

Ethics. Incrementalism: the move from 5 percent to 40 percent was a series of small steps, each only slightly more than the last, so no single step felt like a line being crossed. Overconfidence bias: "I was sure it was a winner" shows an adviser who overestimated his own judgment and so never guarded against the risk. Normative framework: on a duty-based view Colin broke his duty of loyalty by putting his own gain first; on a consequences-based view the large harm to Beatrice far outweighs the fee he earned. Risk management for the firm: written conflict-of-interest disclosure, concentration limits, independent review of related-party investments, and compliance monitoring.

Short on time: Frame v Smith three parts applied, breach (conflict, secret fee, no disclosure), negligent misrepresentation (Hercules) as the alternative, firm vicariously liable, remedies in one line, incrementalism and overconfidence named with a framework, conclusion.