Case Study

An Ontario firm, Fanview, has developed a camera stabilizer that enables an operator to take excellent moving pictures of sports and other action events. Fanview manufactures and services the equipment and also provides a consulting service sending advisers and trainers to clients to help them obtain sharp pictures in challenging situations, whether they are using Fanview's equipment or that of a competitor. Fanview has entered into the following four major contracts this year:

a) a contract to deliver one unit to a film company in New York state

b) a contract to deliver one unit to a ski-instruction school in British Columbia

c) a contract to deliver two units to the British Institute of Sporting Films in London, England; and

d) a contract to send two consultants to help the French Broadcasting Network film skiing events in Davos, Switzerland, in January of next year.

The individual who arranged for these contracts is the sales manager of the company. He is focused on selling the company's product and has no time for expensive lawyers and their interference in his dealings, so the contracts were simple ones. They contained all the essential terms, such as price, packing and shipping arrangements, dates for delivery, insurance and payment obligations.

There was no thought given to settlement of disputes or what law would apply to the contracts. The sales manager assumed that Ontario law would apply to the contracts because all the contracts were signed in Toronto on a standard form prepared by Fanview. He is familiar with the provisions of the Sale of Goods Act of Ontario because he has been in sales for many years and has taking a short course on the sale of goods law in Ontario.

Problems have arisen under each of these contracts, and Fanview has come to you seeking legal advice.

1. Is the sales manager correct in his assumption that the Sale of Goods Act of Ontarioapplies to each of these contracts? Why or why not?
2. Explain the laws that will likely apply to each of the contracts.
3. How could the sales manager have ensured that the Sale of Goods Act of Ontario applied to each of the contracts?
4. Is there an implied duty of faith to continue to negotiate in Canada? Explain your answer.