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    Case Summary

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    Haojing Erica Xie
    This document summarizes several cases relating to contract law in Canada: 1) Kobelt Manufacturing Co. v. Pacific Rim Engineering Products involved an implied warranty claim for defective brakes. Kobelt was not liable as there was no reliance on its expertise by the buyer. 2) Exclusion clauses must be clearly brought to the attention of the buyer to be valid, as seen in Dawe v. Cypress Bowl and Greeven v. Blackcomb. 3) Unconscionable terms, like those omitting material defects in Maloney v. Dockside, will not be enforced. The standard of disclosure is higher for used goods.

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    Case Summary

    Uploaded by

    Haojing Erica Xie
    316 views6 pages
    This document summarizes several cases relating to contract law in Canada: 1) Kobelt Manufacturing Co. v. Pacific Rim Engineering Products involved an implied warranty claim for defective brakes. Kobelt was not liable as there was no reliance on its expertise by the buyer. 2) Exclusion clauses must be clearly brought to the attention of the buyer to be valid, as seen in Dawe v. Cypress Bowl and Greeven v. Blackcomb. 3) Unconscionable terms, like those omitting material defects in Maloney v. Dockside, will not be enforced. The standard of disclosure is higher for used goods.

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    BUSI 393 Case Summary

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    This document summarizes several cases relating to contract law in Canada: 1) Kobelt Manufacturing Co. v. Pacific Rim Engineering Products involved an implied warranty claim for defective brakes. Kobelt was not liable as there was no reliance on its expertise by the buyer. 2) Exclusion clauses must be clearly brought to the attention of the buyer to be valid, as seen in Dawe v. Cypress Bowl and Greeven v. Blackcomb. 3) Unconscionable terms, like those omitting material defects in Maloney v. Dockside, will not be enforced. The standard of disclosure is higher for used goods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    316 views6 pages

    Case Summary

    Uploaded by

    Haojing Erica Xie
    This document summarizes several cases relating to contract law in Canada: 1) Kobelt Manufacturing Co. v. Pacific Rim Engineering Products involved an implied warranty claim for defective brakes. Kobelt was not liable as there was no reliance on its expertise by the buyer. 2) Exclusion clauses must be clearly brought to the attention of the buyer to be valid, as seen in Dawe v. Cypress Bowl and Greeven v. Blackcomb. 3) Unconscionable terms, like those omitting material defects in Maloney v. Dockside, will not be enforced. The standard of disclosure is higher for used goods.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 6

    Kobelt Manufacturing Co. V.

    Pacific Rim Engineering Products (SGA/Special Types of Contracts)


    - Tell me what the brakes are for!
    - fitness-for-purpose/reliance on expertise
    - Kobelt won, PREP had to pay for brakes

    Porelle V. Eddie's Auto Sales Ltd. (Special Types of Contracts)


    - Second hand car broke down after purchase
    - exclusion of SGA in used good
    - with clear terms, Eddie's was excluded

    Kovacs V. Holtom (SGA/Special Types of Contracts)


    - Convertible destroyed while being restored
    - Title did not pass yet (Rule 2), Kovacs won

    Jedfro Investments v. Jacyk (Discharge of Contract)


    - Waiting/ignoring an agreement does not equal discharge of K

    Saturley v. Lund (Discharge of Contract)


    - Lund did not tell Saturley purchase of house was dependent on sale of their house (condition subsequent was not
    in K)
    - discharge of frustration 1) must render performance impossible/radically diff 2) beyond party's control

    Brealta Energy v. First Capital Management Ltd. (Breach of Contract/Remedies/Exclusion Clauses)


    - anticipatory breach must be unequivocal representation (notice of intent not enough)
    - equitable estoppel not applicable

    Westcoast Transmission v. Cullen (Breach of Contract/Remedies/Exclusion Clauses)


    - only liable for damages that were foreseeable at time of K; Kato didn't need to pay for alternative source of
    power

    Blackcomb Skiing v. Schneider (Breach of Contract/Remedies/Exclusion Clauses)


    - liquidated damages enforceable if genuine pre-estimate, which it was; Blackcomb kept deposits

    Dawe v. Cypress Bowl (Exclusion Clauses)


    - exclusion clause binding if clearly states exempted liability & brought to attn

    Greeven v. Blackcomb (Exclusion Clauses)


    - exclusion clauses do not apply if party didn't reasonably bring it to attn
    Maloney v. Dockside (Exclusion Clauses)

    - exclusion clauses do not apply if contract was unconscionable (Maloney omitted info about deficiencies)

    Bevo Farms Ltd. v. Veg Gro Inc. (Special Types of Contracts)

    - SGA Rule 5
    - seedlings lost in accident; title on Veg Gro b/c it passed when it went on the truck to be delivered

    Peacock v. Esquimalt & Nanaimo Railway Co. (Privity of K, Assignment)

    - no privity of K b/c not party to contract for sale of land

    Bank of Nova Scotia v. Rock Corp (Negotiable Instruments)

    - bank was not a holder in due course, so took subject to the equities

    Nova Scotia Ltd. v. Sarkar (Negotiable Instruments)

    - Money Mart was a holder in due course

    Waldick v. Malcolm (Law of Torts)

    - volenti appeal doesn't work b/c Waldick didn't intend to accept all risk and waive legal rights

    Hollis v. Dow Corning (Law of Torts)

    - manufacturer is liable to end user and should inform the learned intermediary of all risks

    Morsi v. Fermar Paving (Law of Torts)

    - cause of accident was Morsi

    - Fermar Paving was not contributorily negligent

    Rangen v. Deloitte & Touche (Professional liability)

    - remoteness/no substantial proximity

    - Deloitte couldn't reasonably predict Rangen would use it for that purpose

    - no duty of care

    Hercules v. EY (Professional liability)

    - there is duty of care b/c knew that Hercules would use it for decision

    - not liable b/c statements prepared for management decisions not investment (need specific purpose)

    Hodgkinson v. Simms (Fiduciary duty / Agency)


    - there was conflict of interest; harm was result of reliance

    - guilty for breach and liable for losses

    Strother (Fiduciary duty / Agency)

    - FD extends for a year after term ends

    - partners liable for breaches

    - Strother competed but did not disclose, breach

    Pemberton Benchlands Housing v. Sabre Transport (Fiduciary duty / Agency)

    - no actual or apparent authority

    - 1) must have representation 2) must be made by person w/ actual authority

    Lanz v. Lanz (Business organizations)

    - no evidence of partnership present

    Penbro Holdings v. Demchuk (Business organizations)

    - no partnership, no intention to share profits/other factors

    Canadian Sports Specialists Inc. v. Phillippon (Business organizations)

    - fiduciary breach by a director towards a company; arrangement was considered improper & illegal; case of
    Strother/Hodginson was comp to comp, here was director to entity

    Challenor v. Nucleus Financial Network Inc. (Business organizations)

    - did not pierce corporate veil because not sufficient relationship of proximity between the two

    Data Business forms v. Macintosh (Business organizations)

    - did not pierce corporate veil which states directors are personally liable only in exceptional circumstances like
    fraud, was not unconscionable

    Universal Property Management v. Westmount (Business organizations)

    - no notice of the existence of it now being a limited company, no notice of change of status, so Macintosh liable as
    a sole proprietor
    EXCLUSION CLAUSES

    DAWE V. CYPRESS BOWL CB 146


    Facts: He knew there was writing, and knew or believed that the writing contained conditions, then he is bound
    by the conditions; that if he knew there was writing on the ticket, but did not know or believe that the writing
    contained conditions, nevertheless he would be bound if the delivering of the ticket to him in such a manner
    that he could see there was writing upon it, was, in the opinion of the jury, reasonable notice that the writing
    contained conditions.
    Result: In my opinion, the Defendant did bring the exclusion of liability condition to the Plaintiff's attention. It
    can do no more, they cannot force the Plaintiff to read them.
    Principles of Law:
     The Defendant applies for an order under Rule 18A for an order declaring that the Plaintiff is pre-
    cluded, by the provisions of the Exclusion of Liability
     seller has done what is reasonable to bring the terms and conditions of an exclusion clause to the
    attention of the buyer, the buyer is bound by the terms.

    GREEVEN V. BLACKCOMB CB 152


    Facts: She was a stranger to the country and to the mountain and purchased the ticket at the very be-ginning of
    her visit. Counsel for the plaintiff says there is no case to be found in which a plaintiff innocent of any degree of
    knowledge of the writing has been held to be bound.
    Result: The notices are garish, and are reasonably legible and clear in their wording. But the evidence as to
    their location in relation to the ticket wickets, as to their number and as to the other circum-stances existing on
    that day, is vague. I cannot conclude that the plaintiff should have seen any of them.
    Principles of Law:
     The defendant applies under Rule 18A for an order dismissing the action on the ground that any
    possible liability on its part to the plaintiff has been excluded by contract.
     Where the seller has not done what is reasonable to bring the terms to the buyer’s attention

    MALONEY V. DOCKSIDE CB 157 – 162, 163-167


    Facts: The Maloney case says that when selling USED goods there is a higher onus on the expert towards the
    unsophisticated buyer to disclose information. The court will also look to the contract to see if the terms were
    grossly unfair to the buyer.
    In the Maloney case the price of the boat being sold by the seller to a less sophisticated buyer added suspicion
    that the seller knew that the boat was deficient and wished to sell it to an unsuspecting purchase
    Result: The plaintiff has been successful, assuming that the problems with the boat are not related to the
    subsequent installation of a freshwater cooling system, in that the exclusion clause within the contract of
    purchase and sale of the Bayliner is unconscionable.
    Principles of Law:
     The first issue is whether, as a matter of interpretation, the exclusion clause even applies to the
    circumstances established in evidence. This will depend on the court's interpretation of the intention of
    the parties as expressed in the con-tract.
     If the exclusion clause applies, the second issue is whether the exclusion clause was unconscionable
    and thus invalid at the time the contract was made.

    Sale of Goods
    SALE OF GOODS ACT CB
    Kobelt Manufacturing Co. v. Pacific Rim Engineered Products (1987) Ltd.
    Facts: The possible theories for the events causing the leaking of the seals appear to be: using the brakes in
    service mode; using the brakes as a holding brake with regular cycles lasting for 5-12 seconds; and/or perhaps
    misaligned springs rubbing the piston wall and causing debris to fall and contaminate the seals.
    Neither PREP nor Guide Technologies relied on Kobelt as a designer, but as a supplier. As such, and in the
    circumstances, their respective roles could not imply reliance on Kobelt to ensure that its brakes performed on a
    drawworks; rather the extent of any reliance was that the brakes meet the needs as expressed by the buyer,
    namely the technical specifications as disclosed by Guide Technologies
    exclusion clause issue:
    Can the reference to the terms and conditions on Kobelt's website in shipping documents, received after the
    contract was formed, in-troduce an exclusion clause as a binding term between the par-ties?
    Result: Accordingly, although the brakes were not suitable for the particular purpose that the buyer used them
    for, I find there was no breach of any implied condition or warranty under the Sale of Goods Act because the
    required communication of a particular purpose and reliance is absent.
    exclusion clause issue:
    Assuming the exclusion clause is part of the contract, is its wording sufficiently clear to oust the implied
    statutory condition or warran-ty under the Sale of Goods Act?
    KOBELT makes no warranty or representation, express, implied, or statutory with respect to its products,
    contents or use of this documentation and all accompanying software and especially disclaims its quality,
    performance, merchantability, or fitness for any non-conforming purpose.

    Principles of Law:
     The three criteria proposed by Professor Fridman in his text, Fridman, Sale of Goods in Cana-da, 4th ed.
    (Scarborough: Carswell, 1995) at p. 186, in determining whether there is an im-plied warranty for
    fitness for a particular purpose are that: (i) the contract was in the course of the seller's business; (ii)
    the seller has knowledge of the purpose of the goods; and (iii) the buyer relied on the seller's skill and
    judgment.

    PORELLE V. EDDIE’S AUTO SALES LTD CB 204


    Facts:
    Result:
    Principles of Law:

    KOVACS V. HOLTOM CB 208
    Facts:
    Result:
    Principles of Law:

    BEVO FARMS LTD V. VEG GRO INC CB 212
    Facts:
    Result:
    Principles of Law:

    PRIVITY OF CONTRACT

    PEACOCK V. ESQUIMALT & NANAIMO RAILWAY CO. CB 218


    Facts: The plaintiff's position was that he was a contracting party for the purchase of lands under a con-tract
    which was frustrated by an intervening fire before closing, thus entitling him to the return of his deposit. At
    issue was whether the plaintiff had actually been one of the parties who contract-ed with the defendant for the
    sale of the land.
    The defendants, on the other hand, argue that there was no privity of contract between the plaintiff and the
    defendants and that the agreement to purchase the lands was between Wessex Management Ltd. ("Wessex"),
    West Steel Corp. ("West"), Darrell Brown and Alan Parkin as purchasers and the defendants and that the
    plaintiff was not a party to any agreement to purchase the land.
    Result: On the whole of the case, I can come to no other conclusion than that the plaintiff was not a contracting
    party with the defendants for the purchase of the property and accordingly there was no privity of contract
    between him and the defendants
    Principles of Law:

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