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:
