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Torts & Contracts Case Solution & Answer

Torts & Contracts Case Solution

INSTRUCTIONS: Carefully consider the arguments for each side and the probable outcome. Explain in proper essay style regarding what the major issues are in each case, what legal contract principles would be argued for each side, and what would be the judge’s ultimate decision.

CONTRACTS QUESTIONS

  1. The city of Calgary advertised for tenders for a construction project. One of the terms of the advertisement was that once submitted, the bid could not be revoked. Northern Construction submitted the lower bid on the job. They then examined their bid and realized they had made an error in their calculations. They showed these documents to Calgary’s representatives who agreed that they had made an error. Northern Construction then requested that they be released from their bid. Calgary, however, would not release them from the bid and then accepted it as the winning one. Northern Construction refused to honor the contract and Calgary was forced to go with the second lowest bid. They then sued. Explain the legal arguments available to both sides and the likely outcome of the action.

By law, the parties entering into a valid contract are always obliged to fulfill their promises. If any party fails to comply with it, then the next party is free to go to the Court, as a result of which, the Court may order the defaulting party to fulfill their promises. On the other hand, whereby a unilateral mistake has made by any party and the other party knows it at the time of signing the contract, then the contract would not be legally binding. It is because both the parties need to be single minded when signing a contract.

In this case, Northern Construction submitted their bid, afterwards, they realized that, their bid calculations included mistakes and presented complete facts and figures to the city of Calgary’s representatives. They agreed that the Northern Construction had made mistakes. This situation confirms that the Calgary representatives knew about the mistake made by the Northern Construction, so the contract would not be legally binding. The Court would favor Northern Construction and it would require the Calgary’s representatives to change the terms of their contract.

  1. The infant plaintiff purchased a second-hand automobile from the defendant for $300 which, after being driven for 119 kilometres, broke down. Because the transmission needed replacing, which would have cost $200; the plaintiff simply towed the car to the home of the defendant, returned the keys and repudiated the contract. The infant then brought an action to recover the purchase price. Explain the probable outcome. Would your answer be any different if the car had not broken down, but the plaintiff had simply decided against buying the car?

As it’s mentioned that after being driven for 119 kilometres, the automobile broke down, which means that the car was not showing problems during the first time driving, after the purchase. Secondly, according to the Canadian law, there is no cooling-off period after the purchase. The purchasing party is required to investigate each and every aspect of the contract before entering into it.

However, the contract would be not legally binding, if the seller has not disclosed all of the information required by law. In this scenario, the Court needs to go in favor of the defendant as after being used for 119 kilometres, the autumnal broke down and earlier it was all well. Even if the car had not broken down and the plaintiff decided not to buy the car, then he would be legally binding under the law, as his action will represent the contract’s breach.

  1. The younger Mr. Gill was fluent in English and a sophisticated businessman who had worked in a credit union for a number of years as well as managing his father’s berry farm. To take advantage of a business opportunity, he arranged with the Royal Bank to borrow $87,000. During the negotiations, it became clear that he could get a more favorable rate of interest if his father guaranteed the loan. In fact, the son had done a considerable amount of banking on behalf of his father who was also a customer of the same bank. The elder Mr. Gill could not read, write or speak English and relied on his son in all his business dealings. The documents were prepared, and the son brought his father to the bank to sign. At no time did he explain to his father that he was signing a personal guaranty and the evidence is clear that the father had no idea what he was signing other than it was a document associated with a loan transaction. Mr. Gill exercised implicit faith in his son’s handling of his business affairs. Mr. Gill, junior, on the other hand was so excited about the deal that he apparently never explained the nature of the document to his father. It is clear in this situation that at no time was there any misrepresentation to the father or the son on the part of the bank. When the loan was defaulted, the bank turned to the father for payment. Explain the arguments of the father and the bank as to whether Mr. Gill, senior, should be held responsible for this debt and the likely outcome.

According to the Canadian law, the commercial lender has to disclose all the relevant information regarding the guarantee before making family guarantee agreement. The disclosed information must include the possible risks, prior loan information, the future credit extensions and the cancellation rights.Section 4 of the Canadian law ensures that the guarantor receives all the necessary information.

In this scenario, Mr. Gill has taken advantage of his father’s weak position, which is referred to as unconsciousness in the Canadian law. As, elder Mr. Gill is unaware of the guarantee details; he will not be binding under the contract. The contract would not be legally binding to elder Mr. Gill, as he is not aware of the transaction and Section 10 would be applied by the Court in resolving such situation.

  1. Banner, the defendant in this action, was in the brokerage business and was developing a computer software network to handle his business. The plaintiff, Computer Workshop Ltd., entered into an agreement with Banner to provide him with the necessary hardware and software equipment to do the job. After 25 of the 100 computers were delivered, Banner discovered that Computer Workshops was negotiating with Banner’s competition to provide them with a similar system with similar capabilities. Banner learned that in those discussions certain confidential information that he had given to Computer Workshops had been disclosed to their competitor. Banner refused to take the rest of the computers. Computer Workshops sued for breach. Explain arguments on both sides and any defiance that might be available to Banner in these circumstances……………………

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