page 118

•He read the labels before starting. These 3 labels indicated repeatedly that, among other horrible things, the product should be kept away from flames, fire, heat or cigarettes. Ventilation was also listed as essential.

•Lambert was using the sealant in his basement when a pilot light in an adjoining room started an explosion and a fire in an open can of sealant.

•In the resulting lawsuit another can of sealer made by a competitor had a warning label that also mentioned pilot lamps and more.

•The court ruled that the chemical company did not provide sufficient warning and that they were liable. It was also noted that even though the engineer ought to have known of the danger, the chemical company could not count on this.

5.7.45 MacMillan Bloedel Ltd. v. Foundation Co.

Location: British Columbia

Court:

Year: 1977

Importance: limits of recoverable economic loss

Details:

•Foundation’s employees negligently cut a cable supplying MacMillan’s office building.

•As a result of lost power, the employees were sent home.

•The estimated loss in wages was $48,841.

•The court indicated that the negligence was evident, but the “economic loss” would have been paid anyway. With no other evidence of loss, the case was dismissed.

5.7.46 Markland Associates Ltd. v. Lohnes

Location: Nova Scotia

Court:

Year: 1973

Importance: an example of implied contract terms

Details:

•The court ruled that a building contract did not clearly state, but implied,

-that the work and materials would be of reasonable quality and meet standards.

-the work was to be conducted in a normal manner.

-the final product would be usable and meet needs.

-the work would be done in reasonable time.

5.7.47 Metropolitan Water Board v. Dick, Kerr and Company, Limited

Location: England

Court:

page 119

Year: 1917

Importance: a discharge by frustration

Details:

•A contract was signed to build a reservoir from 1914 to 1920.

•In 1916 the work was ordered stopped because of the needs for WW-I.

•In light of the delay, the contractor did not want to continue the work.

•The water board wanted the contract resumed (as indicated in a force majeure clause) with the delay included.

•The case was taken to court, and the ruling was that the contract was different than the one entered into and as a result gave a discharge by frustration.

5.7.48 Monticchio v. Torcema Construction Ltd. et. al.

Location: Ontario Court:

Year: 1979

Importance: departed from previous decisions that voided contracts because of lack of licenses made contract illegal

Details:

•A contractor (not properly licensed) entered into a contract to install drains.

•After completion, the contractor was not paid and began a lawsuit

•The judge ruled that while a license was required for the contracting work, it was not required for supply of materials. Therefore the supplier was reimbursed for the materials supplied.

5.7.49 The Moorcock

Location: ?

Court:

Year: ?

Importance: established implied terms in contracts

Details:

•The plaintiff paid for docking space for his boat, the Moorcock.

•As the tide went out the Moorcock settled on hard ground and was damaged.

•The court decided in favor of the defense (dock owner) in the ruling that there was an implied term in the contract that the boat would have been safe at low tide.

5.7.50 Murray v. Sperry Rand Corporation et. al.

Location: Ontario

Court:

page 120

Year: 1979

Importance: an example of fundamental breach

Details:

•A piece of farm machinery was purchased to harvest.

•The machine performance had been much worse than should have been expected.

•In the resulting lawsuit the defendant argued that there was an exemption clause in the contract.

•The court ruled that the supplier has fundamentally not met the obligations of the contract, and because of the fundamental breach it could not be protected by the exemption clause.

5.7.51 Mutual Finance Co. Ltd. v. John Wetton & Sons Ltd.

Location: ?

Court:

Year: ?

Importance: a contract can be revoked because of duress

Details:

•A family member had forged (criminal) a previous guarantee.

•The forger’s father was ill and might be fatally effected by a disclosure of forgery.

•At this point the forger was threatened with disclosure, unless another guarantee was contracted.

•The court put the second guarantee aside, as it was made under duress.

5.7.52 Nedco Ltd. v. Clark et. al.

Location: Saskatchewan Court:

Year: 1973

Importance: the corporate identity is not absolute and can be partially lifted Details:

•Nedco Ltd. was owned by Northern Electric Company Limited.

•Northern Electric employees went on strike and picketed Nedco

•The court was asked to restrict picketing at Nedco because the two companies were separate entities.

•The court rules that Northern both owned and dominated Nedco, making it effectively part of Northern, and in these certain circumstances, the companies would be treated the same and picketing would be allowed.

page 121

5.7.53 Newman et. al. v. Conair Aviation Ltd. et. al.

Location: British Columbia

Court:

Year: 1972

Importance: an example of a tort of nuisance

Details:

•An aviation company was spraying crops, and the spray drifted onto the plaintiffs land.

•The court awarded damages.

5.7.54 Northwestern Mutual Insurance Co. v. J.T.O’Bryan & Co.

Location: British Columbia

Court:

Year: 1974

Importance: employees can be held liable in tort suits

Details:

•The Northwestern Mutual Insurance Co. had routinely asked that one of its agents delete a risk from a policy.

•The agent assured Northwestern that it had been deleted.

•Later, it was discovered that the risk had not been deleted and Northern had to pay for the risk.

•The court ruled that both the agent, and their employer were liable for the losses.

5.7.55 J. Nunes Diamonds Ltd. v. Dominion Electric Protection Co.

Location: Canada

Court:

Year: ?

Importance: draws a line between tort and contract liability

Details:

•Ruled that a tort action could be brought if it was independent of contractual obligations.

•There was special mention of non-performance not being mentioned in a clause.

5.7.56 Owen Sound Public Library Board v. Mial Developments Ltd. et. al.

Location: Ontario Court:

Year: 1979

Importance: application of “equitable estoppel” for accepted late payments Details:

• A construction contract was made that required payments needed to be made by the