COMMERCIAL LAW
CML 2403 B
Winter 2010
Instructor:Professor Stephen Blair
Office:FTX 119; Cell no. (613) 761-2719
E-mail:
Office Hours:TBA; by appointment
Class Times:Monday 3-5:30 pmFTX 147B
Wednesday 4-6:30 pmFTX 147B
COURSE OBJECTIVES
The general objective of this course is to give students a basic understanding of one of the fundamental subjects in commercial law, contracts of sale of goods and secured transactions (PPSA). Throughout the course, the relationship between legal rules and commercial transactions will be emphasized, as well as the role played by lawyers in these transactions.
COURSE FORMAT
For the most part, the course will be delivered by lecture. However, students will be called upon individually from time to time to summarize case law. The active participation of students through class discussion is strongly encouraged.
REQUIRED MATERIALS
1.Textbooks:
J.S. Ziegel, B. Geva, R.C.C. Cuming, Commercial and Consumer Transactions: Cases, Text and Materials, 4th ed., Toronto, Emond Montgomery, 2002 (ACCST@)
Ziegel, Cumming, Duggan, Secured Transactions in Personal Property and Suretyships, 5th ed.(New – Fall 2009), Toronto, Emond Montgomery, 2009(ASTPPS@)
2.Legislation:
Sale of Goods Act, R.S.O. 1990 c. S.1 (ASGA@)
Factors Act, R.S.O. 1990 c. F.1
Personal Property Security Act, R. S. O. 1990, c. P. 10, as amended (PPSA)
Repairer’s and Storage Liens Act, R. S. O. 1990, c. R. 25, as amended (RSLA)
All legislative texts can be downloaded from the Ontario Government site at . Please note that students are required to bring their own copies of these statutes to the final examination. Copies of statutes will not otherwise be provided
OTHER RESOURCES
(Please note that you are not expected to have consulted these sources for exam purposes.)
Benjamin's Sale of Goods, 7th (or earlier) edition A.G. Guest; editors, E.P. Ellinger et al.) (London: Sweet & Maxwell, 1997) KD 1650 .B455
G.H.L. Fridman, Sale of Goods in Canada, 4th ed. (Toronto: Carswell, 1995)
KE 943 .F753 1995
Barry I. Goldberg and Steven G. Golick, Guide to Ontario personal property security (Toronto: DeBoo, 1989 Looseleaf) KEO 322 .A6 G64
R.H. McLaren, Secured Transactions in Personal Property in Canada, 2d ed. (Toronto: Carswell, 1989, looseleaf) KE 765 .A6 M347 1989
R.H. McLaren, The Annotated Personal Property Security Act 2010 (Toronto: Carswell, 2009) KEO 280 .M25 2010
Ontario Law Reform Commission, Report on the Sale of Goods (Toronto: Queen's Printer for Ontario, 1979) KEO 180 .A73S3 1979
Canadian Commercial Law Guide (Toronto: CCH Canadian, looseleaf) KE 943 .A6 C345
METHOD OF EVALUATION
3-hour, open book, final examination worth 100 % of grade. Exam date: Wed. April 21, 2010,
1:30 pm. Permitted materials at the exam, class notes and summaries, required texts and statutes which you may annotate.Please note that students are required to bring their own copies of the statutes noted above under “Legislation” to the final examination. Copies of statutes will not otherwise be provided
Prior Years’ Exams: Winter 2008 (SGA only) and Fall 2008, Winter 2009and Fall 2009 (SGA & PPSA) are on reserve in the library, call no. ZZQ 0171
Note on Reading Assignments: Unless otherwise indicated, sections entitled ANOTE@ which appear throughout both textbooks are not considered examinable material. However, these passages can be helpful in reviewing and understanding key concepts.
Plagiarism
Plagiarism is a serious concern for this faculty. Students are responsible for making sure that they are not copying the work of others without appropriate credit being given to the author of that work.
The university Senate has mandated inclusion of a link to the materials on plagiarism and academic fraud in course syllabi (
The faculty of law website has an Academic Fraud section with links to the university’s Beware of Plagiarism brochure ( ou en français).
For students in need of learning supports
Students who require accommodations or academic support because of a physical or learning disability, or any condition that affects their ability to learn, are invited to register with ACCESS SERVICE:
In person:UCU 339
Telephone:562-5976
TTY:562-5214
E-mail:
Web:
Students can meet with an Access Service specialist to identify their individual needs and to discuss appropriate strategies. All information provided to Access Services and all accommodations received remain strictly confidential.
Deadlines to request accommodations for final exams:
Fall Semester: before 15 November
Winter Semester: before 15 March
For additional information about Access Services you may contact Jessica Simon in Student Services at or at 613.562.5800 x 3302
COURSE OUTLINE
INTRODUCTION
The Afree@ market, commercial law and commercial transactions.
PART I - SALES LAW IN A COMMERCIAL SETTING - THE SALE OF GOODS ACT
1.Introduction and Overview of the Sale of Goods Act
Readings:CCST pp. 1-18
2. Scope of the Sale of Goods Act
Readings:CCST pp. 31-44 (incl. Note pp. 38-39), 49-70 (incl. Note pp. 57-61)
Statute:SGA s. 1, 2
Cases:Barter: Messenger v. Greene* [1937] 2 DLR 26 (NS CA)
Leases: Helby v. Matthews - p. 40 [1895] AC 471 (HL)
Work & Materials: Borek v. Hooper - p. 49 (1994) 18 OR (3d) 470
Keillian West Ltd. v. Sportspage Enterprises Ltd. - p. 51 (1982) 23 Alta. L.R. 199
Gee v. White Spot Ltd. - p. 54 (1987) 32 DLR (4th) 238
Consignment, Sale & Return: Factors Act, R.S.O. 1990 c. F.1
Weiner v. Harris p. 61 [1910] 1 KB 285
Atari Corporation (U.K.) Ltd. v. Electronic Boutiquestores (U.K.) Ltd. - p. 63 [1998] QB 539 (CA)
Modern Application Difficulties:
St AlbansCity and District Council v. International Computers Inc. - p.33 [1996] 4 All ER 481 (CA)
Beta Computers (Europe) Limited v. Adobe Systems (Europe) Limited - p. 35 [1996] FSR 367
Pittman Estate v. Bain* (1994) 112 DLR (4th) 257 (SGA portion of case only)
Ter Neuzen v. Korn* [1995] 3 SCR 674 (SGA portion of case only)
* these cases are not in the casebook
- Formation of sales contracts
Statute:SGA s. 3, 4, 6, 9, 10
4.Basic Obligations of the Buyer and Seller under the SGA - Delivery and Payment (Time of the Essence)
Readings:CCST pp. 401-410
Statute:SGA s. 11-12, 26-36, 54
Cases:Hartley v. Hymans - p. 402 [1920] 3 KB 475
Allen v. Danforth Motors Ltd. - p. 403 (1957) 12 DLR (2d) 572
Chas. Rickards Ltd. v. Oppenheim - p. 407 [1950] 1 All ER 420 (CA)
Sunstrum Ranching Co. Ltd. v. International Building Systems Ltd., [1975] 4 WWR 86 (Sask. Dist. Ct.)
5.Implied Conditions and Warranties
Statute:SGA s. 12-16, 51
a)The Right to Sell and Quiet Possession
Readings:CCST pp. 191-210
Cases:Rowland v. Divall - p. 193 [1923] 2 KB 500 (CA)
Niblett Ltd. v. Confectioners= Materials Co. Ltd. - p. 192 [1921] 3 KB 387
Butterworth v. Kingsway Motors Ltd. - p. 196 [1954] 2 All ER 694
Patten v. Thomas Motors Pty. Ltd. - p. 201 (1965) 65 NSWR 458
Microbeads AG v. Vinhurst Road Markings Ltd. - p. 206 [1975] 1 All ER 529
Ahlstrom Canada Ltd. v. Browning Harvey Ltd. (1987), 31 DLR (4th) 316 (Nfld.CA) –see note 3 @ p. 209
b)Description
Readings:CCST pp. 211-235
Cases:Andrews Brothers (Bournemouth) Ltd. v. Singer & Co. Ltd. - p. 212
Varley v. Whipp - p. 214
Beale v. Taylor - p. 217
Harlingdon and Leinster Enterprises Ltd. v. Christopher Hull Fine Art Ltd. - p.220
Arcos, Limited v. E.A. Ronaasen and Son - p. 228
Ashington Piggeries Ltd. v. Christopher Hill Ltd. - p. 231
Reardon Smith Line Ltd. v. Yngvar Hansen-Tangen - p. 233
c)Merchantable Quality
Readings:CCST pp. 237-284
Cases:Hardwick Game Farm v. Suffolk Agricultural and Poultry Producers Ass. - p. 240
B.S. Brown & Son Ltd. v. Craiks Ltd. - p. 249
IBM v. Shcherban - p. 252
Bartlett – p. 256
Crowther – p. 258
Presley – p. 266
Mash – p. 271
Sumner – p. 278
Thornett – p. 281
d)Fitness for Use
Readings:CCST pp. 285-308 (incl. Note pp. 294-297)
Cases:Hardwick Game Farm v. Suffolk Agricultural and Poultry Producers Ass. - p. 285
Ashington Piggeries Ltd. v. Christopher Hill Ltd. - p. 288
Ingham v. Emes - p. 297
Baldry v. Marshall - p. 305
e)Sales by Sample
Readings:CCST pp. 308-311
Case:Steels & Busks Ltd. v. Bleecker Bik & Co. Ltd. - p.308
f) Private Sales Frey – p. 311 6. Risk of Loss and Frustration
Statute:SGA s. 7, 8, 17-25
Readings: CCST pp. 428-433, 439-440
Cases:Jerome v. Clements Motor Sales Ltd. - p. 428
Alfred Mills Ltd. p. 437
Frustration
Howell v. Coupland – p. 443
Ocean Tramp Tankers p. 446
7.Transfer of Title
a)Between Buyer and Seller
Readings:457-471, 499-500
Royal Bank of Canada v. Saskatchewan Telecommunications - p. 459
Carlos Federspiel & Co., S.A. v. Chas. Twigg & Co., Ltd. - p. 463
Caradoc Nurseries Ltd. v. Marsh - p. 468
Sells v. Thomson - p. 470
In re: Wait p. 471
In re: Goldcorp – p. 476
b)Transfer by Non-Owner - Rights of Innocent Third Parties
Readings:CCST pp. 501-547 (incl. Note pp.511-514)
Cases:Estoppel: Leonard v. Ielasi - p. 507
Mercantile Agents: St. John v. Horvat - p. 514
Seller in Possession: Pacific Motor Auctions Ltd. v. Motor Credits Ltd. - p. 519
Worcester Works Finance Ltd. v. Cooden Engineering Co. Ltd. - p. 525
Buyer in Possession: Shaw v. Commissioner of Police of the Metropolis - p. 530
Newtons of Wembley Ltd. v. Williams - p. 534
Voidable Title: Lewis v. Averay - p. 541
Car & Universal Finance Co. Ltd. v. Caldwell - p. 545
8.Seller's Remedies for Buyer's Breach
Readings:CCST pp. 551-568, 584-588
Statute:SGA s. 36-48
Cases:Action for Price: Colley v. Overseas Exporters - p. 554
Stein, Forbes and Co. v. County Tailoring Company - p. 558
Seller=s Right of Resale: R.V. Ward Ltd. v. Bignall - p. 562
Commission Car Sales – p. 568
Measurement of Damages in Lost Volume Sales
Charter v. Sullivan – p. 572
Anticipatory Repudiation and Measure of Damages
Tai Hing v. Kamsing - p. 578
Relief From Forefeiture of Monies Paid: Stockloser v. Johnson - p. 584
9.Buyer's Remedies for Seller's Breach
Statute:SGA s. 33-35, 49-52
a)Right of Rejection
Readings:CCST pp. 591-624 (incl. Note 2 pp. 595-596; Note 1 pp. 599-601)
Cases:Home Gas Ltd. v. Streeter - p. 592
Hardy & Company v. Hillerns and Fowler - p. 596
Public Utilities Commission v. Burroughs Business Machines Ltd. - p. 601
Rafuse Motors Ltd. v. Mardo Construction Ltd. - p. 602
Hart-Parr Company v. Jones - p. 607
Indivisible Contracts: William Barker (Jr.) and Co Ltd v. Ed. T. Agus Ltd - p. 611
Instalment Contracts: Maple Flock Co Ltd v. Universal Furniture - p. 616
b)Damages
Readings:CCST pp. 625-642
Cases:Wertheim v. Chicoutimi Pulp Co. - p. 626
Bence Graphics International Ltd v. Fasson U.K. Ltd. - p. 628
Bowlay Logging – p. 643
Cullinane – p.649
R. G. McLean – p. 656
Sunnyside Greenhouses – p. 661
Duty to Mitigate – Contributory Negligence (sometimes called “Anticipatory Mitigiation”) 671-674
H. Parsons Livestock p. 681
c)Remedies in Equity
Readings:CCST pp. 689-694
Cases:Sky Petroleum Ltd. v. VIP Petroleum Ltd. - p. 689
Cohen v. Roche - p. 692
10.Disclaimers and Limitations of Liability
Readings:CCST pp. 695-714
Statute:SGA s. 53
Case:Hunter Engineering Co., Inc. v. Syncrude Canada Ltd. - p. 697
Gaflo p. 714
PART II - SECURED TRANSACTIONS
1.Introduction
a)Personal Property Security Law in Canada - Historical overview, Objectives and General Concepts
Readings:STPPS pp. 1-33
2.Scope of the PPSA
a)Defining APersonal Property@
Readings:STPPS pp. 1-33
Statute:PPSA s. 1, 2, 4
Case:Saulnier v. Royal Bank p. 33
b)Trusts
Readings:STPPS pp. 50-54
Statute:PPSA s. 1, 2, 4
Case:Re Skybridge Holidays Inc. - p. 50
c) Leases
Readings:STPPS pp. 55-58 and 517 - 520
Statute:PPSA s. 1, 2, 4
d)Exclusions
Readings:STPPS pp. 60-80
Statute:PPSA s. 1, 2, 4
Cases:Commercial Credit Corp. Ltd. v. Harry Shields Ltd. - p. 60
Re: Stelco, Inc. - p. 62
GE Canada v. ING – p.67
Re Urman - p. 76
3.Validity of Security Interests
Readings:STPPS pp. 81-111
Statute:PPSA s. 2, 9, 11
Cases:Ellingsen (Trustee of) v. Hallmark Ford Sales Ltd. - p. 81
994814 Ontario v. RSL Canada – p. 90
356447 British Columbia Ltd. v. Canadian Imperial Bank of Commerce - p. 95
MacEwan Agricentre v. Beriault – p. 101
Atlas Industries v. Federal Business Development Bank - p. 109
Re BDO Dunwoody Ltd. and Astral Communications Inc. - p. 96
4.Attachment
Readings:STPPS pp. 113-154
Statute:PPSA s. 11, 12
Cases:Access Advertising Management Inc. v. Servex Computers Inc. - p. 117
Crédit Suisse Can. v. Yonge St. Holdings - p. 120-130 (Read trial decision only) (For Ont. CA decision (pp. 130-134) - see section 9(d) below)
Kinetics Technology International Corp. v. Fourth National Bank of Tulsa - p. 146
R v. Canadian Imperial Bank of Commerce - p. 149
5. Perfection
Readings:STPPS pp. 155 - 202
Statute:PPSA s. 19-29
Cases:Re Raymond Darzinskas - p. 157
Sperry Inc. v. Canadian Imperial Bank of Commerce - p. 159
Re Giffen - p. 176
Re 1231640 Ontario – p. 190
6.Conflict of Laws Provisions
Readings:STPPS pp. 527-545
Statute:PPSA s. 5 - 8
Cases:Re Adair; Re GMAC - p. 531
Re Claude A. Bédard - p. 537
Gimli Auto Ltd. v.BDO Dunwoody Ltd. - p. 541
7.Registration - Process, Errors and Subrogation
Readings:STPPS pp. 203-259, 210-217
Statute:PPSA s. 23, 28, Part IV - s. 41-57
Cases:Bank of Nova Scotia v. Clinton=s Flowers & Gifts Ltd. – note p. 211
Re Lambert - p. 218
Coates v. General Motors Acceptance Corp. – p. 231
Adelaide Capital Corp. v. Integrated Transportation Finance Inc. - p. 236
Heidelberg Canada Graphic Equipment Ltd. v. Arthur Andersen Inc. – p. 245
In the Matter of the Bankruptcy of N=Amerix Logistix Inc. – (2001) 57 O. R. (3d) 248 (SCJ)
8.Priorities
a)Basic Priority Rules
Readings:STPPS pp. 255-294
Statute:PPSA s. 20, 30-32, 38
Cases:The Robert Simpson Company Ltd. v. Shadlock and Duggan - p. 260
James Talcott v. Franklin National – p. 266
b)Future Advances
Statute:PPSA s. 13
Cases: Coin-O-Matic v. Rhode Island – p. 274
c)Purchase Money Security Interests (PMSI)
Readings:STPPS pp. 295-340
Statute:PPSA s. 20(3), 30 and 33
Cases:Agricultural Credit Corp. of Saskatchewan v. Pettyjohn - p. 301
Unisource Canada Inc. v. Laurentian Bank of Canada - p. 305
Clark Equipment of Canada Ltd. v. Bank of Montreal - p. 308
Re Chrysler Credit Can. Ltd. and Royal Bank of Canada - p. 315
North Platte v. Production – p. 329
Brodie Hotel v. US – p. 334
d)Fixtures, Accessions and Comingled Goods
Readings:STPPS pp. 341-372
Statute:PPSA s. 34, 35, 37
Cases:Cormier v. Federal Business Development Bank - p. 344
859587 Ontario Ltd. v. Starmark Property Management Ltd. - p. 353
Industrial Acceptance Corp. v. Firestone Tire & Rubber Co. - p. 359
GMAC Leaseco Ltd. v. Tomax Credit Corp. - p. 363
In the Matter of San Juan Packers, Inc. - p. 365
e)Other Legal Priorities - Liens
Readings:STPPS pp. 373-398
Statute:PPSA s. 4
Cases:General Electric Capital Equipment Finance Inc. v. Transland Tire Sales & Service Ltd. – p. 378
Leavere v. Port Colborne (City) - 383
DaimlerChrysler Financial Services (Debis) Canada Inc. v. Mega Pets Ltd. – p. 389
9.Transfer of Collateral
a)Sales in the Ordinary Course of Business
Readings:STPPS pp. 381-400 (including note pp. 399-400)
Statute:PPSA s. 25, 27, 28
Cases:Camco Inc. v. Olson Realty (1979) Ltd. - p. 402
Tanbro Fabrics v. Deering Mills – p. 409
Royal Bank of Canada v. 216200 Alberta Ltd. - p. 414
Spittlehouse v. Northshore Marine Inc. (Receiver of ) - p. 422
b)The Right to Proceeds of Sales
Readings:STPPS pp. 412-424
Statute:PPSA s. 25, 28
Cases:Flintoft v. Royal Bank of Canada - p. 442
c)Tracing Proceeds
Readings:STPPS pp. 448-476
Statute:PPSA s. 28
Cases:Agricultural Credit Corp. of Saskatchewan v. Pettyjohn - p. 449
Flexi-Coil Ltd. v. Kindersley District Credit Union – p. 456
d)License to Carry On Business (Express or Implied)
Readings:STPPS pp. 467-480
Statute:PPSA s. 25
Cases:Crédit Suisse Canada v. 1133 Yonge Street Holdings Ltd. - p.130 (Ont.CA decision only)
Royal Bank of Canada v. Sparrow Electric Corp - p. 135
10. Enforcement and Remedies
a)Limits on Enforcement Rights
Readings:STPPS pp. 489-497
Statute:PPSA s. 8 and Part V - s. 58 to 66
Case:Waldron v. Royal Bank - p. 489
b)Seizure, etc. of Collateral
Readings:STPPS pp. 497-514 (incl. Note pp. 512-514)
Statute:PPSA s. 8 and Part V - s. 58 to 66
Cases:R. v. Doucette - p. 498
Angelkovski v. Trans Canada – p. 483
Copp v. Medi-Dent – p. 492
BMO v. Charest – p. 499
Standard Trust v. Crossing p. 508
Ostrander v. Niagra Helicopter – p. 512
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