Legal Issues and Arguments in Contract Disputes

Case Study 1: Large Truck Limited and Mr. Raymond

1. Mr. Raymond rented a trailer from the Large Truck Limited on which a 100-ton generator was to be loaded from a railway flatcar in Vancouver and moved to a ship for trans shipment to Toronto. Large Truck Limited’s staff was to supervise placing the generator on the trailer in Vancouver and its subsequent unloading from the ship in Toronto and delivery to final destination in Hamsted.The contract provided for advance payment of rental and staff expenses in the amount of $40,500.00 which Mr. Raymond paid before taking delivery of the trailer.

Before transporting the generator from the railhead to the ship at Vancouver, Large Truck Limited staff and the consultant for Mr. Raymond inspected the loading ramp leading from the dock to the ship. They concluded that the physical features of the loading ramp militated against successful completion of the task. Neither party had anticipated thata the physical features of the ramp would prevent loading the laden trailer aboard the ship. In the light of the inability to perform the contract, Mr. Raymond sued and requested a refund of the money paid, which Large Truck Limited refused. Large Truck Limited counterclaimed seeking $15,500 from Mr. Raymond in respect of demurrage and other claims. What is the main legal issue? How can Mr. Raymond succeed in getting refund? How can Large Truck Limited succeed in getting the counterclaim of $15,500?

2. Christopher intended to purchase a Marilyn Company cash card from Moses Adior but he first contacted Marilyn Company to verify the card’s balance. After receiving assurance that the balance was $500, Christopher paid Moses Adior, the cardholder. In essence the cardholder, Moses assigned the benefit of the card to Christopher. Later, it was learned that the assignor paid Marilyn Company with a fake cheque, so Marilyn Company froze the remaining balance. What is the legal issue? What are the implication of the assignor’s payment with fake cheque on Christopher? In what ways will the confirmation provided by Marilyn Company to Christopher affect this case?

3. Clement Hamrod, the principal of Northeast Yachts, acted as an agent in the sale of a Bayliner boat owned by Matthew Rand and sold to Mary Fininh. As Mary Fininh looked over the boat, Hamrod stated that it had a new motor, a new drive, and a painted hull. The boat was purchased after having the boat surveyed by a marine surveyor. Unfortunately, after five hours of use the motor broke down with several things going wrong. It turned out that the engine was not new but rebuilt and Fininh sued. Hamrod claimed that when he stated that the engine was new he meant it was new to that boat. What is the basis for Mary Fininh’s complaint, the arguments for the parties and the likely outcome? How would it affect your answer to know that after the sale when the bill of sale was drawn up a paragraph was added. This document stated that the boat was inspected, that the boat was bought “as is, where is,” and that there were no other representations from the agent with respect to the transactions.

4. Dr. and Mrs. Roland entered into a contract to sell their home to Hellen Ward in August of 2014. Hellen Ward paid a deposit of $30 000, with the agreement conditional upon Hellen Ward being able to obtain financing for the purchase. On 14 September 2014, the agent presented a waiver of the condition precedent, indicating that Hellen Ward had arranged financing for the purchase. On the strength of the now-firm contract, Dr. and Mrs. Roland entered into a contract to purchase another home from John Amphora, putting down a substantial deposit. When the time came to complete the transaction, Hellen Ward told Dr. and Mrs. Roland that she did not have the financing in place and that she would not be going though with the purchase unless they lowered the price. This forced the Rolands to terminate their contract for the Amphora home, forfeiting the deposit paid. They also were threatened with a substantial lawsuit and had to pay an additional amount to settle the matter. The Rolands sued Hellen Ward. Explain the basis of their complaint. What is the likely outcome and what would be included as a remedy? What difference would it have made if Hellen Ward had not waived the subject to financing clause?