The Law and Business Administration in Canada
Fifteenth Edition
J. E. Smyth
Late Professor ofCommerce, FacultyofManagementStudies
University of Toronto
D. A.Soberman
Late Professor ofLaw,Faculty ofLaw
Queen’sUniversity
A. J.Easson
Late Professor ofLaw,Faculty ofLaw
Queen’sUniversity
S. A.McGill
Schoolof Business &Economics
Wilfrid Laurier University
PearsonCanadaInc.,26PrinceAndrewPlace,NorthYork,OntarioM3C 2H4.
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9780134841298
120
Library andArchivesCanada CataloguinginPublication
Smyth,J.E.(JamesEveril),1920-1983,author
ThelawandbusinessadministrationinCanada/J.E.Smyth,Late ProfessorofCommerce,FacultyofManagementStudies,Universityof Toronto,D.A.Soberman,LateProfessorofLaw,FacultyofLaw,Queen’s University,A.J.Easson,LateProfessorofLaw,FacultyofLaw,Queen’s University,S.A.McGill,(SchoolofBusiness&Economics,WilfridLaurier University.--Fifteenedition.
ISBN978-0-13-484129-8(hardcover)
1.Commerciallaw--Canada--Textbooks. 2.Commerciallaw--Canada-Cases. 3.Textbooks. I.Soberman,D.A.,author II.Easson,A.J.,author III.McGill,S.A.(ShelleyA.),author IV.Title.
KE919.S692019
346.7107
C2018-906227-4
KF889.S692019
Detailed TableofContents
AbouttheAuthors
Preface
Authors’acknowledgments
TableofStatutes
TableofCases
CodesofConduct 11
WhoMakesLaw? 11
TheCourtsandLegislation 12
FederalismandtheConstitution 12
TheCharterofRightsandFreedoms 14
TheRightsandFreedomsProtectedbytheCharter 16
TheSignificanceoftheCharterforBusiness 16
ChallengingtheApplicationofaStatute 18
QuestionsforReview 20
2 TheMachineryofJustice 21
ClassifyingLaw 22
WhoMakesLaw? 22
TwoLegalSystems:CivilLawandCommonLaw 22
RegionsoftheWorldunderEachSystem 22
TheNeedforConsistencyandPredictability 23
CommonLaw:TheTheoryofPrecedent 24
CertaintyVersusFlexibility 24
AccommodatingChange 24
TheSourcesofLaw 25
Legislation:GovernmentMadeLaw 25
CaseLaw:Judge-MadeLaw 27
TheSystemofCourts 29
TheCourtsofFirstInstance—TrialCourts 29
TheCourtofAppeal 29
ChallengingGovernmentRegulationofBusiness 48
Jurisdictionover“BusinessActivities”undertheConstitution 48
BusinessRegulationsthatOffendtheCharter 51
RegulationImproperlyAppliedintheCircumstances 52
Competition 54
TheCompetitionAct 54
Conspiracies 55
Monopolizing 57
Mergers 60
ConsumerProtection 61
WhyIsConsumerProtectionLegislationNecessary? 61
PrincipalTypesofConsumerLegislation 62
EnvironmentalProtection 68
TheLegislativeFramework 68
EnvironmentalImpactAssessmentReview 70
EnforcementandLiability 70
StrategiestoManagetheLegalRisks 71
QuestionsforReview 72
CasesandProblems 72
4 TheLawofTorts 75
TheDevelopmentofTortLaw 76
TheBasisforLiability 76
Fault 76
StrictLiability 77
PublicPolicy 77
VicariousLiability 78
IntentionalTorts 79
AssaultandBattery 79
Nuisance 79
FalseImprisonmentandMaliciousProsecution 80
Defamation 81
OtherIntentionalTortsRelatedtoBusiness 82
UnintentionalTorts 84
Negligence 84
ElementsofNegligence 84
DefencestoNegligence:ThePlaintiff’sOwnConduct 89
TheRelevanceofInsurance 90
ProductLiability 90
InherentlyDangerousProducts 92
Occupier’sLiability 94
Remedies
FiduciaryDuty 103
TortLiability 105
StatutoryLiability 106
ChoosingaCauseofAction 107
TortLiabilityforInaccurateStatements 108
FraudulentMisrepresentation 108
NegligentMisrepresentation 108
ProvingNegligentMisrepresentation 109
TheDutyofCare—SpecialRelationship 109
AccuracyoftheStatement 112
TheStandardofCareforProfessionals 112
RelianceandDetriment 114
TheRoleofProfessionalOrganizations 115
ResponsibilitiesandPowers 115
CodesofConduct 116
Discipline 117
ConflictofDutytowardClients,theProfession,andtheCourts 117
Multi-DisciplinaryPartnerships 118
StrategiestoManagetheLegalRisks 119
QuestionsforReview 120
CasesandProblems 120
6 FormationofaContract:OfferandAcceptance 124
TheRoleofContractLaw 125
TheNatureofaContract 125
TheNatureofanOffer 125
TheCommunicationofanOffer 126
WrittenOffers 127
StandardFormContracts:TheirRisksandBenefits 127
NoticeofTerms 128
TheLapseandRevocationofanOffer 129
Lapse 129
Revocation 130
Options 130
RejectionandCounter-offerbytheOfferee 131
TheElementsofAcceptance 132
PositiveandUnconditional 132
CommunicationtotheOfferor 132
TheMomentofFormation 133
TransactionsBetweenPartiesataDistancefromEachOther 135
MethodofAcceptance 135
MethodsofRevocation 136
DeterminingtheJurisdictionWhereaContractIsMade 136
UnilateralandBilateralContracts 137
Bilateral:OfferofaPromiseforaPromise 137
Unilateral:OfferofaPromiseforanAct 137
FormationofInternetContracts 138
7 FormationofaContract:ConsiderationandIntention 145 TheMeaningofConsideration 146
GratuitousPromises 146
8 FormationofaContract:CapacitytoContractandLegalityofObject 163
LimitedCapacity 164
Minors(orInfants) 164
OtherPersonsofDiminishedContractualCapacity 167
Corporations 167
LabourUnions,Associations,andOtherOrganizations 168
AboriginalPeoples 169
TheRoleofLegalityintheFormationofaContract 170
TheDifferenceBetweenVoidandIllegalContracts 170
ContractsAffectedbyStatute 171
SignificanceoftheWordingofaStatute 171
ExamplesofContractsVoidbyStatute 171
ExamplesofStatutesAffectingPublicPolicy 172
ExamplesofAgreementsIllegalbyStatute 174
ExamplesofAgreementsMadeLegalbyStatute 175
ContractsIllegalbytheCommonLawandPublicPolicy 176
TheCommonLaw 176
PublicPolicy 177
AgreementsinRestraintofTrade 178
StrategiestoManagetheLegalRisks 182
QuestionsforReview 183
CasesandProblems 184
9 ContractIssues:MistakeandMisrepresentation 188
SettingAsideaContract 189
TheNarrowMeaningofMistake 189
VoidandVoidableContracts 189
MistakesAbouttheTerms 191
WordsUsedInadvertently 191
ErrorsinRecordinganAgreement 191
MisunderstandingsAbouttheMeaningsofWords 192
MistakesAbouttheSubjectMatter 193
MistakeAbouttheExistenceoftheSubjectMatterofaContract 193
MistakeAbouttheValueoftheSubjectMatter 193
MistakesAbouttheIdentityofaPartytoaContract 194
MistakesAbouttheNatureofaSignedDocument 196
NonEstFactum 196
Misrepresentation 196
ContractVersusTort 196
ConsequencesofMisrepresentationinContracts 197
MisrepresentationbySilenceorOmission 198
UndueInfluence 199
BurdenofProof 200
ArrangementsInvolvingSpouses 200
ImportanceofIndependentLegalAdvice 201
ConsumerProtection 201
Duress 202
StrategiestoManagetheLegalRisks 203
QuestionsforReview 203
CasesandProblems 204
10 WritingandInterpretation 207
TheDistinctionBetweenSubstanceandForm 208
TheBenefitsofaWrittenRecord 208
LegislationDealingwithWriting 208
TheStatuteofFrauds 209
TheTypesofContractsCoveredbytheStatuteofFrauds 209
RequirementsforaWrittenMemorandum 212
ConsequencesforContractsWithinItsScope 213
WhatConstitutesaSaleofGoodsforthePurposesoftheWritingRequirement? 215
EvidenceThatSatisfiestheAct 216
WhenBothActsApply 216
ConsumerProtectionLegislation 217
TheInterpretationofExpressTerms 219
TheGoaloftheCourts:ToGiveValiditytoContracts 219
LegalPrinciplesofInterpretation 219
GeneralApproachtoInterpretation 220
SpecialUsageofWords 220
ConflictingTestimonyandCredibility 220
SpecialContractsorClauses 221
TheParolEvidenceRule 221
TheMeaningofParolEvidence 221
TheMeaningoftheParolEvidenceRule 222
ExceptionstotheParolEvidenceRule 222
ImpliedTermsasaMethodofInterpretation 224
TermsEstablishedbyCustomorStatute 225
ReasonableExpectationoftheParties 226
StrategiestoManagetheLegalRisks 227
QuestionsforReview 228
CasesandProblems 228
11 PrivityofContractandtheAssignmentofContractualRights 232
PrivityofContract 233
ScopeofContractualRightsandDuties 233
ComparisonwithRightsandDutiesinTort 234
TortLiabilityandVicariousPerformance 234
ExceptionstothePrivityofContractRule 236
Trusts 236
Insurance 237
TheUndisclosedPrincipal 237
ContractsConcerningLand 237
ExpressLanguageintheContract 237
AssignmentofRights 239
TheNatureofanAssignment 239
TheImportanceofAssignments 240
TheRoleofEquity 241
EquitableAssignments 241
AssignmentofPartofaDebt 241
StatutoryAssignments 243
Reform 243
TheRequirementsoftheStatute 243
NoticetothePromisor 243
TheEffectofNoticeonthePromisor 243
TheEffectofNoticefromMultipleAssignees 244
TheAssignee’sTitle 244
AnAssignee“TakesSubjecttotheEquities” 244
TheRighttoSetOff 245
AssignmentsbyOperationofLaw 247
Death 247
Bankruptcy 247
NegotiableInstruments 247
TheirNatureandUses 247
NegotiabilityComparedwithAssignability 248
CommercialImportanceofNegotiability 249
Currency 250
StrategiestoManagetheLegalRisks 251
QuestionsforReview 251
CasesandProblems 252
12 TheDischargeofContracts 254
TheWaysinWhichaContractMayBeDischarged 255
DischargebyPerformance 255
TheNatureofDischargebyPerformance 255
TenderofPerformance 255
DischargebyAgreement 255
Waiver 255
SubstitutedAgreement 256
AContractProvidesforItsOwnDissolution 257
DischargebyFrustration 260
DoctrineofFrustration 260
Self-InducedFrustration 263
TheEffectofFrustration 264
DischargebyOperationofLaw 267
StrategiestoManagetheLegalRisks 268
QuestionsforReview 269
CasesandProblems 269
13 BreachofContractandRemedies 274
ImplicationsofBreach 275
HowBreachMayOccur 276
ExpressRepudiation 276
OnePartyRendersPerformanceImpossible 278
FailureofPerformance 279
DegreeofFailure 279
DoctrineofSubstantialPerformance
DutyofHonestyinPerformance 280
Overperformance 280
ExemptionClauses 281
Purpose 281
AnalyticalApproach 281
TypesofRemedies 283
Damages 283
ThePurposeofanAwardofDamages 283
PrerequisitesforanAwardofDamages 284
TheMeasurementofDamages 285
LiquidatedDamages 285
NominalDamages 286
TypesofDamages 286
ExpectationDamages 286
ConsequentialDamages 287
GeneralDamages 288
RelianceDamages 288
PunitiveDamages 288
ChallengesinMeasuringDamages 289
MentalAnguish 289
CostofPerformanceVersusEconomicLoss 290
EquitableRemedies 291
ReasonsfortheInterventionofEquity 291
PrerequisitesforanEquitableRemedy 291
SpecificPerformance 291
Injunction 292
Rescission 292
QuantumMeruit 293
MethodsofEnforcingJudgments 293
StrategiestoManagetheLegalRisks 295
QuestionsforReview 295
CasesandProblems 296
14 SaleofGoodsandConsumerContracts 298
TheSaleofGoodsAct 299
HistoryoftheSaleofGoodsAct 299
ContractsofSale 299
Goods 300
OwnershipandPossession 301
TermsinaContractofSale 302
TheCaveatEmptorPrinciple 302
StatutoryProtectionfortheBuyer:ImpliedTerms 302
ExemptionClauses 307
Payment 309
Delivery 309
RiskofLossBeforeDelivery 309
TitletoGoods 310
WhoMayPassTitle? 310
WhenDoesTitlePass? 311
BillsofLading 311
RemediesoftheSeller 311
Lien 311
Repossession 312
Resale 312
DamagesforNon-Acceptance 312
ActionforthePrice 313
RetentionofDeposit 313
TheSeller’sLiability 314
BreachofaTerm 314
WrongfulWithholdingorDispositionbytheSeller 314
RemediesoftheBuyer 315
ConsumerContracts 316
ConsumerProtection 316
BusinessSalesTacticsTargetingConsumers 316
PressureSelling 316
UnsolicitedGoods 317
Telemarketing 317
TermsinConsumerContracts 318
LegislatedTerms 318
ExemptionClauses 319
Repossession 319
ArbitrationandClassActions 319
Severance 320
FinancingArrangementsandDisclosureoftheTrueCostofCredit 320
ConsumerRemedies 321
StrategiestoManagetheLegalRisks 322
QuestionsforReview 323
CasesandProblems 323
15 BailmentandLeasing 327
Bailment 328
Definition 328
NatureofBailment 328
Sub-Bailment 329
RightsandDutiesofaBailee 330
LiabilityUnderContractandTort 330
TheStandardofCare 331
RightsandRemedies 332
Lien 332
TheRightofSale 333
SpecialTypesofBailment 333
StorageandSafekeeping 333
RepairsandWorkonaChattel 334
Transportation 334
