2 Outline An introduction to the engineering profession, including: Tendering ContractsOutlineAn introduction to the engineering profession, including:Standards and safetyLaw: Charter of Rights and Freedoms, contracts, torts, negligent malpractice, forms of carrying on businessIntellectual property (patents, trade marks, copyrights and industrial designs)Professional practiceProfessional Engineers ActProfessional misconduct and sexual harassmentAlternative dispute resolutionLabour Relations and Employment LawEnvironmental Law
3 Tendering ContractsRescissionOnce parties enter into a contract, there may be questions of equity where a court will allow a party of the contract to rescind the contractThis is a remedy for harm caused to one party of the contractThis can be done at any time and it involves the unwinding of the obligations and benefits of all partiesThe goal is to return all parties back to the original state prior (status quo ante) prior to the contractAlso called cancellation, reversing, etc.
4 Tendering ContractsCause for RescissionThere are numerous cases whereby one party may apply to the courts to rescind a contract:MisrepresentationDuressEconomic duressUndue influence
5 Tendering ContractsMisrepresentationA false statement or a false assertion of a fact is described as a misrepresentationIf one party is influenced by a misrepresentation to enter into a contract, that party can apply for a rescission of the contractThe deceived party will usually be given the option of voiding the contract—that is, the contract will be made voidable by the courts
6 Misrepresentation There are two types of misrepresentation: Tendering ContractsMisrepresentationThere are two types of misrepresentation:Innocent and fraudulentThe options available to the injured party will depend on the type of misrepresentation
7 Innocent Misrepresentations Tendering ContractsInnocent MisrepresentationsAn innocent misrepresentation occurs when a party makes any false statement or false assertion of fact and where the party does not appreciate the statement is falseThe deceived party may, within a reasonable period of time upon the discovery of the misrepresentation, apply for rescissionThe deceived party may also claim for damages with respect to any losses that have resulted as a consequence of the contract
8 Fraudulent Misrepresentations Tendering ContractsFraudulent MisrepresentationsA fraudulent misrepresentation occurs when a party makes a false statement or a false assertion of a fact“(1) knowingly, or(2) without belief in its truth, or(3) recklessly, careless whether it be true or false.”This description was made during Derry v Peek, 1889“where the fact that an alleged belief was destitute of all reasonable foundation would suffice of itself to convince the court that it was not really entertained, and that the representation was a fraudulent one.”
9 Fraudulent Misrepresentation Tendering ContractsFraudulent MisrepresentationIn the case of fraudulent misrepresentation, not only may the deceived party apply for compensation of any losses that may have occurred, they may also sue for additional damages based on the fraudulent deception
10 Misrepresentation and Engineering Tendering ContractsMisrepresentation and EngineeringAny misrepresentation in an engineering design may allow a party to rescind any contract resulting there fromConsider Township of McKillop v Pidgeon and Foley, 1908In this case, the specification gave the estimated amount of excavation required for a particular projectThe contractor submitted a tender based on that submissionIt was found that the estimation was 16 % less than that requiredThis would have eaten up any profit the contractor would have benefitted from
11 Misrepresentation and Engineering Tendering ContractsMisrepresentation and EngineeringAn error in an estimate will not, in general, allow a contractor to sue for further funds and, in general, such suits have failedConsequently, the judge considered this to be an innocent misrepresentation and gave the contractor the option of repudiating the contractA repudiation is a declaration by a party to a contract that it does not intend to fulfill the obligations of the contract
12 Tendering ContractsDuressIf a contract is entered into as a result of intimidation, it is said that the intimidated party was under duress “an act as a result of violence, threat or other pressure against the person” Duress may also include a threat of imprisonment, for example, threatening to expose criminal behaviour to intimidate an individual into entering into a contract The duress may be directed against either a party or a close relation
13 Tendering ContractsEconomic DuressOn occasion, the courts will also entertain economic duress, as in Gotaverken Energy Systems Ltd. v Cariboo Pulp & Paper Co., 1993The owner required a refit of a boilerThe contractor would be paid in excess of $24 millionThe project had to be completed during a shutdown period and the contractor was to work two 11-hour shifts seven days a weekProblems that were the responsibility of the owner resulted in substantial losses for the contractor during the projectThe owner was ready to acknowledge theseThe contractor, however, threatened to reduce the working hours from 154 hr/wk to 36 ½ hr/wk unless the contract was rewrittenThe new contract was thrown out but the contractor did still receive additional costs of $6 million
14 Tendering ContractsUndue InfluenceWhen one party has significant influence on another in forcing the other party to enter into a contract, it is said to be undue influenceThis is usually restricted to family situations where the positions are significantly unequal
15 Tendering ContractsReferences D.L. Marston, Law for Professional Engineers, 4th Ed., McGraw Hill, 2008. Julie Vale, ECE 290 Course Notes, 2011. Wikipedia,These course slides are provided for the ECE 290 class. The material in it reflects Douglas Harder’s best judgment in light of the information available to him at the time of preparation. Any reliance on these course slides by any party for any other purpose are the responsibility of such parties. Douglas W. Harder accepts no responsibility for damages, if any, suffered by any party as a result of decisions made or actions based on these course slides for any other purpose than that for which it was intended.