Difference between revisions of "Clinician Guide for Consumer Transactions (11:X)"

{{REVIEWED LSLAP | date= August 8, 2021}}

In order to enforce the terms of a contract, there must be a contract and the particular terms must be enforceable under that contract.  

Misrepresentation occurs when a party is induced to enter a contract based on a false statement. The remedies available depend on the nature of the misrepresentation. See section IV.I for more information on misrepresentation.  

If performance of the contract is impossible due to circumstances that arise after the contract was signed and that were outside of either party’s control then the contract can be found to have been frustrated, and ongoing obligations under the contract will cease to apply. Once frustration is found to have occurred at common law, the ''Frustrated Contract Act'' will apply to adjust the rights and liabilities of each party and to appropriate restitution.  

Mistake is defined at common law as a fundamental misunderstanding between the parties to a contract. There are three categories of mistake: common, mutual, and unilateral.  

*A '''common mistake''' exists when both parties make the same mistake. For example, the subject matter of the contract may not exist or was destroyed prior to the agreement.  

*A '''mutual mistake''' exists when the parties make a different mistake, e.g. a purchaser wanted type A widgets and the vendor thought he or she ordered B widgets, so there is disagreement as to a term of the contract. This is usually an offer and acceptance issue, for both parties have to come to agreement for there to be a contract in the first place.  

*A '''unilateral mistake''' exists when one party is mistaken about the obligations that they have assumed. This is a difficult defence because a court is unlikely to excuse the party from obligations on account of their unilateral mistake, unless the other party was aware of the mistake.

The doctrine of laches becomes relevant if one party unreasonably delays pursuing a claim, and the other party is thereby prejudiced.  

Promissory estoppel occurs when one party promises not to enforce their rights under the contract. In such a case, and where the other party has relied on the promise, it may be inequitable to allow the first party to later enforce the right. For an example of how promissory estoppel can be raised, see ''Central London Property v High Tress House'', [1947] 1 KB 130, [1956] 1 All ER 256.  

Unconscionability, undue influence, and duress can all make a contract voidable. There are two requirements for unconscionability: an imbalance in the relationship of the parties, and an imbalance in the contract. Unconscionability is also dealt with in the ''BPCPA'', ss 8-10. See ''[https://www.canlii.org/en/bc/bcca/doc/1965/1965canlii493/1965canlii493.html?autocompleteStr=Morrison%20v%20Coast%20Finance%20Ltd%20&autocompletePos=1 Morrison v Coast Finance Ltd]'', (1965), 54 WWR 257, 55 DLR (2d) 710 (BCCA) and ''[https://www.canlii.org/en/bc/bcca/doc/1978/1978canlii393/1978canlii393.html?autocompleteStr=Harry%20v%20Kreutziger%20&autocompletePos=1 Harry v Kreutziger]'', (1978), 95 DLR (d) 231 for examples of unconscionability.  

Undue influence is the abuse of a relationship of trust and confidence to strongly influence another to make a contract. See ''[https://www.canlii.org/en/ca/scc/doc/1991/1991canlii69/1991canlii69.html?autocompleteStr=Geffen%20v%20Goodman%20Estate&autocompletePos=1 Geffen v Goodman Estate]'', [1991] 2 SCR 353, [1991] 5 WWR 389 for an example of undue influence. Duress is the coercion of the will to the point where it vitiates consent.

In the past, Canadian courts would not enforce those contracts created for an illegal purpose.

A leading case in this area is ''[https://www.canlii.org/en/bc/bcca/doc/1996/1996canlii3340/1996canlii3340.html?autocompleteStr=International%20Paper%20Industries%20Ltd%20&autocompletePos=1 International Paper Industries Ltd v Top Line Industries Inc]'', [1996] 7 WWR 179, 135 DLR (4th) 423 (BCCA), in which a lease for a portion of land was declared invalid, preventing the tenant from exercising the option to renew, because the land was subdivided contrary to the ''Land Title Act'', RSBC 1996, c 250.  

Today, courts may enforce contracts made for an illegal purpose if inequity would otherwise result, or if the purpose of the governing statute is not undermined. See ''[https://www.canlii.org/en/ca/fca/doc/1997/1997canlii6379/1997canlii6379.html?autocompleteStr=Still%20v%20Canada%20&autocompletePos=1 Still v Canada (Minister of National Revenue)]'', [1997] FCJ No 1622, [1998] 1 FC 549 (CA). The Court will consider the purpose and object of a statutory prohibition when deciding whether the contract is enforceable or not. ''[https://www.canlii.org/en/ca/scc/doc/1998/1998canlii794/1998canlii794.html?autocompleteStr=Continental%20Bank%20Leasing%20Corp%20&autocompletePos=1 Continental Bank Leasing Corp v Canada]'', [1998] 2 SCR 298 at para 67, in particular, offers a good summary of the law of illegality.

The Supreme Court of Canada has recently recognized that there is a general organizing principle of good faith and duty of honest performance in the context of Canadian contract law (''[https://www.canlii.org/en/ca/scc/doc/2014/2014scc71/2014scc71.html?autocompleteStr=Bhasin%20v%20Hrynew&autocompletePos=1 Bhasin v Hrynew]'', 2014 SCC 71 at para 33). The duty of honest performance requires contracting parties to act honestly in the performance of contractual obligations. Note that this is not a fiduciary duty and parties remain free to act in their own self-interest, as long as they do not lie or mislead the other party.

Since the duty of honest performance applies generally, to all contracts, it would also apply to consumer transactions where one party has been dishonest or misled the other party.

== E. Determine the Limitation Period for Making a Claim ==

The ''Limitation Act'', RSBC 2012, c 13 sets out a general time limit of 2 years on starting any claim from the time that the claim is discovered (s 6(1)). Generally, a claim is discovered on the first day that a person knew or ought to have known that the injury, loss, or damaged had occurred and was caused (or contributed to) by an act or omission of the person against whom the claim is (or may be) made and that the court would be the appropriate means to seek a remedy (s 8). Usually this will be at the time of the act, but not always. If the person was (or is) a minor or was (or is) otherwise incapable of managing their affairs due to a disability special discovery rules apply (ss 18-19). There are also special discovery rules in the case of fraud, trust property, and securities amongst others (ss 12-17). In addition, certain acts provide exceptions to the general limitation period set out in the ''Limitation Act''. For example, the ''Local Government Act'', RSBC 2015, c 1 sets out that an action against a municipality must be commenced within 6 months after the cause of action first arises (s 735). Because of this, you must carefully check through the acts associated with your cause of action to ensure that you will not miss a limitation date.

If the claim was discovered before June 1, 2013, the former ''Limitation Act'' applies. At this point, the claim would be outside the limitation period unless there is an exception in the act for the type of claim brought. Under the former act, if the claim is for breach of contract, s 3(5) of the ''Limitation Act'', RSBC 1996, c 266 states that the limitation period for breach of contract is six years. However, under s 3(2)(a), where damages claimed arise from physical damage to persons or property, the limitation period is two years, even where the claim is based on contract. In addition, if the claim is for negligence as well, the limitation period is two years.