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SUPPLEMENT FOR 



CONTRACTS LAW 
(SECTION 1 AND SMALL GROUP A) 


Professor Peter Benson 


Fall 2005 


Faculty of Law 
University of Toronto 


Note: Section numbering follows the course syllabus. 



ese materials are not to be considered published and this compilation is intended 
ely for teaching purposes. 














bora lot ur mm 

AUG 2 6 2005 

FACULTY Of LAW 
UNIVERSITY OF TOOTTO 




SUPPLEMENT FOR 


CONTRACTS LAW 
(SECTION 1 AND SMALL GROUP A) 


Professor Peter Benson 


Fall 2005 


Faculty of Law 
University of Toronto 


Note: Section numbering follows the course syllabus. 


These materials are not to be considered published and this compilation is intended 
solely for teaching purposes. 


Digitized by the Internet Archive 
in 2018 with funding from 
University of Toronto 


https://archive.org/details/supplementforcon00bens_3 


TABLE OF CONTENTS 


I. REMEDIES 

A. The Compensation Principle 

Fuller and Perdue, The Reliance Interest in Contract Damages .1 

B. The Measures of Damages for Breach of Contract 

(1) The Expectation Measure 

Peevyhouse v. Garland Coal & Mining Co .12 

Radford v. De Froberville . 18 

Ruxley Electronics v. Forsyth .28 

(2) Expectation or Reliance? 

Bowlay Logging v. Domtar Ltd. .49 

Background on Hawkins .53 

Sullivan v. O Connor .54 

C. Problems in Measuring Damages 
(1) Uncertainty 

Chaplin v. Hicks .59 

E. Remoteness of Consequential Loss 

Kerr S.S. Co. v. Radio Corporation of America .62 

H. Parsons (Livestock) Ltd. v. Uttley Ingham & Co .66 

Morris, Duty, Negligence and Causation .74 

F. Mitigation of Loss 

Asamera Oil Corp. v. Sea Oil & General Crop .77 

G. Intangible Injuries and Punitive Damages 

Vorvis v. Insurance Corporation of British Columbia .87 

Whiten v. Pilot Insurance .99 

Fletcher v. Western National Life Insurance Co . 136 

Rookes v. Barnard . 140 

Hegel, Philosophy of Right, paras. 84-86 . 144 

Hegel, Encyclopedia , paras. 496-99 . 144 


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II. FORMATION 


A. Introduction 

Grotius, The Law’ of War and Peace , Bk. II, c. 11 . 146 

Hegel, Philosophy of Right , para 79 .150 

Hegel, Encyclopedia , paras 493 . 151 

B. Offer and Acceptance 
(1) Definitions and Features 

Corbin on Contracts , nos. 11 and 12 .152 

Cooke v. Oxley .154 

Adams v. Lindsell . 155 

Tinn v. Hoffman . 156 

Butler Machine Tool Co. v. Ex-Cell-O Corp . 157 

Corbin on Contracts , no. 21 .162 

C. Doctrine of Consideration 
(1) Introduction 

Golding s Case .164 

Nichols v. Ravnbred . 164 

(3) Past Consideration 

Hunt v. Bate . 164 

Mills v. Wyman . 165 

Webb v. McGowin . 168 

Fuller, Consideration and Form. 171 

Hobbes, Leviathan , xiv .186 

(4) Pre-Existing Duty 

Pao On v. Lau Yin Long . 189 


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III. CONTRACT, TORT, AND UNJUST ENRICHMENT 


A. Detrimental Reliance as a Substantive Basis of Liability: The Tort Principle 

Seavey, Reliance Upon Gratuitous Promises or Other Conduct . 197 

Imperator Realty v. Tull .198 

Re Tudale Explorations Ltd. and Bruce .201 

B. Warranties and Misrepresentations 

(2) Innocent Misrepresentations 

Hedley Byrne & Co. v. Heller .209 

(3) Interaction between Tort and Contract 

Central Trust v. Rafuse .215 

B. C. Hydro v. B.G. Checo International .223 

C. Unjust Enrichment as a Substantive Basis of Liability: The Restitution 
Principle 

Kelly v. So lari .238 

Grotius, The Law of War and Peace , Bk. II, c.10 .239 

Britton v. Turner .243 

Attorney-General v. Blake . 247 

D. Third Party Beneficiaries 

Lawrence v. Fox .271 

Glanzer v. Shepard . 275 

Ross v. Counters . 277 

White and another v. Jones and others . 282 

Trident General Ins. Co. v. McNiece Bros . 303 


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IV. INFORMATION IMPERFECTIONS AND CONDITIONS 


A. Introduction 

Utica City National Bank v. Gunn .. 325 

B. The Parol Evidence Rule 

Corbin on Contracts , nos. 573 and 574 . 328 

C. Conditions 

(1) Express 

Barnett v. Harrison . 331 

(2) Implied 

a. The Fundamental Principle and its Application 

Hong Kong Fir Shipping co. v. Kawasaki Kisen Kaisha Ltd. . 340 

b. Anticipatory Breach 

Hochster v. De La Tour ... 345 

Frost v. Knight . 348 

Williston, Repudiation of Contracts . 353 

c. Non-disclosure and Mistake 

Grotius, The Law’ of War and Peace , Bk. II, c. 11 . 366 

Lever Bros. Ltd. v. Bell . 367 

d. Frustration 

Canadian Industrial Alcohol Co. v. Dunbar Molasses Co . 373 

Herne Bay Steamboat Co. v. Hutton . 376 

Woodward. Impossibility of Performance . 379 

Fibrosa Spolka Akcynja v. Fairbaim Lawson Combe Barbour Ltd. . 386 


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V. FAIRNESS IN CONTRACT 


A. Introduction 

Aristotle, Nichomachean Ethics , V ... 396 

Grotius, The Law of War and Peace , Bk. II, c.12 . 399 

Kant, The Doctrine of Right . 400 

B. The Principle of Equality: Unconscionability 

Beale, Inequality of Bargaining Power . 402 

Hegel, Philosophy of Right , paras. 76-77 . 411 

Hegel, Encyclopedia, para. 494 ... 412 

Fried, Contract as Promise . 412 

C. Exclusionary Clauses and Limitations on Liability 

Heffron v. Imperial Parking Co . 418 

B.G. Linton Construction Ltd. v C.N.R . 426 

Harbutt s Plasticine v. Wayne Tank Co .. 431 

Photo Production Ltd. v. Securior Transport Ltd. . 438 

George Mitchell (Chesterhall) Ltd. v Finney Lock Seed Ltd. . 444 

D. Agreements in Restraint of Trade 

Mitchel v. Reynolds . 458 

Nordenfelt v. Maxim Nordenfelt Guns & Ammunition Ltd. ... 461 

Esso Petroleum v. Harper s Garage (Stourpot) Ltd. . 472 

Stephens v. Gulf Oil Canada Ltd . 474 

Korres Manufacturing Co. v. Kolok Manufacturing Co . 477 


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