CASE 1

Grand Island Development Corporation owned several cottage lots on Vancouver Island and on September10 sent a letter to Onshore Construction Company offering to sell the lots for $300,000.Onshore Construction Company sent a reply by return mail on September 13 offering to buy the lots for $250,000.

Grand Island Development Corporation did not respond immediately, but a week later, on September20, the president of Grand Island Development Corporation met the president of Onshore Construction Company at a charity dinner, at which time the president of Onshore Construction Company indicated that his company was still interested in the purchase of the cottage lots and enquired if Grand Island Development would be willing to reduce the price of the lots. The president of Grand Island Development stated that the $300,000 price was "firm."

On September 23, the Onshore Construction Company sent a letter to Grand Island

Development Corporation accepting its offer to sell the cottage lots for $300,000. Due to a delay in the delivery of the mail, the letter was not received at the office of Grand Island Development Corporation until September 28.

In the meantime, when Grand Island Development Corporation had not heard from Onshore Construction Company by September 26, it accepted an offer to purchase the lots from Cottage Contracting Ltd. Identify the various rights and liabilities that arise from the negotiations.

CASE 2

Base Metal Co. wrote a letter to Steel Manufacturing Co. on May 2 offering to sell it 350tonnesof rolled steel at $2,200 pertonne. Steel Manufacturing Co. received the letter on May 3. A few weeks later, the president of Steel Manufacturing Co. checked the price of theparticular type of steeland discovered that the market price had risen to $2,280 pertonne. On May 22, Steel Manufacturing Co. wrote to Base Metal Co. accepting the offer. Base Metal Co. did not receive Steel Manufacturing Co.'s letter until May 30. Base Metal Co. refused to sell the steel to Steel Manufacturing Co. at $2,200 pertonnebut expressed a willingness to sell at the current market price of $2,310 pertonne.

Steel Manufacturing Co. instituted legal proceedings against Base Metal Co. for breachothercontract that it alleged existed between them. Discuss the rights (if any) and the liabilities (if any) of theparties, andrender a decision.

CASE 3

The Silver Mining Company decided to sell of two of its less productive mines, the Blue Lake mine and the Silver Lake mine, and authorized the company president to find a buyer. On June 10, the president wrote a letter to the Amalgam Mining Corporation offering to sell the two properties for $3,000,000.

On June 22, Amalgam Mining Corporation replied by mail to the letter in which it expressed an interesting the purchase of the Blue Lake mine at a price of $2,000,000, if Silver Mining Company was prepared to sell the properties on an individual basis. On June 28, the president of Silver Mining Company replied by fax that he would prefer to sell both properties, but if he could not find a buyer for the two parcels within the next few weeks, the company might consider selling the properties on an individual basis. On July 6, the Amalgam Mining Corporation made an inquiry by fax to determine if Silver Mining Company had decided to sell the properties on an individual basis.

The president of Silver Mining Company responded with a fax which stated that it was still looking for a buyer for both properties. Following this response, Amalgam Mining decided to examine the Silver Lake mine property and sent out its two geologists todo briefsite evaluation. On July 12, they reported back to say that they had examined the mine and, from company core samples, found what might be a potentially economic ore body worth between 10 and 30 million dollars. Amalgam Mining then prepared a letter accepting the offer of Silver Mining Company to sell both properties for $3,000,000. The letter was mailed on July 15.

On July 16, the president of Silver Mining Company found a buyer for the Silver Lake mine at a price of $1,200,000 and signed a sale agreement the same day. He then wrote a letter to Amalgam Mining in which he accepted their offer to buy the Blue Lake mine for $2,000,000. The president of Silver Mining Company received the July 15 letter of Amalgam Mining on July 17.

Discuss the issues raised in thiscase, andindicate in your answer how the case might be decided if it was brought before the court.

CASE 4

Rafting Company offered white water raft trips involving a relatively short 10-km journey down a swift river. The price of the trip, including overnight hotel stay and meals, was advertised at $300. Hillary and Hal, in response to the advertisement, entered into a verbal agreement with the operator of the Tour to join in on the journey, and they agreed to appear at the designated hotel the evening before the date of the excursion.

At the hotel, they met the president of the tour company and paid him the tour price. The next Morning, as Hillary and Hal assembled their gear with the nine other passengers, a representative of the company spoke to the participants and instructed each of them to sign a form entitled "Standard Release." The form stated that the operator of the tour was "not responsible for any loss or damage suffered by any passenger for any reason, including any negligence on the part of the company, its employees, or agents." They were reluctant to sign the release, but when they were informed by the tour representative that they would not be allowed on the raft unless they signed it, they did so. When the release was signed, the representative gave each of them a life jacket with a normal adult buoyancy rating. After they donned the lifejackets, theywere allowed toclimb aboard the raft.

During the course ofthe journey, the raft overturned in very rough water, and Hal and two other persons drowned. An investigation of the accidently provincial authorities indicated that the life jacket Hal had been wearing was not adequate to support the heavy weight of a person his size. The investigation also revealed that due to the swiftness of the river at the place where the accident occurred, a more suitable life jacket would probably not have saved Hal's life.

Hillary survived the accident and brought an action against the tour company under the provincial Legislation that permitted her to institute legal proceedings on behalf of her deceased spouse.

Discuss the issues raised in thiscase, andindicate the arguments that might be raised by each party. Render a decision.

CASE 5

Metro Developments Ltd. owned a parcel of land on which it wished to have a commercial building constructed. An architect was engaged to design the building, and a contractor was contacted to carry out the construction. Contracts were signed with both.

Before the construction was completed, the Municipal Building Department inspected the building and informed the architect that the building violated municipal by-law and would require certain safety features to be included in the building. Neither the architect nor the contractorwereaware of the by-law at the time they entered into their respective agreements with the company.

The safety features required by the by-law could be incorporated in the building at a cost of approximately$15,000, but the contractor refused to do so unless he was paid for the work as an "extra" to the contract price. Metro Developments Ltd. refused to treat the required changes as an "extra," and it withheld all payment to the contractor on the basis thatthe construction was illegal. The contractor then instituted legal proceedings against the company. Explain the nature of the contractor's claim, and explain thedefence, if any, that might be raised by Metro Developments Ltd.

Discuss the issue of responsibility in the case.Render a decision.

CASE 6

A medical clinic that had been established for many years advertised in the medical press for an obstetrician. Silvano, a medical specialist, answered the advertisement. Following an interview, Silvano was employed by the clinic and signed an employment contract that contained the following clause:

Should the employment of the Party of the Second Part by the Parties of the First Part terminate for any reason whatsoever, the Party of the Second Part COVENANTS ANDAGREES that she will not carry on the practice of medicine or surgery in any of its branches on her own account, or in association with any other person or persons, or corporation or in the employ of any such person or persons or corporations within the City or within 10kilometresof the limits thereof for a period of five years.

Silvano worked well with the other doctors at the clinic and developed a good reputation with the patients at the clinic, but after some years, an argument arose between Silvano and one of the founders of the clinic. As a result of the argument, Silvano resigned. She immediately set up practice in the same city in an office building located across the street from the clinic. The clinic continued to operate without the services of Silvano and later brought an action for damages and an injunction against her.

Discuss the factors the courts should consider in deciding this case. Render a decision.

CASE 7

In 1998, Einstein entered the employ of Security Technology Limited as an electrical engineer. He was employed to design electronic testing equipment, which the company manufactured. At the time he was hired, he signed a written contract of indefinite hiring as a salaried employee. The contract contained a clause whereby he agreed not to disclose any confidential company information. The contract also required him to agree not to seek employment with any competitor of the company if he left the employ of Security Technology Limited.

Some years later, Einstein was requested to develop a home security device suitable for sale to home mechanics through aparticular hardwareStore chain under the chain's brand name. He produced prototype in less than a week and then went to the president's office to discuss the development and production of the equipment.

During the course ofthe discussion, Einstein and the company president became involved in a heated argument over manufacturing methods. At the end of the meeting, the president suggested that Einstein might begin a search for employment elsewhere, as his job would be terminated in three months' time.

The next morning, Einstein went to the president's office once more, ostensibly to discuss the home security device. Instead, Einstein informed the president as soon as he entered the room that he no longer intended to work for the firm. He complained that the company had never given him more than a two-week vacation in any year and that he often worked as much as 50 hours per week, with no overtime pay for the extra hours worked. In a rage, he smashed the prototype of the device on the president's desk, breaking it into a dozen small pieces. He then left the room.

The following week, Einstein accepted employment with a competitor of Security Technology Limited todo atype of worksimilar tothat which he had done at his old firm. He immediately developed a home security device similar in design to the previous model; then, he suggested to the management of his new employer that they consider the sale of the equipment through the same hardware chain that Security Technology Limited had contemplated for its product. The competitor was successful in obtaining a large order for home security devices from the hardware chain a short time later.

Security Technology Limited presented its new product to the hardware chain a week after the order had been given to the competitor and only then discovered that Einstein had designed the equipment for that firm. The hardware chain had adopted the competitor's product as its own brand and was not interested in purchasing the product of Security Technology Limited, in view of its apparent similarity in design.

Security Technology Limited had expected a first year's profit of $60,000 on the home security device, if it obtained the contract from the hardware chain.

Discuss the nature of the legal action (if any) that Security Technology Limited might take againstEinstein, andindicate thedefences(if any) that Einstein might raise if Security Technology Limited should do so.

CASE 8

Tom was tired of running his business and was looking for a buyer so he could retire before the winter. Bill wanted to buy thebusiness, butneeded another month to raise the necessary finances. Tom said to Bill, "Look, for $5,000, I'll give you an option to purchase in 30 days, but if you're not ready to buy then for $50,000, I'm going to sell it to Dan." Bill paid Tom the $5,000. Thirty days later, Bill appeared at Tom's door with $45,000. Tom said, "Sorry, I'm going to sell it to Dan. I said the price was $50,000." Bill wasconfused, andsought legal advice. What advice would the lawyer provide to Bill?

CASE 9

Janine owned a shop selling fine bone china. After customer dropped an expensive bowl and shattered it, Janine made a new policy by posting a sign reading "Lovely to look at, lovely to hold, if you break it, consider it sold." In time, another customer broke a vase she was examining but refused to pay for it. Discuss the legal position of both Janine and her customer.

CASE 10

Ann's electric clothes dryer was unreliable, and she sought a replacement. She noticed an advertisement in the newspaper for a used dryer, in like-new condition, at a price of $200. She visited the residential address given, and was shown the dryer, sitting against the wall inside a garage. The elderly lady who owned it had died, and her son was selling her possessions. Ann was delighted, paid $200 and took the dryer home. When she tried to install it, she discovered it was designed to run on natural gas rather than electricity, a fact that had not even occurred to her to check. Does a contract exist in this situation?