Post-Closing Problems Warranty and Merger General Rule: Rescission is not available for a breach of warranty, the case law sometimes seems that way, but basically the courts are finding that the breach led to an error in substantialibus A breach of warranty generally gives rise to damages (eg. Fraiser-Reid; Roberts) Warranty: When V knows something that P does not, and P relies on the V for that knowledge (Fraser-Reid) Historically there is an implied warranty as to the fitness of the home if the K was signed before the Implied Warranty: home was finished being built Express Warranty: Written into the K specifically generally induce the purchaser to enter into the K (eg. PDS) – Homeowner Protection Act BC Requires that all new homes have an approved home owner insurance from an approved provider that covers: 1. Defects for material labour 3 years – 2. Building envelope defects 5 years – 3. Structural defects 10 years – Clause 18 – Standard Form Contract – Entire Agreement Clause No representations or warranties exist outside of the K, and the written representations and warranties will survive the closing of the contract Expressly does away with merger Fraser-Reid v. Droumtsekas (SCC 1979) – Removes the doctrine of Merger P buying from V builder; 6 months later serious flooding due to lack of drain tiles on exterior there’s K required that V disclose any municipal/provincial permits and whether the work was done for them Trial judge found no express warranty that the house would not leak Issue: Was there an implied/express warranty about the quality of the house?
Post-Closing Problems Warranty and Merger General Rule: Rescission is not available for a breach of warranty, the case law sometimes seems that way, but basically the courts are finding that the breach led to an error in substantialibus A breach of warranty generally gives rise to damages (eg. Fraiser-Reid; Roberts) Warranty: When V knows something that P does not, and P relies on the V for that knowledge (Fraser-Reid) Implied Warranty: Historically there is an implied warranty as to the fitness of the home if the K was signed before the home was finished being built Express Warranty: Written into the K specifically – generally induce the purchaser to enter into the K (eg. PDS) Homeowner Protection Act BC Requires that all new homes have an approved home owner insurance from an approved provider that covers: 1. Defects for material labour – 3 years 2. Building envelope defects – 5 years 3. Structural defects – 10 years Clause 18 – Standard Form Contract – Entire Agreement Clause No representations or warranties exist outside of the K, and the written representations and warranties will survive the closing of the contract Expressly does away with merger Fraser-Reid v. Droumtsekas (SCC 1979) – Removes the doctrine of Merger P buying from V builder; 6 months later there’s serious flooding due to lack of drain tiles on exterior K required that V disclose any municipal/provincial permits and whether the work was done for them Trial judge found no express warranty that the house would not leak Issue: Was there an implied/express warranty about the quality of the house?
Abdulla%20-%20LAW%20317%20-%20Final.docx