Contracts (O'Byrne)
The Requirement of Writing (Introduction)
TOPICS:
A.
B.
C.
D.
E.
F.
G.
Why do certain kinds of contracts have to be reduced to writing or
evidenced by writing?
What are the rationales for the writing requirement?
What kinds of contracts have to be reduced to writing or evidenced
in writing?
What counts as ‘some memorandum or note…in writing…signed by
the party to be charged therewith’?
What is the effect of non-compliance with the Statute of Frauds?;
What is part performance?
When can one seek a quantum meruit and why?
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A. Why do certain kinds of contracts have to be reduced to writing or evidenced by
writing?
•
Due to S/F, Sale of Goods Act, Guarantees Acknowledgment Act
B. Rationales for the writing requirement
C. What kinds of contracts have to be reduced to writing or evidenced by writing?
•
s. 4 of the Statute of Frauds. From a commercial perspective, note
especially:
1. contracts for the sale of land or any interest concerning them
(Deglman v. Guaranty Trust; Thompson v. Guaranty Trust)
2. contracts not to be performed within a year
2 *Rule in Adams v. Union Cinema: contract only
has to be in writing if its performance of
necessity must last longer than 1 year.
*Rule in Hanau v. Ehrlich: If there is no mention
of time and time is uncertain or indefinite, the
agreement is not within the statute.
Example #1: Alexi Yashin enters into an oral, 3 year, no-cut contract with the
Edmonton Oilers in March. The next month, the Oilers cut him.
Query: What is Yashin’s legal position now?
Example #2: What about a lifetime oral contract of employment? It is enforceable?
Example #3: Ms. X is hired by ABC law firm as a junior lawyer under an oral contract
for an indefinite period at $8,000 a month. Both parties anticipate that
the contract will last at least two years. After 3 months, Ms. X is fired
without cause and without notice. Can she successfully sue?
3. A contract for the sale of any goods of the value of $50 or
upwards
Sale of Goods Act, R.S.A 2000,c. S-2, s. 6
Enforcement of contract over $50
6(1) A contract for the sale of any goods of the value of $50 or more is not enforceable by action
(a) unless the buyer accepts part of the goods so sold and actually receives that part, or gives
something in earnest to bind the contract or in part payment, or
(b) unless some note or memorandum in writing of the contract is made and signed by the party
to be charged or the party’s agent in that behalf.
(2) This section applies to every contract referred to in subsection (1) notwithstanding that the goods
may be intended to be delivered at some future time, or may not, at the time of the contract, be
actually made, procured or provided or fit or ready for delivery or that some act may be requisite for
the making or completing the goods or rendering the goods fit for delivery.
(3) There is an acceptance of goods within the meaning of this section when the buyer does any act,
in relation to the goods, that recognizes a pre-existing contract of sale whether there is an acceptance
in performance of the contract or not.
(note evidentiary substitutes that are not found in the original SF s. 4)
4. Contracts of Guarantee
Guarantees Acknowledgement Act R.S.A. 2000, c. G-11
3 Requirements
3 No guarantee has any effect unless the person entering into the obligation
(a) appears before a notary public,
(b) acknowledges to the notary public that the person executed the guarantee, and
(c) in the presence of the notary public signs a statement at the foot of the certificate of the
notary public in the prescribed form.
D.
What counts as "some memorandum or note...in writing...signed by the party to
be charged therewith"?
1.
General comments based on CB
it must adduce the existence of the contract and not fail for uncertainty. See
McKenzie: need the 3 essential P's, namely parties, property, and price. But, per
Tweddell, other essential terms might exist, as here, that payment of the
purchase price was to be in stages.
the document need not be intended as a memo of the contract.
it is sufficient if the memo comes into existence anytime before the action is
commenced.
it can be constituted by several pieces of paper.
it must be signed by the party against whom the contract is being alleged.
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E.
mere initialing is sufficient
hand-printed name is sufficient
printed name of the contracting party on top of a
standard form is sufficient (per McCamus)
What is the effect of non-compliance with the S/F?
1. At common law
Per Treitel: this failure does not make the contract void but only unenforceable.
Per Riddell J.A.: “it must never be forgotten that the Statute of Frauds does not
deal with the validity of the transaction, but only with the evidence to prove an
agreement.”
™ this means plaintiff has only a procedural problem wrt
enforcement of the contract but the contract itself does exist.
™ hence, per CB, the contract can be used by way of defence as in
Barber and can also be used as consideration for a new contract
and the like.
4 2.
In equity
Per Fridman: “it was decided quite early after the passage of the Statute, by
courts of equity, that defendants would not be allowed to plead and rely upon
the Statute if to permit them to do so would be to allow the Statute `to be used
as an engine of fraud.'”
Per Coyne J.A.: “Equitable principles which hold that the Statute of Frauds does
not apply where there has been performance or part performance of the oral
contract by, or where otherwise the result would be fraud against, or injustice to,
the other party….”
See F. below
F.
What is P/P?
1. Equity's desire to ensure S/F is not used as an engine of fraud is the
foundation for the doctrine of P/P.
2. What counts as part performance?
a. Lord Selbourne in Maddison v. Alderson seems to posit two views, per
Fridman
i.
per Lord Selborne: the acts relied on “must be referred to the
contract” [emphasis added]
ACTUAL
o This is the narrower view, per Fridman
**Part performance must be ‘referable to the oral
agreement that is relied on’, per court in McMillen v.
Chapman.
o This narrow view appears to have been followed in
Deglman (S.C.C. 1954) by Rand J. while the broader view
appears to have been followed by Cartwright J.,
according to the analysis offered by Erie Sand and Gravel
Ltd. v. Seres’ Farms Ltd., 2009 ONCA 709
ii.
per Lord Selborne: the acts relied on ‘must be unequivocally,
and in their own nature, referable to SOME such agreement
as that alleged.’ [emphasis added]
o This is broader view, per Fridman
5 o See related analysis by MacDonald J. in Toombs v.
Mueller:
The broader doctrine is stated in Spry's Equitable
Remedies, 1st ed. (1971), at pp. 244-5, where it is
said:
... if the possession of land is delivered up in
circumstances which are consistent, not only with the
existence of a contract of sale, but also with the
existence of a contract of lease, or of assignment, or
of settlement, or indeed any other contract relating to
the obtaining of a proprietary, possessory or other
interest in that land, it will ordinarily be open to the
plaintiff to establish any contract which falls within
this wide general class. Accordingly, if once a
contract of the general class of that actually
entered into is sufficiently pointed to, the actual
terms of the contract may be proved ...
[emphasis added]
o
Per Upjohn L.J.: “acts need not be referable to no other title than the
one alleged. They need only ‘prove the existence of some contract,
and are consistent with the contract alleged.’”
o This broader view appears to be the one followed in Thompson (SCC
1974). SCC in Thompson says that its decision in Brownscombe stands
for the proposition that the performance has to be plainly referable
to an agreement as to the very land.
o Sask C.A. in Lensen discusses the theoretical foundation of the
doctrine of P/P:
i.
orthodox account: “alternative evidence” – acts of P/P
are seen as evidence sufficiently cogent of the contract to
permit equity to enforce it. Leads to a more narrow test
of P/P
ii.
modern account: “raising equities” - acts of P/P raise
equities in the plaintiff’s favour which render it unjust not
to enforce the contract, per Steadman. Leads to a
broader test of P/P.
o Test in Canada is not yet clear.
G.
When can one seek a quantum meruit and why?
*see Deglman
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