Business Law: Agribrands Purina Canada Inc v Kasamekas Case Study

This case study analyzes the legal principles and implications of the Agribrands Purina Canada Inc v Kasamekas case, focusing on business tort law. The analysis delves into the concept of "unlawful conduct" in relation to contract breaches, as established by the court, and how it influences the awarding of punitive damages. The study examines the interpretation of contracts, particularly the role of good faith clauses and the principle of least burden in determining damages. It explores the court's stance on contractual breaches, the application of punitive damages, and the significance of the ruling in shaping future legal precedents. The case also addresses the concept of "unlawful interference" and its impact on third-party rights. The provided references support the legal arguments and provide a comprehensive understanding of the case's context and implications.

Running head: BUSINESS TORT LAW
Business Law
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In 2011Goudage J.A in the case of Agribrands Purina Canada Inc v Kasamekas held
that breach of contract will not be said to be qualifying as “unlawful conduct” enough to
constitute a case of tort or unlawful conduct (Goldberg, Sebok & Zipursky, 2016). The claims of
“unlawful conduct” shall be enough ground to grant punitive damages. The case is important
because it laid down the guidelines as to how to construe contractual breaches in the future and
how to interpret contracts. The Supreme Court of Canada while deciding on the merits of this
case, placed reliance on the case of Hamilton v Open Window Bakery Ltd. where the Supreme
Court held that there are various ways to interpret a contract (Gilbert & Gilbert, 2017). In
assessing the merits of the purpose of a contract, the Court has to take into account the technique
which is most profitable to the plaintiff. In determining the damages in company cases dealing
with breach of contract, the damage has to be calculated placing maximum reliance on the
intention of the defendant that he has tried the best possible way to mitigate the damages
(Macaulay, 2018). The case deals with the breach of contract and the resultant determination of
damages. Agribrands Purnia Canada Inc had entered into a dealership agreement and the trial
judge found that the company breached the exclusivity clause of the agreement (Johnson &
Soshi, 2016). The trial judge found that the good faith clause of the plaintiff was also missing as
there was no intention on his part to carry put the contract in the way that would be least
burdensome for the defendant (Knapp, Crystal & Prince, 2016). The decision of the trial judge
went for appeal where the Court of Appeal was of the view that the Trial Judge has erred in
coming to a definite clause and the “good faith” clause used by the Trial Judge was not in line
with the Hamilton decision. The court held that the principle of “good faith” was not a pre-
requisite to carry out the “least burdensome” principle (hannigan, 2015). The Court also held that
to apply “unlawful conduct” the court has to check the action as unlawful and causing

2BUSINESS TORT LAW
unreasonable interference (McKendrick, 2014). Along with dealing with contractual breach, the
case also deals with punitive damages and how the Courts should apply the principle of punitive
damages. The Court of Appeals upheld the punitive damages award. The decision of the Court in
this case is significant because it shaped the path of punitive damages and also held that the
conduct of parties is not a determining factor. The Court of Appeal allowed the punitive damages
on the ground that breaching the exclusivity clause and supplying the competitor with prohibited
merchandise was against the basic principles of contract law. The Court of Appeal held that
many ways can be adopted in conducting a contract and to calculate damages, the principle of
“least burden” should be applied (Bradley & Goldsmith, 2017). The Court applied the liability
stretching principle that says that whenever the defendant commits an actionable wrong, the tort
of unlawful interference takes place which gives the third party the right to sue for wrongs
arising out of actionable wrong.

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References
Bradley, C. A., & Goldsmith, J. L. (2017). Foreign Relations Law: Cases and Materials. Wolters
Kluwer law & business.
Gilbert, R. J., & Gilbert, P. T. (2017). Maryland Tort Law Handbook. LexisNexis.
Goldberg, J. C., Sebok, A. J., & Zipursky, B. C. (2016). Tort Law: Responsibilities and Redress.
Wolters Kluwer law & business.
Hannigan, B. (2015). Company law. Oxford University Press, USA.
Johnson, J. S., & Sohi, R. S. (2016). Understanding and resolving major contractual breaches in
buyer–seller relationships: a grounded theory approach. Journal of the Academy of
Marketing Science, 44(2), 185-205.
Knapp, C. L., Crystal, N. M., & Prince, H. G. (2016). Problems in Contract Law: cases and
materials. Wolters Kluwer Law & Business.
Macaulay, S. (2018). Non-contractual relations in business: A preliminary study. In The Law and
Society Canon (pp. 155-167). Routledge.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).