Contract Law: Legality

Douglas Wilhelm Harder, M.Math. LELDepartment of Electrical and Computer Engineering

University of Waterloo

Waterloo, Ontario, Canada

ece.uwaterloo.ca

dwharder@alumni.uwaterloo.ca

© 2013 by Douglas Wilhelm Harder. Some rights reserved.

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Outline

An introduction to the engineering profession, including:– Standards and safety– Law: Charter of Rights and Freedoms, contracts, torts, negligent

malpractice, forms of carrying on business– Intellectual property (patents, trade marks, copyrights and

industrial designs)– Professional practice

• Professional Engineers Act• Professional misconduct and sexual harassment

– Alternative dispute resolution– Labour Relations and Employment Law– Environmental Law

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Contract Law

The five essential elements of a contract are:– An offer is made and accepted– There is mutual intent to enter into the contract– Consideration– Capacity to contract– Lawful purpose

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Legality

For an agreement to be legally enforceable, it must have a legal purpose– They must satisfy both statute and common-law precedence

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Bankruptcy and Insolvency Act

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Competition Act

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Construction Lien Act

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The Requirement to Licence

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Contrary to Public Policy

By common-law precedence, any contract that is against public policy may be illegal or void– Public policy doctrine are those principles that form the social,

moral and economic foundation of the state

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Contrary to Public Policy

Public policy, n. The principle that prospective injury to the public good is a basis for refusing to enforce a contract which would otherwise be valid.

www.oed.com

Also described as the public policy doctrine

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Contrary to Public Policy

Most obviously, a contract that may aid an enemy state or harm the relationship with a friendly state may be declared void as being against public policy

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Contrary to Public Policy

What is public policy relevant to engineering?

Freedom of trade

Any term in a contract that restricts trade may be seen to be contrary to public policy– Non- competition clauses must continue to allow the individual in

question to continue to make a living– The time and space restraints in non-competition clauses must

be reasonable• Courts will not reinterpret unacceptable non-competition clauses;

they will simply render them void

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Contrary to Public Policy

There is also the doctrine of evasion:– You cannot enter into a contract simply to evade a responsibility

you have to the state

Examples:– You cannot enter into a contract for the sole purpose of evading

taxes– Loopholes in the tax code, however, may be exploited—it is not

the purpose of the court to close loopholes made by the Legislature

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Contrary to Public Policy

A contract cannot have a term to cause the breach of a term in another contract

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References

[1] D.L. Marston, Law for Professional Engineers, 4th Ed., McGraw Hill, 2008.

[2] Julie Vale, ECE 290 Course Notes, 2011.

[3] Wikipedia, http://www.wikipedia.org/

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.

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