Cornwall Gravel wanted to submit a tender (offer) for a government contract. It contacted Purolator Courier to arrange delivery of the offer to the government office. Purolator collected the envelope at 6:00 pm on October 1. At that time, Cornwall Gravel told Purolator's employee that the envelope contained a "tender" and stressed that it had to be delivered by 3:00 pm on October 2. It then signed a bill of lading, which was presented by Purolator's employee, and which created a contract between Cornwall and Purolator. That contract contained a paragraph that said, "Purolator's liability for any loss or damage to the package shall be limited to $1.50 per kg based on the weight of the envelope." Because of the employee's carelessness, Cornwall's envelope was not delivered to the government office until 3:17 pm on October 2. As a result, the government refused to consider Cornwall's offer. The evidence indicates that if the envelope had been delivered on time, Cornwall would have received the government contract and would have earned a net profit of $700 000. Cornwall has therefore sued Purolator for breach of contract. In defence, Purolator says that (i) since the package weighed only 1 kilogram, damages must be limited to $1.50, and (ii) even if the exclusion clause does not apply, it should not be held liable for $700 000 because it did not know all the details concerning the contract that Cornwall hoped to receive from the government. What will the court decide? 7. Donald Evans Inc (DEI) supplies materials to the oil industry in Alberta. Although the company deals in several types of equipment, the vast majority of its profits are generated by a device called a heavy oil extraction coupler (or, more simply, a "coupler"). The manufacture of those couplers required the use of widgets purchased from Harjat Machine Corp (HMC). HMC is the only source of such widgets. Two years ago, the parties created a contract that obligated HMC to provide widgets to DEI for 10 years. One year ago, however, HMC breached that contract by refusing to perform the contract unless DEI promised to pay a higher price. As it was entitled to do, DEI immediately discharged the contract for breach of condition. HMC now concedes that it had acted wrongfully and that it is liable to DEI. The more difficult question pertains to the measure of relief. There are three possibilities: (i) Because DEI cannot manufacture its couplers without HMC's widgets, DEI is entitled to the full value of the profits that it will lose for the remainder of the full life of the parties' 10-year contract: (ii) DEI could have rearranged its manufacturing process, within two years, to produce its couplers without widgets from HMC. Damages could be confined to DEI's lost profits during that period; and (iii) within a very short time of its own breach, HMC admitted that it had acted wrongfully. It therefore offered to create a new contract with DEI to supply widgets for either (a) the remainder of the time contemplated by the original contract, or (b) the length of time that DEI would require to develop a manufacturing process that did not involve widgets. Which solution would a court most likely adopt? Explain your answer. 8. CanPro, a Canadian film company, hired Alan Smithee, a relatively unknown actor, to star in a biographical movie about Pierre Trudeau. Although the contract called for payment of only $15 000 in exchange for four months of work, Smithee accepted the role because he believed that the film would be widely publicized in Canada and consequently would give his career an invaluable boost. The evidence supports that belief. In similar circumstances, other actors have seen their annual income rise to an average $100 000 in the year following the release of a major motion picture. Given the other factors involved in the movie industry, however, it is almost impossible to predict the longer-term effects of starring in a major motion picture. Unfortunately, Smithee never actually tasted glory. Just days before filming was scheduled to begin, CanPro decided to replace Smithee with another actor. The movie has now been made and Smithee is unhappy. CanPro has not given any reason for its decision to replace him, but it insists that its breach of contract did not really cause him to suffer much of a loss. Although Smithee is trained as an actor, he has spent the last four years working as a waiter for $2000 per month. Out of "generosity," CanPro is willing to pay $2000 to Smithee on the assumption that he stopped working a month before filming was scheduled to begin to rehearse his part. Would a court agree with that conclusion? Explain your answer.