Contemporary Canadian Business Law: Principles and Cases Tenth Edition Cases

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Contemporary Canadian Business Law: Principles and Cases Tenth Edition

Chapter 15: Case 9

Case 9 deals with a homeowner (the principle) who lists her property for sale and enters into an agreement with an agent to facilitate a sale with a third party. Over the course of the agency agreement a prospective buyer inspected the property but didn’t make an offer before the agency agreement expired. The legal issue that arises comes after the agency agreement expires. The prospective buyer later decided to put in an offer, which was accepted, but once discovering that the agreement between the principle and agent had expired brought legal action against the agent.

The nature of the buyer’s actions in my opinion could be considered abnormal. The expiration of the agency agreement between the principle and the agent doesn’t have much bearing on his decision to place an offer on the house. The buyer indicated his interest in the house when he inspected the property and would have become aware of the disclosed agency at that time, so the fact that the agency agreement was expired at the time the offer was made is irrelevant.

If anyone was to have a problem with the fact that the offer was accepted after the expiration of the agency agreement expired it should be the principle, depending on the situation. While the agreement may have expired the principle may have indicated through her actions that they would like the relationship to continue without signing a new agreement. Without the principle notifying potential third parties that the agent no longer had the authority to bind the parties, the agent was completely within their rights to accept the offer.

The property owner would be able to ratify the agreement assuming that at the time the offer was accepted it was an agency of conduct that existed between her and the agent. If agency of conduct wasn’t the case and the principle had made it known to potential third parties that the agent no longer had the authority to act on her behalf, before the agent accepted the offer, then it could not be ratified. Ratification is retroactive, so agency by estoppel prevents the principle from denying representation after the fact.

Chapter 22: Case 9

Case 9 deals with two individuals, Smith(plaintiff) an owner of a large farm in eastern Ontario and Crockett (defendant) who occupied a small cabin on a woodlot that was on Mr. Smith’s farm property. Mr. Crockett constructed the log cabin in 1978 with the permission of the property owner and used the cabin as a fishing and hunting camp. For many years the defendant used the cabin on weekends during the summer while he was fishing, and for a weeks during the fall hunting season.

Beginning in the summer of 1981, Crockett began to make improvements to the area surrounding the cabin, by adding a small vegetable garden and constructing a fence during his months long summer vacation. The fence was constructed around both the cabin and garden for the purpose of keeping the animals out. During the hunting season of that year, Crockett cut down a number of small trees and extend the fenced-in-area to a parcel of land 23 metres by 30 metres and included a gate in the fence for access to the roadway. Smith made sure to ask Crockett about the fence, shortly after it was constructed, and was told that it was there to keep the animals away from his flowers and vegetables. The following year Crockett accepted early retirement and spent the period from May 1st to November 30th at the cabin. Crockett continued to take advantage of the fishing, continued to plant a garden and helped Smith with the planting of his crops and his fall harvest. Crockett would leave his belongings in the cabin over the cold winter months and spend his winter in a warmer climate.

When Crockett returned to the cabin the next April he was met by a local tax assessor, who asked him if he owned the cabin and answered with an affirmative and sometime alter...
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