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law 69 similarly the capacity of a corporation to do so is determined by the law under which it is incorporated which may be the federal canada business corporations act in which case the relevant provincial or territorial law may be determined with reference to the location of the corporation s registered office or a provincial act 70 consequently questions of capacity are largely determined under the contract law of the relevant province or territory the following chart shows the main differences between bills of exchange and promissory notes 71 bill of exchange promissory note name the name of the bill or note in the text of the document in the language the document has been issued in subject unconditional order for the payment of the specified sum unconditional assumption of obligation for the payment of the specified sum drawee the name of the person obliged to pay drawee n a date the specification of the maturity place of payment specification of the place of payment payee the name of the person to whose behalf the payment must be effected issue date the specification of the date and place of the issuance of the bill or note signature the signature of the drawer the signature of the issuer duties and equitable doctrines edit further information good faith law and estoppel in canadian contract law there are two distinct duties requiring parties to act in good faith the first pertaining to pre contractual relations is a duty to negotiate in good faith while the second is a duty to act honestly in the performance of contractual obligations the two duties are equally relevant to both québec s civil law and the other provinces and territories common law approaches to contract law representing an attempt by the supreme court of canada to extend the duties of good faith embedded in québecois law to the jurisprudence of the country s common law jurisdictions additionally in the common law provinces and territories the doctrine of estoppel is another way in which the courts restrict the ability of parties in a contract to act in bad faith another important equitable doctrine in canadian contract law is that of unconscionability whereby the enforceability of a contract or of one or more terms in a contract is restricted on the grounds that it would be unjust to enforce it duty to negotiate in good faith edit the duty to negotiate in good faith is enshrined in québecois contract law by the broader obligation on individual s to exercise their civil rights in good faith and has been recognised in certain circumstances in the common law jurisdictions in québec this right is grounded in section 1375 of the civil code which provides that parties to a contract must act in good faith not only at the time an obligation is performed but also at the time the obligation arises 72 while english common law did not traditionally recognise a duty to negotiate in good faith canadian contract law recognises the duty where an imbalance in bargaining power exists between the parties to a contract 34 circumstances giving rise to this duty include negotiations between franchisors and franchisees insurers and insured parties contracts pertaining to marriages and separation agreements invitations to tender and fiduciary relationships 34 courts may also recognise a duty to negotiate in good faith in situations involving a pre existing relationship between the parties particularly where the negotiation pertains to collateral terms in an otherwise complete contract as well as in situations where parties to an oral contract have agreed to negotiate the terms to be recorded in a written contract 34 in circumstances where one party has incurred expenses in anticipation of a contract and the other party withdraws in bad faith from negotiations the violation of the duty to negotiate in good faith may entitle the aggrieved party to restitutionary damages 34 with regard to invitations to tender this duty is applied in the form of the contract a doctrine a process contract referred to as contract a 73 is formed between the owner person company or organisation tendering the project and each bidder when a request for proposal is responded to in the form of a compliant bid sometimes also known as submission of price the owner must deal fairly and equally with all bidders and must not show any favouritism or prejudice towards any bidder s in essence this concept boils down to the right of an individual to have equal opportunity to be successful with their bid for work a breach of contract a may occur if the owner or an owner s officer or representative see vicarious liability provides information changes specification during the tendering process to unfairly benefit a particular bidder enters into closed negotiations with an individual bidder in an effort to obtain more desirable contract conditions etc the most common situation in which an owner is accused of having breached contract a occurs when a bidder is selected who is not the lowest bidder this contravenes established custom and practice which would normally dictate that the lowest bid be awarded the subsequent contract to perform the work contract b but is not normally a source of a breach if handled properly successful suits for breach typically occur where the lowest bidder is excluded based on a clause or stipulation that is either not clearly outlined in the tender documents such as preference for local bidders or is deemed by the courts to be too broadly worded to have any meaning duty of honest contractual performance edit main article duty of honest contractual performance the duty of honest contractual performance referred to in québec as the doctrine of abuse of rights is a contractual duty and implied term of a contract in québec it is rooted in sections 6 and 7 of the civil code which provide that every person is bound to exercise his civil rights in accordance with the requirements of good faith 74 and that no right may be exercised with the intent of injuring another or in an excessive and unreasonable manner and therefore contrary to the requirements of good faith 75 it was extended to canada s common law provinces and territories as a result of the decision of the supreme court of canada in the case of bhasin v hrynew in essence this duty requires parties to a contract to act in good faith and with honesty in exercising their rights under a contract and in delivering their obligations under a contract this duty prohibits parties to a contract from lying or otherwise knowingly mislead ing each other about matters directly linked to the performance of the contract 76 while it is also currently an integral part of the jurisprudence of canada s common law provinces and territories the duty of honest contractual performance is rooted in the civil law doctrine of abuse of rights and the supreme court of canada has established that precedent from québecois contract law is applicable to interpreting this duty in cases arising in the country s common law jurisdictions and vice versa 77 consequently in all canadian jurisdictions this duty is rooted in articles 6 7 and 1375 of the civil code of québec with article 7 in particular providing that no right may be exercised with the intent of injuring another or in an excessive and unreasonable manner 78 while this duty does not serve to extinguish or negate a party s rights under a contract it serves to limit the manner in which parties to a contract may exercise their rights 79 by mandating that parties must act in good faith both at the time the obligation arises and at the time it is performed or extinguished 72 estoppel edit estoppel is an equitable remedy whereby a contracting party may not rely on the terms of a contract if by its words or conduct it led the other party to believe that certain terms in the contract will be ignored interpreted in a particular way or given a less strict construction 80 one type of estoppel recognised in canada s common law jurisdictions is estoppel by convention which operates where three criteria are satisfied 1 a manifest representation of a shared assumption of fact or law pertaining to the application or construction of a contractual term 2 one party acts in reliance of the shared assumption in a manner that alters its legal position 3 the party that acted in reliance shows that it did so reasonably and would be significantly harmed if the term is strictly enforced 81 82 the ontario court of appeal has held that the shared assumption required to invoke estoppel by convention does not need to arise as a representation by the party seeking enforcement of the contractual term 83 two distinct but related types of estoppel recognised in canada are promissory estoppel or estoppel by representation which enables courts to enforce a promise or representation by one party to a contract stating that it will not invoke a particular term of a contract or rely upon a particular provision of law if the other party has acted to its own detriment in reliance on such a promise or representation 84 in canada s common law provinces and territories these categories of estoppel serve to require parties to a contract to act in good faith in invoking contractual terms unconscionability edit unconscionability is a doctrine in canadian contract law that restricts the enforceability of unfair agreements that resulted from an inequality of bargaining power 85 the test for unconscionability applied by canadian courts is to determine whether there was an inequality of bargaining power between the parties to the contract and if so whether this inequality resulted in the contract being an improvident bargain for the party with lesser bargaining power 85 86 the inequality criterion is satisfied where one party is unable to sufficiently protect its interests while negotiating the contract while the improvidence criterion is satisfied where the contract unduly advantages the stronger party or unduly disadvantages the more vulnerable 85 improvidence must be measured with reference to the time of the contract s formation and involves a contextual assessment of whether the potential for undue advantage or disadvantage created by the inequality of bargaining power has been realised 85 unlike the duty to negotiate in good faith the doctrine of unconscionability which applies to contracts in all contexts does not require the party with greater bargaining power to have intentionally taken advantage of the weaker party or otherwise have acted in bad faith 85 it is particularly relevant in the context of standard form contracts especially with regard to choice of law choice of court or forum selection clauses 85 where the disadvantaged party understood the improvident terms of the contract the contract is unconscionable if they were so reliant on the advantaged party that they assented out of perceived necessity meanwhile where the disadvantaged party did not understand the improvident terms the focus is on whether they have been unduly disadvantaged by the terms they did not understand or appreciate 85 the intended purpose of the doctrine of unconscionability is the protection of vulnerable persons in transactions with others 85 87 88 89 nominate contracts edit both québec and the common law provinces and territories have enacted special rules for certain categories of contracts specifying standard rules and conditions applying to these contracts contracts for the sale of goods edit both the civil code of québec and statutes in the common law provinces provide for certain standard rules in relation to contracts for the sale of goods the purpose of these provisions is to ensure that parties to sale of goods contracts particularly buyers are protected from unfair conduct and defective products while the purposes underlying both are similar there are substantive differences in the provisions themselves in québec a sales contract is defined as a contract by which a person the seller transfers ownership of property to another person the buyer for a price in money 90 the code provides for a series of protections for both buyers and sellers and defines the statutory obligations of each in terms of protections for sellers the code provides that a person charged with the sale of the property of another is not permitted to acquire such property including through an intermediary 91 and that the sale of property by a person other than its owner or a person authorised to sell it may be declared null unless the seller later acquires ownership of the property in question 92 in terms of protections for buyers the code provides that the promise of sale with delivery and actual possession is equivalent to sale 93 in terms of obligations the code provides that buyers have the obligation to take delivery of the product sold pay the price thereof at the time and place of delivery pay any expenses related to the act of sale and to pay interest on the sale price either from the time of delivery of the property or after the expiry of a period agreed by the parties 94 the code provides for four distinct obligations owed by sellers 1 delivery this obligation is fulfilled when the seller puts the buyer in possession of the property or consents to his taking possession of it and all hindrances are removed 95 provided that the property is delivered in the condition it is in at the time of the sale and with all its accessories 96 additionally the seller is required to provide the buyer with the appropriate title documents and records as to the property s ownership 97 and to deliver the area volume or quantity specified in the contract except where it is obvious that the certain and determinate property was sold without regard to such area volume or quantity 98 2 warranty of ownership the seller is bound to warrant the buyer that the property is free of all rights except those he has declared at the time of the sale and is bound to discharge the property of all hypothecs even declared or registered unless the buyer has assumed the debt so secured 99 3 warranty of quality the seller must warrant that the property sold is free of any defects that would render it unfit for purpose or which would have diminished its usefulness such that the buyer either would not have purchased it or agreed to pay the price agreed 100 4 conventional warranty a sale contract may add to or diminish from the warranties provided for by law but a seller may not contract out of liability for their own acts or omissions 101 furthermore the code provides that buyers and sellers have the following rights for buyers 1 the right if a seller of movable property fails to deliver to consider the sale resolved if the seller is in default by operation of law or if he fails to perform his obligation within the time allowed in the demand putting him in default 102 2 the right where the seller is bound to deliver the area volume or quantity specified in the contract and is unable to do so to obtain a reduction of...