Chapter Summary.doc

8/13/2019 Chapter Summary.doc

1/50

Chapter 7, 8 & 9: Contracts

Elements of a Valid Contract

1. An intention to create legal relationship2. Offer 3. Acceptance

4. Consideration5. Capacity to contract6. Legality

Intention to create legal relationship (Consensus ad idem

o !resumptions in contract la"

#trangers intend to $e $ound $y their promises

%amily mem$ers and close friends do not intend to $e $ound in contracts

&oth are presumptions can $e re$uttedo 'nitation to do &usiness

Adertisements are not offers

'nite offers that seller may accept or re)ect Offer

o Offer must $e communicated $y the offeror to the offeree $efore acceptance may ta*e

place.o Offer is not alid until it is receied $y the offeree+ and the offeror is not $ound $y the

offer until such time as it is accept.o Only the person to "hom an offer is made may accept the offer.

o Cannot accept an offer you do not *no" of.

Acceptance

o ,he acceptance of the offer ta*es place "hen the letter of acceptance+ properly

addressed and he postage paid+ is placed in the post$o- or post office.o 'f the acceptance lost "hile in the hands of the post office+ the contract "ould still $e

$inding.o ,he acceptance "ould not $e complete until the offeror "as made a"are of the

acceptance.o ,he offeror should "ithdra" the offer $efore the offeree has fully performed the

acceptance+ then no contract "ould e-its.o Lapse of an Offer the termination of an unaccepted offer $y the passage of time+ a

counteroffer+ or the death of a party.

Offer cannot $e accepted later unless the original offer is reiedo Reocation of an Offer the termination of an offer $y notice communicated to the

offeree $efore acceptance. /nli*e lapse+ it re0uires an act of offeror to $e effectie and notice of

reocation is only effectie "hen its finally receied $y the offeree.

'ndirect notice of reocation possi$le (e.g.+ rumour from third party or arelia$le source goods hae $een sold

Offers can $e reo*ed anytime $efore acceptance unless there is an option (Aseparate promise to *eep an offer open for a period of time


2/50

o !nilateral Offers An offer made to the "orld at large. ,he performance of the act is

acceptance. Offeror cannot reo*e offer so long as offeree is in the course ofperforming their part

Consideration

o #omething that has alue in the eyes of the la"+ and "hich a promisor receies in

return for a promise. Consideration must flo" in both directions.o 'f consideration is a serice+ it must $e performed "ith care and s*ill other"ise+ the

promisor "ill $e lia$le for any loss suffered due to careless performance or negligence(not $reach of contract+ $ut tort committed.

o "enders( /nless proided to the contrary in the call for tenders+ an offer made

in response to the call may $e reo*ed at any time $efore acceptance.o !ast Consideration is no consideration at all+ and the promise is gratuitous (

o #$ant$m %er$it A reasona$le price for the serices rendered (unless family or

friends as much as he has earned. A 0uasicontractual remedy that permits aperson to recoer a reasona$le price for serices andor materials re0uested+ "here noprice is esta$lished "hen the re0uest is made.

Court decides on price $ased on price of similar goods or serices in area 7uantum meruit payments may $e re0uired "here8 1 ,here is an agreement to

proide goods or serices+ $ut the price is unspecified+ and2 ,he conte-t of the contract or the customs of a trade indicate an e-pectationthat a mar*et price "ill $e paid.

o rat$ito$s Red$ction of 'e(t Once creditor accepts a lesser payment (i.e.+ actual

sum is paid+ cant sue for more later

Creditors agreeing to accept less than "hat is o"ed is a gratuitous promise

9e" promise re0uires ne" consideration

:-ceptions to this rule e-ists for $usiness efficiency

#ign under seal Acceptance of something other than money

!ay $efore the due date

,hird party ma*es the payment

o Estoppel A rule "here$y a person may not deny the truth of a statement of fact

made $y him or her "hen another person has relied and acted upon the statement orsuch a gratuitous promise.

o rat$ito$s promisesare generally not enforcea$le $ecause they lac* consideration

A gratuitous promise of a large sum to a charity for a specific purpose may $eenforcea$le.

A gratuitous promise made under seal is enforcea$le.

A statement on "hich another party relied to his or her detriment may $eenforcea$le+ een "ithout consideration. ,he party ma*ing the statement may$e estopped from denying the truth of the statement and may $e $ound $y it.

o Consideration must $e legal

,he promises cannot $e illegal or a iolation of pu$lic policy

As*ing for additional funds to complete a construction pro)ect


3/50

!romise to proide e-tra funds is gratuitous ne" promise re0uires ne"consideration

o Cannot iolate #tatutes contracts "ith clauses that $uyer must resell at fi-ed or

minimum price is unla"ful under Competition Act

Capacit) to contract

o Infantor %inor a person "ho has not reached the age of ma)ority (common la"8

less than 21+ most proinces8 less than 1; or 1 are enforcea$le against minor

o =inors can repudiate other contracts

o the sale of goods act in most proinces proides that a minor must pay a reasona$le

price for goods that are necessaries that are sold and deliered to the minoro ?here a contract is oida(leit contains a potential unfairness or inalidity $ut it is

enforcea$le until one party e-ercises an e0uita$le right to repudiate the terms.o ?here a contract is oidits defects and unfairness are manifest and o$ious and the

contract is deemed to $e unenforcea$le from the ery $eginning.o 'f the contract made $y the minor has $eenf$ll) performed (e-ecutory contract for

nonnecessary item then minor may $e $ound $y agreement+ unless he can sho" thathe had $een ta*en adantage of $y the merchant and can return all goods purchased.

E*ec$ted Contact:fully e-ecuted $y the minor (enforcea$le against minorunless minor "as ta*en adantage of

E*ec$tor)8 yet to $e performed (may not $e enforcea$le against minoro A minor "ho has falsely presented himself as haing attained the age of ma)ority "ill

not $e permitted to hold the minor to the contract+ so the merchant may $e entitled torecoer the goods on the $asis of the minors fraud.

o

&an*rupt !ersons /ntil receies discharge can only enter into contracts fornecessaries. Contract unenforcea$le against (an+r$ptparties (i.e.+ not yet dischargedfrom $an*ruptcy if agreement is for nonnecessaries.

o Rep$diation ,he refusal to perform and agreement or promise

o Ratification ,he adoption of a contract or act of another party "ho "as not

originally $ound $y the contract or acto ?hen minor has entered into a contract of a continuing or permanent nature and

receies $enefits and incurs o$ligations8

,he contract must $e repudiated "ithin a reasona$le time after attainting theage of ma)ority (or the contract is $inding

o Contracts for nonnecessaries not of a continuing nature8

=inor must e-pressly ratify on attaining the age of ma)orityo 'f a minor (engaged in $usiness continues to accept $enefits under a contract after

attaining age of ma)ority+ "ill $e $ound

Legalit)

o Contracts must hae a legal purpose+ i.e.+ not contrary to8

tat$te8 contract to commit crime (e.g.+ Criminal Code+ restraint ofcompetition (Competition Act+ party not licensed (e.g.+ doctor+ dentist+ la"yer


4/50

-$(lic polic)8 o$structing )ustice+ interfere "ith pu$lic serice+ to commitnegligence+ dishonest or immoral act

o Restrictie Coenant A contractual clause limiting future $ehaior. '.e. @estraint

of trade agreements (e.g.+ that restrict the right to compete of either the party selling a$usiness or a former employee are prima facie oid and unenforcea$le /9L:## one

can demonstrate the agreement is reasona(lein terms of duration and geography (e.g.+cant compete for 1 year "ithin certain ,oronto neigh$ourhood

Chapter ./: "he Re0$irements of 1orm and 2riting

-o3er of Attorne) A legal document usually signed under seal in "hich a person appoints

another to act as his or her attorney to carry out the contractual or legal acts specified in thedocument.

%ollo"ing contracts coered $y thetat$te of 1ra$ds (Certain type of contracts must $e in

"riting or they are unenforcea$le1. Contracts () E*ec$tors and Administrators 4 e.g. promise to pay deceaseds

de$t out of o"n personal funds. Can personally assume such de$ts $ut only if such

contract is in "riting2. $arantees A collateral promise (in "riting to ans"er or the de$t of another (the

principal de$tor if the de$tor should default in payment. 3 parties in a guarantee

Creditor

e$tor (!rimary lia$ility

Buarantor (#econdary lia$ility must distinguish $et"een guarantees and indemnities8

guarantees must $e in "riting+ indemnities need not $e in "riting3. Ass$med lia(ilit) for a tort 4Any agreement "here$y a third party

promises to ans"er for the tort of another.

=ust $e in "riting

#igned $y the party to $e charged4. Contracts concerning an interest in land Land Contracts concern an interest in

land+ including sale of land or lease of land does not include those things ancillary to the land or remote (repairs+ renoations+ etc does not include room and $oard

contracts

-art -erformance 5e0$ita(le doctrine6 4 A doctrine that permits the courts toenforce an un"ritten contract concerning land "here certain conditions hae$een met8

Acts performed relate to land in 0uestion

Lac* of a "ritten memo "ould perpetuate ( a fraud and a hardship on

the person Agreement must relate to an interest in land

Agreement must $e alid and enforcea$le apart from the re0uirement of

"riting and er$al eidence must $e aaila$le to esta$lish the e-istenceof the agreement

Re0$irements for a 2ritten %emorand$m

o 9eed not $e in a formal document

o 9eed all terms of contract (3 !s8 parties+ property+ price


5/50

o Can $e an e-change of letters 2 letters together can constitute an agreement in

"ritingo =ust $e signed $y the party against "hom it is $eing enforced

o A contract under seal is enforcea$le een if there is no consideration

-arol Eidence R$le 4 A rule that preents a party from introducing eidence that

"ould add to or contradict terms of a contracto Limits the *inds of eidence that may $e used to proe terms of a contract

o Cannot contradict a clear unam$iguous contract

o 'f the language of the "ritten agreement is unclear or am$iguous+ oral eidence or

other "ritten eidence may $e used to assist in interpretation.o 'f there is a collateral contract+ it may $e used to interpret and modify the main

"ritten agreement.

:-ceptions to the !arol :idence @ule8

o Condition -recedent A condition that must $e satisfied $efore contract may come

into effect. 'f condition isnt met then contract is cancelledo octrine of Implied "erm ,he insertion $y the court of a standard or customary

term omitted $y the parties "hen the contract "as prepared

'mplied terms cannot conflict "ith e-press terms

/sually implied in order to implement the agreemento Collateral Agreement An agreement that has its o"n consideration+ $ut supports

another agreement.

Could alter or add to the main agreement

Courts usually dont allo" unless one can proe it e-ists as a separate andcomplete agreement "ith its o"n consideration

$(se0$ent Agreement An agreement made after a "ritten agreement that alters or cancels

the "ritten agreement.

Chapter ..: 1ail$re to Create an Enforcea(le Contract

1 =ista*e

2 =isrepresentation

3 /ndue 'nfluence

4 uress

=ista*e of La" !resumed to *no" the la" /sually no relief proided :-ception8 if statute

proided for recoery

=ista*e of %act =ista*e as to the e-istence of the su$)ect matter of the contract or the

identity of a party (i.e. dealing "ith someone else on Est 1act$m A defense that may allo" illiterate or infirm persons to aoid lia$ility on a

"ritten agreement if they can esta$lish that they "ere not a"are of the true nature of thedocument+ and "ere not careless in e-ecution

o 9arro" form of mista*e

o Applies only to type of agreement $eing signed not to the terms of the agreement

!nilateral %ista+e A mista*e $y one party to the agreement


6/50

%$t$al %ista+e A mista*e "here $oth parties hae made mista*en assumptions as to the

su$)ect matter of the agreement. Can $e same mista*e or different mista*eso =ista*e as to su$)ect matter of contract+ then the contract is unenforcea$le

o =ista*e as to identity of the !arty

epends if the identity of the person is an essential element of the agreement

'f essential may not $e enforcea$le+ if not essential it "ill $e enforcea$le Courts "ill not enforce agreements "hen the other party is a"are of the mista*e $eing made

Rectification ,he correction of a mista*e in an agreement that "ould hae rendered the

agreement impossi$le to perform.o :.g. A agrees to sell to & and delier to &s house at 1D =ain #treet. &ut in contract+

"ritten 1DD =ain #treet (no e-ist. & later found lo"er price of some"here else andrefuse to $uy. A may apply for rectification to correct to 1D =ain #treet and sell to &.

%isrepresentation

Characteristics of %isrepresentation: 1 statement or conduct+ 2 'nduces the other party to

enter into the contract. 3 =ust $e a material matter. 4 =ust $e a statement of fact and notopinion (:-ception8 e-pert opinion+ 5 #tatement made $efore contract entered into

Rescission ,he reocation ( of a contract or agreement

,ypes of %isrepresentation

o Innocent %isrepresentation 4A false statement of a material fact made $y a party

that honestly $elieed the fact to $e true.

Courts attempt to put the parties $ac* into position they "ere $efore thecontract "as entered into

o 1ra$d$lent %isrepresentation A false statement of fact made $y a person "ho

*no"s+ or should *no"+ that it is false+ and made "ith intention of deceiing another

'eceit(4 A tort that arises "hen a party suffers damage $y acting upon afalse representation made $y a party "ith the intention of deceiing the other

=ade *no"ingly ?ithout $elief in its truth

@ec*lessly or carelessly "ithout regard for its truth

Contractual s. ,ort remedy

Contract8 rescission is contractual remedy 'f courts can restore parties

to position they "ere $efore entering into the contract

,ort8 eceit allo"s for damages and can a"ard punitie damages

o %isrepresentation () on'isclos$re 4 Beneral rule is 9o o$ligation to disclose+

:-ception8 certain types of relationships or contracts+ e.g. Contracts Contractsof /tmost Bood %aith ('nsurance !artnership Contracts "ith special trust or

confidence $et"een the parties !artial disclosure of facts has effect of rendering the part disclosed as false

o egligent %isrepresentation ( #tatements that are sufficiently rec*less $ut not

0uite fraudulent

@emedy ( depends on type of misrepresentation8

o 'nnocent rescission only

o 9egligent rescission and damages


7/50

o %raudulent rescission and damages

!nd$e Infl$ence 4 A state of affairs "here$y a person is so influenced $y another that the

persons )udgment is not his or her o"n. '.e. 9ot in a fair $argaining positiono 2 #cenarios

#pecial @elationship does not e-ist

#pecial @elationship e-ists ,ypes8 la"yerclient doctorpatient trustee$eneficiary parentchild

spiritual adisorparishioner

oes not apply to spousal relationship

/ndue influence re0uires dominant party to proe other"ise

o 9o undue influence if

agreement "as fair and reasona$le in the circumstances

%ull disclosure is made prior to the formation of contract

?ea*er party free to see* independent legal adice

Contract is oida$le at option of "ea*er party

'$ress (4 ,he threat of in)uring or imprisonment for the purpose of re0uiring another toenter into a contract or carry out some act.

o ,hreat can $e to person directly or to persons family (or a close relatie

o Contract is oida$le at option of person once they come out from under duress

o ,hreat to person and not persons goods

!arty should aoid the contract immediately after free other"ise court may not accept duress.

Chapter .: "he E*tent of Contract$al Rights

-riit) A person cannot incur lia$ility under a contract to "hich he or she is not a party

o #trangers or third parties hae no lia$ility nor rights under a contract. :-ceptions8

Constructie ,rusts gies rights to $eneficiaries

9oation parties replace contract or parties if all agree

Eicarious !erformance allo"s third parties to perform under a contracto Only parties to a contract hae lia$ilities or rights under a contract

o ,hese rights can $e transferred in manners that are e-ceptions to the rule of priity

"r$sts An agreement or arrangement "here$y a party (trustee holds property for the

$enefit of another ($eneficiary. Constructie ,rust (e0uita$le concept 9ormally$eneficiary is not a party and gae no consideration so has no rights &eneficiaries are not aparty to the trust $ut can enforce its terms under e0uity

!romises under seal ,hird parties can enforce agreements for the $enefit if made under seal

#tatutory @ights and Lia$ilities ,hird party has statutory right to enforce contract

o :-ample8 $eneficiary under a life insurance policy under the 'nsurance Act

oation ,he su$stitution of parties to an agreement+ or the replacement of one agreement

$y another agreement. =ost common in creditorde$tor relations

E0$ita(le Assignments An assignment that could $e enforced if all parties could $e

$rought $efore the court. 9eed not $e in "riting+ and all parties must $e $efore the courto Assignments Can only assign rights not o$ligations

o Assignor one "ho assigns their rights


8/50

o Assignee one "ho receies rights under an assignment

o Choses in Action A paper document that represents a right or interest that has alue

Common la" originally only recogniFed rights in contracts $et"een parties aspersonal rights that "ere not su$)ect to transfer

,reated differently $y e0uity courts

o Vicario$s -erformance A performance of a contract $y a third party+ "here thecontracting party remains lia$le for the performance

tat$tor) Assignment An assignment of rights that an assignee may enforce if certain

conditions are met $y the assignment. Conditionso Assignment in "riting and signed $y assignor

o Assignment is a$solute and not conditional

o 9otice of assignment is gien

o Assignment ta*en su$)ect to the e0uities

et off ?hen t"o parties o"e de$ts to each other+ the payment of one may $e deducted

form the other+ and only the $alance paid to e-tinguish the inde$tedness

egotia(le Instr$ment 4An instrument in "riting that+ "hen transferred in good faith andfor alue "ithout notice of defects passes a good title to the instrument to the transferee

Assignments can assign rights to third parties

Chapter .: -erformance of Contract$al O(ligations

"ender ,he act of performing a contract or the offer of payment of money due under a

contract.o ,ender of !ayment !erformance is made "hen money paid at time and place

re0uired under the contracto Legal tender Cannot $e refused if tendered $y $uyer #eller can refuse credit card+

chec*+ $ill of e-change unless specified as form of paymento e$t 'f proper tender of payment is made and refused $y creditor+ interest stops

running. e$tor need not attempt to pay againo ,ender of !erformance of an Act

=ust delier goods to proper place at proper time

'f refusal $y $uyer seller need not tender again

ischarge $y means other than !erformance

o E*press "erms ischarge $y the occurrence of an eent specified in the contract

o Condition $(se0$ent A condition that alters the rights or duties of the parties to a

contract+ or that may hae the effect of terminating the contract if it should occuro 1orce %a;e$re A ma)or+ unforeseen eent that occurs that preents the performance

of a contract or causes damage to propertyo

Implied "erms ischarge $y the occurrence of an eent that $y custom of the trade"ould normally result in e-emption from lia$ilityo Act of od An unanticipated eent that preents the performance of a contract or

causes damage to property.o 1r$stration A contract under "hich performance $y a party is rendered impossi$le

due to an unforeseen or une-pected change in circumstances affecting the agreement

%rustration results in the contract $eing discharged

#hould $e inserted into the agreement


9/50

#ale of Boods Act !roides for frustration in certain circumstanceso %rustration :-amples8

!ersonal serices of one party re0uired

:ent alters circumstances such that "hat "ould hae $een performed isradically different that that contemplated $y the parties

/sually arises during "ar Boods dierted due to "ar

%rustration re0uires impossi$ility not mere hardship or greater e-penseo #elf 'nduced %rustration oing something not necessarily re0uired to aoid a

contract

on C$lpa(le 'ismissal ismissal of an employee "here the ina$ility to perform is not

self induced $ut due to frustrating factors

%aterial Alteration ,he ma)or alteration of an agreement that has the effect of discharging

the contract and replacing it "ith anothero Change must go to root of agreement

o

=inor alterations or a num$er of minor alterations is not enough &reach of Contract ,he failure of a party to perform a contract according to its terms. Bies

one party the possi$le right to discharge the agreement

Chapter .


10/50

o ?arranty 'n a sale of goods+ a minor term in a contract+ the $reach of "hich allo"s

one to sue for damages $ut not rescission. Conditions may $ecome "arranties

Remedies 4 Compensation or @ight of in)ured party to sue for compensation for the loss

suffered.o 1 Loss or in)ury must $e proen 2 Courts attempt to place party into position "ould

hae $een had the contract $een performed (restore to original position 3 Can ta*ethe form of monetary damages+ specific performance+ or 0uantum merit

o @estitutio in integrum ,o restore or return a party to an original position.

,ype of amages8 1 Li0uidated damages 2 /nli0uidated damages 3 Conse0uential

damages 4 :-pectancy damages 5 Lost opportunity damageso eneral 'amages @estitution (compensation in G for losses naturally e-pected

from a $reach of contract

!ut party into position they "ould hae $een had the contract $een performed

@epresents compensation for losses Losses must flo" naturally from the$reach can cannot $e too remote

:.g. A pays & for &s $usiness for G1=. & refuses to sell. & has to pay A $ac*G1= plus interest as general damages.

o pecial 'amages #pecific damages that "ould flo" from a $reach of contract

o not arise naturally or generally from the normal course of eents follo"ingsuch a $reach. :.g. A pays & for $usiness and moe from another city+ the costof moing+ capital loss on a house etc. is special damages.

o -$nitie 'amages 9ot compensation $ut rather punishment "hen actions "ere

deceitful+ malicious or offensie

%itigation (duty of mitigate loss ,he o$ligation of an in)ured party to reduce the loss

flo"ing from a $reach of contracto =ust ta*e steps to mitigate losses

o %ind a ne" $uyer+ find a ne" seller Li0$idated 'amages A $ona fide estimate of the monetary damages that "ould flo" from

the $reach of a contract.o Li0uidated damages are damages that can $e determined o$)ectiely+ $y applying a

simple formula8 Creditor o"es 2DDD as the contract price $ut has paid only 1DDD8G2DDD G1DDD H G1DDD in li0uidated damages

o 'f unreasona$le amount is a penalty clause+ !enalty clauses are unenforcea$le as they

are a*in to punitie damages "hich are not allo"ed for ordinary $reaches of contractso amount must $e some relation $et"een amount estimated and actual loss.

o ifference $et"een partpayment and deposits+ i.e. $uying a $i*e of G5DD and put

deposit of G4DD. $uyer may pay only partial payment not lose all G4DD

Remedies for -artic$lar it$ationso pecific -erformance 4an e0uita$le remedy of the court that may $e granted "hen

damages "ould $e inade0uate+ and that re0uires the defendant to carry out theagreement according to its terms.

%orce the party to do something they agreed to do and must $e a uni0ue su$)ectmatter. :.g. Land+ anti0ues+ rare goods since cant find similar one


11/50

o In;$nction An e0uita$le remedy of the court that orders the person or persons

named therein to refrain from doing certain acts

!reent party from doing something they agreed not to do.

:.g. A offer & "ith ery high "age to "or* for him only (not for other for 1month. & "or* for C+ court may issue in)unction to order & not "or* for C.

o #$ant$m %erit /sually in situations of serices or mi-ed goodsserices @emedy not $ased on the contract $ut upon 0uasicontract+ reasona$le price

Aaila$le if contract has $een partly performed

Courts concerned "ith compensation for the "or* performed


12/50

Chapter


13/50

Intentional "orts 3ith the Rep$tation -erson

'efamation %alse statements that in)ure a persons reputation

o Li(el(printed or pu$lished permanent form such as "riting or a cartoon+ applies to

the internet todayo lander (spo*en false statements or gestures that in)ure a persons reputation.

'efenseo "r$th As to the statements made

o A(sol$te priilege !rotects the spea*er "hether statements are true or false or een

made maliciously

Limited to statements made in parliament+ @oyal Commissions+ courtso #$alified priilege #tatements made in good faith "ithout malicious intent ,o

allo" free speech on matters of pu$lic importance. :-amples8 letters of reference+ faircomment and criticism in matters of pu$lic interest

if statement made in good faith (i.e.+ no malicious intent "ith an honest $eliefin its accuracy

o 'eath of a -art) 4 Cannot defame the dead

Criminal :lement Li$el can $e criminal if pu$lished "ithout la"ful e-cuse or )ustification

e-posing the person to hatred+ contempt or ridicule

Intentional Interference 3ith Land and Chattels (

"respass to Land 'n)ury of a person+ entry on the lands of another "ithout permission+ or

the seiFure of goods of another "ithout consento :ntering land "ithout permission can $e implied or e-pressed

o Originally there "ith permission $ut refusing to leae "hen re0uested to do so

o ,unneling under anothers land "ithout permission

o :recting a "all or fence on anotherIs land+ stringing "ires oer anothers land

o ,hings can trespass such as oerhanging eaes or trees Conersion 4the refusal to delier up (return chattel to its rightful o"ner $y a $ailee (

o ,respass to goods or ?rongful ta*ing of anothers goods

o e.g.+ refuse to return goods you are storing for o"ner

o ?illful damage of goods "hile in o"ners possession (e.g.+ puncturing tires of cars on

dealers loto Remed) amages e0ual to the goods ta*en

o @ights of $ailee in possession

,he $ailee does not ac0uire o"nership

&ailee may act li*e an o"ner against those "ho interfere "ith his possession as

a $ailee 'f the $ailee sues to recoer damages+ they are held in trust for the o"ner$ailor

,he $ailor can also sue someone "ho interferes "ith the $ailees possessionfor negligence or interference "ith the $ailors property rights.

o ,he right of the $ailee to the return of the goods

,he $ailor has the right to the return of the identical goods originally delieredto the $ailee+ unless they are fungi$le goods


14/50

%ungi$le goods are those "hich are indistinguisha$le for other goods of thesame type+ and "hich are interchangea$le.

=$siness Related "orts

Coers situations "here $usiness engage in improper practices that cause in)ury to others

/ntrue statements a$out competitors goods or serices Attempts to steal trade secrets

@estriction of trade

!rotected through common la" and statute (Competition Act

lander of oods #tatement alleging that the goods of a competitor are defectie+ shoddy

or in)urious to the health of a consumer.o Can apply to consumers or $usinesses

o :.g. #alesperson8 ont $uy the other stores plasma teleisions+ 'e chec*ed them

out and theyre all defectie.

In;$rio$s 1alsehood %alse statements a$out a firm+ its products or $usiness practicesintended to dissuade others from doing $usiness "ith the firm

o ?ider scope than slander of goods

lander of "itle 4 An untrue statement a$out the right of another to the o"nership of goods

o #tatements that a competitor has improperly ac0uired the goods put up for sale

o :.g. #alesperson8 Jou dont "ant to $uy the other stores ,oronto =aple Leaf hoc*ey

shirts+ theyre not een officially licensed 9KL products.

=reach of Confidence 4 'mproper dealings "ith a competitors employees. :.g. Offering

money for trade secrets.o amages8 =onetary damages ismissal of employee

Restraint of "rade 4 Agreement $et"een firms to fi- prices+ in)ure competition+ or preent

others from entering a mar*et.o ,reated as crime under the Competition Act and Coered $y common la"

o :.g. Bas station manager to another8 ?hy dont you duplicate my gas prices this

month+ and 'll copy your prices ne-t montho 'nducing &reach of Contract 'nducing another to $rea* or seer a $usiness

relationship e.g. A force & stop doing $usiness "ith C other"ise A "ont $uy from&. C can ta*e action again A.

'eceit (4 A tort that arises "hen a party suffers damages $y acting upon a false

representation made $y a party "ith the intention of deceiing the othero Arises from fra$d$lent misrepresentation

o =ust &e 1 a material nature 2 =ade "ith intention of deceiing 3 Other partyrelied upon the statement

1ra$d$lent Conersion O$taining goods under false pretenses 9ot theft since the o"ner

did gie the party the goodso #upposed :mployee8 'm the personal assistant of &ill Bates+ and he "ants his ne"

$o- 36D deliered tomorro"

!nfair =$siness -ractices &usiness practices designed to ta*e adantage of consumer

ignorance or ine-perience. /sually dealt "ith through consumer protection la"s


15/50

o :.g. #alesperson8 ' )ust ma*e a *illing selling that used car that "as ruined in the flood

to that elderly illiterate man "ho doesnt een really spea* :nglish and *no"s nothinga$out cars.


16/50

Chapter >: !nintentional "orts and egligence

"he Concept of "ort Lia(ilit) 4 one should not intentionally cause in)uries to another.

'nitially only deli$erate direct in)ury "as actiona$leo trict Lia(ilit) @esponsi$ility for loss regardless of the circumstances

#trict lia$ility still e-ists $ut a moe to"ards negligence

o Vicario$s Lia(ilit) ,he lia$ility at la" of one person for the acts of another :mployers (deep poc*ets theory 'f done during the course of employment

-ro*imate Ca$se 5Ca$sation6 A cause of in)ury directly related to an act of a defendant

o =ust $e a connection $et"een the defendants act and the plaintiffs in)ury Cannot $e

too remoteo '$t) of Care 4 uty not to in)ure another person.

A rightduty relationship

uty not to in)ure must $e o"ed to the party suffers the in)ury

1oreseea(ilit)(@easona$le person A standard of care used to measure acts of negligence

o A reasona$le person "ould foresee that their actions "ould cause harm to another

o

'f yes H lia$le 'f no H not lia$le 'ts a fle-i$le concept /nintentional negligence or rec*lessness

o /sually an omission on the part of someone

o uty to refrain from acting negatiely

o 9o duty to act a certain "ay (positie duty

%ens Rea 4 A guilty state of mind or intention to commit a crime or tort.

Re0$irements egligence 5Lia(ilit)6:

o efendant o"es the plaintiff a duty not to in)ure

o efendants actions constitute a $reach of that duty

o !laintiff suffers some in)ury as a direct result (causation of the defendants actions

Res Ipsa Lo0$itor 4 the thing spea*s for itself. !laintiff must proe81. Cause of in)ury is something in the e-clusie care and control of the defendant2. Circumstances constitute eents that "ould not normally occur if proper care had

$een ta*en $y the defendanto &urden shifts to defendant if proen

Occ$pier?s Lia(ilit) 4 (common la" duty of care o"ned $y occupier to those "ho come on

their land. uty o"ned depends on *ind of person entering (ascending order of importanceo "respassers

Lo"est duty of care o"ed

uty of common humanity+ not deli$erately in)ureo Licensees :nter land "ith e-press or implied permission

=edium duty duty to protect from concealed dangerso Initees A person "ho enters upon the lands of another $y initation+ usually or the

$enefit of the person in possession of the land

@etail stores

O"ed the highest duty of care


17/50

o Contract$al Entrant A person "ho enters on the premises "ith a colour of right

stemming from a contract "ith the occupier. :.g. Koc*ey game+ moie theater+ opera+night clu$

uty to "arn or protect from any unusual dangers or haFards of "hich theoccupier is a"are or ought to $e a"are

%an$fact$rers? Lia(ilit) for 'efectie -rod$ctso =anufacturers no" o"e a duty of care to any foreseea$le users of their products if8

,hey "ere negligent in their manufacture

,hey "ere a"are of dangers associated "ith the goods and failed to "arno ?hen a manufacturer produces a product "hich is defectie and causes a consumer or

user to $e in)ured+ the manufacturer may find itself sued for negligence in the designor manufacture of the product.

o !roduct lia$ility suits often inole many in)ured consumers "ho participate in class

proceedingso ,he use of the doctrine res ipsa lo0uitur $y the plaintiff is not uncommon in product

lia$ility suits.

$isance(4 (?ide application 'nterference "ith the en)oyment of real property or+ in

some cases+ material interference "ith a persons physical comfort. #uch as noise+ i$ration+smo*e+ fumes+ and contaminants of all sorts that may affect the use of land.

o &alance the reasona$le use of land $y one "ith the decrease in en)oyment $y another.

Re0$irements8

#erious decrease in en)oyment of land

#pecific damage to the lando Remedies for damage

o In;$nction :0uita$le remedy order the person to refrain from doing certain acts

o :nironmental nuisance Coered through legislation

'efenses

o Contri($tor) egligence

Actions of the in)ured party contri$uted to their in)uries (plaintiffscarelessness

'n)ured party is the author (partially or "holly of their o"n misfortune

@esponsi$ility is apportionedo Vol$ntar) Ass$mption of Ris+ (Eolenti non fit in)uria Eoluntary assumption of

the ris* of in)ury.o Act of od /nanticipated eent that preents the performance of a contract or

causes damages to property. '.e. Cause are $eyond ones control. :.g. lightning causefire in As house and spread to &s house. 'f & sue A+ A can use act of Bod to defend.

o 2aier An e-press or implied renunciation ( of a right or claim.

/sually must $e "ritten and coer the in)ury contemplated $y the parties at thetime

o Release 4 !romise not to sue or press a claim+ or a discharge of a person form any

further responsi$ility to act


18/50

o tat$te of Limitations 4 Legislation sets forth time periods "ithin one must $ring an

action. =ost proinces it is 2 years from the date the in)ury occurred

'octrine of Laches An e0uita$le doctrine of the court "hich proides thatno relief "ill $e granted "hen a person delays $ringing an action for anunreasona$le long period of time.


19/50

"ortRemedies

o Compensator) 'amages 4 =oney damages. !urpose is to restore the in)ured party to

a "hole state (undo the harm done

pecial damages: coers specific losses or costs (actual amounts

eneral damages: compensation for pain and suffering+ future health issues+

permanent incapacity (estimated $y courto ominal 'amages 49o actual damages and ,ort does not result in a monetary loss

A"ard nominal damages i.e. G1 (as "ell as court cost and legal fee of plaintiffo -$nitie 'amages or E*emplar) 'amages 4 amages a"arded to set an e-ample

to deter similar $ehaior $y others

Co$rt Orders 4 Order $y a court to a person to stop doing something or to do something

o Contempt of Co$rt refusal to o$ey a court order fine or )ail sentence

o Order of Replein Court action that permits a person to recoer goods unla"fully

ta*en $y another.

Chapter @: pecial "ort Lia(ilities of =$siness -rofessionals -rofessionalClient Relationship

o Created $y Contract Contractual duty of professional to perform serices

9egligent performance is a $reach of contracto 'mplied4 &y proiding serices

1id$ciar) '$t) uty to place a clients interests a$oe the professionals o"n interests

o istinguishes a professional from others

o Aoid conflicts of interest

,ort uty of Care professionals must perform their duty according to the accepted industry

standards. 'ts determined $y the self regulating $ody

Informed Consent %ull and understanda$le e-planation of ris*s associated "ith a course of

action+ and the clear understanding $y the client or patient

o 'f not done a cause of action

o 'f done a defense

o =oral o$ligation (the right thing to do

egligent %isstatements negligent misstatements made $y a professional to a client.

o =ay constitute a $reach of the standard of care

o #cope of lia$ility e-tends to those "hom the professional *ne" "ould rely on such

statements and "as intended to $e relied upon

"hreefold "est(determines lia$ility

o ?hether the harm "as foreseea$le

o ?hether there "as a relationship $et"een the parties of sufficient pro-imityo ,erms of pu$lic policy it "ould $e )ust and reasona$le to impose the duty on the party

ma*ing the statement

-rofessional Lia(ilit)

o Beneral rules of professional lia$ility apply regardless of the profession

o Certain statutes may impose e-tra duties for certain professions (i.e. accountants


20/50

o #ome differences e-ist for certain professions (i.e. olicitor Client -riilegefor

la"yers the duty of a la"yer to *eep confidential information proided $y a cliento :ngineers more specialiFed and restrict their practices to areas of e-pertise

o Architects lia$le for design fla"s not construction fla"s

Chapter .@: La3 of Agenc)

Characteristics of Agenc)o Arises $y e-press agreement+ conduct+ or necessity

o 'noles 3 parties8 principal+ agent+ third party

o !rinciple that an agent can $ind a principal to a contract

Role of an Agent: Agenc) la" deals "ith relationship $et"een principal and agent

o -rincipal A person on "hose $ehalf an agent act

o Agent A person appointed to act for another+ usually in contractual matters

at$re of Relationship

o Boerned $y tort la"+ contract la"+ and e0uity

o Agent is one "ho is empo"ered on $ehalf of another

o Acts of agents $ind principals if done "ithin cope of -o3ero Can act for more than one principal at the same time (insurance agents

o =inors can act as agents

Agenc) () E*pressed can $e esta$lished $y e-press agreement+ either "ritten or oral

o Boerned $y contract la"+ i.e. Contractual rules must $e follo"ed

#tatute of %rauds+ formal contracts

uties set forth in agreement (adantage to a "ritten agreemento Contracts

Contract one is $et"een agent and principal

Contract t"o is $et"een principal and third party (although negotiated $y theagent

Agenc) () Cond$ct or Estoppel 4 agency inferred from the actions of the principal

o Arises $y actions "hich coney impression that one is an agent for another or has

conferred authority to act on ones $ehalfo ,ypes of Authority

Act$al A$thorit) "here e-pressly gien

Apparent A$thorit)(implied from actions A$ility of an agent to $ind aprincipal "here the principal hasnot notified third parties of the restrictionsor terminated authority of the agent

'$ties of the -arties

o ood 1aith &oth parties must act in good faith

Agent must act in the $est interests of the principal+ not themseleso -rincipal?s'$ties !ay for serices $y agent 'ndemnify ( agent for reasona$le

e-penseo Agent?s '$ties

O$ey la"ful instructions of principal

Meep information confidential

'nform principal


21/50

=aintain standards re0uired to perform

9ot delegate duties "ithout permission of principal

Meep accounts "hen re0uired

Agenc) () Operation of La3 4 Agency that may arise in certain circumstances out of

necessity "here it is not possi$le to o$tain the authority of the principal to act

o Agency $y necessity and /na$le to communicate "ith principleo ,oday such situations are limited $ecause of modern communication

Ratification(of Contracts $y a !rinciple

o ?hen a principal "ishes to ta*e adantage of contract negotiated $y their agent "hen

agent had not authority to negotiateo 'f done properly $inds principal to contract "ith third party

o =ay ratify if principal "as identified in agreement as principal

o #u$)ect matter of contract is something principal is capa$le of

o =ust $e made "ithin a reasona$le time after agent enters into contract

o =ust $e for the "hole agreement

o

'f accept $enefits under the contract then the principal has ratifiedo =ust repudiate a contract made $ an agent "ithout authority promptly or "ill $e

$ound $y the contracto #ilence $y principal is not acceptance

o @atification is at date contract "as made $y agent

"hird -arties and the Agenc) Relationship

o 'isclosed Agenc) Agent should indicate only acting as agent

Agent signs on $ehalf of principal in principals name (only principal is lia$leunder the contract+ not the agent

'f principal "ishes not to hae identity reealed agent can8

:nter in agents o"n name or

:nter as agent for unnamed principal

o !ndisclosed Agenc) Agent fails to disclose they are acting as an agent

Agent may $e lia$le

Agent can also enforce contract against third partyo 1ictitio$s Agenc) Agent contracts on $ehalf of a fictitious or none-istent principal

,hird party may sue for $reach of "arranty of authority

,his is the same if agent enters for a principal for "hom the agent does nothae authority to act

'f intention $y agent "as to deceie "ill $e lia$le for fraud (remedy of deceito !ndisclosed -rincipal Agent fails to disclose identity of principal $ut descri$es self

as agent Agent is not lia$le

&ut if Agent fails to disclose acting as an agent+ Agent andor principal is lia$le

Lia(ilit) of -rincipal in "ort

o !rincipal may $e held lia$le for tort committed $y agent if committed in ordinary

course of carrying out agency agreement

Often $ased on fraudulent misrepresentation


22/50

o 'f committed outside scope of agents employment only agent lia$le

"ermination of the -rincipalAgent Relationship

o =ethods8

:-press contract8 usually proides for termination

/sually must gie notice

%i-ed or implied

,as* is completed

'ncapacity of principal or agent

&an*ruptcy of principalo =ust inform third parties of termination

Chapter .7: La3 of ole -roprietorship and -artnership

ole -roprietorship A $usiness "here the sole o"ner if responsi$le for the management

and the de$ts of the $usinesso #implest form of $usiness

o /nlimited personal lia$ility

o Limited a$ility to raise capitalo =ay re0uire registration or license

-artnership A legal relationship $et"een t"o or more parties for the purpose of carrying

on a $usiness "ith a ie" to a profito 9ot include organiFations not in $usiness for profit charities+ social clu$s+ sports

groupso Kistorical eelopment8

Originally common la"

,oday mi- of common la" and statute

=ost recent deelopment is the limited lia$ility partnership or LL!

at$re of a -artnership 5%actors that esta$lish a partnership een if no e-press agreement8

o #haring of profits

o Contri$ution of capital

o Actie participation in management

o !art o"nership or coo"nership not necessarily a partnership

1actors that do not esta(lish a partnership:

o )oint o"nership of property

o sharing of gross feesreturns (i.e.+ as opposed to sharing profits

o contract for remuneration (e.g.+ $onus or commission $ased on $usiness performance

o repayment of a de$tloan

'isting$ish -artnership s Coo3nership

o !artnership

Contractual

%ounded on mutual trust

!artner agent of other partners and the partnership

!artners share in partnership property is al"ays personality

#u$)ect to !artnership Acto Coo"nership


23/50

Arises in seeral "ays

%reely aliena$le "ithout consent of other coo"ner

9ot an agent of other coo"ners

Coon"ers can o"n any type of property

issoled through disposition of property

Lia(ilit) of -artnership !ersons "ho form a partnership are collectiely called the firmand $usiness carried on in the firm name.

o Noint and seeral lia$ility

!artners indiidually and as a group hae lia$ility for a de$t of the partnership

!artners are agents for each other and for the partnership

Lia$le for tort of partner if committed in course of partnership $usinesso Newpartner not lia$le for e-isting de$ts /9L:## agrees to assume them


24/50

Lia(ilit) of Emplo)ees

o !artnership firm is the employer

o !artners responsi$le for direction and superision of employees

o Lia$ility in tort 'f committed in performance of partnership $usiness

o Lia$ility in contract 'f employee authoriFed to enter into such contracts

Rights and '$ties of -artnerso !artnership usually sets out rights and duties

o %ree to fi- such rights and duties

o =inimal re0uirements under !artnership Acts

o !roperty $rought into the partnership is partnership property

o Land is held in trust for the partnership

-artnership Act 4 @ules determine partners interests+ a$sence of e-press or implied

agreemento :0ual share in capital and profits

o 'ndemnity $y the firm for personal payments and personal lia$ilities

o 'nterest paid on e-cess capital contri$utionso 9ot interest $efore profits

o :ery partner may ta*e part in management

o 9o ne" partners "ithout consent of others

'issol$tion of -artnership ,he termination of the partnership relationship

o Can $e set forth in partnership agreement

o issole automatically at end of term set in agreement

o eath or insolency of a partner

o =entally unsound or incompetent

o &reach of partnership trust

Retiringpartner remains lia$le for de$ts /9L:## notice gien (e.g.+ in Ontario Gazette.@etired partner must notify all old customers of the firm $y letter+ and notify the generalpu$lic $y the "ay a notice pu$lished in the official proincial aBette (.

Court may dissole partnership or party may apply to court for dissolution

o mental incompetence or permanently incapa$le of performing duties

o $reach of partnership agreement

o $usiness operates at continuous loss

Res$lt of dissol$tion

o Li0uidation of assets

o etermine partners share

o #et order of payment of de$ts from li0uidation is set out in Act and in agreement

o =ust notify customers of firm of dissolution

!artners lia$le for de$ts of partnership during time as a partner

Limited -artnership

o Limited -artner A partner "ho may not actiely participate in the management of

the firm+ $ut has limited lia$ility

Limited partner can $ecome a general partner if one ta*es an actie role inmanagement


25/50

=ay adise (occasionally only+ cant $e appear in letterheado eneral -artner 4 A full partner "ith unlimited lia$ility for the de$ts of the

partnership. At least one general partnership for a $usiness.

Limited Lia(ilit) -artnerships

o A partnership "here indiidual partners are lia$le for the general de$ts of the

partnership and for personal negligence $ut not lia$le for the negligence of otherpartners

#uited to professional practices such as la" and accounting

#ome proinces hae created limited lia$ility partnership legislation

=$siness Applications

o oint Vent$re 4 A $usiness relationship $et"een corporations

Can $e $et"een t"o or more corporationso ,a- adantages 'ncome of a partnership flo"s through the partnership "ithout

ta-ation

,a-ed at the hands of the partners indiidually

Re0$irement Registration of -artnershipso Earies $y proince

o /sually re0uires disclosure of partners name+ partnerships name+ date of

commencement etc.o #ome proinces cannot defend or institute legal proceedings if unregistered

Chapter .8: Corporation La3

Corporation a type of legal entity created $y the state

o :-istence in la" is separate from those "ho form it (limited lia$ility

o A person in the eyes of the la" "ith similar rights and responsi$ilities to that of an

indiidual

Characteristic of Corporationo 9ot an indiidual nor a partnership

o #eparate legal entity from its o"ners

o :-istence at la"+ $ut not material e-istence

o @ights and duties set forth $y la"

o Agents can $ind corporations

o #hareholders hae limited lia$ility

hareholder A person "ho holds a share interest in a corporation a part o"ner

'irector 4/nder corporation la"+ a person elected $y the shareholders to manage its affairs

Officer A person elected or appointed $y the directors to fill a particular office (president+

secretary+ etc. #hareholders elect directors and directors appoint officers

Control =anagement lies "ith directors

o #u$)ect to limitations in the articles or shareholders agreement

o #hareholders cannot $ind the corporation in contract (only officers and directors

Limited Lia(ilit) #hareholders loss are limited to inestment+ personal assets generally are

not su$)ect to creditors.


26/50

"ransfer of Interests %reedom of shareholders to transfer shares

o %reely in a pu$lic or priate company

o #u$)ect to restrictions in articles or shareholders agreement

,erm of Operation of the &usiness

o Corporation has perpetual e-istence

o Continues een if shareholders die Operation of the $usiness entity is Boerned $y #tatute and internal agreements

#eparate :-istence #eparate legal e-istence from shareholders

o Assets $elong to the corporation and not the shareholders

Corporate 9ame =ust not $e the same as another corporation

o Last "ord identifies it as a corporation ('nc.+ Ltd.+ etc.

%ethods of Incorporation

o Ro)al Charter Original method used to permit a monopoly or o"n land (e.g.

KudsonIs &ay Company

Mings prerogatie

o Letters -atent A goernment document that creates a corporations a legal entity 7ue$ec and !.:.'

/ltra ires not apply unless third party a"are of restrictionso pecial Act A corporation created $y an act of parliament or a legislature for a

specific purpose

Only po"ers specifically granted to it $y the Act

%or pu$lic or 0uasipu$lic purposes

/ltra ires if corporation attempts to perform something outside its po"erso eneral Act A form of incorporation "here$y a corporation may $e created $y

filing specific information re0uired $y statute

/sed $y most proinces

Certificate of Incorporation A goernment certificate creating thecorporation

Relations 3ith "hird -arties

o 'octrine of Constr$ctie otice !resumption at la" that eeryone has *no"ledge

of the content of all statutes

octrine of /ltra Eires and Constructie 9otice a$olished for generalActcorporations

o Indoor %anagement R$le 4 A party dealing "ith a corporation may assume that the

officers hae the alid and e-press authority to $ind the corporation

Incorporation -rocess 4 1Content 2 9ame 3 Address 4 irectors 5 'ncorporators 6

#hare capital (restrictions !u$lic or priate 'nternal documents hareholders? Agreements 4 An agreement $et"een shareholders of a priate corporation

concerning management andor future reorganiFation of the corporation such as $uyout ofinterests

o !rotects minority shareholders

o #ets ground rules

")pes hareholders? Agreements


27/50

o #hareholder and corporation

o #hareholder and other shareholders

o #hareholders "ho act as directors

'ssues in #hareholders Agreements

o =inimums of the Act must $e a$ided $y

o Earious matters (set forth in te-t at page 321


28/50

Corporate ec$rities

o #hare ,he o"nership of a fractional e0uity interest in a corporation

/sed to raise capital for corporation

Can $e fi-ed or paralue

Common or preferred

All corporations must hae some oting common shareso 1loating Charge A de$t security issued $y a corporation in "hich assets of the

corporation+ such as stoc*intrade+ are pledged as security. /ntil such time as defaultoccurs+ the corporation is free to dispose of the assets

9ot a share $ut a de$t

Attaches to assets in generalo 'e(ent$re A de$t security issued $y a corporation that may or may not hae

specific assets of the corporation pledged as security for paymento !riority rights determined $y &an*ruptcy Act and !ersonal !roperty #ecurity Acts

'iision of Corporate -o3ers

'$ties and Responsi(ilities of 'irectors

o O"nership is separate from management

o =ust hae at least one director

o irectors responsi$le for corporations operations

o @ight to declare diidends

o &alance need of shareholder protection and freedom to manage

o irectors hae a fiduciary duty

1id$ciar) A relationship of utmost good faith in "hich a person+ in dealing "ith property+

must act in the $est interests of the person for "hom they act+ rather than in their o"n $estinterests

o Accounta$le at la" for $reach of dutyo irectors responsi$le for daytoday operations

o #hareholders may remoe directors

irector must

o Act in good faith at all times

o /se care and s*ill in carrying out duties

o :-ercise po"ers and duties honestly "ith a ie" to the $est interests of the

corporationo :-ercise po"ers "ith the care and s*ill of a reasona$ly careful and prudent person in

similar circumstances

irector may not8

o :ngage in actiity that might permit the director to profit at the corporations e-pense

o &e in a conflict of interest

=ay if disclose and gets approal of the &oard

=ust a$stain from oting on such matters as a director $ut may ote as ashareholder

'octrine of Corporate Opport$nit) 4 ,he use of corporate information for a personal

$enefit to the detriment of the corporation.


29/50

o 'f director ta*es an opportunity $elonging to the corporation they hae $reached their

fiduciary duty. :-amples8 land or shares-ersonal Lia(ilit) of 'irectors

irectors are personally lia$le for certain acts and imposed to encourage directors to comply

"ith the la".

o Beneral rule8 lia$le for any loss $y the corporation+ if the directors commit the act"hen it is ultra ires

o o things contrary to the statute+ declare a diidend that impairs the capital of the

corporationo Certain statutes impose lia$ility8 enironmental

o =ay $e lia$le for unpaid ta-es and employee "ages

'irector?s 'efense of '$e 'iligence ,he o$ligation on the directors to ensure that

effectie systems are in place to comply "ith the la"+ and to monitor the systems to ensurecompliance.

o oes the action lead to a$solute lia$ility

o Can a defense of due diligence $e raised

o irectors must e-ercise the care+ diligence+ and s*ill that a reasona$ly prudent person

"ould do in similar circumstances

'efense of '$e 'iligence

o #tandard of Care Earies depending on the circumstances

o O$tside 'irector A director "ho is not an officer or employee of the corporation

=ust inform self of corporations $usiness

=ay rely on e-pert reportso =$siness $dgment R$le 4,he reluctance of the court to interfere "ith decisions of

the $oard

&ad $usiness decisions are not necessarily lia$le decisions

@ecent Legislation8 #ar$anes O-ley Act (/#A

ar(anesO*le) Act A /.#. statute that imposes e-tensie duties on corporations to ensure

accuracy of financial and securities information proided to the pu$lic.

hareholders? Rights

o @ight to information

o @ight to elect directors

o @ight to approe actions of directors

o @ight to ote one at annual general meetings

o Auditors duty is to the shareholders not the directors

=a)ority @ule #hareholder meetings decide matters $y a ma)orityo :-ceptions8

?here the act o$)ected to is ultra ires (

,he act personally affects the rights of minority shareholders

Corporation fails to comply "ith procedural rules

Act constitutes a fraud on minority shareholders


30/50

issentAppraisal @ights

o @e0uirement of corporation to $uy shareholders shares for fair alue "ho dissent from

certain fundamental corporate changeso unhappy shareholders may e-it allo"s change to go ahead

oppression

o shareholders may see* relief if directors or corporation act in a "ay that oppresses+unfairly pre)udices+ or unfairly disregards their interests

o a $road standard protecting reasona$le e-pectations of shareholders

'issol$tion 4 Corporation has perpetual e-istence

o 'na$ility of corporation to ma*e a profit

Corporation is solent and may "ind up its $usiness

Apply for dissolution

Corporate "inding up proceedings

Corporation ceases to e-ist "hen process completed

!rocedure dictated $y statute

%ethods of -$rchase and ale

o hare ale &uyer $uys the shares of the corporation

,a*e the good "ith the $ado Asset ale &uyer $uys certain assets of the corporation

Can $uy the good and need not purchase the undesired

'ssues

,a- implications for each type of sale

Beneral rule seller li*es to sell shares and $uyer li*es to $uy assets


31/50

Chapter /: Emplo)ment La3

:mployment Contract @e0uires the essential elements of a contract

o 'ssue8 :mployment relationship or not

:mployee or independent contractor

1o$rfold "est a test for employment $ased upon

1. O"nership of tools2. Control3. Chance of profit4. @is* of loss

't replaced the simple control test and still had limitations so they added the OrganiFation ,est

OrganiBation "est A test for employment $ased upon an e-amination of the serices in

relation to the $usiness itselfo Loo* at serices of employee Are they an integral part of the $usiness or something

ad)unct or accessory to normal $usiness

'ndependent Contractor Controls8

o 'nitiatie to do the "or*

o =anner in "hich the "or* is done

o oes the independent contractor employ others

'ndication one is not an employee

Chec*list of :mployment %actors

o %ourfold ,est

egree of Control (high ?ho controls the "or*

O"nership of ,ools (lo" ?ho o"ns the tools used to do the "or*

Chance of !rofit (lo" ?ho ta*es a chance on earning a profit

@is* of Loss (lo" ?ho $ears the ris* of losso O@ Oerall integral part of $usiness (high

o '% these tests are not met+ then the person may $e an independent contractoro #ignificance :mployee entitled to rights under la" and $enefits "hich independent

contractor is not

1orm of the Contract 4 Characteristics

o 9eed not $e in "riting to $e enforcea$le

o =ay need to $e in "riting under #tatute of %rauds

@un for a fi-ed term for more than one year

'nformal eidence is allo"ed to proe the contract

:-change of letters

Corporations $oo*s

=any contracts are er$al of indefinite hiring 9o re0uirement for a formal document

'$ties of the Emplo)er

o Beneral @ule

:mployers cannot contract out of employment legislation

=ost proinces hae employment standards legislation "hich sets outminimum "ages+ hours of "or*+ oertime+ holiday pay+ holidays+ etc.


32/50

o 2 %orms of La"s

!hysical Aspect (health and safety

:mployment Contract (employment standardso Occ$pational Dealth and afet) 4 Kealth and #afety Legislation

!roision of safety e0uipment "hen haFards associated "ith the )o$

%ailure allo"s employee to refuse "or* until such e0uipment is proided @e0uirement to train employees in use of such e0uipment

Legislation imposes stiff penalties for iolations

!ersonal fines for superisory staff "ho commit iolations

Criminal charges can also e-ist for iolationso Emplo)ment tandards Legislation

#ets forth the minimum re0uirements of employers

!arties free to negotiate more faora$le terms. i.e. can pay a$oe minimum"age or gie more holidays

Beneral ,erms (found in most standards legislation

=inimum "age Kours of "or*

Oertime pay Eacation

Eacation pay Kolidays

,ermination notice or pay in lieu

Leaes of a$sence

o D$man Rights Legislation

!urpose8 preent discrimination in hiring or treatment of employees

Benerally cannot discriminate $ased on a persons race+ creed+ colour+

place of origin+ nationality+ se-+ age+ and in some cases physicaldisa$ilities+ or past criminal record

'$t) to Accommodate ,he o$ligation of an employer to ad)ust "or* for anemployee "ith a recogniFed disa$ility

&ona %ide Occupational @e0uirement (&%O@

o Can discriminate in hiring process if one can esta$lish &%O@

for the positiono =ust esta$lish re0uirement is reasona$le and necessary in order

to perform the "or* and complete the tas*o =ust $e done in good faith $y the employer

o Age iscrimination and =andatory @etirement

#eeral proinces hae amended legislation to eliminate the right to retireemployees "hen they reach age 65

Can still terminate for other causes or for &%O@ ,ermination solely on age is discrimination

o ?or*place iscrimination

@ight of employee to hae a discrimination "or* free enironment

:mployers must control discrimination $y employees against other employeeso !ay :0uity Legislation

Cannot pay female employees a lo"er "age than male employees for same )o$


33/50

#ome proinces go a step further proide e0ual pay for "or* of e0ual alueo Other uties

'ndemnify employee for e-penditures or losses incurs in normal course of )o$

!roide employee "ith sufficient tools to do the )o$ "here it is customary

!roide employee "ith sufficient information to allo" employee to calculate

the remuneration due to employee '$ties of the Emplo)ee 4 ,hose specifically set out in the contract and 'mplied duties8

o O$ey all reasona$le orders of employer

o /se property or information of employer in careful and reasona$le manner

o Meep confidential information confidential

o 'f professional or other accreditation perform s*ills to standard of such profession etc.

o uty to act in $est interests of employer

#enior e-ecuties+ employees hae a higher duty to the employer than do ordinary employees.i.e. %iduciary positions

"ermination O1 the Contract of Emplo)ment

o

#ets out minimum notice period re0uiredo Length aries depending on length of serice of employee

o =inimum re0uirement of legislation Common la" may re0uire more

o Common la" rule is one of reasona$le notice Ade0uacy of reasona$leness

determined $y seeral factorso Common la" %actors8

9ature of contract =ethod of payment

Length of serice of employee Age of employee

!osition of employee =ar*et place

A$ility to find similar "or* =ethod of termination $y employer

'ismissal and 2rongf$l 'ismissal

o ismissal can $e "ith notice or "ithout notice

o 'f "ithout notice dismissal is8

"ith )ust cause or

"ithout )ust cause ("rongful dismissalo $st ca$se ,he onus on the employer to esta$lish the grounds for termination of an

employee "ithout notice. Brounds for ismissal8

'ncompetence Brossly negligent in performance of duties

Commits a crime A$senteeism

#u$stance a$use ishonesty and diso$edience

Conflicts of interest isruption of corporate culture

Off )o$ $ehaior that has a negatie impact on employero 2rongf$l 'ismissal ,he failure of an employer to gie reasona$le notice of

termination. ?hen an employee is dismissed "ithout )ust cause or "ithout propernotice or pay in lieu of notice

:mployee may sue for "rongful dismissal

:mployee must mitigate their losses


34/50

Beneral rule8 damages is actual loss $et"een time dismissed and the end of thereasona$le notice period

!urpose place employee in same position had the employee $een gien propernotice

o !unitie amages Only a"arded for $ad faith dismissals

:mployers actions "ere harsh+ indictie+ reprehensi$le or maliciouso Constructie ismissal :mployer termination of a contract of employment $y a

su$stantial+ unilateral change in the terms of the conditions of employment

emotions+ lo"er pay+ transfer to ne" location+ transfer to undesira$leposition+ changes to "or* enironment

2rongf$l Diring (:mployer =isrepresentation ?hen an employer induces an employee

to )oin the employer $ased on misrepresentations of )o$ duties or the positiono &ased on tort of negligent or fraudulent misrepresentation

o :mployer should not oerstate the importance or status of a position

o :mployees accept positions $ased on description

o :mployee must sho"8

@eliance on the misrepresentation

#uffered a loss

Emplo)er Lia(ilit) to "hird -arties

o Vicario$s Lia(ilit) Contracts usually in name of company (employer not the

employee.

:mployers are lia$le for the actions of their employees

9egligence

&reach of contract

,est8 if "ithin the scope of the employees )o$

9ot include acts outside the employees duties

@easons8 :mployer has deeper poc*ets

Emplo)er Lia(ilit) for an Emplo)ees In;$ries

o Kistorically+ :mployees faced a dilemma !ro$lems e-isted in employee suing either

employer or other employees of the employer

#uccess may lead to dismissal or financial drain on the company

:mployer may argue employee oluntarily assumed ris* or that it "as anin)ury due to employees negligence

o ?or*ers Compensation

!roides compensation to "or*ers in)ured on the )o$

:liminates the dilemma

9o fault system (insurance scheme :mployees coered $y act entitled to compensation $ut "aie right to

sue employer

:mployers contri$ute to compensation fund


35/50

Chapter : "he La3 of =ailment

at$re of =ailment

o =ailment 4 ,ransfer of a chattel $y the o"ner to another for some purpose+ "ith the

chattel to $e later returned or dealt "ith in accordance "ith the o"ners instructions

#pecial arrangement $et"een a person ($ailor "ho o"ns or la"fully possess a

chattel+ and another person ($ailee "ho is gien possession of the chattel for aspecific purpose.

o =ailor 4 ,he o"ner of a chattel "ho deliers possession of the chattel to another in

$ailmento =ailee ,he person "ho ta*es possession of a chattel in a $ailment

,hree :lements

o eliery of goods $y the $ailor

o !ossession of the good $y $ailee for a specific purpose

o @eturn of the goods to the $ailor at a later time+ or the disposition of the goods

according to the $ailors "ishes

#u$$ailment &ailee $ecomes the su$$ailor+ and someone else $ecomes su$$ailee

o @e0uires permission of $ailor

o Allo"ed under a common custom or practice of a trade

=ailor=ailee Relationship

o eliery eliery must ta*e place $efore the $ailor$ailee relationship comes into

e-istence. (eliery can $e apparento !ossession @e0uirement of deliery of possession ('ncludes constructie possession

,itle retained "ith $ailor ($ailee receies possession only

&ailee @ights @ight to institute legal proceedings for8

'nterference "ith property or

?rongful in)ury to the goods

o @eturn of Boods =ust return goods or dispose of goods according to $ailors

instructions

#ame goods must $e returned

:-ception8 fungi$le goods must return same 0uantity and same 0uality

Lia(ilit) for Loss or 'amage

o #tandard of Care

ifferent standards for each of the forms of $ailment

&ailees lia$ility aries from one type of $ailment to anothero Beneral Lia$ility &ailee lia$le for8

failure to return goods

@eturned goods damaged or destroyed. :-ception8 reasona$le "ear and tear Onus shifts to $ailee to proe standard of care not $reached

@eason8 &ailee has *no"ledge of eent+ not $ailor

o E*c$lpator) Cla$ses 5E*cl$sion cla$ses6 A clause in a contract that limits or

e-empts a party from any lia$ility for damage to the goods

&ailees attempt to limit their lia$ility $y inserting e-culpatory clauses in theircontracts (often standard form


36/50

:nforcea$ility depends on8 1 rafted carefully 2 &rought to attention of$ailor 3 @easona$leness (is it a clear a$use of freedom of contract


37/50

")pe of =ailment

o rat$ito$s =ailment 4 A $ailment for the $enefit of either the $ailor or $ailee+ or

$oth and is "ithout monetary re"ard

Lia$ility (#tandard of Care

,est8 ?ho is the $enefit of the $ailment for &ailee or &ailor

o 'f for $ailor =inimal lia$ility ta*e reasona$le care of thegoods $y protecting them from foreseea$le ris*

o 'f for $ailee Lia$le for any damage caused $y $ailees

negligence

#tandard of that of an ordinarily prudent person and ho" that person

"ould ta*e care of their o"n goods

#imilar Legal Concepts to &ailment

o License 4 ,he right to use property in common "ith others. ifference $et"een

$ailment and license

License lac*s either or $oth e-clusiity of possession and responsi$ility of

protection.o Consignment ale (4 ,he deliery of a chattel to another person "ith instructions

for its sale

A 0uasi$aliment for re"ard

One difference is the goods under a consignment are usually not returned

=ailment for Re3ard

o %or storage or deposit ("arehouse

o eliery of goods for repair

o @ental of a chattel

o Carriage of goods

o !ledge of alua$les as security

o 'nn*eeper safe*eeping of anothers goods

Lia$ility aries (the standard of care $y each actiity due to relationship that e-ists $et"een

$ailor and $ailee

torage of oods

o 2areho$se torage &ailee must ta*e reasona$le care of the goods "hile in their

possession

#tandard is that of a s*illed store*eeper

!rotect goods from foreseea$le ris*

'f special type of storage and hold one out as haing such special facilitiesstandard raised accordingly

Lia$ility is not a$solute+ only lia$le if failure to meet standard of care &ailee lia$le icariously for negligence of its employees

&ailee for re"ard is not an insurer and not responsi$le as a general rule for actsof third parties

o Lien ?ith respect to goods+ it is the right to retain the goods until payment is made

Common la" right of $ailee for storage to retain goods until charges are paid

#tatutory Liens


38/50

=ost proinces hae legislation that proides for arious statutory liens

@ight to retain and later right to sell the goods

Legislation sets out procedures for notice and sale

-ar+ing Lots

o istinguish &et"een true $ailment and mere us or rental of a par*ing space

,est8 transfer of possession of ehicle

/sually in the form of giing the *eys to par*ing attendant

Meys gien $efore or after par*ing H $ailment

O"ner retains *eys H license

:-culpatory clauses enforcea$ility once again depends on $ringing suchclauses to $ailors attention

=ailment for Repair or erice

o #tandard of Care ,a*e reasona$le care of goods "hile in $ailees possession

o Lia$le for damage or loss

o #u$$ailment $ailee also lia$le if lost or damaged "hile "ith su$$ailee

o #pecialist 'f $ailee has a particular repair s*ill must e-ecute the repairs inaccordance "ith standards set for the s*ill

o &ailee lia$le for negligent repairs

&ailees @ight to a Lien &ailee entitled to agreed upon price or reasona$le price for serice.

Common la" right to a lien

Dire or Rental of a Chattel

o Kire &ailment for re"ard

/sually done $y "ritten contract ($ut need not $e

&ailee re0uired to pay fee+ if determined+ or a reasona$le fee

&ailee entitled to possession and use of goods for the entire rental period &ailee must not use goods for any other purpose than that for "hich they "ere

intended

=ust not su$$ail the goods

&ailee "ill $e a$solutely lia$le if $reaches any of the a$oeo &ailee not lia$le for8

Ordinary "ear and tear

=aintenance of the e0uipment (usually $ailors responsi$ilityo &ailor must8

!roide goods that are reasona$ly fit for the use intended

!roide goods free from defect "hich might cause damage or loss

?arn $ailee of any inherent danger or ris* associated "ith the goods use

:-ception8 if the $ailee is licensed or e-perienced in the use of the e0uipment

Carriage of oods 4 'ncludes a num$er of different forms

o eliery of goods $y $ailor to $ailee for the purpose of deliery to some destination

$y the $aileeo Boods in possession of $ailee for a particular purpose+ title is "ith someone else

o Carrier for @e"ard usual case ho"eer can $e gratuitous carrier


39/50

o #tandard of care different for carrier for re"ard and gratuitous carrier


40/50

o Classes of Carriers Common carrier s. !riate Carrier. #tandard of carrier differs

$et"een the t"o

Common Carrier

A transportation $usiness that specialiFes in the transport of goods

%ed :-+ /!#+ ,ruc*ing companies+ shipping companies

#tandard of care legislated (high Limits common carriers to escape lia$ility

An insurer of goods and lia$le for damages as a general rule

&ailee has a right of a lien

Change of o"nership during the carriage is allo"ed

!riate Carrier

Carrier that may occasionally carry goods+ $ut normally engaged in

some other $usiness

uty to ta*e reasona$le care of goods "hile in possession

-ledges (4 ,ransfer of securities $y a de$tor to a creditor as security for the payment of a

de$to /sing personal property as security for a de$t

o 'n essences giing the property is a $ailment

o Creditor as $ailee is responsi$le for the property "hich must $e returned upon the

payment of the de$t

-a3n ( ,ransfer of possession ($ut not o"nership of chattels $y a de$tor to a creditor

"ho is licensed to ta*e and hold goods as security for payment of de$to !a"n$ro*ers are licensed in Canada

Inn+eepers (

o Kistorical Lia$ility of inn*eeper goes $ac* to middle ages

Boods "ere at mercy of inn*eeper 'n order to protect guests+ la" imposed a ery high standard of care on

inn*eeperso Common La" #tandard

'nn*eeper responsi$le for any loss+ een if not inn*eepers fault (insurerstandard

&ased on custom or the realm

:-ception8 loss due to negligence of guesto #tatutory #tandards

#ame as common la" standard as a general rule

#tatute defined "ho is an inn*eeper

istinguished from others "ho offer accommodation (rooming house+ safehouse+ shelters

Legislation sets out rights and o$ligations of inn*eepers

Limit of lia$ility allo"ed under act (aries from G4D G15D

9o lia$ility if loss due to negligence of guest

,o o$tain protection of act must post releant sections in all $edrooms andpu$lic rooms


41/50

Chapter 8: Interests in Land

Real -ropert) Land anything permanently attached to it

o Common la" includes $uildings+ minerals or anything else $elo" the surface and the

air space a$oe

1i*t$res A chattel that is constructiely or permanently attached to land

%eudal #ystem Land "as held as long as the holder of the land complied "ith a promise toproide the necessary armed men or serices in support of the cro"n

o 'f holder failed+ land "ould reert (escheat $ac* to the cro"n

o =ain source of "ealth historically

o Cro"n al"ays retained o"nership+ use to another

"en$re a method of holding land granted $y the Cro"n

o :states held "ere either free or unfree

o %reeholds had fi-ed serices attached to them

1eeimples An estate in land that represents the greatest interest in land that a person may

possess+ and that may $e coneyed+ or passed $y "ill to another+ or that on an intestacy "ould

deole to the persons heirs. Estates in Land

o 1ee imple

Canada all land still o"ned $y Cro"n and estates of land in fee simplegranted $y Cro"n patent to indiiduals

Cro"n often reseres right to minerals

Can dispose of land $y "ay of sale+ "ill+ or inheritanceo Escheat ,he reersion of land to the Cro"n "hen a person possessed of the fee dies

intestate and "ithout heirs (o E*propriation ,he forceful ta*ing of land $y a goernment or goernment agency

for pu$lic purposeso 'eed"ransfer ?ritten or printed instrument effecting legal dispositiono Life Estate An estate in land in "hich the right to possession is $ased upon a

persons lifetime.

Life tenant should not commit "aste eli$erate destroying of property

=a*es property harder to sello Remainderman A person "ho is entitled to real property su$)ect to a prior interest

(e.g.+ a life estate and "ho ac0uires the fee "hen the prior estate terminateso :.g. A has a land in fee simple and grant to & for life+ then C for life+ and the

remainder to C+ resering a life estate to himself. A has possession of land until hislife+ then & passion the land+ after & die+ C possess the land in fee simple.

Leasehold Estate 4 Brant of the right to possession of a parcel of land for a period of time inreturn for the payment of rent to the lando"ner (Contractual in nature

Condomini$m 4 A form of o"nership of real property+ usually including a $uilding+ in "hich

certain units are o"ned in fee simple and the common elements are o"ned $y the arious unito"ners as tenantsincommon

o Condominium eelopment efining the common elements from those o"ned

e-clusiely $y unit o"ners. &oth pass on transfer of title


42/50

o Condominium =anagement 1 =anagement through $oard or condominium

corporation. 2 !roide for insurance+ common element e-penses+ enforce rules3Boerned $y $yla"s similar structure to corporations

Cooperatie Kousing Corporations Broup of persons ac0uires an indirect interest in land

through a corporation

o #hareholders and tenants of the corporation Lesser Interests in Land

o Easements 4 A right to use the property of another+ usually for a particular purpose

o 'ominant "enement a parcel of land to "hich a right of "ay or easement attaches

for its $etter useo erient "enement 4 a parcel of land to a rightof"ay or easement

o Right of 2a) 4 a right to pass oer the land of another+ usually to gain access to ones

property

Restrictie Coenant 4 A means $y "hich an o"ner of property may continue to e-ercise

some control oer its use after the property has $een coneyed to anothero !romise not to use the property in a particular "ay

o Control the uses of the land+ control the *eeping of animals

o Eoid against pu$lic policy if attempts to preent the purchase or use $y a person $ased

on race+ creed+ colour+ nationality+ or religiono Kelps maintain alue of property

%ineral Rights /sually resere the mineral rights to the Cro"n

o -rofit a prendre a person "ho ac0uires the mineral rights in the lands of another

=ust $e in "riting

'n deed formo Leases !roides for the remoal of minerals and for the surface use

Riparian Rights(Common la" rights @ight to ta*e "ater from stream or "atercourse

o Cannot restrict do"nstream flo"

Aderse -ossession 4 A possessory title to land under the @egistry #ystem ac0uired $y

continuous+ open+ and notorious possession of land inconsistent "ith the title of the trueo"ner for a period of time (usually 1D 2D years

o Occupant in possession must do the acts normally re0uired $y the o"ner (pay ta-es+

maintain fences+ etco ,reat it as the occupants o"n

o Encroachment A possessory right to the property of another that may $e ac0uired

$y the passage of time

:.g. roof oerhang

&uilding constructed too close to property line &uilding constructed on neigh$ors property

1i*t$res 4 Chattels permanently or constructiely attached to real property

o :arly rule8 use and en)oyment of the particular item

Chattel attached to improe the land $ecame a part of realtyo &asic ,ests (at common la"

Attached $y o"n "eight

Affi-ed slightly are realty unless intended to continue as chattels


43/50

egree of anne-ation and o$)ect of anne-ation

'ntention only material from presumption of degree and o$)ect of anne-ation

,enants fi-tures purposes of tradeo "rade 1i*t$res 1 Can $e remoed $y tenant 2 'f easily remoa$le 3 =ust $e

remoed promptly after lease ends

"itle to Lando oint "enanc) 4 ,he )oint holding of e0ual interests in land "ith the right of the

suriing tenant to the interest of a deceased )oint tenant

'dentical in time+ interest+ and possession

Arises out of same instrumento "enanc) in Common ,he )oint holding of interests in land that need not $e e0ual

o @ight of #uriorship @ight of )oint tenant to others interest upon their death. Only

e-ists for )oint tenancy and not for tenancy in common

Registration of -ropert) Interests

o Registr) )stem

A proincial goernment operated system for the registration of interests inland

Bood chain of title trace $ac* present o"ners title to ensure good title

/sually for a 4D year period

Onus on prospectie purchaser

!urchaser may sue sellero Land "itles )stem 4 A proincial goernment operated system for the registration of

interests in land "here the goernment confirms and "arrants the particular interestsin land

!articular language for different instruments to aoid confusion

eed H transfer mortgage H charge

Certainty of title

=irror principle "hat you see is "hat you get @egistry mirrors title

Compensation comes from the proincial goernment if they are negligent inthe records

Chapter 9: La3 of %ortgages

%ortgage 4 An agreement made $et"een a de$tor and a creditor in "hich the title to property

of the de$tor is transferred to the creditor as security for payment of the de$to Old method of securing payment of inde$tedness

Contains terms of mortgage

Conditions of dischargeo ,ransfer title of property to the creditor

o %ound (true form in registry systems

Charge A secured claim (similar to mortgage registered against real property under the

Land ,itles systemo oes not transfer property to the creditor

at$re of %ortgages


44/50

o Legal %ortgage 4 A first mortgage of real property "here$y the o"ner of land in fee

simple transfers the title of the property pledged as security to the creditor on thecondition that the title "ill $e reconeyed "hen the de$t is paid

Only first mortgage may $e the legal mortgageo E0$ita(le %ortgage(#econd or #u$se0uent =ortgage A mortgage su$se0uent to

the first or legal mortgage a mortgage of the mortgagors e0uityo E0$it) of Redemption :0uita$le right of a mortgagor to ac0uire title to the

mortgaged property $y payment of the de$t secured $y the mortgage

-riorities =et3een %ortgages

o &y time of registration

o :-ception8 if $ona fide mortgagee has notice of prior unregistered mortgage

o =ort

Documents

Chapter Summary.doc