Exam 14: Breach of Contract and Remedies

Andrew, a carpenter, entered into a contract with Steven for the construction of a garage on Steven's property for $5,000. Andrew had constructed the entire garage except for a small door, when he refused to complete the contract. Steven is entitled to ask the court for an order of specific performance of the contract.

Nature's Flowers is required, as a condition of their contract, to supply the Ubiquitous Chip, a trendy restaurant, with 45 flower arrangements for tables and three large displays, twice a week. This week, it was two table arrangements short one day and three short on the other. Nature's Flowers is entitled to be paid the amount of the contract less the value of the five table vases because there has been substantial performance of the contract.

Trendy Imports entered into a contract on June 1^st with Neat Things, a small upscale gift shop, to supply it with 100 tooled leather boxes. Delivery was to be made on September 15^th so that the boxes could be on display in the store by October 15^th, ready for the pre-Christmas rush. On August 6^th, Trendy notified Neat Things that a dock strike in Italy was holding up the shipment and, if the boat on which they were loaded could not leave port within a very few days, Trendy would not be able to make the delivery on September 15^th. Suppose Neat Things does nothing immediately, the boat sails and the delivery would have been made on time, but the boat sinks in a hurricane on August 23^rd.

Guthrie Caterers failed to turn up as contracted to cater Dev and Rabinda's wedding reception. The deposit, which was the only money paid to that point, was returned by courier the next morning without comment. This was an implied repudiation since they did not contact Dev and Rabinda and actually tell them "We will not be catering your wedding."

Antoine, a bush pilot, agrees to ferry an exploration crew from Gamma Oil to a remote part of Alberta in his helicopter, and to retrieve them a month later. Three weeks into the bush, the Gamma team learn through listening to local radio chatter on their short-wave radio that Antoine has sold his helicopter to a pilot in New Brunswick. If Gamma Oil arranges on its own for another helicopter to pick up the crew, it runs the risk of having to pay both the new pilot, and Antoine, should Antoine have made some alternative provision to honour his obligation to extract the crew.

Joe agreed to hire Ron to shovel his sidewalk but they did not agree on a price. Ron shovelled the snow, but they could not agree on a price. Does quantum meruit apply?

Guthrie Caterers failed to turn up as contracted to cater Dev and Rabinda's wedding reception. The deposit, which was the only money paid to that point, was returned by courier the next morning without comment. There was an express repudiation of the contract when Guthrie failed to arrive when and where they should have.

Mario, a professional entertainer, entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre, and to perform nowhere else during that period of time. A week after the agreement was signed, Mario entered into another agreement with a competitor of Barnum to perform at his opera house. An injunction is a discretionary remedy.

Robin offered to sell her 10-speed touring bicycle to Felicia for $200 on her return from a two-week bicycle trip to a distant city. At the end of the first week, Felicia received a long distance telephone call from Robin, in which Robin advised Felicia that she had decided not to sell the bicycle on her return. Felicia was disappointed, as a similar bicycle on the market would cost her at least $250. She decided to wait until Robin returned then urge her to go through with the sale. Before Robin reached home, her bicycle was stolen, and never found. Repudiation before the date fixed for performance is known as anticipatory breach.

In which of the following cases will a court order specific performance of the contract? i. Gigantic Electrical Warehouse repudiates its contract with Video Co. to purchase 2,000 VCRs. The loss of this deal might push Video into bankruptcy. ii. Joan, a great opera singer, decides it is too far from New York to the National Arts Centre in Ottawa and so she will not perform at the sold-out concert there next week for which she had contracted months ago. iii. Mitsuko had a contract with Refined Galleries to purchase a small Rembrandt drawing, which Refined wants now to sell to a regular and very wealthy customer of theirs. They will not give Mitsuko the drawing. iv. John is refusing to perform a contract to sell his house to Eli. Eli has wanted to live in that house since he was a small boy. v. Alvin is refusing to perform a contract to purchase Huma's house. Huma has another purchaser but her highest offer is $10,000 less than Alvin's.

Ming was dismissed from his senior management position by his employer. He was very upset and said "I'm going to fight this in court." He did not look for another job. The court held that he had been wrongfully dismissed and said that the proper notice period was 6 months.

Mario, a professional entertainer, entered into a one-year contract with Barnum to perform exclusively at Barnum's theatre, and to perform nowhere else during that period of time. A week after the agreement was signed, Mario entered into another agreement with a competitor of Barnum to perform at his opera house. Barnum is entitled to treat Mario's actions as a breach of his contract.

Robin offered to sell her 10-speed touring bicycle to Felicia for $200 on her return from a two-week bicycle trip to a distant city. At the end of the first week, Felicia received a long distance telephone call from Robin, in which Robin advised Felicia that she had decided not to sell the bicycle on her return. Felicia was disappointed, as a similar bicycle on the market would cost her at least $250. She decided to wait until Robin returned then urge her to go through with the sale. Before Robin reached home, her bicycle was stolen, and never found. Had the bicycle not been stolen, Felicia would be entitled to specific performance of the contract if Robin had refused to sell.

Jackson Asphalt Co. Ltd. had been informed of upcoming requirements of the Ministry of Transportation for the supply of $600,000 worth of asphalt for a nearby road project. To comply with the requirements for tenders, Jackson Asphalt was required to have their bid submitted to the Minister of Transport no later than 3 p.m. on October 2^nd of that year. Jackson Asphalt prepared their bid and contacted Swisher Couriers Limited and requested them to pick up the envelope. Swisher attended at the Jackson offices at 12 noon on October 1, and their driver was met by an engineer of Jackson Asphalt. "I do not know if you can do this or not, but this must get to the addressee by 3 p.m. tomorrow. If you can do it, that's great, it will save me driving up myself." In response the driver said, "Well, we have our noon next day service." The engineer answered, "Well, noon would be three hours grace, do you have any problem doing that?" The driver responded, "They probably build in a little lead time anyway, but I do not think they would advertise it if we could not come through." The engineer nodded and the driver handed him the bill of lading. The engineer filled it out, marked it as a tender, and removed his copy. On it was a clause which read in fine print, "Maximum liability $2 per pound, not responsible for any further loss, damage, or injury, however caused." The envelope arrived at the provincial capital at 11:00 a.m. the following morning but missed the local routine morning deliveries. The envelope was finally delivered at 3:25 p.m. that day but was rejected by the government clerk as not being submitted in time. As matters would have it, when the tenders were opened, had the tender from Jackson Asphalt been delivered on time, it would have received the government contract and would have made a profit of $85,000. On learning this, Jackson Asphalt Co. Ltd. brought suit against Swisher Courier Ltd., for the amount of its lost profits. Discuss the issues with respect to breach of contract that arise in this case and render a decision. D.L.R. (3d) 267.

When faced with a seller's onerous exemption clause, it would be time well spent for an aggrieved purchaser to consider the effect of the law as it relates to fundamental breach.

Robin offered to sell her 10-speed touring bicycle to Felicia for $200 on her return from a two-week bicycle trip to a distant city. At the end of the first week, Felicia received a long distance telephone call from Robin, in which Robin advised Felicia that she had decided not to sell the bicycle on her return. Felicia was disappointed, as a similar bicycle on the market would cost her at least $250. She decided to wait until Robin returned then urge her to go through with the sale. Before Robin reached home, her bicycle was stolen, and never found. Because Robin's bicycle was stolen, Felicia is entitled to demand that Robin replace the stolen bicycle with a similar one and sell it to her.

Al was a farmer who grew cash crop vegetables on a large-scale commercial basis. He purchased seeds from his usual supplier for a certain type of cabbage that his brother, also a farmer, had recommended. Al's brother had had particular success growing these cabbages, which matured later in the season than most varieties. It became apparent to Al partway through the growing season that the cabbages were not doing well. Very few of the plants were maturing and the crop would probably produce less than 60% saleable cabbages. The summer had been quite cool and rainy, and Al suspected that this may have played a part in the cabbages' performance. Al also suspected that his supplier might have sent him the wrong seeds. The sales contract that accompanied Al's order contained an exemption clause which permitted the supplier to substitute seed products without notice depending on availability. It also required the buyer to make full payment of the contract price in the event of such substitution. The clause also stated that the supplier would not be liable for any loss or damage experienced by a purchaser, however caused, and that a purchaser may not escape the obligation to make payment for seeds purchased on the basis that he experienced loss or damage. Al referred to the supplier's seed catalogue and found the description of the cabbages. The brochure stated that the cabbages were a hearty variety that could withstand extremes of temperature and moisture making them ideal for late planting to mature in the late autumn. The catalogue further stated that this particular cabbage had a higher than average crop recovery rate among cabbage varieties, although results could vary depending on soil composition. Apparently, this variety performed less well in acidic soil. Al contacted his seed supplier and told it about the failure of his cabbage crop. He asked to confirm the variety of seeds that had been supplied and was told that he had, in fact, been shipped the correct seeds. Al, convinced that he had been supplied defective seeds, decided to initiate legal proceedings against the seed supplier. Identify and discuss the legal issues that will be raised by the parties and render a decision.

Marnie fails to deliver any of the fruit pies she had contracted to make for Benny's Bakery. If Benny treated Marnie's failure to perform as a breach of warranty, the contract would not end but, to the extent that Marnie's breach had caused him injury, she would have to pay Benny damages.

In the six months since Zippy Worldwide Courier bought a truck from the Solidbuilt Motor Co., the truck has broken down constantly and has only been in use for a total of two weeks, never for more than half a day at a time. Zippy wants to return it and get a new truck, but Solidbuilt insists it is repairable. The contract has a replacement warranty clause for defective parts, and another clause says that only the warranties, conditions and other obligations set out in the contract are valid, and that all others, no matter how they might arise, have no force or effect. Discuss whether or not Zippy could get a court to permit them to rescind the contract.

Eric was painting the interior of Erna's house. While he was painting, Erna was constantly nattering at him. One day, he quietly packed up all of his equipment, waved good-bye and left. He had almost completed the job and had two walls left in the small bedroom. What remedy is available to Erna?