331752099.

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Term

5ex. of equal treatment (human rights)

Definition / Information
Race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex,
sexual orientation, age, marital status, familty status, record of offences, or
handicap.
A bribe or kickback. A conviction for taking secret commissions can result in
imprisonment.

Secret Commission
In the context of contracts, a promise made without consideration (payment,
exchange of services, etc.).

Gratuitous Promise
Clause in a contract whereby a party is required to pay prescribed (reasonably
estimated) damages in the event of a breach.

Liquidated Damages / Penalty Clause

Where a contract is ambiguous, it will be construed or interpreted against the
party that drafted the provision

Rule of Contra Proferentem

Director's Standard of Care

The obligation of a director to act honestly, in good faith, and in the best
interests of the corporation - with the care, diligence, and skill of a reasonably
prudent person.
An amount owing to a contractor that is held back for a period of time to allow
liens from sub-contractors to be filed and resolved.

Statutory Holdback
In tort, the limitation period begins when damage is first discovered, or ought to
have been discovered, by the plaintif (called discoverability).

Discoverability Concept
If a condition is agreed upon verablly but is not included int the contract, the
condition is not part of the contract.

Parol Evidence Rule

Consequentail Damages

Vicarious Liability

Damages resulting from a breach in contract that are indirect or consequential

to the breach. (e.g. lost profits from shutdown because of poorly performed
service)
In tort, the employer is vicariously liable for the negligent performance of an
employee (it is presumed that the employer is in a better financial position to
compensate the injured party that is the employee).
A request for tenders constitutes an offer, and Contract A is formed when the
owner's offer is accepted upon the submission of each compliant bid.

Contract A

Duress

Threatened or actual violence or imprisonment used to persuaded a party to

enter into a contract. If a contract is induced by means of intimidation, it is
voidable.
Occurs when, without default by either party, changing circumstances radically
change the obligations of the parties in a contract, thus discharging the contract.

Contract Frustration
Similar to duress, but less drastic. Occurs where one party dominates the free
will of another to coerce the dominated party into an unfair agreement/contract.

Undue Influence

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Limitation Period

The prescribed period in which tort actions and actions for breach of contract
must be commenced. (2 years under discoverability and 15 years from from
date of the act or omission on which the claim is based).

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Term & Short Definition

More Detailed Information

Five examples of equal treatment

employment rights to which individuals
are entitled under Ontarios Human
Rights Code (list only)

Every person has a right to equal treatment with respect to

employment, without discrimination because of race, ancestry, place of
origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation,
age, marital status, family status, record of offences, or handicap. (p.
322)

Secret Commission
A bribe or kickback. A conviction for
taking secret commissions can result
in imprisonment.

A bribe or kickback. A conviction for taking secret commissions can

result in imprisonment. From Section 426 of the Criminal Code: (1)
Every one commits an offence who (a) Corruptly (i) gives, offers or
agrees to give or offer to an agent or (ii) being an agent, demands,
accepts or offers or agrees to accept from any person, any reward,
advantage or benefit of any kind as consideration for doing or
forbearing to do, or for having done or forborne to do, any act relating
to the affairs or business of his principal or for showing or forbearing to
show favour or disfavour to any person with relation to the affairs or
business of his principal; or (b) with intent to deceive a principal, gives
to an agent of that principal, or, being an agent, uses with intent to
deceive his principal, a receipt, account or other writing (i) in which the
principal has an interest (II) that contains any statement that is false or
erroneous or defective in any material particular, and (iii) that is
intended to mislead the principal. (p. 179-180)

In the context of contracts, a gratuitous promise is a promise made

without consideration (something of value that is exchanged by
contracting parties). Pursuant to contract law, consideration must be
Gratuitous Promise
present in order to make an amendment to a contract enforceable otherwise, the amending promise is gratuitous. Conwest provides a
In the context of contracts, a promise basis on which to argue that where the terms of a contract are
made without consideration (payment, amended without the consideration that would make the amending
exchange of services, etc.).
promise enforceable, there may be relief for the party that relies upon
the gratuitous promise. The concept whereby such relief may be
provided is called "equitable estoppel". (p. 92)
Contracts often contain provisions whereby a party is required to pay
prescribed damages if a certain event occurs - for example, if the
contract is not completed by a specified date. However, the parties
Liquidated Damages / Penalty
must make a genuine attempt at the time of entering into the contract
Clause
to pre-estimate the amount of damages likely to occur as a result of
such breach; otherwise, the court will not uphold such provisions. In
Clause in a contract whereby a party is contracts, these pre-estimated damages are called "liquidated
required to pay prescribed (reasonably damages". A court will not enforce a penalty clause that does not
estimated) damages in the event of a represent a genuine pre-estimate of damages. The use of the term
breach.
"penalty" should be avoided in contracts. Use the term "liquidated
damages" instead. (p. 149-150)

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Term & Short Definition

A contract rule of interpretation that underscores the importance of

clear and unambiguous language in the drafting of contracts is "rule of
contra proferentem." Simply put, the rule provides that where a
Where a contract is ambiguous, it will contract is ambiguous, it will be construed or interpreted against the
be construed or interpreted against the party that drafted the provision. Accordingly, it is most important to
avoid ambiguities. The rule of contra proferentem provides a
party that drafted the provision.
convenient basis upon which to attack a poorly drafted and ambiguous
document. (p. 136)
Rule of Contra Proferentem

Director's Standard of Care

The obligation of a director to act
honestly, in good faith, and in the best
interests of the corporation - with the
care, diligence, and skill of a
reasonably prudent person.

Every director and officer of a corporation in exercising his or her

powers and discharging his or her duties shall (a) act honestly and in
good faith with a view to the best interests of the corporation; and (b)
exercise the care, diligence and skill that a reasonably prudent person
would exercise in comparable circumstances. (p. 20-21)

This is a term which occurs mainly in construction contracts. The

purpose is to ensure that sub-contractors (suppliers, tradespeople or
skilled workers who work for the contractor) are paid by the main
contractor responsible for the construction project. Each province has
a "statue" (or law) which requires the owner to "holdback" a percentage
of the amount owed to a contractor, for a specified period of time, to
Statutory Holdback
permit the sub-contractors to file liens with the government if they have
An amount owing to a contractor that is not been paid. If no liens are filed by the sub-contractors within the
held back for a period of time to allow specified period, then the holdback may be paid to the contractor. If a
liens is filed, then the owner must not pay the holdback amount until
liens from sub-contractors to be filed
the dispute is settled between the main contractor and the suband resolved.
contractor. (note - I did not have a good understanding of statutory
holdbacks from the Marston text, so I quote here from an outdated
"Study Guide for PEO PPE" by Gordon C. Andrews p.55-56)

The "discoverability" concept has been applied to determine the

limitation period commencement date. The limitation period
commences when the damage is first discovered, or ought with
reasonable diligence to have been discovered, by the plaintiff. A basic
limitation period, premised on the discoverability concept, runs for two
years from the date that the claim is discovered. In the 2002 Ontario
Limitations Act, the following are requirements for discovery: 5.(1) A
Discoverability Concept
claim is discovered on the earlier of (a) the day on which the person
with the claim first knew (i) that the injury, loss or damage had
In tort, the limitation period begins
occurred, (ii) that the injury, loss, or damage was caused by or
when damage is first discovered, or
ought to have been discovered, by the contributed to by an act or omission, (iii) that the act or omission was
that of the person against whom the claim is made, and (iv) that, having
plaintif (called discoverability).
regard to the nature of the injury, loss, or damage, a proceeding would
be an appropriate means to seek to remedy it, and (b) the day on which
a reasonable person with the abilities and the circumstances of the
person with the claim first ought to have known of the matters referred
to in clause (a). (p.71-74)

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Term & Short Definition

A contract should embody all terms agreed upon by both parties.

Problems can occur when terms that are agreed upon verbally are not
included in the written contract that embodies the agreement. If a
If a condition is agreed upon verablly
condition is agreed upon verabally but is not included in the contract,
but is not included int the contract, the the condition is not part of the contract. The contract law that
condition is not part of the contract.
precludes evidence of the omitted condition is called the "parol
evidence rule." (p. 136)
Parol Evidence Rule

Indirect damages are perhaps best illustrated as "consequential" to the

contract breach and might include damages for 'lost profits' caused by
Consequentail (Indirect) Damages
a plant shutdown resulting from a contractor failing to perform services
properly and thereby affecting the overall operation of the plant. An
Damages resulting from a breach in
example might be where an outside contractor working within a factory
contract that are indirect or
cuts a power line that interferes with the operation of the plant, a grim
consequential to the breach. (e.g. lost
prospect for all concerned. Another example of an indirect damage is a
profits from shutdown because of
fine that might be levied against a plant owner as a result of a
poorly performed service)
contractor's non-compliance with an environmental protection statute.
(p. 148-149)
Our courts have long recognized the concept that the employer is
vicariously liable for the negligent performance of an employee. If an
employee commits a tort in the course of employment, the employer
In tort, the employer is vicariously
will be vicariously liable for the damage caused. This concept may
liable for the negligent performance of
appear onerous as far as the employer is concerned, but it is consistent
an employee (it is presumed that the
with the basic premise of tort law; its purpose is to compensate the
employer is in a better financial
injured party. The employer provides compensation because it is
position to compensate the injured
presumed that the employer is in a better financial position than the
party that is the employee).
employee. (p.52)
Vicarious Liability

In Ron Engineering,the Supreme Court of Canada held, in effect, that

the owner's request, or invitation, for tenders constitutes an offer and
that a Contract A is formed when the owner's offer is accepted upon the
A request for tenders constitutes an
submission of each compliant bid. A second contract, Contract B,
offer, and Contract A is formed when
the owner's offer is accepted upon the arises on the selection of the winning bid. (p.121)
submission of each compliant bid.
Contract A

Duress
Threatened or actual violence or
imprisonment used to persuaded a
party to enter into a contract. If a
contract is induced by means of
intimidation, it is voidable.

If a contract is induced by means of intimidation, it is voidable. Such

intimidation is termed "duress." Duress can be defined as threatened
or actual violence or imprisonment used as a means of persuading a
party to enter into a contract. The actual or threatened violence or
imprisonment must be directed at the contracting party or a close
relative. For example, lawful imprisonment - as the result of criminal
prosecution - might be threatened. The court may nevertheless provide
equitable relief. (p. 110-111)

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Term & Short Definition

At times, without default by either party to a contract, changing

circumstances may radically change the obligations of the parties. If
this happens, the contract will have been "frustrated," and is
Contract Frustration
discharged by such frustration. However, the doctrine of frustration
may not be used to justify discharge of a contract simply because
Occurs when, without default by either circumstances have made performance more onerous than
party, changing circumstances radically contemplated. Such an application of the doctrine would be contrary to
change the obligations of the parties in the general principles that support the binding effect of contracts. The
a contract, thus discharging the
doctrine of frustration will be applied by a court only where exceptional
contract.
circumstances, which were not contemplated by the parties, have
arisen, and only where discharge by the frustration is the only practical
and reasonable solution. (p. 142)
Undue influence is similar to duress, but arises in less drastic
circumstances. Undue influence occurs where one party to a contract
dominates the free will of the other party to such an extent as to be
Undue Influence
able to coerce the dominated party into an unfair agreement. In such
circumstances, the dominated party is entitled to be relieved of
Similar to duress, but less drastic.
Occurs where one party dominates the contractual obligations. Undue influence is an equitable concept. It is
not frequent in business situations, where parties are at arms' length. It
free will of another to coerce the
allows family members (for example, husband and wife or parent and
dominated party into an unfair
minor child) to repudiate a contract where bargaining positions are
agreement/contract.
unequal and undue influence occurs. (p. 113)

Limitation Period
The prescribed period in which tort
actions and actions for breach of
contract must be commenced. (2
years under discoverability and 15
years from from date of the act or
omission on which the claim is based).

Limitations statutes of the common-law provinces provide that tort

actions and actions for breach of contract must be commenced within
prescribed time periods. An action may be commenced at any time
within the prescribed time period. Should the action be commenced
too late, it will normally fail. (p.71) In Ontario, the limitation period is 2
years from the date the claim is discovered, with a new ultimate
limitation period of 15 years from the date that the act or omission on
which the claim was based took place. (p.72)

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Term
5ex. of equal treatment (human rights)
Secret Commission
Gratuitous Promise
Liquidated Damages / Penalty Clause
Rule of Contra Proferentem
Director's Standard of Care
Statutory Holdback
Discoverability Concept
Parol Evidence Rule
Consequentail Damages
Vicarious Liability
Contract A
Duress
Contract Frustration
Undue Influence
Limitation Period
Elements of an Enforcable Contract
Fraudulent Misrepresentation
Quantum Meruit
Mitigation of Damages
Economic Duress
Statue of Frauds
Innocent Misrepresentation
Exemption Clause
Common Law
3 Criteria for Tort Liability to Rise
Specific Performance
Doctrine of Fundamental Breach

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