Abracadabra
Does selling goods require legal expertise? Plus the war against equalization, speaking about Israel/Palestine, and an offer for criminal lawyers
Dylan Gibbs, Michel Hajjar, Amira Tekle & Alexandra Son
June 04, 2024
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I hope the producers of Jury Duty are following convoy and blockade trials for inspiration. In the first season, one of the cast members used racism to try and escape their civic duty. Frankly, that’s a bit tired. What’s not tired is getting out of jury duty by printing a photo of the accused on your t-shirt.
— Dylan Gibbs
with Amira Tekle, Alexandra Son, and Michel Hajjar
TODAY'S DOCKET | 6-min read |
Selling goods without casting spells
Attacking equalization
Speaking about Israel/Palestine
An offer for criminal lawyers
And recent cases you might have missed
CONTRACTS
No magic words to escape implied terms
What’s worse for lawyer job security—ChatGPT or the Supreme Court enforcing contract terms written without legal advice?
The Court's latest decision brings sale of goods law into the modern era. As of Friday, parties don’t need to use precise words to contract out of implied statutory conditions. They can use plain language instead, as long as they make their intention clear.
What happened: Earthco agreed to sell Pine Valley a specific mix of soil. The contract said Earthco “would not be responsible for the quality” of the soil if Pine Valley chose not to test it before delivery. Pine Valley didn’t test the soil. And wouldn’t you know it—the soil Earthco delivered didn't match the description it promised.
Pine Valley sued Earthco for breaching a condition implied by the Sale of Goods Act:
Where there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description
Under every Canadian Sale of Goods Act, parties can contract out of implied terms by "express agreement". The question was whether Earthco’s exclusion clause was express enough.
Well, technically: An apple buyer who receives rotten apples has a quality issue. But a green apple buyer who receives red apples has an identity issue. Pine Valley argued that it only agreed to accept the risk of quality issues—Earthco still had to deliver the soil identified by the contract, even though Pine Valley chose not to test it.
The Court of Appeal agreed, sending a reminder that this area of law can be a minefield. The Court said it takes "clear, explicit, and direct" language to contract out of the Sale of Goods Act. And the soil contract didn't go far enough.
Earthco needed to use a phrase like “implied conditions”, or at least mention “identity”, to get itself off the hook.
But the gist was good enough for the Supreme Court. The majority said the days of hyper-technical wording requirements are behind us. The goal is to find the parties’ objective intention. And that means looking at the entire factual matrix instead of fixating on magic words.
[A]n express agreement means that a court [can] reasonably ascertain the parties’ intention after reading the words of the contract in light of the factual matrix.
[Using language] that explicitly, clearly and directly ousts a [statutory protection] is an optimal way to ensure the parties’ mutual objectives are being carried out. [I]t is the gold standard. But [it] should not be elevated into a binding prerequisite…
For Earthco and Pine Valley, the word quality was clear. Pine Valley knew soil. And it knew that testing soil was important. But it was in a rush, so it accepted the risk.
The entire reason the parties added the exclusion clause was to make the risk allocation clear. And even though there’s a technical distinction between identity and quality—that’s not what Earthco and Pine Valley had in mind.
[S]ophisticated parties negotiating through lawyers may know all about the legally significant differences between conditions and warranties, and between identity and quality. However, in many situations, such a rigid and rigorous review may thwart the parties’ objective intention, especially when their words have different meanings and admit of multiple interpretations.
[Earthco and Pine Valley] used the word “quality” in its colloquial and commercial sense, and not in its legal sense.
One judge dissented, hung up on the distinction between quality and identity. Do you need the name?
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HEARSAY ROUNDUP
Canadiana
💰 Newfoundland and Labrador says the equalization formula is unconstitutional. The province announced its plan to take the federal government to court, arguing that the current formula doesn’t take a fair view of expenses and revenues. Saskatchewan, full of adrenaline from defying the carbon tax, plans to join in. The Constitution Act describes the equalization formula in aspirational terms—so the argument looks to be an uphill battle.
This NL constitutional challenge to federal equalization payments should be interesting to watch. I think it would look at s. 36 of the Constitution Act, 1982 which hasn't received a lot of judicial attention. Problem is it's a "commitment" provision and feds have discretion.
— Tom Slade (@thomasslade)
4:21 PM • May 30, 2024
👨⚖️ TMU letter could have used revisions, but students didn’t breach the school’s Code of Conduct. The external report authored by former Associate Chief Justice Michael MacDonald largely exonerated the TMU students who signed a letter supporting Palestine shortly after October 7. But the report also recognized the harm the students caused, condemning the letter as an example of poor advocacy.
Whatever your views on the current conflict, MacDonald’s reflections on advocacy and civil disagreement are worth a read (page 144 of the report, on page 156 of the pdf).
Overall, there was a huge gulf between what the students genuinely intended — to show solidarity with Palestinians, support a ceasefire, and encourage LASL administration to take an unequivocal stance against the war — and how the letter landed. The letter’s aggressive and harsh tone, along with its ambiguities, ultimately distracted from its goals.
🤐 Sarah Jama doesn’t get the same latitude as the TMU students. Ontario’s Legislative Assembly sanctioned Jama for her social media posts about Israel and Palestine last October. Since then, the Speaker hasn’t recognized Jama (except to kick her out of the Legislative Assembly for wearing a keffiyeh). Jama tried to judicially review the censure, arguing that it violates her fundamental freedoms, but Ontario’s Divisional Court said it doesn’t have jurisdiction to weigh in.
Parliamentary privilege gives the Assembly the power to control debates and to discipline its members—even for conduct on social media.
🔒 Stay tuned for the SCC’s secret trials decision. The Court is releasing a decision about the open court principle on Friday. If you’re looking for a recap, check out this past edition of Hearsay.
🗞️ Chief Justice Wagner held his annual presser yesterday. He covered topics like judicial vacancies, the need for Jordan timelines, and disinformation circulated about the Court’s R v. Kruk decision.
CASES YOU MIGHT HAVE MISSED
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