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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
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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
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!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
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-$(lic polic)8 o$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
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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 $y one party to the agreement
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%$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 $ut not
0uite fraudulent
@emedy ( depends on type of misrepresentation8
o 'nnocent rescission only
o 9egligent rescission and damages
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o %raudulent rescission and damages
!nd$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
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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
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#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 .
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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
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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 $een partly performed
Courts concerned "ith compensation for the "or* performed
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Chapter
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Intentional "orts 3ith the Rep$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
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%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
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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$out cars.
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Chapter >: !nintentional "orts and egligence
"he Concept of "ort Lia(ilit) 4 one should not intentionally cause in)uries to another.
'nitially only deli$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
$enefit of the person in possession of the land
@etail stores
O"ed the highest duty of care
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o Contract$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
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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.
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"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
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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
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=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 $ased on fraudulent misrepresentation
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o 'f committed outside scope of agents employment only agent lia$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
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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$ts /9L:## agrees to assume them
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Lia(ilit) of Emplo)ees
o !artnership firm is the employer
o !artners responsi$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
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=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.
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"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
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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 $y
o Earious matters (set forth in te-t at page 321
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Corporate ec$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.
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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
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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 $uy assets
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Chapter /: Emplo)ment La3
:mployment Contract @e0uires the essential elements of a contract
o 'ssue8 :mployment relationship or not
:mployee or independent contractor
1o$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
'$ties of the Emplo)er
o Beneral @ule
:mployers cannot contract out of employment legislation
=ost proinces hae employment standards legislation "hich sets outminimum "ages+ hours of "or*+ oertime+ holiday pay+ holidays+ etc.
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o 2 %orms of La"s
!hysical Aspect (health and safety
:mployment Contract (employment standardso Occ$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 $y employees against other employeeso !ay :0uity Legislation
Cannot pay female employees a lo"er "age than male employees for same )o$
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#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
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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
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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
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: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
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")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
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=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
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o #tandard of care different for carrier for re"ard and gratuitous carrier
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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
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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
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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 $y o"n "eight
Affi-ed slightly are realty unless intended to continue as chattels
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egree of anne-ation and o$)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
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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