1) During the pandemic of 2020, the government imposed a stay at home order requiring everyone to stay at home except for essential trips. Brad operated a small ice cream and candy shop in Niagara­ on-the-Lake. Once the order was issued he had virtually no customers since no tourists could come to the Town. At the end of the first month he told his landlord, Patrick, that he would likely need to declare bankruptcy because he could not pay the rent. Patrick encouraged him to stay and said that he would reduce the rent from $8,000.00 to $2,000.00 per m.onth to help him out. Brad paid Patrick $2,000.00 and with loans from family members managed to do so each  month.

In the seventh month the pandemic was declared to be over and the stay at home order was rescinded. Brad went to Patrick's office with a big sm i le and gave him a cheque for $8,000.00. Patrick said "Where is the $36,000.00 for the other 6 months"? Brad was surprised and said "That rent was forgiven because of the pandemic". Patrick replied "Of course .not, we still have a valid lease that requires payments of $8,000.00 per month. You still owe me the rent". Brad claims that he would have closed the store and declared bankruptcy 6 months earlier if Patrick had not promised to reduce the rent. He commences an action to enforce Patrick's promises.

Required: Discuss the legal issues that will be raised by the parties with reference to the applicable principles. What is the likely  result?

2) Patrick, a lawyer, was hired by Book LLP, a firm of lawyers in downtown Toronto. Patrick worked with the firm for 15 years and acquired an expert knowledge of tax law and made several connections with prominent accounting firms that referred work to Book LLP. Patrick worked almost entirely in the offices of the firm, the partners handled most negotiations with the firm's clients and referred the work to Patrick.

Patrick's contract of employment stated that for a period of two (2) years after the termination of his employment "the employee will not engage in the professional practice of tax law either alone or in association with or as an employee of any person or firm within Metropolitan Toronto and will not

accept work from any existing client of the firm or any referrals from any accountant who provided services to the firm's clients."

Within a few days of terminating his employment with Book LLP, Patrick advised the fmn's partners that he considered the restrictive covenant illegal and unenforceable and that he intended to open his own office as a tax lawyer within North York, part of Metropolitan Toronto, but which was 10 kilometres from the offices of Book LLP. Book LLP then sued Patrick to obtain an injunction to restrain him from breaking the contract and opening the office.

Required: Identify the legal issues and state the principles that would affect the decision. Is there any additional information which would be relevant to your assessment of this case? What is the likely outcome of the application?

Answer:

A contract is an agreement between two parties to perform an obligation that both parties must complete. The contract can be in writing, oral, or a combination of both.

Under contract law, for a contract to be enforceable, there are certain elements that the agreement should meet.
They are ;
Offer, acceptance, consideration, and intention to be bound.
1.
Legal issues and applicable legal principles:
The critical legal issue is whether there was a valid contract between Patrick and Brad regarding the new rental reduction agreement.
To determine if there was a valid contract, the following legal issues arise ;
Whether there was a valid agreement in terms of an offer and acceptance;
Whether there was a valid consideration;
Whether there was an intention to be legally bound by the new agreement.


Whether there was an "offer" in the potential contract between Patrick and Brad
There was an offer by Patrick to Brad to reduce the rent from $8,000.00 to $2,000.0.

Offer
An offer is a statement of terms to which the person making the offer is prepared to be contractually bound. An offer should be communicated, committed, and have specific terms. Without an offer, there would be no contract. When one party makes an offer, the other contracting party can either accept, reject, or give a counter offer.
If the offeror acts in a way that a third party is made to believe that the offeror intended to be bound even though he may not have had such intention, he is bound.
In this case, there was a valid offer to reduce the rent from $8,000.00 to $2,000.0.
Patrick communicated the offer to Brad.


Whether there was "acceptance" in the potential contract between Patrick and Brad;
Brad accepted the offer and fulfilled his obligation to pay the new rent of $2,000.0.
Yes, there was a valid acceptance.

Acceptance
Acceptance of an offer is when the contracting party accepts the offer made. The acceptance must be expressed in communication or conduct and should not have conditions. The offer must be accepted as it is. Any negotiations that are done after the initial offer are considered as counter offers and not acceptance. Remaining silent is not considered acceptance unless action is taken by the accepting party to act on the offer through payment or fulfill what the offer requires.
There must also be an objective manifestation by the offer's recipient of an intention to be bound by its terms. An offer must be accepted per its precise terms if it is to form an agreement. Acceptance takes legal effect once it is communicated to the offeror. 

The offeree must accept the offer as given by the offeror.
Brad accepted the offer as given by the uncle. He expressed acceptance by conduct when he fulfilled his obligation, as stated in the offer and within the given time.



Whether there was "consideration" in the potential contract between Patrick and Brad
There was a valid consideration of reducing the rent from $8,000.00 to $2,000.0 in exchange for Brad's continuation to rent the shop.
Yes, there was a valid consideration.

The consideration was the promise and action of reducing the rent payable for Brad to continue renting the candy shop. 
Brad had expressed to his landlord, Patrick,  his intention to declare bankruptcy because he could not pay the rent. Patrick encouraged him to stay and said that he would reduce the rent from $8,000.00 to $2,000.00 per m.onth to help him out. 
Brad claims would have closed the store and declared bankruptcy six months earlier if Patrick had not promised to reduce the rent. 

Consideration
An exchange of something in return for something else, whether it is an action, a promise to act, or a promise to abstain from doing something. For a contract to be binding, there must be an exchange of value between the parties. When one party promises another to act or abstain from doing something, such an act, abstinence, or the promise is considered the promise. The price that one party pays to buy the other's promise or action is the consideration. 

Consideration must not be adequate -if there is an agreement, parties are free to determine the appropriate consideration.

Whether there was the intention to create a legal binding relationship
Yes, there was an intention to be legally bound by the agreement.
Brad started to pay the new rent agreement immediately after they agreed.
Patrick also accepted the new rent and allowed Brad to continue renting the shop.
Brad paid Patrick $2,000.00 and managed to do so each month with loans from family members.

Intention to Create Legal Relation
For an agreement to be binding, the contracting parties must intend to create legal relations and be bound by the contract.
The party which wants an agreement to be a contract should prove that they intended to enter into a legally bound contract.
For an intention to be legally bound to be established, the following elements must be present;

Commercial relations
In commercial relations, unless rebutted, it's usually presumed that the parties intend the agreement to be legally binding.
The relationship between Patrick and Brad was commercial, and it can be presumed that there was an intention to be bound by the agreement.

Nature of the relationship between the contracting parties
The general assumption is that when parties have a domestic or social relationship, there is no intention to form a legally binding relationship.
In this case, since they did not have a domestic or social relationship, it is clear that they had intentions to create legal relations.

The nature of the agreement
In social situations, the general assumption is when parties agree, there is no intention to be legally bound. The contract made by the two parties was not made in a social environment. It was a commercial agreement. Patrick had explicitly gone to inform Brad about his financial situation and his inability to continue renting the shop when Brad made the offer.t was for the sale of a coffee shop.

Conduct of the parties
Through the parties' conduct, it can be determined if there was an intention to create legal relations when agreeing to the two parties.
Fulfillment of the new obligations as set in the new agreement was a sign of intention to create legal relations.
Brad paid Patrick $2,000.00 and managed to do so each month with loans from family members. Brad never refused to accept the $2,000.00 paid to him every month. Neither did he indicate then that Patrick was left with a balance of $6,000.00 every month for the six months.


Based on the above principles, there was a valid contract between Patrick and Brad that is enforceable.
Patrick can sue Brad for breach of contract, and he can successfully have the contract enforced.
Patrick is likely to succeed in his legal action against Brad.

2.
A restrictive clause in an employment contract prevents the employee from working for a competitor. The employee is restricted from performing a particular job or profession after leaving the current employment.

The clause aims to protect a business's goodwill and trade secrets. The clause is can also be to prevent an employee from leaving immediately after joining a company. The clause may also impose the time limit within which the employer cannot join a competitor or operate the same business or profession. Some clauses include specific geographical areas within which the employee cannot run the same business. The geographical location in which they may not work for a given time.


a) The following are legal issues and principles relating to the above restrictive covenant;

Legal issues
Whether the restrictive clause was illegal;
Whether the restrictive clause between Patrick and Book LLP is enforceable;
If there was a contractual breach by Patrick opening a tax lawyer office within North York Metropolitan Toronto;
The effect of the restrictive covenant and the likely outcome of the case by Book LLP against Patrick


b)
Principles

Valid interest 
To enforce a restrictive covenant, the employer should have a legitimate interest in restricting activity in the following areas;
Intellectual property, confidentiality, and trade secrets.
Interest is deemed legitimate If the departing employee has breached or is set to breach intellectual property rights, confidentiality, or trade secrets. Breach of these rights is enforceable if the employer's interest is to protect his company from the above. The departing employee is not justified to benefit from the proprietary material protected, which belongs to the employer.
In this case, Book LLP has a claim of clients' confidential information on Patrick. Through the fifteen years that Patrick worked for Book LLP, he was able to gain expert knowledge of tax law. Most of the clients were referred to Patrick by Book LLP's partners, who handled the clients' negotiations.

Opening an office as a tax lawyer within North York, part of Metropolitan Toronto, but which was 10 kilometers from the offices of Book LLP. would be a contractual breach of the restrictive agreement.

Geographical area
The geographical area within which Patrick should operate is quite reasonable. Opening an office as a tax lawyer within North York, part of Metropolitan Toronto is within the 10kilometres radius to create unhealthy competition with his former employer.

Effect of breach
If an employee's contract is terminated following an employer's repudiatory breach, the restraint may be unenforceable. If an employee resigns without any valid reason, the restraint will be enforceable. In this case, Edgar's resignation was not based on the repudiatory breach. If Patrick resigned willingly and immediately opened up the tax law office, it forms a legitimate reason for the restrictive covenant to be enforced. Patrick's action would negatively affect the Book LLP's business because Patrick is privy to its client information.
It would create unfair competition as Patrick would solicit Book LLP's clients and benefit at the expense of Book LLP.

Cooling-off period
This is a period within which employees take up another job opens up a similar business or profession. The cooling-off period should be reasonable to allow the two parties to negotiate and settle any differences before action can occur. Patrick was planning to open his tax law office within a few days of terminating his employment. This is a legitimate reason for the enforcement of the restrictive clause.


c) The additional information that would be relevant in the assessment of the case would be reasons for termination of his employment;
Whether there was an offer made to Patrick when he informed Book LLP's partners of his intention to open his own office as a tax lawyer;
Whether he had signed and agreed to the restrictive covenant, which he now believed was illegal and unenforceable.

d) 
Based on the above legal issues and principles, the likely outcome is that Book LLP may succeed in enforcing the restrictive agreement against Patrick. The court may grant an Injunction sought by the Book LLP restricting Patrick from breaking the contract and opening the office.
The restrictive agreement was legal and enforceable.
There was a contractual breach by Patrick opening a tax lawyer office within North York Metropolitan Toronto;
The likely outcome of the case by Book LLP against Patrick may be the enforcement of the restriction.