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(a)
(10)
(b)
(5)
(c)
(5)
(d)
What are the limits of the Temporary License? (In your answer, DO
NOT discuss the qualifications/requirements for obtaining this license..
Question 2
(15)
Does Delta, who is hired to only give technical advice about the construction
of the power plant, have any obligation in respect of the possible danger that
the work crew faces? Discuss and give reasons for your answer.
What are the responsibilities of Sigma? Do they differ from Delta?
(10)
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(15)
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(a) Is Primus argument for refusing the assignment valid? Explain your
reasoning.
(10)
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1(a) PEO functions, 2 of 1) enforcement has to do with a person who does not hold a PEO licence (or
where needed, a Certificate of Authorization - C of A) but who has been offering engineering services in
the public marketplace, while 2) discipline has to do with a holder of a PEO licence, who has acted with
incompetence or dishonesty. The difference is whether or not a licence is held. Under enforcement a
person is exposed to prosecution in the courts, PE Act section 40. Under discipline a holder is exposed to
orders by the Discipline Committee of PEO, up to loss of a licence, PE Act section 28. (4)(a).
1(b) PEO as a self-regulating profession means, PEO has authority under the PE Act passed by the
government of Ontario to, 1) set up a Council and Committees (mostly PEng volunteers) to regulate the
profession, 2) set standards to qualify for a licence (or Certificate of Authorization, C of A), 3) examine
persons applying for a licence 4) issue licences to those qualified 5) discipline a licence holder who has
acted with incompetence or dishonesty, and 6) enforce the requirement for a licence to offer services.
1(c) Public, means any persons or group, who are relying directly or indirectly, on professional engineers
for the safeguarding of life, health or property. Public can also include any person, corporation,
municipality, etc., who is purchasing, or has purchased, professional engineering services.
1(d) Temporary licence, limits 1) one project / service, 2) one client / employer to be named, 3) a work
time window of 12 months specified, and if needed, 4) name of a PEng collaborator, Reg 941 / 42.
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1.
(25)
Equitable estoppel
The essential elements of an enforceable contract.
DRB
How arbitration awards are enforceable internationally
Statutory holdback applicable to construction
Vicarious liability
The discoverability concept as it relates to limitation periods.
The corporate directors standard of care
2.
Clearwater Limited, a process-design and manufacturing company, entered
into an equipment-supply contract with Pulverized Pulp Limited. Clearwater agreed to
design, supply, and install a cleaning system at Pulverized Pulps Ontario mill for a
contract price of $800,000. The specifications for the cleaning system stated that the
equipment was to remove ninety-eight percent of certain prescribed chemicals from the
mills liquid effluent in order to comply with the requirements of the environmental
control authorities. However, the contract clearly provided that Clearwater accepted no
responsibility whatsoever for any indirect or consequential damages, arising as a result of
its performance of the contract.
The cleaning system installed by Clearwater did not meet the specifications, but
this was not determined until after Clearwater had been paid $720,000 by Pulverized
Pulp. In fact, only seventy percent of the prescribed chemicals were removed from the
effluent.
As a result, Pulverized Pulp Limited was fined $60,000 and was shut down by the
environmental control authorities. Clearwater made several attempts to remedy the
situation by altering the process and cleaning equipment, but without success.
Pulverized Pulp eventually contracted with another equipment supplier. For an
additional cost of $950,000, the second supplier successfully redesigned and installed
remedial process equipment that cleaned the effluent to the satisfaction of the
environmental authorities, in accordance with the original contract specifications between
Clearwater and Pulverized Pulp.
Explain and discuss what claim Pulverized Pulp Limited can make against
Clearwater Limited in the circumstances. In answering, explain the approach taken by
Canadian courts with respect to contracts that limit liability and include a brief
summary of the development of relevant case precedents.
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3. Live Rail Inc. (Live Rail), a company specializing in the manufacture and
installation of railway commuters systems was awarded a contract by a municipal
government to design and build a transit facility in British Columbia. The contract
specified electrically powered locomotives. As part of the design, Live Rail was
contractually obligated to design an overhead contact system in a tunnel. Live Rail
subcontracted the subdesign of the overhead contact system to a consulting design firm,
Ever Works Limited (Ever works).
Ever Works designed an overhead contact system in the tunnel, however, in doing
so it did not carry out any testing, nor did it gather any data of its own relating to the
conditions inside the tunnel. It did not even request copies of underlying reports, which,
had they been examined, would have indicated that there was a large volume of water
percolating through the tunnel rock, and that the tunnel rock contained substantial
amounts of sulphur compounds. The project documentation that was turned over to Ever
Works by Live Rail did not include the underlying reports, but did identify the existence
and availability of the underlying reports.
The construction of the rail system through the tunnel was completed in
accordance with the Ever Works design. However, within eight months of completion,
the overhead contact system in the tunnel became severely corroded and damaged due to
the water seepage in the tunnel.
As a result of the corrosion damage, the municipality had to spend substantial
additional money on redesigning and rewiring the system.
What potential liabilities in tort law arise in this case? In your answer, explain
what principles of tort law are relevant and how each applies to the case. Indicate a likely
outcome to the matter.
4. An Ontario municipality (the Owner) decided to update and expand its water
treatment facilities. To do so, the Owner invited competitive tenders from contractors for the
construction of the new water treatment facility.
(25)
The Owners consultant on the project, a professional engineer, designed the facility and
prepared the Tender Documents to be given to contractors interested in bidding on the project.
Each of the bidders was required to be prequalified and approved by the Owner for participation
in the bidding. The Tender Documents included the Plans and Specifications, the Tendering
Instructions which described the tendering procedure and other requirements to be followed by
the bidders, the Tender Form to be completed by the bidders, the form of written Contract that
the successful contractor would be required to sign after being awarded the contract, and a
number of other documents.
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1.i. Equitable estoppel a means of ensuring an equitable result, where to follow the strict
wording of a contract would be inequitable. Equitable estoppel is used where a gratuitous
promise has been relied on by the performing party to a contract, but the other party wants to
renege on the promise, page 92.
1.ii. Contract elements 1) offer made and accepted 2) mutual intent of the parties to enter
into the contract 3) consideration 4) capacity (ability to perform) of the parties, and 5) lawful
purpose, page 79.
1.iii. DRB, dispute review (or resolution) board the purpose of a DRB is to resolve disputes
without the costs of litigation when going to the courts. A DRB is formed by the parties to a
contract, before work starts. Usually 3 representatives are selected, who have expertise in the
applicable industry, page 31.
1.iv. Arbitration awards in 1958 a New York Convention under United Nations auspices,
was signed by over 135 nations including Canada. These nations agreed to enforce arbitration
decisions made in their countries. International contracts should be with a party from a signing
nation, page 30.
1.v. Statutory holdback a % of contract price held back by an owner to ensure that all liens,
by sub-contractors or others, have been satisfied, or have expired, before making the final
payment, page 249.
1.vi. Vicarious liability the liability an employer must assume for the negligent acts of an
employee, because the employer is considered to have deeper pockets than the employee,
page 52.
EIT SEMINAR FEBRUARY 2011
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If CPE does go along with PCM and recommends the award to the LLB, then CPE is open to a
suit by OM for breach of trust and damages. Furthermore, CPE is open to a charge of
misconduct by Professional Engineers Ontario (PEO), Regulation 941, section 72.(2)(j).
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