UAP Inc. v. Oak Tree Auto Centre Inc., (1994) 118 Nfld. & P.E.I.R. 312 (PEITD)

• Judge: Campbell, J.
• Case Date: March 18, 1994
• Jurisdiction: Prince Edward Island
• Citations: (1994), 118 Nfld. & P.E.I.R. 312 (PEITD)

UAP v. Oak Tree Auto (1994), 118 Nfld. & P.E.I.R. 312 (PEITD);

    369 A.P.R. 312

MLB headnote and full text

UAP Inc. (plaintiff) v. Oak Tree Auto Centre Inc. (defendant) and Oak Tree Auto Centre Inc., Bagnall's Building Supplies Ltd., Bagnall's Mills Limited and Carl Bagnall (plaintiffs by counterclaim)

(GSC-8778)

Indexed As: UAP Inc. v. Oak Tree Auto Centre Inc.

Prince Edward Island Supreme Court

Trial Division

Campbell, J.

March 18, 1994.

Summary:

A shopping mall owner negotiated with UAP to operate an Automax franchise. The agreement was never put into written form. The mall owner incorporated a company and leased space in his mall, but the busi­ness suffered losses and eventually closed down. UAP sued the mall owner for the price of goods it had supplied to the fran­chise oper­ation and the mall owner counterclaimed against UAP for breach of contract.

The Prince Edward Island Supreme Court, Trial Division, awarded judgment to the plaintiff and disallowed the counterclaim. The court held that there was no contract because the parties were not ad idem on a central term of the agreement, however, the court found there were some monies owed to the franchise by UAP and allowed that amount to be set off against the judgment granted to UAP.

Contracts - Topic 1503

Consensus or agreement - What consti­tutes a consensus necessary for a binding contract - A shopping mall owner nego­tiated with UAP to operate an Automax franchise - The parties negotiated a joint venture but the agreement was never put into written form - The business was not a success and eventually closed down - UAP sued the franchise operator for the price of goods supplied - The franchise operator counterclaimed for breach of contract - The Prince Edward Island Supreme Court, Trial Division, held that no bind­ing con­tract existed because the parties were not ad idem on a major term of the agreement - See paragraphs 41 to 56.

Contracts - Topic 1604

Formation of contract - Mistake, misun­derstandings or misrepresentation - Mis­representation - What constitutes - A shopping mall owner negotiated with UAP to operate an Automax franchise - The owner and UAP negotiated a joint venture but never put the agreement in written form - The business failed and UAP sued the franchise operator for the price of goods it had supplied - The franchise operator sued for breach of contract and alleged misrepresentation - The Prince Edward Island Supreme Court, Trial Divi­sion, held that UAP had not made misrep­resentations - The court relied on case law that stated actionable misrepresentation must be a factual statement on a crucial matter - See para­graphs 57 to 72.

Fraud and Misrepresentation - Topic 2561

Misrepresentation - Representations - Particular statements - General - [See [Contracts - Topic 1604 ].

Cases Noticed:

Bell (C.W.) Holdings Ltd. v. Accenter Ltd. et al. (1978), 31 N.S.R.(2d) 313; 52 A.P.R. 313 (T.D.), refd to. [para. 42].

British American Timber Co. v. Elk River Timber Co., [1933] 4 D.L.R. 286 (B.C.C.A.), refd to. [para. 42].

Windmill Place v. Apeco of Canada Ltd. (1976), 16 N.S.R.(2d) 565; 16 A.P.R. 565 (C.A.), refd to. [para. 42].

Thierry v. Thierry (1956), 18 W.W.R.(N.S.) 127; 2 D.L.R.(2d) 419 (Sask. C.A.), refd to. [para. 47].

Esso Petroleum Co. v. Mardon, [1976] Q.B. 801 (C.A.), refd to. [para. 60].

Counsel:

James Travers, for the plaintiff;

Daniel Tweel, for the defendant.

This case was heard on March 20, May 2, August 18 to 20, 23 and 24, 1993, before Campbell, J., of the Prince Edward Island Supreme Court, Trial Division, who delivered the following decision on March 18, 1994.