Canadian Common Law Foundations Flashcards

Under Canadian trust law, the three certainties required to create a valid express trust are:

Answer: Certainty of intention, certainty of subject matter, and certainty of objects

A valid express trust requires: (1) certainty of intention—the settlor must intend to create a trust obligation, not merely a moral obligation; (2) certainty of subject matter—the trust property must be identifiable; (3) certainty of objects—the beneficiaries must be ascertainable.

A commercial lease contains a covenant by the tenant to pay rent. The landlord assigns its interest to a new landlord. Under Canadian common law, can the new landlord sue the tenant for future rent?

Answer: Yes, because the covenant touches and concerns the land and the benefit passes to the assignee of the reversion

Under the rules in Spencer's Case (1583) and the doctrine of privity of estate, covenants that 'touch and concern' the land (including the covenant to pay rent) run with the land. The benefit passes to the assignee of the reversion and the burden passes to the assignee of the lease.

The equitable remedy of specific performance is available in a contract dispute where:

Answer: Damages are an inadequate remedy, typically because the subject matter is unique, such as land or a unique chattel

Specific performance is a discretionary equitable remedy granted when damages are inadequate—historically, all land is treated as unique. Canadian courts have also granted specific performance for unique chattels, businesses, and contracts where damages cannot adequately compensate.

The defence of ex turpi causa non oritur actio in Canadian tort and contract law provides that:

Answer: A court may decline to award a remedy where doing so would allow the plaintiff to profit from their own serious illegal or immoral conduct

Ex turpi causa ('from a dishonorable cause no action arises') allows courts to refuse relief when granting it would allow a plaintiff to benefit from their own serious criminal or immoral conduct. The SCC in Hall v. Hebert [1993] limited its application in tort to situations where allowing recovery would stultify the criminal law.

Under the doctrine of unconscionability in Canadian contract law, when may a court refuse to enforce a contract?

Answer: Where there is an inequality of bargaining power combined with an improvident bargain, such that enforcement would be unconscionable

Canadian courts (following Harry v. Kreutziger [1978] BC and Morrison v. Coast Finance Ltd. [1965] BC) will refuse to enforce a contract where: (1) there is inequality of bargaining power; (2) the stronger party took advantage of it to impose an improvident or oppressive bargain. Both elements must be established.

In which case did the Supreme Court of Canada recognize that good faith in the performance of contracts is a general organizing principle of Canadian contract law?

Answer: Bhasin v. Hrynew [2014]

In Bhasin v. Hrynew [2014] the SCC recognized good faith contractual performance as a general organizing principle of Canadian common law, and established a specific duty of honest performance—parties must not lie or knowingly mislead each other about matters directly linked to performance.