Markovits: good faith in the U.S

In this section, we will face the theoretical issue head on through a comparative look at the doctrinal developments of good faith in U.S. contract law. This comparative look will further elucidate the varying paths to interpreting Bhasin and why the SCC is headed in the wrong direction with Callow and Wastech. I illustrate the SCC’s conceptual unclarity through their discussion of remedies for a breach of good faith. I suggest that Markovits’s theory of good faith can vindicate Bhasin, and I then highlight some strengths and weaknesses of Markovits’s view.

The English common law can trace good faith to Lord Mansfield in Boone v. Eyre,[1] which was adopted into American jurisprudence in Kirke La Shelle Co. v. Paul Armstrong Co.[2] The Uniform Commercial Code adopted a duty of good faith in performance for all contracts within its scope,[3] and it understands this duty to mean “honesty in fact and the observance of reasonable commercial standards of fair dealing.”[4] In other words, “the range of permissible variation is limited by what is commercially reasonable.”[5] The Restatement of Contracts echoes this and “imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.”[6] The policy rationale is to stop conduct that “violate community standards of decency, fairness or reasonableness.”[7] Examples include, “evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms, and interference with or failure to cooperate in the other party’s performance.”[8] Of course, this is a non-exhaustive list and good faith only serves to “effectuate the intentions of the parties, or to protect their reasonable expectations.”[9] In fact, it may be futile to attempt to generalize the duty of good faith to capture all fact patterns. Reasonable expectations and contractual intentions are often incomplete and nebulous, and therefore the nature of good faith being rooted in these concepts makes it difficult to boil down to a rigid test. Put differently, “An account that understands good faith as a rule of decision, thus commits a circle.”[10]

The idea of reasonable expectation and not abusing discretion is a common thread between Canada and the US. Broadly, good faith looks at the purpose of the contract and protects against sharp practices that are manipulative or exploitative or “advantage taking.”[11] When parties fail to foresee some outcome ex ante, they must make good faith arrangement to address this unforeseen gap.[12] But it does not obligate parties to alter their agreements and good faith is “not a principle of substantive fairness even just in the face of new contingencies that arise within the contract relation.”[13] Substantive fairness is irrelevant for good faith even to the point where “one side to a contract has leveraged undeserved bargaining advantages in contract formation, so that the substantive terms of an exchange unfairly favor her over the other, she may perform her contract in good faith.[14] Good faith prevents parties from exploiting a strategic vulnerability to secure a private advantage. The strategic vulnerability arises from a rigid interpretation of contractual obligations and shirking an obligation that may not be expressly stated. Nevertheless, “even after you have signed a contract, you are not obliged to become an altruist toward the other party.”[15] 

Markovits is keenly attuned to the problem of navigating between the two poles of fraud-like egoism on the one side and fiduciary-like altruism on the other. The common illustration to make this point is that if a beneficiary asks their fiduciary to walk a kilometre with them, the fiduciary has a duty to walk two kilometres if it is in the beneficiary’s best interest; in contrast, in contractual relations, a party that agrees for self-interested reasons to walk with another party for one kilometre, then they must walk one kilometre and not a metre more. As Markovits puts it, “The inner and outer bounds of good faith are thus easy to discern.”[16] While the current law states a duty to abide by the community’s standards of reasonableness in contracts, good faith does not “require contracting parties to adopt even an attitude of substantive impartiality between their contractual interests and the interests of their contracting partners.”[17] Good faith permits self-interested behavior so long as parties honor the terms of their agreements. It is clear that contract law does not try, “in the name of good faith, to make every contract signatory his brother’s keeper.”[18] However, again, the intentions of the parties and the emergent reasonable expectations are often unclear and a matter of interpretation, so we cannot derive a duty of good faith from the reasonable expectations of parties since it is the very subject of interpretation and construction. It is therefore difficult to see how good faith could be understood as a substantive contractual obligation implied ex ante.

Markovits’s conception of good faith is tied to his larger project of understanding contracts as “collaboration.”[19] Ambitiously, he understands the duty of good faith as “the core doctrinal expression of freedom of contract.”[20] In short, he understands the altruism in fiduciary relations as partly paternalistic just as “lawyers must override the choices of their clients” if their client is “self-destructive or even just imprudent client initiatives.”[21] In contrast, contractual relationships are necessarily anti-paternalistic, which is “just another facet of freedom of contract.”[22] He explains that, unlike beneficiaries in a fiduciary relationship, promisees must not be at the “mercies of her promisor’s paternalism” as it would deprive the promisee of a “reliable mechanism for pursuing her own purposes” within the contract.[23] He continues, “Good faith thus underwrites a distinctive form of recognition in which contracting parties recognize one another’s expressed intentions, at face value. When they do so, the parties to contracts recognize one another as sovereign wills, whose freedom and hence also choices must be respected. Fiduciary relations lack this variety of respect, not in spite but rather because of the substantive other-regard that they involve.”[24] For Markovits, the impartiality of contractual relationships is key to the freedom of contract which is understood as freedom from paternalism or the imposition of the will of others. On this view, the duty of good faith must necessarily be thin and formal because anything more substantive would no longer be an arm’s length contractual relationship. The contractual relationship is different in kind to fiduciary relationships, and good faith in contracts cannot cross the line into the kind of altruism in fiduciary relationships or else it collapses the core of the institution of contract law. In Markovits’s words, good faith is a “distinctively contractual notion.”[25] While fascinating, we need not concern ourselves with the entire story Markovits tells about good faith as collaboration.

The lesson we can take from Markovits is that good faith is more of an interpretive tool or “a practical analog to the principle of charity in interpretation of theoretical communications.”[26] To be clear, good faith must be connected to the actual intentions of the parties, that is, according to Markovits, “their actual joint plan.”[27] This is in contrast to idealizing good faith to what parties may have ideally agreed to or “what they would have agreed ex ante had they known then what they have discovered ex post.”[28] This is the familiar worry of post hoc judicial scrutiny or judges interpreting the intentions of the parties instead of tending to the parties’ actual intentions. The upshot is that good faith is taken to be an exercise of looking at counterfactuals only insofar as it relates to the joint intentions of the parties and not scrutinizing the mind of a single party or some abstract rational agent. Markovits understands good faith among parties as an attitude of respect, but he also understands good faith as an interpretive tool for judges to what is ex ante reasonable (although not perfect) interpretation of the parties’ intentions.

Reinterpreting Bhasin a la Markovits

In Bhasin, the SCC seems to be aligned with Markovits in understanding good faith as an “organizing principle” and not a “free-standing rule.” The SCC can be understood to be expressing what good faith means among contracting parties. The SCC is stating, similar to Markovits, that there is no explicit rule of good faith that parties can point to; rather, good faith is a general attitude parties are expected to have towards one another when contracting and it expresses a mutual respect between arms-length parties. The specific four doctrines of the duty of good faith that is derived from the general principle of good faith can be understood as the interpretive tools which judges use to analyze the intentions of the parties. The intentions of the parties and their reasonable expectations must be understood as objective or else it would undermine the arms-length nature of contracts that is critical to the freedom of contract, which Markovits takes to be the raison d’être of contract law. My exegesis of Bhasin vis-à-vis Markovits requires further unpacking.

The SCC intentionally avoids a conceptual debate as to “whether a good faith obligation is being imposed as a matter of law, as a matter of implication or as a matter of interpretation.”[29] This was a missed opportunity for the SCC to provide some much-needed clarity.[30] This debate sheds light on how to properly conceptualize good faith and how to understand its role for parties and its utility for judges. Understandably, this is a vexed topic that is more theoretical than having practical guidance. The American jurisprudence seems equally ambiguous as some suggest that good faith should be “an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party.”[31] Others suggest that good faith is a interpretative tool or “that the doctrine of good faith merely directs a court towards interpreting contracts within the commercial context in which they are created, performed, and enforced, and does not create a separate duty of fairness and reasonableness which can be independently breached.”[32] Markovits identifies this as “very similar to that which jurisdictions in the United States have imposed through substantive unconscionability.”[33] Economic theorists, like Richard Posner, understand good faith as to perfecting the imperfect intentions of the parties to “give the parties what they would have stipulated for expressly if at the time of making the contract they had had complete knowledge of the future and the costs of negotiating and adding provisions to the contract had been zero.”[34] On this view, idealizing the intentions of parties would ultimately be more efficient since it would conceive of contracts as if parties reasoned perfectly and take away inefficient transaction costs. Markovits is against the view of implying terms of good faith into a contract and teaches us that it “does not establish affirmative duties of other-regard so much as articulate respect among parties who remain at arm’s length.”[35]

As argued by Markovits, the most plausible account seems to be a thinner account of good faith such that it regulates the attitudes of contracting parties and functions as an interpretive tool for judges. This interpretive tool must be constrained by the realities of the intentions of the parties. Good faith does not add substantive contractual obligations because that would paternalistically interfere with the actual intentions of the parties and undermine their freedom to contract. Similarly, good faith cannot be understood as modifying the substantive terms according to some ideal of reasonableness or efficiency because this would again fail to tend to the actual intentions of the parties. The reasonable expectations of parties are decided between the parties and it is the parties that generate the norms of reasonableness within their particular contractual relation. Imposing idealized norms from outside of the norms established by the parties, whether through judicial scrutiny or ideals of substantive fairness, would thus undermine the freedom of parties to plan and structure their own contractual relations. Good faith must instead be understood as a thin attitude of respect between parties and the reasonable expectation among parties is to respect the autonomy of the other party. It is therefore not possible to contract out of good faith since it animates the existence conditions of a legally enforceable contract. The contents of what constitutes mutual respect among parties is furnished by the norms established between the parties when forming the contract.[36] The duty of good faith “thus expresses a commitment to a particular normative (and indeed legal) relation” and to reject good faith is “to deny the contractual obligation to which good faith attaches.”[37]

Markovits’s approach seems consistent with the Canadian general principle of good faith not being a “free-standing rule,” but, on first glance, it seems contrary to the four specific doctrines of good faith; although, it is still not clear that Canada understands the four doctrines as “affirmative duties.” Moreover, while the principle of good faith is not freestanding, the four doctrines are and can be used as a cause of action.  The SCC is supposedly agnostic to how a duty of good faith is generated—whether implied through law, intention, or by facts—but it seems that there are additional “thick” obligations of good faith.[38] Perhaps the four doctrines of good faith are a useful guide to the “attitude” Markovits refers to and does not add any new obligations. The attitude can be too abstract and spelling out distinct doctrines can be a useful heuristic or guide for future cases. This is a possible way to interpret the SCC even more narrowly, especially because the four doctrines have not been elucidated in any great detail, but it would be a view that is compatible with Markovits’s view of good faith.

Even understood narrowly, it seems that in Callow that the duty of honest performance problematically modifies the substantive terms relating to discretionary powers. The SCC specifies that the duty of honesty has “a limiting function on the exercise of an otherwise complete and clear right because the duty, irrespective of the intention of the parties, applies to the performance of all contracts and, by extension, to all contractual obligations and rights.”[39] The SCC inferred what was a reasonable expectation or what was only an expectation in the mind of one party, and subsequently thrusted a new obligation on both parties. Reasonable expectations may foresee something that is not explicitly mentioned in the wording, but it does not go contrary to the wording or spirit of the parties’ intentions. Trying to idealize the agreement strays away from the actual, imperfect intentions of the parties. In trying to perfect an imperfect contract ex post, courts violate the contract and does the party a disservice in constraining their freedom of contract. Good faith only “steps in to require contracting parties to respect each other’s contractual intentions even where they, preferring manipulation, are disinclined to do so.”[40] Even if it one party regrets what they contracted, they need to be held to their agreement and the court’s job is to enforce the actual intentions of freely entered contracts.

Critique of Markovits and the future of good faith in Canada

Despite the strengths of Markovits’s view, his account of remedies with respect to a breach of good faith is not convincing. On this front, I believe both Markovits and Bhasin get remedies wrong. There is a conceptual question as to the relationship between the duty of good faith and the corresponding remedy for a breach of good faith. Markovits understands expectation damages to be the proper remedy as it “vindicates the promisee’s reasonable contractual expectations.”[41] His gripes are with those who insist good faith implies specific performance and illustrates his point through the justification of efficient breach. He explains that, in cases of efficient breach, “it would be bad faith for a promisee to insist on specific performance, as this would give the promisee a benefit that he did not pay for and deprive the promisor of one of the benefits that the contract expressly gave her.”[42] This assumes that the expectation is for the value and that there is nothing beyond the fungible value contractual performance. Moreover, Markovits argues that it is implied in fact that a promisor has an ex ante entitlement to gains from efficient breach, and this possibility is priced into the agreement to the benefit of the promisee. As such, a promisee asking for specific performance ex post would be clawing back the value of what was previously negotiated. However, it is not clear that efficient breach is an implied in fact or implied in law, especially when dealing with non-sophisticated parties.

In Callow, the SCC was split on the measure of damages. Similar to the result in Bhasin, the majority awarded expectation damages.[43] However, the counterargument was that damages should be “measured against a defendant’s least onerous means of performance, the least onerous means of performance in this case would have been to correct the misrepresentation once Baycrest knew Callow had drawn a false inference.”[44] This measure would be reliance damages and the loss of Callow securing another contract for the winter. The non-majority judgments did not think expectation damages are appropriate. This can differ with the doctrinal subcategories of good faith, say, between a duty of honest performance and duty to exercise discretion in good faith.[45] For a duty of honest performance, there is argument that misleading conduct is independent of the termination provision and that reliance on the misleading conduct is the proper measure of damages.[46] The idea is that the defendant did not fail to perform the contract and defeated the plaintiff’s expectations, rather that the loss was due to a “dishonest extra-contractual misrepresentations concerning that performance, upon which the plaintiff relied to its detriment, and there is no “lost value of performance, but detrimental reliance on dishonest misrepresentations.”[47] There is a similar confusion amongst the SCC around what the appropriate remedy is for breaches of good faith.

At this point, we might question if the categories of common law damages can be the correct framework to address good faith. Awarding expectation damages would sometimes lead to a windfall, and perhaps then a better way to frame the damages is in terms of restitution or unjust enrichment. This question of remedies opens the door for a critique of Markovits’s view of good faith. In what follows, I offer a brief sketch of an alternative view to Markovits that largely draws on a promissory view of contracts.

Markovits understands the duty of good faith as inextricably embedded into the contractual obligations negotiated among parties at the formation of a contract. For the judge, the duty of good faith expands the scope of interpretating the contractual obligations of parties to capture exploitative behavior that is consistent with the reasonable expectations of the parties. Practically, acting in bad faith just means to breach contractual obligations and thereby giving the right to expectation damages to the innocent party. But this can sometimes lead to windfalls when performance is not at issue but there is a successfully claim of bad faith. We can see this in Callow whereby expectation damages were awarded because Baycrest failed to correct Callow’s impression that providing gratuitous services would lead to a renewal of their contract. It is hard to see how Baycrest’s bad faith and putative breach of an obligation is anyway related to a failure of performance on the part of Baycrest. Again, at the most, Callow is entitled to restitution on a quantum meruit basis. I take this absurd result of remedies to be a weakness in both the SCC and Markovits’s view.

There might be an alternative picture of good faith that makes better sense of good faith remedies. Instead of understanding good faith as an ex post interpretive tool to patch contractual obligations so it leaves bad faith actors with a breach of the original agreement, we might understand good faith to be an extra-legal or second-order obligation to not discharge contractual obligations in an exploitative manner. The theoretical backdrop to such a view would not be Markovit’s collaboration view, rather it would fit with a promissory view of contracts.[48] The justification for this view of good faith is that we are sensitive to the normative force of something above and beyond the words of the contract, namely a norm or duty not to use the institution of contract to undermine the spirit of a promise. Good faith is not only an attitude animating legal relations, it also has a constitutive role in creating promissory relations between strangers free from exploitation, deception, or coercion. Markovits is correct to identify contractual obligations as sui generis and not owed to anybody else other than the parties involved, but they do not arise out of a normative vacuum and contractual obligations carve out select norms from a landscape of extra-legal promissory norms between the parties. To be clear, reasonable expectations between parties are not objective in the sense that they refer to a community’s norms that are external to the parties. Rather, reasonable expectations must be relative to the norms set by the contracting parties but it remains objective in the sense it does not refer to the subjective mental states of one party. For example, sophisticated parties might find themselves in a community of commercial norms and thereby structure their contractual obligations within this commercial backdrop to allow, for example, efficient breach (whereas the norms of other communities may find efficient breach morally repugnant); yet, they may also set their own novel and granular contractual obligations, such as requiring specific performance in cases of a global pandemic. These extra-legal norms do not necessarily have to appeal to ideals of substantive fairness, but they can attend to background conditions of injustice and gives latitude to the judges to discern the entitlements of a wronged party.

Extra-legal obligations can impose new, ex post rights to remedies, similar to the remedial constructive trust. This obligation is triggered when first order contractual obligations are used to unjustly (i.e., through advantage taking that is contrary to the intention of the parties and undermines a party’s autonomy) deprive someone of a good. This view does not try to reinterpret the contractual obligations of the parties to infer that the intentions of the parties (ex ante) precluded the bad faith behavior; rather, it acknowledges the failure of the parties to foresee circumstances that are disadvantageous to one party and (ex post) corrects the entitlements of the disadvantaged party. We would then think that a breach of good faith is not a breach of a contractual obligation, yet it calls for some remedy. In this vein, good faith fits better with equitable doctrines such as unjust enrichment.

The difference between these views of good faith is mostly theoretical. However, I think my view better fits with moral intuitions. Extra-legal norms are important for understanding what kind of behavior should be legally prohibited, such as contracts for organs or other morally repugnant acts. Both Canadian and American jurisprudence seem sensitive to extra-legal norms: they understand the duty of good faith to prevent conduct “while consonant with the letter of a contract, exhibits dishonesty, ill will, improper motive or similar departures from reasonable business expectations.”[49] Consider, again, the doctrine of efficient breach. On my view, good faith may preclude some cases of efficient breach if they undermine the spirit of the promise, such as when parties negotiate against efficient breach or establish a reasonable expectation against it. To be clear and to address the more obvious objections, I take good faith to be important but not as a core contractual concept. I agree that it is morally important, but I think it is important to remain pluralistic for other contractual considerations, like efficiency. In this vein, I would think good faith is secondary to contractual obligations and good faith attaches to some types of contractual obligations, specifically obligations generated within promissory norms. In contrast, efficiency concerns or sophisticated parties like corporations may not follow the structures of promissory norms, and good faith may not be needed since everything should be explicitly spelled out in the contract (e.g., commercial contracts). Moreover, I concede that my appeal to promissory morality and extra-legal norms requires a larger justificatory story about contract law, but it is sufficient for my purposes to appeal to the shared intuitions of morality and the phenomenology of commonplace promissory practices.

Conclusion

Good faith is central to contractual relations and any analysis of good faith must say something about the nature of contractual relations. Much of the discussions of good faith here have been mostly explanatory in the sense that it tries to make sense of good faith rather than coming up with some legal test or defining the contours of the duty. This is no coincidence. The analysis of good faith reveals that it is conceptually thin, has strong commitments to formal equality, and it is a mistake to try to understand it as a substantive duty.

I have argued that good faith in Canada has gone awry since Bhasin. Markovits provides a view of good faith that is thin and essentially functions as an interpretive guide. Markovits’s view of good faith is consistent with Bhasin and makes sense of good faith better than the subsequent Canadian cases. Still, Markovits’s view of good faith has an odd view of remedies that I suggest is better understood by looking to extra-legal norms. The resultant view of good faith understands the remedial aspect as akin to equitable doctrines. More work is required to flesh out a view of good faith as a coherent equitable doctrine which fits into an account of the law of equity. For instance, it is not clear how rights-based theories of private law can accommodate good faith. By and large, the critique here of Markovits may be too ambitious and require a deeper analysis, but this paper can stand on its more modest thesis that Markovits offers a vindication of Bhasin and good faith in Canada.

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[1] (1777) 126 Eng. Rep. 160 (K.B.); 1 H. Bl. 273.

[2] 188 N.E. 163, 167 (N.Y. 1933).

[3] Uniform Commercial Code § 1-304 (2003)

[4] U.C.C. §§ 1-201, 2-103.

[5] U.C.C. § 2-311 cmt. 1.

[6] Restatement § 205 cmt.

[7] Restatement § 205 cmt. [a].

[8] Restatement § 205 cmt. [d].

[9] Sessions, Inc. v. Morton, 491 F.2d 854, 857 (9th Cir. 1974); Ryder Truck Rental, Inc. v. Cent. Packing Co., 341 F.2d 321, 323–4 (10th Cir. 1965); Perkins v. Standard Oil Co., 383 P.2d 107, 111–12 (Or. 1963) (en banc).

[10] Markovits, supra note 4, at 278.

[11] Ibid at 274.

[12] For example, a party seeking to terminate an agreement must give “reasonable notification” or “reasonable time to seek a substitute arrangement.” U.C.C. § 2-309 cmt. 8.

[13] Markovits, supra note 4, at 278.

[14] Ibid at 291.

[15] Mkt. St. Assocs. Ltd. P’ship v. Frey, 941 F.2d 588, 595 (7th Cir. 1991) at 594.

[16] Markovits, supra note 4, at 278.

[17] Ibid at 278.

[18] Ibid at 593.

[19] Daniel Markovits, “Contract and Collaboration” (2004) 113:7 Yale LJ 1417.

[20] Markovits, supra note 4, at 282.

[21] Ibid at 283.

[22] Ibid.

[23] Ibid.

[24] Ibid at 284.

[25] Ibid at 292.

[26] Ibid at 288.

[27] Ibid at 285.

[28] Ibid.

[29] Bhasin, supra note 1, at para 48.

[30] The trial judge understood the agreement between Can-Am and Bhasin as analogous to a franchise or employment agreement, so good faith was understood as an implied term. Good faith is built into the statutes for employment, franchise, and insurance contracts. The rationale is that Bhasin is in a position of inherent vulnerability to Can-Am. The trial judge noted that, in the alternative, good faith can be implied by the intentions of the party. Significantly, the contract contained an “entire agreement clause” stipulating that no other express or implied contracts applied to the parties’ agreement.

[31] Kirke La Shelle Co. v Paul Armstrong Co., 188 N.E. 163, 167 (N.Y. 1933).

[32] U.C.C. § 1-304 cmt.

[33] Markovits, supra note 4, at 277.

[34] Mkt. St. Assocs. Ltd. P’ship v. Frey, 941 F.2d 588, 595 (7th Cir. 1991) at 596.

[35] Markovits, supra note 4, at 281.

[36] Consider the analogy of a marriage. We might think that every marriage carries an objective obligation of mutual respect and care, and that each party to a marriage can reasonably expect this from their partner. However, this objective obligations of mutual respect and care is a thin and formal notion that acts as the scaffolding, and it is the parties in the marriage that actually build out the substantive norms of respect and care. For example, one marriage might establish that doing the laundry for their partner is an act of respect and care; for another marriage, they might establish this as an act of disrespect and grounds for divorce. What is important to note is that even if there is an objective standard of respect and care among all marriages, it is still important to look at the specific norms of each relationship. This analysis of marriage largely draws from Eric Rasmusen and Jeffrey Evans Stake. See Eric Rasmusen & Jeffrey Evans Stake, “Lifting the Veil of Ignorance: Personalizing

the Marriage Contract” (1998) 73:2 Ind LJ 453.

[37] Markovits, supra note 4, at 284.

[38] Bhasin, supra note 1, at para 52.

[39] Callow, supra note 3, at para 53.

[40] Markovits, supra note 4, at 276.

[41] Ibid at 281.

[42] Ibid.

[43] Callow, supra note 3, at para 107.

[44] Ibid at para 114.

[45] Ibid at para 181.

[46] Ibid at para 139.

[47] Ibid at para 142.

[48] Seana Valentine Shiffrin, “The Divergence of Contract and Promise” (2007) 120:3 Harv L Rev 708.

[49] Bhasin, supra note 1, at para 29.

This factum focuses on the first part of the analysis of Section 35(1) of the Constitution Act.[1]The analytic framework draws mostly from Van Der Peet,[2] and the relevant legislation in Ontario’s Forestry Act.[3] In order to establish an Aboriginal right, the activity must be an element of a practice, custom, or tradition integral to the distinctive culture of Ninaatig First Nation (“NFN”).[4]

Characterization of the Aboriginal right?

First, the nature of the practice in question derives from the practice of collecting maple sap and processing it to create maple syrup for the purpose of subsistence and trade. Consistent with the norms of mutual aid, trade was integral for the interdependence between communities of First Nations’ people. The distinct roles and specialization in survival goods among different First Nation has been a longstanding practice prior to European contact, and the specialization among First Nations of producing syrup is distinctive to NFN.

Second, the nature of Forestry Act is regulating the extraction and commerce of tree products. Preserving a natural resource would be a valid legislative objective as conservation benefits all communities. Flowing from this objective is ensuring the fair access to syrup among the population through a system of licensing. In short, nobody has a right to extract and trade tree products without first attaining approval.

Third, the nature of the modern activity by the NFN can be a source of contention. To be clear, the modern practice is extracting birch sap through modern means, selling it and making excess profit; this is inspired by the historical practice of extracting syrup and trading it for survival goods. While the practice has evolved, the corresponding right has remained substantively the same. Nevertheless, the scope of the Aboriginal right must be expanded to accommodate the modern practice, and this expansion can be contentious.  

Integral to the distinctive culture?

Let us now turn to the question of whether the practice is integral to the distinctive culture. Even by the highest jurisprudential standards for a practice being integral, we can see there was no alternative available to the NFN to extracting sap for surviving the winters. Minimally, the general practice of extracting sap existed prior to European contact. This practice was crucial for the survival of winters as it provided a source of sustenance as well as a commodity to trade for other items needed for survival. The NFN’s identity is tied to this practice as it was necessary for their existence since the syrup was tied to their survival in the winter.

The current practice does not have the same significance of survival or basic subsistence, but survival need not be the threshold for a practice being integral. The syrup presently provides the basis of funding subsistence and promoting the wellbeing of the society.  Additionally, the central significance of the syrup is to meet the needs of the community and there is no intrinsic significance in the type of syrup, the mode of extraction, or the amount that was traded. The syrup has always been instrumentalized as a commodity to meet the needs of their own community members. In modern times, a step is added of commodifying the syrup into the contemporary currency system and this currency is used to meet the needs of the community.

While there is no pan-indigenous approach, the rationale or the normative order common to many indigenous perspectives must inform our justificatory analysis. The NFN’s governance procedures uphold mutual aid and kinship relationship with the birch trees. For example, the birch trees are not sparse but there is a substantial grove, and this was clearly a factor in the NFN’s decision. The mode in which the Forest Act’s uses to achieve the end of conservation is licensing. There is a shared objective of conservation.

However, the Forest Act derives from a liberal perspective which assumes that actors are egoistic and must be constrained from violating the rights of others. This assumption does not hold throughout indigenous perspectives. If it is not true that individual actors are self-interested and would not, say, extract sap for their own benefit to the point of harming the tree or harming others who are dependent on the sap, then we can question why licensing would be an effective mode of conservation. If we instead consider that actors respect the interdependence of humans with natural resources, then a scheme of licensing would be largely superfluous. In this vein, from the indigenous perspective, the analogous right to extract tree products is limited insofar as it continues to preserve the kinship with the natural world; as soon as it becomes overly harmful to the natural world, indigenous norms would put an end to the extract of sap.

The indigenous perspective may not have the strict empirical approach to conservation that is common with western epistemologies. Instead, the relationship of mutual aid with the natural world may allow a higher degree of extraction for periods of higher need, such as the need for a long-term care facility. While western perspectives may be more sensitives to exact thresholds, boundaries, and numerical figures, as per the licensing process, the indigenous approach can be more flexible and permissive depending on the circumstances. This is consistent with the relaxed rules of evidence, not only in terms of the onus of historical evidence, but also for establishing measures of conservation and markers for establishing harmony with the natural world.

In response, Ontario government may raise several arguments that the practice is not distinctive or integral to the NFN. First, the NFN only restarted the practice when they wanted to raise money. The fact that the NFN was not engaging in the practice to meet their general subsistence needs suggests that this is not integral to NFN culture and only incidental. Second, integrality can be challenged on the basis that there is no significance of extracting sap to survive winters in modern times because surviving winter is no longer an issue for the NFN.

Next, a possibly stronger thread of arguments can be launched for challenging the distinctiveness of the practice. The modern-day NFN practice uses industrial equipment and online trading, which is only due to European influence. Ontario may allow the practice as it existed without technology, but the modern evolution of the practice has become diluted by European influence. Separately, Ontario can argue that extracting syrup is not a distinctive practice since many cultures extra syrup; more generally, all cultures use resources around them to facilitate trade and survive harsh conditions, so there is nothing that separates the NFN’s practice from the European industrial practice of chopping down trees.

In the alternative, a more modest challenge would be against the excess profit reserved for the long-term facility. The Aboriginal right is extraction for survival, full-stop, although some limited forms of trade are permissible. The right does not cover wellbeing through commercial profit. If NFN wanted commercial profit, they should have applied for a license consistent with the Forest Act, as per the rule of law and Canadian sovereignty. More specifically, attaining something beyond one’s rights is unjust enrichment and they must return their excess profits to Ontario.

Continuity?

Let us shift to analyzing whether there is a reasonable degree of continuity between the pre-contact practice and the modern practice. Granted, the NFN are not collecting the same type of sap as the traditionally did as birch was not on the land then. Arguably the type of tree is irrelevant for the purpose of the act since it serves the same function and does not change the practice in any meaningful way. Moreover, but-for the modern effects of climate change, the NFN would have continued to produce maple instead of birch syrup. Aboriginal rights must be interpreted flexibly in its contemporary context.

The modern practice has evolved logically to incorporate technological advances. The new methods are more efficient by saving time and labour, but it is not clear that this changes the core of the practice. There were no traditional limitations placed on the amount of sap extracted, and any limitations were either a result of time and labour constraints or through principles of caring for the natural world. These considerations, along with other adverse consequences to affected parties, were already contemplated by NFN’s internal policies.

The modern practice has a broader commercial use and moved away from personal use. Traditionally, the NFN kept a percentage of the syrup for their own personal use and traded the rest in order to acquire the goods to survive winter. Still, the variance in the ratio of what was kept versus what was sold suggests that the syrup is a mere instrumentalized commodity and keeping some portion is not traditionally significant. However, the commodification and trading of the syrup remains essential since the NFN would not have survived without the goods from other First Nations. What is significant is that there is still the shared general purpose of using the proceeds of syrup for subsistence—namely, for food and basic living expenses.

Granted, this is possibly different from the additional monies used for the long-term care facility, as the purpose expands from subsistence to the wellbeing of the community and the needs of community members; nevertheless, the additional profit aimed at caring for the elders through the new facility is defensible. The extended scope of the use of the monies from the commercial production of syrup is consistent with the interest of all Canadians and the aims of reconciliation. NFN laws are governance procedures are an exercise of sovereign authority, and Canada musts respect indigenous self-determination and the right of self-governance. The NFN nation assessed the impact of this modern activity through the governance procedures, and Aboriginal rights inherently exists through indigenous legal orders. Moreover, the long-term care facility promotes the social and cultural wellbeing of the NFN and this is a partial step towards reconciliation with indigenous peoples. It is crucial to show deference to internal governance procedures, especially since they are sensitive to the shared objective of conservation.

Ontario may respond that the modern practice expands Aboriginal rights to an unacceptable degree. The claim can become too general if we allow it to turn from extracting syrup from maple trees to any kind of trees. Allowing NFN to broaden the scope of their right could open the floodgates and allow NFN to eliminate all potential access to non-Aboriginal right holders.

Even if we grant that extracting sap is a protected Aboriginal right, the extraction of sap for commercial practices are incidental and is too remote from the original practice. In other words, there is no logical continuity from the pre-European practice to NFN’s current practice. Modern commercial practices of selling syrup online bears no resemblance to the purpose of surviving the winter, and the dimension of retaining some for personal use has dissipated. We may permit small scale trades or transactions as was the case prior to European contact, but selling online for hundreds of thousands in excess profits goes well beyond what was contemplated.

In the alternative, Ontario may again focus their challenge to the excess profits for the facility. The Aboriginal right may be defensible even with the expanded use of modern technology but only insofar as it is used to meet basic needs of subsistence. Additional proceeds must be returned as it is beyond the scope of subsistence.

Which argument is more persuasive for courts?

Interpretations must be generous and liberal, consistent with the Crown’s fiduciary duty and any “doubt or ambiguity must be resolved in favour of aboriginal peoples.”[5] Courts are likely to side with NFN’s argument because environmental protection is a shared objective with the NFN community.

Ontario’s strongest argument is against the excess funds being considered for the facility. Notably, courts leave open the possibility of expanding the scope of Aboriginal rights beyond land claims, which suggests that wellbeing or health can in principle be protected. But it is more likely that courts will defer to NFN governance procedures to facilitate reconciliation.

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[1] Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11.

[2] R v Van der Peet, [1996] 2 SCR 507 [Van Der Peet].

[3] Forestry Act, R.S.O. 1990, c. F.26.

[4] Van Der Peet, supra note 2 at para 46.

[5] Van Der Peet, supra note 2 at para 23.

I’ll be focusing on two things from BCE: the test for determining whether an arrangement is fair and reasonable, and the threshold considerations for an oppression claim.

I’ll give some brief context, a bit of the rationale behind the analysis, and say a little bit about the application to the specific facts of BCE.

To start with the oppression claim, the analysis follows two steps, and it’s important to distinguish these steps.

First: does the evidence support the reasonable expectation asserted by the claimant? There’s a number of factors outlined in the case law which I’ll go through in the next slide, but it’s important to note that “reasonable expectation” is an objective and contextual assessment. Think here about first year contracts: what’s actually in the minds of the parties or what their actual expectations were is not conclusive; it’s really dependent on the facts.

Moving on to the second step of the analysis: does the evidence establish that the reasonable expectation was violated by conduct falling within the terms “oppression”, “unfair prejudice” or “unfair disregard” of a relevant interest? Here, once you establish a reasonable expectation from step one, you have to show that they failed the reasonable expectation in a way that’s oppressive or unfair to a relevant interest. To be clear, it’s not enough that the reasonable expectation fails, it has to fail a relevant interest (the most obvious is a legal right or entitlement) and it has to fail in an unfair way. More to come on this.

Returning to the first step of establishing a reasonable expectation, there are a number of factors the Court noted from case law. I noted the paragraph references for each one, but feel free to ask questions on any of these and I can elaborate.

73 Commercial practice plays a significant role in forming the reasonable expectations of the parties. A departure from normal business practices that has the effect of undermining or frustrating the complainant’s exercise of his or her legal rights will generally (although not inevitably) give rise to a remedy

74 The size, nature and structure of the corporation are relevant factors in assessing reasonable expectations:

75 Reasonable expectations may emerge from the personal relationships between the claimant and other corporate actors. Relationships between shareholders based on ties of family or friendship may be governed by different standards than relationships between arm’s length shareholders in a widely held corporation

76 Past practice may create reasonable expectations, especially among shareholders of a closely held corporation on matters relating to participation of shareholders in the corporation’s profits and governance

78 In determining whether a stakeholder expectation is reasonable, the court may consider whether the claimant could have taken steps to protect itself against the prejudice it claims to have suffered.

79 Shareholder agreements may be viewed as reflecting the reasonable expectations of the parties:

82 The cases on oppression, taken as a whole, confirm that the duty of the directors to act in the best interests of the corporation comprehends a duty to treat individual stakeholders affected by corporate actions equitably and fairly. There are no absolute rules. In each case, the question is whether, in all the circumstances, the directors acted in the best interests of the corporation, having regard to all relevant considerations, including, but not confined to, the need to treat affected stakeholders in a fair manner, commensurate with the corporation’s duties as a responsible corporate citizen.

What’s important to note about these factors is that they’re fact driven and there’s no definitive answer by completely satisfying one factor while partially satisfying another. It’s a holistic analysis. And the interpretative guide is that it’s a objective, contextual analysis.

It’s really important to carry this interpretative approach to the second step. The two quotes on the screen outline the animating rationale behind these two steps: namely, as an equitable remedy. Recall first year contracts again, and think about doctrines of conscionability or estoppel (and Lord Denning), and the way that they identified unfairness or oppressive circumstances—the analysis was driven by the specific facts of the case.

As we move to a closer look at the second step, it’s important to keep close to the statutory language. The Court emphasizes that “oppression” and “unfairness” is not completely open-ended and it’s reined in by how these concepts are used within section 241.

In the facts of BCE, the Courts said that there was a reasonable expectation that the directors would consider the interests debentureholders, but the debentureholders failed to prove that this reasonable expectation protected their economic interest. The directors gave sufficient consideration to the debentureholders’ legal interest, which amounted to the adequate attention to the contractual rights of the debentureholders. Since their legal interests were considered, the directors satisfied their duty and didn’t show any oppressive or unfair disregard.

Before we move onto section 192, are there any questions? Anything I can clarify? You can also save them for the end.

The Court really emphasizes the distinctness of sections 241 and 192, especially because conflating the two is the main error that the Court of Appeals made.

Note the quote: “The oppression remedy is a broad and equitable remedy that focuses on the reasonable expectations of stakeholders, while the s. 192 approval process focuses on whether the arrangement, objectively viewed, is fair and reasonable and looks primarily to the interests of the parties whose legal rights are being arranged.”

I think it’s helpful to understand some of the legislative history around section 192 to get a sense of what “fair and reasonable” is supposed to mean. In 1923, there was a Companies Act Amending Act designed to permit corporations to modify their share capital and permit changes to shareholders’ rights while offering shareholders protection. In 1974, plans of arrangements were omitted from the CBCA because Parliament considered them superfluous and feared that they could be used to squeeze out minority shareholders. Upon realizing that arrangements were a practical and flexible way to effect complicated transactions, an arrangement provision was reintroduced in the CBCA in 1978: Consumer and Corporate Affairs Canada.

So, there is a persistent policy goal of protecting minority shareholders, but section 192 also protects other stakeholders, like debentureholders.

On these appeals, it is conceded that the corporation satisfied the first two requirements. The only question is whether the arrangement is fair and reasonable.

How do we understand the third branch of “fair and reasonable”? (a) the arrangement has a valid business purpose, and (b) the objections of those whose legal rights are being arranged are being resolved in a fair and balanced way.

This is another fact driven test. There are a variety of relevant factors, including the necessity of the arrangement to the corporation’s continued existence, the approval, if any, of a majority of shareholders and other security holders entitled to vote, and the proportionality of the impact on affected groups. The procedure involved in coming to the arrangement is less important than the consequences of the arrangement on the rights of the parties and what’s in the best interest of the coproration as a whole.

Courts may consider whether an intelligent and honest business person, as a member of the class concerned and acting in his or her own interest, might reasonably approve of the plan. Courts on a s. 192 application should refrain from substituting their views of the “best” arrangement, but should not surrender their duty to scrutinize the arrangement. This isn’t the business judgement rule.

…the fact that the business judgment test referred to here and the business judgment rule discussed above (at para. 40) are so similarly named leads to confusion. The business judgment rule expresses the need for deference to the business judgment of directors as to the best interests of the corporation. The business judgment test under s. 192, by contrast, is aimed at determining whether the proposed arrangement is fair and reasonable, having regard to the corporation and relevant stakeholders. The two inquiries are quite different. Yet the use of the same terminology has given rise to confusion. Thus, courts have on occasion cited the business judgment test while saying that it stands for the principle that arrangements do not have to be perfect, i.e. as a deference principle… (para 140)

Again, some indicia of fairness include voting, proportionality of the compromise, and the impact on securityholders’ rights. Other factors include a special committee of independent directors, fairness opinions from experts, and access of shareholders to dissent and appraisal remedies.

In the facts of BCE:  Since only their economic interests were affected by the proposed transaction, not their legal rights, and since they did not fall within an exceptional situation where non-legal interests should be considered under s. 192, the debentureholders did not constitute an affected class under s. 192, and the trial judge was correct in concluding that they should not be permitted to veto almost 98 percent of the shareholders simply because the trading value of their securities would be affected.

It was well known that alteration in debt load could cause fluctuations in the trading value of the debentures, and yet the debentureholders had not contracted against this contingency.

I want to begin this reflection with some lessons I learned through my lived experience which I find myself meditating on throughout this course. Escaping loan sharks in [redacted], my family sought refuge in Canada. We remained undocumented as risking deportation meant risking our lives. Our home was the product of charity by the grocery store owner below us. My parents were forced into jobs that precariously paid under the table. Pushed to desperation, they appealed to our unique circumstances to apply for permanent residency on “Humanitarian and Compassionate” grounds. We did not have to return to danger; our status was finally ratified in 2011. The years prior, however, left us financially depleted. The moment I saw the eviction notice on our apartment door, I realized my parents were too ashamed to tell me the financial realities of being undocumented for over 10 years.

I did not realize how much of my thinking was shaped by the premise of survival and assimilation. When we landed in Canada, my parents gave me an anglicized name so that I would fit in. I started out in English as a Second Language programs, but slowly lost my ability to speak my native tongue – only now am I trying to relearn it. Still, I am one of the lucky ones. My privilege as a settler meant that I had the choice to integrate into this society and try to quietly advance within Canadian socio-economic institutions. I chose an undergraduate degree that was less demanding so that I could juggle three part-time jobs. Incidentally, my choice to study philosophy was deeply formative on my worldview, but now I wonder if it was just one more step in trying to assimilate into Western society.

As a student of the Anglo-American tradition and was taught to think of questions relating to law and morality through the lens of analytic philosophy. While the historical roots of this tradition are rooted in a Judeo-Christian worldview, more “modern” developments have secularized theories of law and divorce themselves from “natural law.” Such “legal positivists,” most notably HLA Hart, have conceptually separated law from morality. Others working within this Anglo-American tradition draw on a politically neutral form of morality to structure their theory of law, which found influence in the works of Ronald Dworkin; others still, like John Finnis, push for more controversial forms of morality being at the centre of thinking about the questions of “what is law.” All of these thinkers subscribe to the analytic method of deriving at truth through deduction, conceptual analysis, and the like. Let us call these “Western” approaches (granted, areas like critical theory and continental philosophy do not follow these methods yet are commonly placed under Western philosophy).

What is striking about Indigenous approaches to law is that law and morality appear to be a continuum. Western approaches understand law as having a distinct function from morality, so there is a conceptual starting point for thinking about law and another starting point for thinking about morality. The Western writers mentioned above dedicate their lives to looking at areas where they overlap and try to make sense of what the relationship between law and morality. The Indigenous approach is a more cohesive enterprise that collapses these sharp divides between law, morality, and metaphysics. It is this all-encompassing picture that I have trouble getting a handle on.

My education in Western philosophy taught me to breakdown the meaning of concepts and then apply them to syllogistic arguments of a single conclusion following from premises. This is not always appropriate to employ for Indigenous approaches to law. Leroy Little Bear notes the holistic and cyclical view of the world through Aboriginal philosophy. Trying to reconcile these views with Eurocentric values of objectivity, linear social organization, and reliance on static collective agreements leads to a fragmentation or “jagged” Aboriginal worldview. Indeed, as seen through the lens of Canadian history and current legality, Indigenous culture is only partially developed and preserved.

I am grateful for this critical eye towards Western approaches, especially to its subtle language and presuppositions. It has pushed me to try to learn about non-Western approaches that are more focused on the community and relational values. Western approaches promote the individual’s power for choice and self-determination, as well as their intrinsic dignity and rationality which must be piously guarded. This approach neglects the interdependence of people for their well-being – social attachments, like family or a community, are crucial to thrive and flourish. Ironically, this point was emphasized by Aristotle, a philosopher who is arguably the most influential Western thinker.

As we dive deeper into the nuances of international law and claims of genocide, I keep reflecting on the underlying tensions between worldviews. There is no doubt that the Western approach is the dominant power and the approach that is employed in the language of the laws, reasoning, and moral justifications. I think about what this approach neglects. The lacuna in Western approaches is interestingly at the forefront in Third World Approaches to International Law.

I want to conclude this reflection with a recent story. Despite my engrossment in being educated in Western approaches, I discovered that I carried one value that was not very Western: filial piety. This showed up in my discussions with my mentors, peers, and intimates around my career decisions. I was challenged by those around me to choose a path in law that I was passionate about, that made me happy, and that promoted my own self-actualization. It was difficult to explain why pragmatic considerations of finance were so important to me – my parents do not have their own retirement plan, that is, I am their retirement plan. I cannot afford to pick a career that I am passionate about at the cost of a small starting salary. Some have diagnosed this as a lack of a backbone, having “tiger” parents, or being to driven by money. Granted, I loathe business law. But after all that my parents have done for me, I can learn to like business law. My prioritization of finances as a symbol of gratitude to my parents is not pathological. Rather, I believe it is honorable and moral – although, self-doubt is still a daily occurrence.

SOURCE	POSITION	THESIS	ARGUMENT STRUCTURE	COMMENTARY
E Cooke, The Modern Law of Estoppel (Oxford: Oxford University Press, 2000).	Introductory textbook on the historical developments of estoppel.	Attempts to find a unified (although not seamless) account of estoppel, along with practical guidelines for application (especially raising a party’s expectation); moreover argues estoppel “should never be static” and must evolve to address injustices.	Is “estoppel in one area of law or several”; is it “possible to construct a unified doctrine”; how do we explain “estoppel within a law of obligations”…? (4)	Explicitly excludes estoppel per rem judicatam; includes “formal estoppels” in chapter 2; looks at the history and doctrinal evolution in latter chapters; categorizes estoppel as “formal” and “reliance-based.”   There are a lot of useful case references (mostly English). There are a number of other interesting “departures from the norm” (155).   The author also devotes a chapter to addressing the question of “too many labels” (54) and the number of types of estoppel.
Larissa Katz, “Blowing Hot and Cold: The Role of Estoppel” in Paul B Miller & John Oberdiek, ed, Civil Wrongs and Justice in Private Law (Oxford: Oxford University Press, 2020) 131.	Estoppel from a private law procedure theory lens.	It argues that a principle of estoppel is a central component of a decentralized and popularized form of public administration, in which private rightsholders— alongside of judges and other public officials— participate in forming and stabilizing the private law order.	The author frames the principle of estoppel as having a regulative function with respect to the “authority rights-bearers have to determine how in fact things stand between themselves and others.” (132) This authority is used by private actors to govern their own rights.	Estoppel is understood thinly (“pure” estoppel) as a “principle against self-contradiction” and “a basic principle of private law procedure.” (131)   The author also distances the principle of estoppel from other common ideas related to unconscionability. Estoppel has a more basic function in embedding the private actor into the courts through authoritative declarations of their rights (and stopping them from “blowing hot and cold at the same time”).
Juliet P Kostritsky, “The Rise and Fall of Promissory Estoppel or is Promissory Estoppel Really as Unsuccessful as Scholars Say It Is: A New Look at the Data” (2002) 37:2 Wake Forest L Rev 531.	Empirical approach to promissory estoppel.	Responds to the argument that promissory estopped in unimportant (Robert Hillman and Sidney De Long), and claims that estoppel can promote efficiency.	Gilmore (1974) suggested the central role of promissory estoppel, but empirical challenges (Hillman and De Long) showed that courts rejected estoppel claims. The author argues that the rejection of estoppel claims have a different explanation: weak evidence (and a failure to control for qualitative factors).	An interesting upshot of this paper is the suggestion that promissory estoppel is efficient and courts have been using efficiency as reasons to hold in favor of estoppel claimants.
Charles L Knapp, “Rescuing Reliance: The Perils of Promissory Estoppel” (1998) 49:Issues 5 & 6 Hastings LJ 1191.	Doctrinal argument for reliance based promissory estoppel.	A doctrinal/historical look reveals a common thread of reliance which supports promissory estoppel.	The author provides a historical overview of promissory estoppel. The author finds reliance to support promissory estoppel as a doctrine; moreover, the author further suggests that equity is crucial for contract law.	This article is over 100 pages, but offers a close look at the early debate on estoppel in the 80s. It is a good starting point for diving into the literature. It is interesting to see the enormous influence of Gilmore (1974) in sparking such debates.
Douglas Lichtman, “Rethinking Prosecution History Estoppel” (2004) 71:1 U Chicago L Rev 151.	Empirical assessment of prosecution history estoppel for patents (in a US context).	Prosecution history estoppel has evidentiary presumptions that favor parties based on arbitrary criteria; as such, a better rule would take a more attenuated approach.	The author starts with a definition of prosecution history estoppel (153) and raises empirical issues based on the arbitrariness of examiners and the categorization of technologies.  Patent prosecution often involves changes to the language, but there is a question of how these changes ought to be considered as evidence in a claim.	This article is a bit esoteric in that its notion of estoppel is within the US patent law context. Notably, Canada does not follow the US in this regard
Knapp, Charles L. “Reliance in the Revised Restatement: The Proliferation of Promissory Estoppel.” Columbia Law Review, vol. 81, no. 1, January 1981, p. 52-79. HeinOnline.	A doctrinal analysis of reliance and promissory estoppel in Restatement (Second) of Contracts.	The Restatement (Second) and its broadening of promissory estoppel is a step towards reliance theories/	The author looks closely at the Restatement (Second), specifically sections 87, 90, and 139.	The author further suggests other reliance-based principles, like good faith and unconscionability, will further evolve.
Avery Katz, “When Should an Offer Stick–The Economics of Promissory Estoppel in Preliminary Negotiations” (1996) 105:5 Yale LJ 1249.	An economic (rational choice) look at promissory estoppel during bargaining and formation.	“…the efficiency of promissory estoppel in preliminary negotiations depends in large part on which party holds the bulk of the bargaining power ex post. If the original offeror holds the bargaining power, then the modem doctrine that holds her to her offer is likely to provide the more efficient rule, other things being equal.” (1256-7)	“The level of reliance that is privately profitable for the parties will coincide with the socially optimal level under two conditions: The person who controls the reliance must enjoy its marginal benefits, and he or she must also pay the costs when it is wasted. Since in preliminary negotiations both parties control the reliance and the party with the ex post bargaining power gets the gains, it is that party who should also bear the costs.” (1257)	Interestingly, this article looks at promissory estoppel in the precontractual setting. The main economic problem is wasted reliance and how to ensure reliance is overall socially optimal.
Daniel A Farber & John H Matheson, “Beyond Promissory Estoppel: Contract Law and the Invisible Handshake” (1985) 52:4 U Chicago L Rev 903.	A survey of promissory estoppel cases to support the doctrinal expansion of promissory estoppel as its own distinct contractual obligation (and not reliance-based).	A survey of courts shows that promissory estoppel is being transformed into a distinct contractual obligation that is congruent with economic and moral ends.	Courts have moved away from reliance in promissory estoppel and whatever exists of it is merely a formality; as such, estoppel cannot be properly said to be a reliance-based recovery. Their main conclusions from their survey are in four parts (907-915).	An interesting part of the authors’ survey is how promissory estoppel is being expanded to include awards of expectation damages and specific performance (see starting on 907).   They also seem to be expanding what counts as consideration.
Juliet P Kostritsky, “A New Theory of Assent-Based Liability Emerging under the Guise of Promissory Estoppel: An Explanation and Defense” (1987) 33:3 Wayne L Rev 895.	A doctrinally analysis of promissory estoppel and a proposal for a unifying theory for its place in contract law.	“This Article posits that promissory estoppel, together with other orthodox doctrines, are merely substitute doctrinal methods for showing the assent required for an enforceable consensual exchange.” (902)	“This new approach to contract suggests that liability obtains when either (1) complete contracting is possible and an explicit bargain or a bargain plus formalities is reached, or (2) persuasive barriers to, or explanations for the parties dispensing with, explicitly reciprocal or formalized contracting exist and a plausible benefit to the promisor can be identified.” (905-6)	Promissory estoppel is not reliance-based, rather it is bargain-based. Promissory estoppel should not be thought of as an independent source of obligations, but merely as extending obligations. Estoppel is employed in most cases where there are “barriers to bargain,” like differences in knowledge and having a history of prior dealings, and it seeks to compensate parties for the barrier.
Randy E Barnett & Mary E Becker, “Beyond Reliance: Promissory Estoppel, Contract Formalities, and Misrepresentations” (1987) 15:3 Hofstra L Rev 443.	A doctrinal look into promissory estoppel and how courts have treated estoppel in relation to liability.	“In this article, we suggest that promissory estoppel serves two of the functions served by traditional contract and tort remedies available to parties in consensual relationships: the enforcement of some promises intended as legally binding and the imposition of liability to compensate for harm caused by some misrepresentations.” (445-6)	“In section I, we discuss promissory estoppel cases which can be understood as contractual in the broad sense that the promisor apparently intended to be legally bound by the promise, though some formal requirement for an enforceable contract may be missing. In section II, we discuss those cases in which liability cannot be understood as entirely contractual. In these cases, courts have used promissory estoppel to afford a remedy for some promissory misrepresentations not remedied by traditional contract and tort doctrines.” (448)	An interesting point the authors explains is that, contrary to interpretations of the Restatement (Second), the damages in promissory estoppel cases are often expectation damages. Moreover, promissory estoppel is appropriately a part of contracts, although some parts can be understood as being a part of torts.   We also see Barnett’s consent theory dealing with promissory estoppel: while a promisor might not have met the formal requirements, they still intended to be bound to a promise.
Michael Gibson, “Promissory Estoppel, Article 2 of the U.C.C.,and the Restatement (Third) of Contracts” (1988) 73:3 Iowa L Rev 659.	A critique of reliance-based theories, mainly arguing that Llewellyn excludes promissory estoppel in the UCC (and more generally in the commercial context).	“This Article will argue that Karl Llewellyn consciously rejected the theory of promissory estoppel when he drafted Article 2, and that he believed reliance should play only a minimal role in both the law of sales and the law of contract.” (661)	“This Article has three purposes. The first is to explore the relationship of promissory estoppel and reliance to the formation sections of Article 2 of the Uniform Commercial Code.’ 7 The second is to analyze what effects that relationship should have on judicial use of promissory estoppel in transactions concerning the sale of goods, and to determine whether modem judicial application of promissory estoppel to goods transactions-an application which is far more common than one might expect’ 8-has been proper. The third purpose is to discuss what effect experience with promissory estoppel under Article 2 should have on common law use of that doctrine.” (661)	An interestingly claim by this author is that the expansion of promissory estoppel needs to be contained.
Edward Yorio & Steve Thel, “The Promissory Basis of Section 90” (1991) 101:1 Yale LJ 111.	Promissory estoppel based on enforcing promissory obligations instead of reliance-based protection.	“As this Article shows, however, these commentators are wrong about the way courts have decided Section 90 cases. Rather than using Section 90 to compensate promisees for losses suffered in reliance, judges use it to hold people to their promises by granting specific performance or by awarding expectation damages.” (112)	The authors take a close look at the historical developments of Section 90 of the Restatement, and shows that specific performance and expectation damages are the routine remedy. Courts have not been primarily concerned with remedies or protecting reliance; rather, they focus on the enforcement of the right promises.	The authors conclude that, like consideration doctrines, reliance should be thought of as a tool for determining serious promises.
Jay M Feinman, “Promissory Estoppel and Judicial Method” (1984) 97:3 Harv L Rev 678.	A doctrinal look at the history of promissory estoppel and an argument for bargain theory.	The author argues for bargain as the unifying principle (with reliance having a secondary role); while reliance is important, expectation damages suggest that bargain is the core.	“Part I chronicles the evolution of promissory estoppel against the backdrop of the classical conception of contract law and the attack on that conception. Part I then examines the ways in which courts have applied the elements of the doctrine of promissory estoppel and suggests that such applications pose continuing problems for contract law. Part HI explores and criticizes the doctrinal applications as manifestations of competing methods of contract adjudication.” (679)
Jay M Feinman, “The Meaning of Reliance: A Historical Perspective” (1984) 1984:5 Wis L REV 1373.	A historical, interpretive look at reliance.	Promissory estoppel as a doctrine has a multitude of sources and its source cannot be pinned down to one.	The author traces the history of how protections of reliance (like promissory estoppel) developed.	The author makes the point that the historical analysis contributes to critical legal studies, and possibly expanding reliance to offer greater protection.
Jay M Feinman, “The Last Promissory Estoppel Article” (1992) 61:2 Fordham L Rev 303.	A rejection of promissory estoppel and its developments, especially reliance theories.	The author suggests that the focus on promises as the source of liability needs to change; instead, relationships need to be the starting point.	The author rejects the Yario & Thel (1991) suggestion that promissory estoppel is based on either promise enforcement or reliance protection. Instead, we should shift our focus to relational obligations.	A short but rich article.  It also engages Bernett & Becker(1987), Kostritsky (1987), and Farber & Matheson (1985).
Randy E Barnett, “The Death of Reliance” (1996) 46:4 J LEG EDUC 518.	A version of consent theory: promissory estoppel should be enforced in relation to a promisor’s intention to be legally bound to a promise.	Contrary to reliance theories, promissory estoppel is not about detrimental reliance, rather it is about picking which promises to enforce.	The discussion starts with Fuller and Gilmore, and their influence on the “new consensus” (522) in the 80s. The author then moves to suggest a reform of reliance theories (527).
Eric Mills Holmes, “Restatement of Promissory Estoppel” (1996) 32:2 Willamette L Rev 263.	A US state-by-state look at promissory estoppel proving its relevance.	Contrary to the prediction of critics, promissory estoppel is not dead.	The author offers a four-stage doctrinal evolution of promissory estoppel (same as below: Holmes 1996), then dives into US jurisdiction.	A very long (over 250 pages) article and a fastidious look into American caselaw on promissory estoppel.
Eric Mills Holmes, “The Four Phases of Promissory Estoppel” (1996) 20:1 Seattle UL Rev 45.	The author looks at the development of promissory estoppel from broader principles in equity.	The doctrinal evolution of estoppel can be understood in four phases: estoppel, contract, tort, and equity. Understood as such, promissory estoppel is distinct from contract or tort (and deflationary views are wrong).	The author tackles four questions (49) which coincide with the four phases of promissory estoppel. In short: “Is estoppel from equit the basis of promissory estoppel, as its name suggest?”; “With its basis in promise and assent, is promissory estoppel a contract doctrine”; “Is the root foundation of promissory estoppel grounded in the tort of detrimental reliance?”; “Is modern equity the “mother mold” of promissory estoppel with the doctrine’s basis grounded in the equitable principles of good faith and conscience?”	The author is great at distilling from a large volume of literature (see footnote on promissory estoppel on 50).
Andrew Robertson, “Situating Equitable Estoppel within the Law of Obligations” (1997) 19:1 Sydney L Rev 32.	A doctrinal look into estoppel in Australia.	“The central thesis of this article is that equitable estoppel is, and should be, a doctrine which is organised around the concept of detrimental reliance and which is part of the law of wrongs.” (33)	This article looks at the development of reliance-based doctrines of estoppel, then looks at the debate on how this doctrine fits within the law of obligations (i.e. between theories of promise, conscience, and reliance).	The Australian cases cited suggest a reliance-based view.

SOURCE	POSITION	THESIS	ARGUMENT STRUCTURE	COMMENTARY
Curtis Bridgeman, “Contracts as Plans” [2009] 2009:2 U III L Rev 341.	A theory of contracts based on philosophy of action and legal theory (mostly Scott Shapiro and Michael Bratman).	Contracts as a plan to solve a “coordination problem” and better accounts for how societies might use contract law to achieve good ends.	The author surveys the current theories of contract law and notes weaknesses in each theory. The author then explains the relevance of Bratman’s work and how Shapiro uses it to build a general legal theory; finally, the author applies Shapiro’s legal theory to contracts.	While creative in many ways, the real upshot seems to be that practical reasoning needs to be looked at more closely by contract scholars.
A Mitchell Polinsky, “Risk Sharing through Breach of Contract Remedies” (1983) 12:2 J Leg Stud 427.	An economic, efficiency argument that leads to liquidated damages as a the principled (based on risk sharing) remedy, but expectation damages as the practical one (since risk sharing is not the only metric for law).	“The risk allocation effects the choice of remedy for breach…” (p 428) If we consider the effects of risk in affecting remedies, we find that liquidated damages is always optimal and that the expectation remedy is optimal “only if the seller is risk neutral.” (429)	The author considers scenarios illustrating how risk affects the choice of remedy, especially with respect a party’s tolerance for risk. Then the author looks at five remedies and models them in terms of risk allocation.	While this is an interesting addition to Shavell’s paper (1980), it is mostly an economics paper.
Ian Ayres & Gregory Klass, “Promissory Fraud without Breach” (2004) 2004:2 Wis L Rev 507.	An (economic) argument for money damages over specific performance based on options valuation.	Money damages are best understood as an option to buy back performance.	This article responds to transaction costs and how they lead to scenarios of excessive breach and excessive performance. Money damages as options makes sense of this by looking at a parties ex ante preferences (of valuing the option and tolerance to risk).	This is an economic piece that moves towards a more sophisticated economic model of contract law analysis.
Anthony T Kronman, “Contract Law and Distributive Justice” (1980) 89:3 Yale LJ 472.	A normative theory of contracts based on distributive justice.	“I argue that the non-distributive conception of contract law cannot be supported on either liberal or libertarian grounds, and defend the view that rules of contract law should be used to implement distributional goals whenever alternative ways of doing so are likely to be more costly or intrusive.” (474)	This article looks at the moral legitimacy of redistribution and the failure of both liberal and libertarian views that contract is a bad instrument for distributive justice. Voluntary agreement is to be understood as a distributional concept and it is perfectly compatible as a legitimate instrument for redistribution (in the way taxation is viewed).	A very convincing argument for redistribution through contractual regulation (e.g. minimum wage laws). The structural similarities with taxation make this a viable alternative and consistent with political liberalism (see 500 for discussion on Rawls).
Lionel D Smith, “Disgorgement of the Profits of Breach of Contract: Property, Contract and Efficient Breach” (1994) 24:1 Can Community LJ 121.	A doctrinal argument in favor of disgorgement for breach of contract.	Breach of contracts where the plaintiff suffers no loss but the defendant’s breach provides gain need to allow disgorgement for breach of contract.	The author engages the question of whether disgorgement is available for contracts – that is, a damage measure not based on the loss suffered by the plaintiff, but rather based on the gains by the defendant.	There is an interesting discussion of efficient breach as a counterargument for disgorgement.

SOURCE	POSITION	THESIS	ARGUMENT STRUCTURE	COMMENTARY
Alan Schwartz & Robert E Scott, “Contract Theory and the Limits of Contract Law” (2003) 113:3 Yale LJ 541.	A pluralistic (but mostly efficiency based) methodological clarification.	Contract law must be sensitive to the nature of contractual relations and how fairness differs. Efficiency theories, for one, indeed apply to contracts between firms and looks at what contract laws best fit relation between firms.	“A transaction involves a seller (whether of goods or services) and a buyer. Parties to transactions can be partitioned into individuals and firms. This yields four transactional categories: (1) A firm sells to another firm, (2) an individual sells to another individual, (3) a firm sells to an individual, and (4) an individual sells to a firm.” (544) If we take seriously what kind of laws firms want, mandatory rules often undercut their aims.	While this paper is highly influential, it is not directly relevant for expectation damages. Its ingenious move is narrowing the scope of contracts to commercial firms so efficiency can come to the fore (and other concerns of obligations can be sectioned off to non-commercial entities).   What might be interesting to think about is how the Hegelian view of contracts might treat these categories. The authors here broadly categorize Hegelian rights-based theories under autonomy theories. Are the property relations the same for firms? The authors’ focus on firms seems to make contract law disjointed (in a way that the rights-based views do not).
Nathan B Oman, “Markets as a Moral Foundation for Contract Law” (2012) 98:1 Iowa L Rev 183.	A further critique of economic theories; an argument for a pluralistic, promissory theory of contracts.	“My thesis is that contract law exists primarily to support markets and that the moral and political value of markets as a social institution undergirds its justification.” (187)	Promise-based views need to incorporate markets into their theory. The author claims to provide a justification of the “good of markets,” understood in three ways: “reinforcing a liberal political order,” generating “social goods,” and promoting relational virtues. (187) Promissory obligations are instrumentally good for promoting markets, and contracts orders the legal structure of markets, so of course contracts will reflect promissory obligations.	The author ties contracts to the promotion of markets, then provides a moral analysis of markets. This is a unique spin, but it takes away a lot of the deontological force away from promises by making promises instrumental for markets.
Randy E Barnett, “Contracts is Not Promise; Contract is Consent” (2012) 45:3 Suffolk UL Rev 647.	A modification to promissory views (mainly, Fried): the author suggests consent and “public” morality as the basis of contracts.	Fried’s promissory theory cannot account for the objective theory of assent and cannot account for default rules, but consent can explain these features.	On Fried’s view, subjective agreement between parties can be idiosyncratic, but consent looks at the objective relation. Second, “gap-filling” (default) rules are awkward to think of as a promise, rather they are better put in terms of a “manifestation of intention to be legally bound,” or consent (662).	Tier 2   This builds on the author’s previous influential paper (1986) where the author notes that morality-based theories need a broad notion of consent in order to capture all the elements of contract law. Here, the author makes explicit the comparison between the limited scope of promises and the larger scope of consent. This seems like a form of the rights-based view.
Melvin A Eisenberg & Brett H McDonnell, “Expectation Damages and the Theory of Overreliance” (2002) 54:5 Hastings LJ 1335.	Economics approach to defending expectation damages; in-house clarification on the theory of overreliance	A widely held assumption is that expectation damages provide inefficient incentives – because of overreliance – is generally untrue.	The question and issue Overreliance is contingent upon institutional considerations which are unlikely to occur; in the remaining cases of overreliance, expectation measure does not insure a promisee’s reliance and related modification to the expectation measure is unnecessary.	This paper vindicates the economic approach to expectation damages by dispelling the problem of overreliance. There is a nice discussion of the concept of reliance and this builds into an explication of the considerations from the buyer’s and seller’s points of view.
Tess Wilkinson-Ryan, “Do Liquidated Damages Encourage Breach – A Psychological Experiment” (2010) 108:5 Mich L Rev 633.	Empirical study on breaching behavior.	Moral judgments affect breaching behavior, as demonstrated by the preference to breach in contracts with liquidated-damages clauses.	Contrary to economists, people are not wealth-maximizers, rather their behavior is sensitive to incomplete contracts and sanctions. Experiments show that liquidated-damage clauses induce the belief that breach is less immoral and thereby encourages breaching behavior.	This paper may support Hegel’s idea that contracts separate the value from the material thing by suggesting that people’s decision procedure already works like this.   The author has numerous papers in this area of experimental jurisprudence, notably “Breach Is For Suckers” (2010) and “Moral Judgment and Moral Heuristics in Breach of Contract” (2009).
Steven Thel & Peter Siegelman, “Wilfulness versus Expectation: A Promise-Based Defense of Wilfull Breach Doctrine” (2009) 107:8 Mich L Rev 1517.	Doctrinal investigation into willful breach.	The relevance of willfulness for courts is not to pick a more generous definition of the promisee’s expectations, rather it is to deprive the promisor of incentives to breach and grant the promise full expectation.	A promisee’s expectation interests seem to have little conceptual connection to the willfulness of breach by a promisor, yet courts often take willfulness into account. Willful breach doctrine is best understood as a screen for breaches with no benefit to the promisor (and perhaps no net benefit to the parties).	This paper takes expectation damage measures for granted (although there are some suggestions for supercompensatory remedies) and tries to find a coherent fit for the willful breach doctrine. Moreover, it also largely silent on cases of efficient breach.
Richard Craswell, “Promises and Prices” (2012) 45:3 Suffolk UL Rev 735.	Critique of non-economic approaches; survey of economists’ and philosophers’ approaches, particularly with respect to how they deal with pricing.	“Philosophers,” or the broad category of non-economic approaches, often omit the significance of pricing in their analysis, so it seems the economists’ approach is more complete.	The discussion on “price” is focused on price effects or the normative impact pricing has on contracting parties. The significance of pricing can be overlooked by the methodological approaches of non-economist (philosophers), notably in impermissible choices, default rules, tacit understandings, deductive logic, entailments of promises, scope of contract law, impermissible rationales, and cultural effects.	This paper is very interesting and raises a lot of important questions, but it does not provide a sustained analysis of one particular area of weakness by the non-economist. Rather it opts for breadth and covers a large range of how economists and philosophers think differently.
Richard RW Brooks, “The Efficient Performance Hypothesis” (2006) 116:3 Yale LJ 568.	Economic approach to specific performance; modification informed by moral intuitions	Promisee should be given the power to weigh costs and benefits of performance. This is more consistent with moral intuitions while remaining efficient.	“Perform or pay” describes the economic choices and not the legal character (i.e., the power vs the right), economic efficiency is not the foundation for the disjunctive duty in law. A look into contract doctrine reveals how courts craft remedies. A framework can be developed in terms of enforcement, efficiency, and distribution. Using this framework, we can arrive at the conclusion that efficiency and moral intuitions can be satisfied by giving promisee’s the power to weigh costs/benefits.	There is an interesting look into separating the rules courts use (for contract remedies) and the decision procedure to choose a rule (or a combination of rules). The author argues that the court is trying to “realize the equivalent of some counterfactual state.” (p 578) Generally, this is a strong economic argument for specific performance that takes morality into consideration. More specifically, if, all things equal, performance and breach are equally efficient, then performance is preferable given moral considerations.
Robin Kar, “Contract as Empowerment” (2016) 83:2 U Chicago L Rev 759.	A theory of contract based on empowerment (and not efficiency or morality based).	Contract as empowerment “has interpretive advantages over competing theories of contract.” (761)	The paper starts by unpacking the empowerment view. The interpretive advantages of contract as empowerment are in expectation damages, consideration, and the intention of parties.	Contract as empowerment is a fascinating and intuitive starting point. The discussion on expectation damages (starting on 785) is based on which remedy is more empowering. The author also replies to the idea that specific performance or punitive damages might be more empowering (792), but the argument becomes a bit muddy at this point.
Charles J Goetz & Robert E Scott, “Liquidated Damages, Penalties and the Just Compensation Principle: Some Notes on an Enforcement Model and a Theory of Efficient Breach” (1977) 77:4 Colurn L Rev 554.	Economic-based criticism of penalty doctrine and in favor of penal damages.	The current rationale behind the penalty doctrine – namely, inefficiently overcompensating the non-breaching party – it wrong and results in unfair remedies by failing to account for procedural costs.	Penalties can be useful ways for parties to negotiate and protect from breach, but the current penalty rules constrain this process and make it inefficient. This is seen in cases of idiosyncratic losses where expectation damages are often inadequate.	The focus of this paper is more on penal damages than expectation damages.   It is nevertheless interesting to think about the disjunctive obligation (to perform or pay) with respect to penalties. What is a Hegelian view of penal damages?
Edward Yorio, “In Defense of Money Damages for Breach of Contract” (1982) 82:7 Colurn L Rev 1365.	A response to advocates of specific performance.	Despite popular issues (e.g. undercompensation), both morality and efficiency support the claim for money damages as the default rule due to its flexibility and responsiveness as a remedy.	This paper responds specific performance (mainly, Schwartz 1979) arguments from both the moral and economic camps. The author notes that a more attenuated form of money damages can account for the purported gaps that specific performance arguments claim to fill. Further, specific performance is less satisfactory than money damages in terms of fairness and efficiency.	This generally buttresses the case for expectation damages, but it is more about vindicating money damages from the suggestion that specific performance is more fair and more efficient.
Yuval Feldman & Doron Teichman, “Are All Contractual Obligations Created Equal” (2011) 100:1 Geo LJ 5.	A critique of instrumental (generally understood as economic) views of disjunction obligations by an empirical investigation into individual’s decisions and motivations.	Three experimental surveys show that people are motivated by non-instrumental forces (e.g. morality), and this undercuts the economic analysis of contracts.	Participants given efficient breach scenarios were sensitive to things like uncertainty of paying damages and the form of contract. So, economic incentives are not the only variable for determining breach and performance.	Tier 2   The disjunctive is looked at in terms of “options” to perform or breach. Experimental jurisprudence is useful in looking at individual attitudes towards breach, but it does not clarify what the obligations are in contracts. Moreover, as many economists point out, their views on efficient breach are based on models, so one must accept their starting points. These authors outright reject these starting points, then provide an empirical justification – in this respect, they seem to be talking past each other.
Charles Fried, “The Convergence of Contract and Promise” (2007) 120 Harvard L Rev Forum 1.	A response by Fried to Shiffrin; an in-house discussion on the promissory view.	Expectation damages and mitigation are consistent with promissory morality.	Fried disagrees with Shiffrin on specific performance and mitigation. Friend suggests expectation damages fills the gap for a lack of explicit bargain. He further suggests expanding morality from promises to include a duty to rescue.	The picture of morality Fried suggests is a bit puzzling, especially when he speaks about normative economics furthering similar ends to morality (see p 9).
Andrew S Gold, “A Moral Rights Theory of Private Law” (2011) 52:6 Wm & Mary L Rev 1873.	A rights-based account of private law, primarily responding to corrective justice and civil recourse theories.	The morality of rights has to do with the legitimate use of coercion. The state enforces these rights through a private right of action, and this model helps us understand elements of private law.	The author starts with a number of issues for the corrective justice and civil recourse approach. Then the author outlines the moral rights approach on an abstract level and elaborate on how it addresses the issues of the other approaches. The second half of the paper then tries to spell out the application of the rights approach for legal theory and legal doctrines.	What is particularly interesting is the incorporation of political theory and tying in ideas of social contract into an account of private law. There is also a clear section on methodology.
Peter Linzer, “On the Amorality of Contract -Remedies Efficiency, Equity, and the Second Restatement” (1981) 81:1 Columba L Rev 111-139.	A morality-based approach for specific performance.	A broader understanding of efficiency supports morality-based approaches to contracts.	The author makes an early distinction between commercial and noncommercial transactions, then argues that remedies need to be sensitive to this distinction. More specifically, in a noncommercial setting, specific performance should be liberally applied.	Tier 2   This is an important paper that is in the general camp of Fried and Shiffrin. One crucial difference, however, seems to be the concession for efficient breach in commercial settings.
Nathan B Oman, “Failure of Economic Interpretations of the Law of Contract Damages” (2007) 64:3 Wash & Lee L Rev 829.	A critique of economic theories of contract in favor of a pluralistic theory.	“Economic accounts of the current doctrine governing contract damages have failed, and the nature of that failure places limits on the role of economics in an integrated theory of contract law.” (832)	Economic theories cannot account for the “bilateralism” of contract law. The bilateralism of explains why overreliance is such a problem for economic theories: simply, it fails as a complete theory for contracts. We need an alternative that places autonomy in the center and uses efficiency as a guide to doctrine.	The author makes a compelling case for why damages must go to the injured party rather than the state – it does seem like an issue for economic theories, and an advantage for promissory and rights-based theories.   The author covers their bases by address the minimal scope of their argument, noting that the “failure of economics as an interpretive theory is trivial.” (p 861)
Eric Posner, “Economic Analysis of Contract Law after Three Decades: Success or Failure?” (2003) 112 Yale LJ 829.	A critique of the normative shortcomings of economic theories.	“This Essay has two purposes: to document the failures of economic models to explain contract law or to justify reform, and to provide an explanation for these failures. The explanation centers on the difficulty of developing a model of contractual behavior that can be tested and that does not make unreasonable assumptions about the cognitive abilities of contractual parties.” (830)	The author notes that this article is merely a critique and does not purport any normative alternative. This is strictly doctrinal and looks at how economics fails to make sense of contractual doctrines.	What is notable here is Part III’s discussion on incomplete contracts and the economists’ solution. The author suggests economic theories are on their “way out,” and this conclusion seems to hold in current day.
Avery Katz, “Virtue Ethics and Efficient Breach” (2012) 45:3 Suffolk UL Rev 777.	A critique of moral argument against efficient breach and a proposal for a new kind of moral argument (based on virtue ethics).	“It argues that the standard deontological objections to efficient breach do not substantially undermine its basic analysis, because they can generally be addressed by reinterpreting or revising the underlying contract so that paying a money substitute in lieu of specific performance is explicitly authorized.” (779)	This article sketches the current views on efficient breach and categorizes them into the three main normative ethical theories. The author then suggests that, while intuitions may clash, most would not take efficient breach as a virtue.	This article puts a new line of arguments onto the table: “aretaic” or virtue based.
Charles J Goetz & Robert E Scott, “Enforcing Promises: An Examination of the Basis of Contract” (1980) 89:7 Yale LJ 1261.	A doctrinal analysis of contracts that pushes in the direction of utility/social welfare (but not an economic theory).	Contract theory needs to take a closer look at which doctrines yield the optimal social benefit with respect to the benefits and harms of enforcing some promises over others.	The author is interested in contracts as a legally enforceable promise and how the rest of contract law doctrine can make sense of this. The author further suggests that social welfare is the guiding principle. There is an important separation of the benefits of performance and the harm of breach for the calculus of social welfare.	This is a very detailed doctrinal account. There is a brief discussion of the expectation damage measure (starting on 1265). There is a development of Fuller & Perdue’s views (1284) from an ideal standpoint (i.e. perfect measurement and no transaction costs), then looks at it from a more practical standpoint (1288).
Nathan B Oman, “Consent to Retaliation: A Civil Recourse Theory of Contractual Liability” (2011) 96:2 Iowa L Rev 529.	An interpretive theory of contracts understood as consent to retaliate.	“This Article argues in favor of a simpler, rawer claim: contractual liability consists of consent to retaliation in the event of breach.” (531)	The author looks at the issue of accounting for contractual liability and rejects the approach that there are existing promissory duties. Rather, civil recourse empowers injured parties to acquire remedies.	There is a fascinating move in the argument that suggests the threat of retaliation against the breaching party is a better solution than third-party enforcement of obligations.   Another notable point is that the theory views expectation damages as a limit on retaliation rather than an incentive to perform or compensate for the value of the promise; here, the theory supposedly better explains deviations from the expectation measure better than the alternatives.
Menachem Mautner, “A Justice Perspective of Contract Law: How Contract Law Allocates Entitlements” (1990) 10 Tel Aviv U Studies in L 239.	A normative theory of contracts as a tool for distributive justice and resource allocation.	“My major concern in this paper will be with thejustice aspects of contract law in its role as a normative system governing the use of contract as an instrument. I shall offer a normative model of thejustice principles that lie at the basis of many contract law doctrines.” (240)	This article looks to the works of Nozick and Rawls, and then builds a view of contracts based on “desert” (which is understood as a criterion of distributing resources, along with “equality” and “need”). (245)	This article has received almost no scholarly attention, but it makes an interesting claim about the instrumental use of contracts for realizing claims of distributive justice. It also suggests efficiency can converge with the goals of justice.   This seems like a rigorous piece of scholarship, but why was it ignored?
Barry E Adler, “Efficient Breach Theory through the Looking Glass” (2008) 83:6 NYUL Rev 1679.	A doctrinal look into negative damages, which helps us understand the expectation remedy.	“The objective of this Article is to explore the potential benefits and costs of an award to the party in breach and to determine whether a justification for the current law exists within the framework of efficiency theory. In addition, the Article sheds new light on express contractual alternatives to expectation damages as well as on the mitigation doctrine.” (1681)	“Doctrinally, a party who breaches cannot sue for damages on the contract and thus cannot collect any benefit conferred by the breach. One might ask why this should be so. Such a suit surely would offend those who find it immoral for a person to profit from her broken promise. But efficient breach theory is amoral by nature.” (1681)	Negative damages have an interesting link to the morality of cooperative behavior and disclosing breach for the benefit of the other party.
Marco J Jimenez, “The Value of a Promise: A Utilitarian Approach to Contract Law Remedies” (2008) 56:1 UCLA L Rev 59.	A critique of economic approaches to efficient breach from a utilitarian lens.	“And because its foundations are utilitarian, the use of L&E-rather than utilitarianism-to determine contract law remedies often results in an misallocation of resources, which is not only anathema to wealth maximization theory, but should cause us to reject this approach outright when applied to contract law remedies on efficiency grounds alone.” (61)	The question the author focuses is on is whether efficient breach can be defended on utilitarian grounds (rather than criticizing the idea of wealth maximizing). Surprisingly, the author further suggests that utilitarian theories have better application to law over economic theories.	It is hard to grasp exactly where economic theories cannot incorporate utilitarianism into their views. The author seems to suggest that utility and wealth are distinct, and utility is increased is every contract whereas wealth is not; however, it is not clear why the economist would need to make this distinction.   There is an interesting claim about expectation damages (107) on the endowment effect and also the marginal value of the dollar to less wealthy parties. The subjective value might not translate into dollar amounts.
Thomas S Ulen, “The Efficiency of Specific Performance: Toward a Unified Theory of Contract Remedies” (1984) 83:2 Mich L Rev 341.	An efficiency-based argument for specific performance over money damages.	“If specific performance is the routine remedy for breach, there are strong reasons for believing, first, that more mutually beneficial exchanges of promises will be concluded in the future that they will be exchanged at a lower cost than under any other con- tract remedy, and, second, that under specific performance post- breach adjustments to all contracts will be resolved in a manner most likely to lead to the promise being concluded in favor of the party who puts the highest value on the completed performance and at a lower cost than under any alternative.” (343-344)	This article looks at efficiency breach and the economic arguments surrounding it. It then shifts the advantages of specific performance, and how it might be more efficient in formation and post-breach negotiation. The crux is that economic analyses need to follow transaction costs for determining remedies (factually, parties often have low transaction costs, so specific performance should be the remedy).	The main upshot of this article is that awarding specific performance will protect the innocent party’s future expectations and this leads to an overall efficient result. This is an interesting economic approach to protecting the innocent party and perhaps trying to square efficiency with moral intuitions.
Richard Craswell, “Contract Remedies, Renegotiation, and the Theory of Efficient Breach” (1988) 61:3 S Cal L Rev 629.	A critique of efficient breach arguments based on the aims of contract remedies with respect to compensation.	“Writers who for noneconomic reasons favor remedies that punish breachers, for example, invariably assert that their remedies are not inconsistent with economic efficiency because the parties can always renegotiate to permit an efficient breach. This Article attempts to remedy that error by drawing together the other contractual issues that economics can illuminate, and by showing that these effects do not disappear if ex post renegotiation is costless.” (631)	“Part I describes the early analysis of the perform-or-breach decision, and explains its emphasis on renegotiation costs. The remaining parts describe the other effects of contract remedies, and show that these effects do not depend on the ease of ex post renegotiation.’	The author poses an issue for both economic and non-economic theories that appeal to efficient breach. The efficiency of a remedy does not depend “solely on ex post negotiation costs,” but a variety of other facts.

SOURCE	POSITION	THESIS	ARGUMENT STRUCTURE	COMMENTARY
Daniel Markovits, “Contract and Collaboration” (2004) 113:7 Yale LJ 1417.	Promise-based (generally Kantian) view cast in terms of the value of relationship and the institution of contracts as promoting community (filling out Raz’s view of promises).	The unifying value between promises and contracts is a “relation of recognition and respect,” (1420) which the author defines as “collaboration.” This is intrinsically valuable and explains the structural similarities/differences between contract and promise; moreover, doctrinal elements of contract law.	This paper looks to make sense of promissory obligations and contractual obligations from the approach of relationships instead of traditionally individualistic approaches. Contract foster mutual recognition and respect which in turn foster community.	This paper is around 100 pages long and touches on the philosophy of promise, contractual doctrines, and a general normative theory. It is a novel relational/collaborative account that dissects the steps in entering, sustaining, and terminating a contract/promise. Still, there remains the question of how efficiency is valued and whether other public values (like substantive equality) fit on the author’s picture.   The last section on consideration and expectation remedy sheds light on the values that give texture to contract relations. Notably, the section on expectation damages (1491) is not critical and does not recommend specific performance. Instead, the author argues that expectation damages promotes collaboration because it allows parties to treat each other as ends in themselves (the remedy is respectful rather than instrumental).
Markovitz, D., & Schwartz, A. (2012). The expectation remedy and the promissory basis of contract. Suffolk University Law Review, 45(3), 799-826.	Promissory view building on Fried’s trust-based approach.	The disjunctive obligation to trade or transfer (“dual performance”) fits under Fried’s promissory view of contracts if we understand expectation damages as enforcing the disjunctive obligation.	This paper takes up Fried’s promissory view and looks closely at the “shaky” foundations the obligations generated by promises. For Fried, the two foundational pillars are dignity and fidelity. This paper restates the “dual performance” theory of the previous paper (Markovits & Schwartz 2011) and understands Fried’s view on expectation damages in terms of this theory.	There is a remarkable move: if the promise underlying contracts is understood in the disjunctive, then expectation damages is specific performance of one of these options. Thus, we have all the explanatory power/scope of the disjunctive, the promise, and specific performance.   The rights-based view might have the same explanatory advantages. Although the starting points are different – e.g., it might start with a person’s relation to property – it can, in principle, capture promissory norms and similarly argue that there is no breach (rather, there is specific performance of one of the disjunctives).
Jody S Kraus, “The Correspondence of Contract and Promise” (2009) 109:7 Colurn L Rev 1603.	Promise-based approach defending expectation damages; in-house critique and proposal of an alternative account.	The correspondence of contract law and promissory norms cannot be assessed without first having an account of self-imposed moral responsibility. The most plausible account, coherent with current contract doctrine, is a “personal sovereignty” account.	The starting point is Fried’s view of contracts as legally enforced promises. Promissory norms need some account of self-imposed moral responsibility in order to make sense of the practice of promising. Taking from Feinberg (reminiscent of Rawls’ treatment of Kant), the “personal sovereignty” account is the prime candidate, and it begins with the idea of respecting autonomy as respect for “unfettered voluntary choice” except for “where the interests of others need protection.” This is supposed to make sense of most contract law doctrines, notably areas where there might be divergences between law and morality.	A very unique promise-based view. The author claims that the promissory views (like Shiffrin) have failed to account for the existing default expectation measure. Fried does better, but still lacks a normative framework for promissory morality, and this is the gap the author explores.   There is an interesting move of separating promissory morality from rights to remedy, and the author makes a convincing case for why the content of remedial rights needs to be looked at with respect to moral responsibility.
Stephen A Smith, “Duties, Liabilities, and Damages” (2012) 125:7 Harv L Rev 1727.	A critique of rights-based and “utility” (mostly economic) approaches to damage awards by showing its inconsistency with the common law.	Damage awards are best understood as the court vindicating a right instead of merely enforcing an existing right. The right-based and utility approaches are therefore wrong about damage awards (vis-à-vis common law)	Damage awards can be understood as enforcing a duty (duty view) or generating a duty from a liability (liability view). The right-based and utility approaches are committed to the duty view, but the common law is not structured this way. Instead of enforcing duties, the law (through damage awards) generates them on the basis of vindicating the rights of the plaintiff.	This article has a very interesting look at how to understand damage awards: they are directed towards courts and tells courts how to decide cases. The suggestion seems to be that duties to pay damages are not understood to be generated at the time of breach, but they are generated by the court’s imposition of the remedy of damages.
Aditi Bagchi, “Separating Contract and Promise” (2011) 38:4 Fla St UL Rev 709.	“Separatist” view of promises and contracts only insofar as private promises and contracts.	Private promises and contracts often are in tension because their normative domains are commonly conflated. Contractual obligations are not parasitic of promissory obligations, rather contractual obligations are augmented (i.e., the contract begins “where private promise ends”).	Private promises and contracts share in having a role in moral agency, but private promises function to cultivate personal relationships whereas contracts can be used to pursue our ends in at arms-length with strangers. Consistent with common law, private promises should be legally enforced with great caution, and legal remedies should follow this distinction between promises between intimates and promises between strangers.	A strong argument for the separation of private promises and contracts. This view seems to cohere well with the rights-based accounts and better explains doctrines in common law.
Steven Shavell, “Damage Measures for Breach of Contract” (1980) 11:2 The Bell Journal of Economics 446.	Economic analysis defending expectation damages.	Damages measures substitute performance in incompletely specified contracts.	Expectation damage measures are a good default rule to reflect what parties would have, especially with respect to the costs of specificity in contracts.	This seems to be an early version of Shavell’s views on counterfactual agreements (cf. Shavell 2009). This is an economics paper and most of this paper delivers an economic model (46 open propositions) of the efficiency of expectation damages.
Gregory Klass, “Three Pictures of Contract: Duty, Power, and Compound Rule” (2008) 83:6 NYUL Rev 1726.	The structure of contracts is such that it is both duty-imposing and power-conferring.	While many laws are straightforwardly power-conferring, some lose are structured to function both as creating power and imposing duties. These are called “compound rules.”	The author carves contract law into power-conferring and duty-imposing rules. The power-conferring view is understood as an act of self-legislation and modifying obligations with others. The duty-imposing view is understood as tracking some other obligation, like keeping promises. Compound rules are a third category, which better explains doctrines in contract law.	This is a dense paper that draws a lot from legal theory and philosophy. However, this is fairly removed from the question of expectation damages and more about the nature of contract law. It was particularly interesting to see Raz’s picture of voluntary obligations applied to this view.   The “compound rule” view of contract law, however, is fairly attractive. It seems generally compatible with the Hegelian rights-based approach to contracts.
Daniel Markovits & Alan Schwartz, “The Expectation Remedy Revisited” (2012) 98:5 Va L Rev 1093.	A response to Shiffrin (2012) and Klass (2012).	Methodological critiques do not undermine their previous (2011) argument.	Shiffrin and Klass fail to appreciate the methodology: economic models are theoretical and individuals’ preferences can be predictably revealed.	This is convincing and addresses many of the questions which arose in their original paper. However, I wonder if the scope of their methodology is too small to address the questions in this area; on the other hand, perhaps their paper should be read more modestly.
Gregory Klass, “To Perform or Pay Damages” (2012) 98:1 Va L Rev 143.	A critique of Markovits & Schwartz (2011).	The “dual-performance hypothesis must be an empirical interpretive claim.” (p 145)	Like Shiffrin, the “is” and “ought” distinction comes to the fore. The author wants some further empirical back to prove that most people prefer dual-performance commitments. The author further suggests that the dual-performance model implies an expansion of punitive damages doctrine.	The author notes a number of limitations to the dual-performance hypothesis, but the author mostly agrees and takes a charitable posture.
Richard Craswell, “Contract Law, Default Rules, and the Philosophy of Promising” (1989) 88:3 Mich L Rev 489.	Critique of moral (autonomy based) promise theories.	“My thesis is that such claims on behalf of philosophical theories of promising are greatly exaggerated. In particular, analyses such as Fried’s have little or no relevance to those parts of contract law that govern the proper remedies for breach, the conditions under which the promiser is excused from her duty to perform, or the additional obligations (such as implied warranties) imputed to the promiser as an implicit part of her promise.” (489)	The focus of this article is on promissory accounts of contracts. It begins with the philosophy of promises and further argues that none of these theories can give us the background rules (in contrast to “agreement rules”) in contract. Promises might be helpful for explaining why one ought to follow background rules, it cannot give the background rules themselves.	The author makes an interesting point that autonomy-based theories are content-neutral for filling out default rules, and they need to rely on some other theory (e.g. efficiency) for its default rules. The most illuminating example of autonomy theories deriving default rules in an ad hoc manner is the author’s charge against Fried (517). The author claims that autonomy gives no reasons for favoring the expectation measure over other remedies.
Randy E Barnett, “Consent Theory of Contract, A ” (1986) 86:2 Colurn L Rev 269.	A “consent” theory of contract which uses property rights to buttress promises.	“Properly understood, contract law is that part of a system of entitlements that identifies those circumstances in which entitlements are validly transferred from person to person by their consent. Consent is the moral component that distinguishes valid from invalid transfers of alienable rights.” (271)	This article deals with the common question of which commitments contract law should enforce. The criteria of assessment for contract theories is threefold: “(a) the number of known problems the theory handles as well or better than its rivals, (b) the centrality of the problems that the theory handles well, and (c) the promise that the theory offers for solving future problems.”	A fairly influential article that puts forth a promissory (?) account based on one’s power to consent to transfer property (i.e. property rights). This is a very interesting account of promissory obligations that fits in to the broader question of justifying legal force (author cites Fuller and Nozick).
Shawn Bayern & Melvin A Eisenberg, “The Expectation Measure and Its Discontents” (2013) 2013:1 Michigan State L Rev 1.	A critique of economic (efficiency) approaches to expectation damages.	Economic models cannot work for remedies because efficiency is too difficult to determine, too difficult to practically administer, and the many models themselves conflict in incommensurable goals.	“This Article has a substantive and a methodological aspect. The substantive aspect analyzes the validity of the alternative models and regimes apart from questions of administrability and institutional issues. The methodological aspect examines the administrability of these models and regimes and the congruence between the models and regimes, on the one hand, and institutional considerations, on the other.” (3)	There is a lot packed into this article, but the main upshot seems to be that limitations lead to the expectation measure being less than fully compensatory.
Melvin A Eisenberg, “Actual and Virtual Specific Performance, the Theory of Efficient Breach, and the Indifference Principle in Contract Law” (2005) 93:4 Cal L Rev 975.	An account of why expectation damages are often undercompensatory, while also arguing against efficient breach and for the modification of principles around awarding specific performance.	|A promisee can accomplish virtual specific performance if he can readily find in the market a commodity that he could not in good faith reject as an equivalent of the breached performance, given his demonstrable preferences-by which I mean subjective preferences whose existence can be satisfactorily demonstrated. Cover damages, in turn, should be awarded if a buyer who made a substitute purchase shows that his choice of the covering substitute was made in good faith, given his demonstrable preferences, after he conducted a reasonable search.”	“In Part I, I discuss the principle that the remedial regime for breach of bargain contracts should make promisees indifferent between performance and legal relief. In Part II, I develop the systematic shortfall between expectation damages and the indifference principle. In Part III, I consider the theory of efficient breach. In Parts IV and V, I consider the remedy of specific performance. Finally, in Part VI, I consider the remedy of cover, or virtual specific performance.” (978)	The author makes several interesting claims: first, that efficient breach theories are hardly efficient; second, routine specific performance is not the solution; third, a distinction between “actual” and “virtual” specific performance. The author seems to want to expand notions of fault, the indifference principle, and the practical limitations of expectation damages. The inefficiency point is especially poignant (see starting 1006).

1970

SCC/appellate

R. v. Agozzino, [1970] 1 C.C.C. 380.

• Accused charged with possession of counterfeit money; defence counsel agreement with Crown not to seek imprisonment for guilty plea; Crown appealed claiming inadequate sentence
• Court interprets plea bargain as a contract; accused relied on plea bargain agreement
• Para 5: “There is evidence before us to indicate that had it not been for the position taken by the Crown which was subsequently adopted by the magistrate, the accused would not have pleaded guilty. The circumstances, therefore, dictate a dismissal of the Crown’s appeal as to the sentence even though, had we thought ourselves at liberty to consider its propriety, we probably would have come to a different conclusion.”

R. v. Wood, [1975] 26 C.C.C. (2d) 100.

• Sex offense; Crown visited Judge in chambers to discuss sentencing to avoid jail; held that accused was prejudiced by Crown telling defence that jail sentence not sought
• “a judge has no place in plea bargaining.” (para 34)

Canada (Attorney General) v. Roy, [1972] 18 C.R.N.S. 89.

• Crown suggested $150 fine; 3 principles for plea bargaining
• “1. Plea bargaining is not to be regarded with favour. In the imposition of sentence the court, whether in first instance or in appeal, is not bound by the suggestions made by Crown counsel. 2. Where there has been a plea of guilty and Crown counsel recommends a sentence, a court, before accepting the plea, should satisfy itself that the accused fully understands that his fate is, within the limits set by law, in the discretion of the judge, and that the latter is not bound by the suggestions or opinions of Crown counsel. If the accused does not understand this, the guilty plea ought not to be accepted. 3. The Crown, like any other litigant, ought not to be heard to repudiate before an appellate court the position taken by its counsel in the trial court, except for the gravest possible reasons. Such reasons might be where the sentence was an illegal one, or where the Crown can demonstrate that its counsel had in some way been misled, or finally, where it can be shown that the public interest in the orderly administration of justice is outweighed by the gravity of the crime and the gross insufficiency of the sentence.” (para 17)

R. v. Draskovic, 5 C.C.C. (2d) 186.

• Accused negotiated with officer for guilty plea if others charged dropped; admissibility issue; voluntary and appeal dismissed
• “Without expressing any views as to whether there exists in Ontario or Canada any privilege with respect to discussions between counsel for the accused and counsel for the Crown with respect to what charges will be proceeded with and what pleas will be made, commonly referred to as “plea bargaining”, I am of the opinion that the topic is irrelevant in this case. What occurred was in no sense “plea bargaining” but was simply a volunteered statement made by the accused to the detective, who had no authority to do anything other than report the making of the statement to someone else.” (para 6)

 

Official reports

Ontario Law Reform Commission, “Fourth Annual Report, 1970” (1970). Ontario Law Reform Commission. 70.

• “In our view plea-bargaining can’t be justified. To decide upon a defendant’s guilt or sentence in accordance with what he’s prepared to accept and bargain for is like determining a student’s grade by reference, not to the work he’s done, but the bribe he’s offered his professor” (p 14)

Ontario Law Reform Commission, “Report on Administration of Ontario Courts, Part II” (1973) Ontario Law Reform Commission 88.

• “The abuses which are said to be inherent in this practice are that (a) a false impression is created in the mind of the accused as to the extent of the influence of the prosecutor in securing a specific sentence; (b) there is a tendency towards the habitual laying of charges in a manner intentionally designed to put the prosecutor in the position to offer an apparent concession in the reduction of either the number or seriousness of charges. Overcharging, charging a more serious offence than would appear justified on the facts, and charging offences with a fixed minimum penalty, all fall into this category; and (c) the existence of the practice leads to an expectation on the part of the accused that a “deal” will be offered and he may use delaying tactics (such as dismissing his counsel on the eve of trial or electing trial in another court when he intends to plead guilty eventually), simply for the purpose of exerting pressure on the prosecutor to offer a concession.” (p 120)

Scholarship

Gerald A Ferguson, “The Role of the Judge in Plea Bargaining” (1972) 15:1 Crim LQ 26

• Analysis and argument for the abolishment of judicial plea bargaining
• “The argument would be that the pressure becomes undue when the judge proposes the bargain because there is certainty of differential treatment, whereas when a prosecutor promises he will recommend sentence leniency or even charge reduction, there is not the same certainty of sentence differential, that is to say, the accused can only hope that leniency will result since the prosecutor is not ultimately the person who imposes sentence…” (p 36)

Arthur D Klein, “Plea Bargaining” (1972) 14:3 Crim LQ 289.

• A comparative (England and US) of Canadian approaches to plea bargaining; Canadian caselaw pre-1970
• “In the special lectures given at Osgoode Hall in 1969 and 1970 under the auspices of The Law Society of Upper Canada there were lengthy dissertations on the subject of plea discussions and sentence negotiations, and a great deal of additional ground was covered as to the practice of Crown counsel and defence counsel upon a plea of “Not Guilty”.” (p 300)
• “Under most circumstances it is not necessary, practicable, or desirable, except perhaps in cases of particular prominence, that any statement be made by counsel as to why a certain course is being taken, such as proceeding with certain charges, withdrawing other charges, accepting pleas of guilty to certain charges or to lesser offences, or dis-continuing the prosecution altogether, and, in the light of experience, there is no occasion for a provincial judge to comment on the withdrawal of a charge or the acceptance of a plea of guilty to a lesser charge.” (p 305)

Gerard A Ferguson & Darrell W Roberts, “Plea Bargaining: Directions for Canadian Reform” (1974) 52:4 Can B Rev 497.

• Descriptive overview of plea bargaining in Canada pre-1970s; argues that despite challenges to voluntariness, the accused would feel the same pressure to plead guilty given attractive offers
• “In offering benefits or concessions to accused persons in order to secure guilty pleas, plea bargaining encourage both the guilty and the innocent to plead guilty” (p 544-45)

Howard Shapray, “The Prosecutor as a Minister of Justice: A Critical Appraisal” (1969) 15:1 McGill L J 124.

• Descriptive overview of English and American plea bargaining compared with Canada; early rebuttal to efficiency-based arguments and a lack of a principled approach

Brian A Grosman, “The Role of the Prosecutor in Canada” (1970) 18:3 Am J Comp L 498.

• Descriptive overview of criminal prosecution in Canada; generally concludes that the Canadian system is similar to the US

 

Other jurisdictions

R. v. Turner, [1970] 2 All E.R. 281 (C.A.).

• English Court of Appeal
• Accused charged with theft and pleaded not guilty; counsel advised pleading guilty, and accused only accepted after believing it was the judge’s view; appeal nullified guilty plea because accused was deceived
• Lord Parker: “idle to think that he really had a free choice” (p 284); “could be taken to be undue pressure on the accused, thus depriving him of that complete freedom of choice which is essential.” (p 285)
• Judicial plea bargaining; outlined issues related to plea bargaining and sparked subsequent scholarly commentary

Brady v US, 397 US 742 (1970).

• Not coercion if the defendant accepts plea to avoid death penalty

Bordenkircher v. Hayes, 434 US 357 (1978).

• Not violate due process of prosecutor threatens to indict with more serious charges if plea is refused

North Carolina v. Alford,400 U.S. 25 (1970).

• Alford plea allows the accused to maintain their innocence

Brady v. United States, 397 U.S. 742 (1970)

• Reserving judgment on the constitutionality of plea bargains

American Bar Association, Standards Relating to Pleas of Guilty 3 & 60-62 (Approved Draft, 1968).

• ABA criticizes the use of the terms “plea negotiation” and it suggesting something improper

Herbert S Miller, William McDonald & James A Cramer, Plea Bargaining in the United States (National Institute of Law Enforcement and Criminal Justice: 1978).

• Comprehensive descriptive overview of plea bargaining in the US during the 70s; somewhat critical posture; see executive summary on xii

Albert W Alschuler, “The Trial Judge’s Role in Plea Bargaining, Part I” (1976) 76:7 Colum L Rev 1059.

• Descriptive overview of the role of judges; argues that judges can address bad prosecution and defense

1980

SCC/appellate

Morrison v. R., [1981] 63 C.C.C. (2d) 527.

• Drug sold to undercover officer; Crown repudiating plea bargain agreement in submissions to sentence; court not bound by plea bargain agreement

R. v. Boutilier, [1981] 48 N.S.R. (2d) 179.

• Crown appealed sentence related to plea agreement; leave to appeal dismissed
• “In view of this arrangement and the fact that we do not necessarily have all the facts associated with such a bargain, this Court is not prepared to grant the Crown leave to appeal from the sentence imposed by the trial magistrate.” (para 3)

R. v. Goodwin, [1981] 43 N.S.R. (2d) 106.

• Attempted robbery; Crown not to repudiate plea bargain position on appeal when sentence not grossly insufficient
• “bargain is a bargain and, if the Crown does not wish to be bound by it, the simple solution is to make no bargain at all” (para 267)

Official reports

Canadian Sentencing Commission, Sentencing Reform: A Canadian Approach (Ottawa: Supply and Services Canada, 1987)

• “Commission recommends a mechanism whereby the Crown prosecutor would be required to justify in open court a plea bargain agreement reached by the parties either in private or in chambers.” (p 428)

Law Reform Commission of Canada, Working Paper no 60: Plea Discussions and Agreements (Ottawa: Canadian Law Reform Commission, 1989).

• 23 recommendations (with commentary); summary p 67-71

Simon N Verdun-Jones & Alison Hatch, Plea Bargaining and Sentencing Guidelines (Ottawa: Department of Justice Canada, 1988)

• Comparative look from US law; 17 recommendations

Scholarship

David Vanek, “Prosecutorial Discretion” (1988) 30:2 Crim LQ 219.

• Overview of prosecutorial discretion understood as the freedom of choice exercised in matters of criminal offences in their authority
• “The disposition of criminal charges on the basis of a “deal” made between the Crown prosecutor and defence counsel constitutes plea bargaining. The various vehicles for the exercise of Crown discretion above-discussed, particularly the alleged absolute right to withdraw charges, are the devices by which the criminal law is administered, in large measure, not by decisions of judges in open court, but by Crown prosecutors through settlements made out of court and in secret that the judges are invited to endorse and which they may often stamp with approval as a valid exercise of prosecutorial discretion.” (p 235)

Other jurisdictions

Gene Grossman & Michael Katz, “Plea Bargaining and Social Welfare” (1983) 73:4 The American Economic Review 749.

• Argument in favor of plea bargaining: acts as insurance for risk-averse public and screens the guilty from innocent defendants

Terance D Miethe, “Charging and Plea Bargaining Practices under Determinate Sentencing: An Investigation of the Hydraulic Displacement of Discretion” (1987) 78:1 J Crim L & Criminology 155.

• An early look into the effects of prosecutorial (yet not judicial due to determinate sentencing) discretion in plea bargaining practices in the US; description of a “hydraulic” or zero-sum effect of discretion for policy aims

1990

SCC/appellate

R. v. Halvorsen, [1994] 50 B.C.A.C. 87.

• Armed robbery and guilty plea; accused applied to strike guilty plea claiming prior plea bargain and defense counsel swore affidavit; appeal allowed
•  “In my opinion, the trial judge did not give sufficient weight to the fact that the guilty plea to the robbery charge was conditional upon the Crown not proceeding with the firearm charge.” (para 22)

R. v. Collard, [1997] 123 Man. R. (2d) 154.

• Dangerous driving charge; accused entered plea; changed his mind after entering guilty plea and appealed; appeal dismissed

R. v. Pashe, [1995] 91 W.A.C. 61.

• Criminal negligent; accused pleaded guilty; judge refused to accept recommendations; appeal allowed—trial judge did not have good cause to reject recommendations
• “Plea bargaining has become a routine part of the process of handling criminal cases. The bargaining process is undermined if the resulting compromise recommendation is too readily rejected by the sentencing judge.” (para 11)

R. v. Closs, [1998] 105 O.A.C. 392.

• “The justice system acknowledges and encourages plea-bargaining and must show some resistance to undoing a bargain. Especially one whereby the applicant obtained benefit for his friends and can no longer put that chip back on the table.” (para 11)

R. v. Burlingham, [1995] 2 S.C.R. 206.

• Murder; accused offer plea bargain from police for lesser charge; police should have offered plea bargain to counsel; appeal allowed
• “Furthermore, I conclude that s. 10(b) mandates the Crown or police, whenever offering a plea bargain, to tender that offer either to accused’s counsel or to the accused while in the presence of his or her counsel, unless the accused has expressly waived the right to counsel. It is consequently a constitutional infringement to place such an offer directly to an accused, especially (as in the present appeal) when the police coercively leave it open only for the short period of time during which they know defence counsel to be unavailable.” (para 21)

R. v. Pawliuk, 2001 BCCA 13.

• Murder and joint charge; plea agreement conditional on acceptance of both accused; condition not an abuse of process
• “While this colourful language underscores the notion that a plea bargain is a special sort of agreement between the Crown and the accused, it also suggests that the formation of the agreement is in many ways analogous to the formation of a contract. Once a plea agreement is reached and the accused has fulfilled part of the bargain, it is improper for the Crown to renege on the agreement.” (para 52)

Official reports

Ontario Attorney General’s Advisory Committee on Charge Screening, Disclosure, and Resolution Discussions, Report of the Attorney General’s Advisory Committee on Charge Screening, Disclosure, and Resolution Discussions (Toronto: Ministry of the Attorney General, 1993).

• “properly conducted, benefit not only the accused, but also victims, witnesses, counsel, and the administration of justice generally” (p 281)

Scholarship

Stanley A Cohen & Anthony N Doob, “Public Attitudes to Plea Bargaining” (1989) 32:1 Crim LQ 85.

• Canadian attitudes towards plea bargaining are negative; academics believe it treats the accused unfairly while the public believes it is too lenient on defendants

Other jurisdictions

United States v. Redondo-Lemos, 955 F.2d 1296 (9th Cir. 1992).

• “Such decisions [to plea-bargain] are normally made as a result of a careful professional judgment as to the strength of the evidence, the availability of resources, the visibility of the crime and the likely deterrent effect on the particular defendant and others similarly situated. Even were it able to collect, understand and balance all of these factors, a court would find it nearly impossible to lay down guidelines to be followed by prosecutors in future cases. We would be left with prosecutors not knowing when to prosecute and judges not having time to judge.” (p 1299)

American Bar Association, ABA Standards for Criminal Justice: Prosecution and Defense Function Standards, 3d ed (Washington, DC: American Bar Association, 1993).

• “a prosecutor’s refusal to honor a plea agreement concerning a recommendation to the court after a guilty plea is made undermines the voluntariness of the plea and results in fundamental unfairness to the defendant” (p 89)

Robert E Scott & William J Stuntz, “Plea Bargaining as Contract” (1992) 101:8 Yale LJ 1909.

• Plea bargains conceived through common law contract law doctrine; argument that plea bargains are most coherent when understood through the lens of contract law principles

2000

SCC/appellate

R. v. Sinclair, 2004 MBCA 48.

• Assault causing bodily hard; joint submissions based on plea bargain; Criminal Code provisions in s. 606(1.1) and (1.2) and voluntariness of plea
• “There is a continuum in the spectrum of plea bargaining and joint submissions as to sentence. In some cases, the Crown’s case has some flaw or weakness and the accused agrees to give up his or her right to a trial and to plead guilty in exchange for some consideration. This consideration may take the form of a reduction in the original charge, withdrawal of other charges or an agreement to jointly recommend a more lenient sentence than would be likely after a guilty verdict at trial. Evidence always varies in strength and there is always uncertainty in the trial process. In other cases, plea negotiations have become accepted as a means to expedite the administration of criminal justice.” (para 13)

R. v. B. (J.), 2003 MBCA 92.

• Sexual assault; plea bargain for stay of other counts; sentencing rejected joint submission; appeal allowed
• “Before us the Crown left no doubt that this was truly a case of “quid pro quo,” and that the plea bargain was of considerable benefit to the Crown itself. The certainty it achieved for the appellant was also achieved for the Crown, and the guilty plea resolved the difficulties facing the Crown. The victim, and her sister, were spared having to testify. All this was known by the sentencing judge.” (para 23)

R. v. Oxby, 2000 SKCA 129.

• First degree murder; guilty plea entered but sentenced to 20 years; appealed to expunge guilty plea on grounds of duress; appeal dismissed
• “Mr. Oxby’s diagnosis is that of Antisocial Personality Disorder. It is my opinion although he is intellectually able to appreciate the nature of the interaction with his lawyer and was able to communicate to his lawyer in terms of agreeing to a plea bargain, his denial, rationalization and detachment for the legal process with which he was involved, predisposed him to potentially entering into a plea bargain which from a legal perspective created a vulnerability in terms of his being able to instruct his lawyer fully. It’s also my opinion that he is quite capable of lying, manipulating and being deceitful when it serves his best interests.” (para 16)

Re Ravelston Corp., 2007 ONCA 135.

• Court-appointed receiver recommended guilty plea; civil liability
• “In our view, it was clearly open to the motion judge to accept the receiver’s assessment that a guilty plea to one count and an acquittal on all other counts under this plea agreement carried less risk of exposure to civil liability that a conviction on all counts.” (para 9)

Official reports

Canada, Department of Justice, Victim Participation in the Plea Negotiation Process in Canada: A Review of the Literature and Four Models for Law Reform, by Simon N Verdun-Jones & Adamira A Tijerino (Ottawa: DOJ, 2002).

• A descriptive overview of plea bargaining practices in Canada and its historical evolution; critical of the lack of formal process for plea bargaining in Canada; a comparative look at the US
• Argues for the participation of victims in the plea bargaining process and suggests further ratification in legislation

Ministry of the Attorney General, Resolution Discussions, (Ontario: Crown Policy Manual Resolution Discussions: 2005).

• “The term “resolution discussion” refers to the process during which defence and Crown  counsel discuss the evidence and likely outcome of a criminal prosecution with a view to achieving results that advance the administration of justice. Resolution discussions encompass much more than simply plea negotiations. Resolution discussions include any discussion between counsel aimed at resolving any issues that a criminal prosecution raises.” (p 1)
• “There are some fundamental principles of resolution discussions that are binding directives: • Crown counsel must not accept a guilty plea to a charge knowing that the accused is innocent • Crown counsel must not knowingly accept a guilty plea to a charge when a material element of that charge can never be proven unless that fact is fully disclosed to the defence • Crown counsel must not purport to bind the Attorney General’s right to appeal  any sentence • Unless there are exceptional circumstances, Crown counsel must honour all agreements reached during resolution discussions.” (p 1-2)

Scholarship

Candace McCoy, “Plea Bargaining as Coercion: The Trial Penalty and Plea Bargaining Reform” (2005) 50:Issues 1 & 2 Crim LQ 67.

• An empirical study of case prison terms; jury trial sentences were longer than guilty please after controlling for numerous factors

Gregory Lafontaine & Vincenzo Rondinelli, “Plea Bargaining and the Modern Criminal Defence Lawyer Negotiating Guilt and the Economics of 21st Century Criminal Justice” (2005) 50:Issues 1 & 2 Crim LQ 108.

• A practitioner’s perspective on plea bargaining; provides a descriptive historical overview; argues the need for plea bargaining and suggestive of efficiency-based views

Milton Heumann, “Back to the Future: The Centrality of Plea Bargaining in the Criminal Justice System” (2003) 18:2 Can JL & Soc 133.

• A look into the relationship between case pressure and plea bargaining; argues for a nuanced view and pulls apart this relation, then presents some suggestions

Other jurisdictions

Stephanos Bibas, “Plea Bargaining outside the Shadow of Trial” (2004) Harvard Law Review 117:8 2463.

• Influential conception of plea bargaining; argues against efficiency-based views

Oren Bar-Gill & Omri Ben-Shahar, “The Prisoners’ (Plea Bargain) Dilemma” (2009) Journal of Legal Analysis 1.

• A look into prosecutorial ethics and decision-making given the limitations of the criminal process; argues that inequalities in bargaining power is a collective action problem for the accused
• The upshot of this argument is that voluntariness cannot support arguments for plea bargaining

Michael M O’Hear, “Plea Bargaining and Procedural Justice” (2008) 42:2 Ga L Rev 407.

• An analysis of plea bargaining practices from a procedural (not distributive) justice approach; draws on psychology research for the perception of procedural justice
• Argues that plea bargaining is procedural just insofar as it gives the accused an opportunity to tell their side before making an offer and ensuring they are fully informed of the offer without coercive tactics

2010

SCC/appellate

R. v. O. (B.J.), 2010 NLCA 19.

• Sex assault; joint recommendation rejected; no quid pro quo as result of guilty plea
• “The judge says that 14 months conditional is too lenient, that it undermines deterrence. It is not surprising that the sentence is seen as lenient. That is what results when there is a plea bargain. But, is it so light that it would undermine the deterrent effect of the ordinary expectation of a sentence for such offences? The answer is no.” (para 53)

R. v. Oxford, 2010 NLCA 45.

• Plea bargain of 19 months and 2 years probation; trial judge reject joint submission; accused appealed sentence; appeal allowed
• “Whatever one’s personal views may be as to the appropriateness or utility of plea bargaining in our criminal justice system, the fact remains that for at least the past twenty years it has been judicially sanctioned at the appellate court level.” (para 56)
• “Proper plea bargaining presupposes, of course, full disclosure by the Crown, informed un-coerced consent by the accused to a plea of guilty in return for an agreed submission on sentence with proper procedural safeguards throughout the process, and an accepted factual underpinning supporting the plea. It is in that context that the ensuing comments about the acceptance or rejection of joint submissions must be understood. (para 58)

R. v. Malcolm, 2015 MBCA 75.

• Drug trafficking; judge accepted joint recommendation for CSO; accused appealed and dismissed
• “The sentence imposed results from a true plea bargain and as such cannot be said to be demonstrably unfit” (para 7
• “in this case the essence of the plea bargain and joint submission was placed on the record in open court giving the sentencing judge a solid factual basis on which to make a reasoned decision. The plea bargain was beneficial to the accused. The charge of trafficking was far more serious than the modified charge of possessing proceeds of crime. He does not seek to set aside the plea bargain or his guilty plea, but only to parse out the sentence that stems from that plea bargain.” (para 10)

R. v. Anthony-Cook, 2016 SCC 43.

• Manslaughter; court recognizing plea bargaining as key for efficiency
• “Resolution discussions between Crown and defence counsel are not only commonplace in the criminal justice system, they are essential. Properly conducted, they permit the system to function smoothly and efficiently.” (para 1)
• “Joint submissions on sentence — that is, when Crown and defence counsel agree to recommend a particular sentence to the judge, in exchange for the accused entering a plea of guilty — are a subset of resolution discussions.1 They are both an accepted and acceptable means of plea resolution. They occur every day in courtrooms across this country and they are vital to the efficient operation of the criminal justice system.” (para 2)

R. v. Nixon, 2011 SCC 34.

• Impaired driving; prosecutors given authority to renege on plea deals

Official reports   

Federal Provincial and Territorial Heads of Prosecution, Innocence at Stake (Ottawa: Ministry of Justice, 2018).

Bruce Frederick and Don Stemen, The Anatomy of Discretion: An Analysis of Prosecutorial Decision Making – Technical Report (New York: The Vera Institute of Justice, 2012).

Scholarship

David Ireland, “Bargaining for Expedience: The Overuse of Joint Recommendations on Sentence” (2015) 38:1 Man LJ 273.

• Preventing wrongful convictions; chapter 9 outlines false guilty pleas

Jerome Kennedy, “Plea Bargains and Wrongful Convictions” (2016) 63:4 Crim LQ 556.

Other jurisdictions

Lindsey Devers, “Plea and Charge Bargaining” (2011) Bureau of Justice Assistance.

• “According to the Bureau of Justice Statistics (2005), in 2003 there were 75,573 cases disposed of in federal district court by trial or plea. Of these, about 95 percent were disposed of by a guilty plea (Pastore and Maguire, 2003).” (p 1)
• “To date, two studies have investigated the impact of what happens to the system when plea bargaining is abolished. These studies found an increase in the number of cases brought to trial when plea bargaining was limited, and over time the number of convictions became more consistent (Heumann and Loftin, 1979; Holmes et al., 1992).” (p 3)

David S Abrams, “Is Pleading Really a Bargain” (2011) Special Issue J Empirical Legal Stud 8:200.

Comments and Riders to Existing Sections

RE: ABOUT THIS PROSPECTUS SUPPLEMENT

We should add clear language from the start that the Offering assumes no exercise of the Over-Allotment Option (unless otherwise indicated). For consistency, this should be the default position.

RE: DOCUMENTS INCORPORATED BY REFERENCE

In point (c) of the list, the MD&A should be included for each current annual financial statement (see s 11.1 (1)2 NI 44-101F1), so it should include the MD&A for year end Dec 31, 2019.

RE: SUMMARY OF THE BUSINESS

It may be appropriate to include some more details for a “full” disclosure. There will we some information that is omitted as it cannot be ascertained at this time (see s. 5.6 of NI 44-102), but we should add as much missing information from the base shelf prospectus (see s. 6.1 of NI 44-102). While a short form perspective only needs to provide a “brief summary” of the business “carried on and intended to be carried on” (see s 2.1 NI 44-101F1), it is important to include material (see s. 4.1 of NP 51-201) details about the expansion and growth of the business through the acquisition, as well as the company’s 14 offices and approximate $1 billion in assets. While we noted on the cover page the location of our head office, we should include information about any other reportable segments (see s.1 of NI 52-112).

We can add another subheading for “Recent Developments,” and we can include details about the April 2021 $400 million Goldeen Limited acquisition; additionally, we should also note that the Business Acquisition Report and the Q3 earnings are available on SEDAR (see s. 8 of NI 51-102). Moreover, while the New Credit Facilities are mentioned in the “Details of the Acquisition,” we should also mention “the sale of the Great Lakes gold mine in Ontario, Canada for $100 million completed on September 17, 2021.”

RE: DETAILS OF THE ACQUISITION

We may want to include more details about the acquisition—remember, we are required to disclose any probable acquisitions, as well as related “financial statements or other information” (see s. 10 of NI 41-101F1). In addition to the financial statements, we might add information, for instance, on the nature of the business of Shiny Gold, as the press release notes that it is “one of the largest privately-held gold mining companies in Canada with approximately 325 employees with operations in 10 countries.” Moreover, the reason for the acquisition is that it is “expected to result in significant synergies to Goldmember’s existing gold mines and operations.” This all needs to be disclosed.

While the base prospectus outlines generally what the use of proceeds are, it is important to add the new details of the use of proceeds for the specific purpose of the acquisition. These details can be contained under a separate subsection titled, “Use of Proceeds.” There are already several references to this section throughout this supplement, and it is a necessary part of our disclosure obligations (see generally s. 4 of 44-101F1). Under the “Use of Proceeds,” we should include the following clarifying language: “The Company intends to use the net proceeds of the Offering to finance (i) the Purchase Price; and (ii) the costs of the Acquisition. Alternatively, in the event the Acquisition is not completed following the Offering closing and the closing of the New Credit Facilities, the net proceeds from the Offering will be used to pay down amounts outstanding under the Company’s current credit facilities and for general corporate purposes.” Additionally, in the case that the acquisition is not completed following closing, it is possible that the principal purpose could shift since more the 10% could be used to pay down the outstanding credit facilities (s. 4.3 of NI 44-101F1).

RE: FINANCING THE ACQUISITION

The details of the credit facilities are mentioned, but the other sources of financings should also be disclosed. Since there already is a reference to “Use of Proceeds,” the details of the bought deal offering and Over-Allotment Option can be housed under the section, “Details of the Acquisition.” However, even though we already mentioned “available cash on hand,” we can include a subheading for the “sale of the Great Lakes gold mine,” which we should elaborate in detail because the cash will be used to finance the acquisition; moreover, we can make reference to “see Prior Sales,” as they represent cash and cash equivalents available to us.

RE: PLAN OF DISTRIBUTION

Consider adding language to protect against the scenario where, in a bought deal, the Underwriter passes the risk of unsold shares back onto us: “The Underwriters propose to offer the shares initially at the Offering Price. After a reasonable effort has been made to sell all of the Units at the price specified, the Underwriters may subsequently reduce the selling price to investors from time to time in order to sell any of the Units remaining unsold. Any such reduction will not affect the proceeds received by the Company. The Underwriters will inform the Corporation if the Offering Price is reduced. See Plan of Distribution.”

We should be more specific about the Over-Allotment Option. Here is some language elaborating on the Over-Allotment Option: “The Over-Allotment Option may be exercised to purchase up to an additional 8,000,000 Common Shares. If the Over-Allotment Option is exercised in full, the Company will receive gross proceeds of $580,000,000. Any purchaser who acquires Additional Securities forming part of the over-allotment position of the Underwriters pursuant to the Over-Allotment Option acquires such securities under this Prospectus Supplement and the Prospectus, regardless of whether the over-allotment position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases.”

We should revise the existing language, “solely to cover over-allocations,” to include market stabilization purposes (see s 6.6 of NI 44-102). Remember that the Canadian Securities Administrators have specific policy rationale for over-allotment options, that is, “solely to facilitate the over-allocation of the distribution and consequent market stabilization” (see s. 2.4 of NI 41-101CP). In other words, the language should have the effect of allowing Underwriters to over-allot to stabilize the market price of the Offer Shares. The Underwriters need to be given discretion to stabilize transactions insofar as shorting both under and over the Over-Allotment Option amount; moreover, the Underwriters should be given flexibility to discontinue or close out any short positions according to the price in the open market.

We should add that, in addition to the Prospectus Supplement being distributed electronically, the Common Shares will also be delivered electronically. Recall that, barring some limited circumstance, shares are usually delivered electronically through the Non-Certificated Inventory system of Canadian Depository for Securities. We should add some language that the transfer of ownership is done through a depository participant (e.g., brokers, dealers, banks, etc.), and that shareholders using this system will not be entitled to a certificate or instrument from us. This language is important because we need to stipulate that shareholders rights as a beneficial owner can be limited by using a system that does not entail them possessing a physical certificate (see generally NI 54-101).

We should confirm compliance with trading securities during distribution (see s. 3 of OSC Rule 48-501). Additionally, we should add in a lock-up arrangement for the customary 90 days after the initial Closing Date. This should already be spelled out in the underwriting agreement (which we can make reference to), but we can specify some exceptions here: “(i) transfers by any such person to its affiliates for tax or other bona fide tax or estate planning purposes, provided that each transferee shall, as a condition precedent to such transfer, agree to enter into a substantially similar undertaking; (ii) in order to accept a bona fide take-over bid made to all securityholders of the Company or similar business combination transaction; (iii) the receipt of a grant of stock options, restricted share units and other similar issuances pursuant to the share incentive plan, restricted share unit plan, and other share compensation arrangements of the Company, provided that the exercise price thereof shall not be less than the Offering Price; or (iv) the conversion, exercise or exchange of any convertible, exercisable or exchangeable securities existing on the date hereof or upon exercise of stock options or restricted share units granted in accordance with (iii) above, provided that any Common Shares or other securities received will also be subject to the lock-up undertaking.”

RE: RISK FACTORS

We should add some risk factors about the implications of COVID-19. As you know, the global financial conditions are quite volatile, and it could affect our specific business in the mining industry. These conditions could materially affect the ability to grow our business and generate revenue, so we should disclose this risk. To this end, we can specify some factors around the slowdown in the financial markets (e.g., consumer spending, employment rates, inflation, tax rates, etc.).

We should also add some language about mineral claims, licenses, and permits. Since we are in the mining industry, we are subject to periodic renewals with limitation periods. I do no suspect we will run into any trouble, but we need to state that there is no assurance in renewal and this risk could impede our business objectives. We also have related legal risks with mining that we should disclose, such as environmental laws, construction laws, and Aboriginal laws. As you know, we should always err on the side of caution and disclose all possible risks.

Additional Sections

CONFLICT OF INTEREST

We should disclosure any possible underwriters’ conflict of interest or if the issuer is “connected” or “related” to any of the underwriters pursuant to NI 33-105 (see also s. 6.5 of NI 44-102). To be safe, we should add a section to explicitly state the relationship between us and the underwriters. Here is some possible language to add: “The decision to purchase the shares by the Underwriters was made independently of their being affiliated lenders, and those lenders had no influence as to the determination of the terms of the distribution of the shares. The offering price of the shares and the other terms and conditions of the Offering were established without involvement of their affiliate lenders. None of Underwriters will receive any benefit from the Offering, other than these Underwriters’ respective portion of the Underwriters’ fee payable as described above. Certain of the Underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for the Corporation, for which they received or will receive customary fees.”

CAUTIONARY NOTE REGARDING MINERALS

Since we are in the mining business, we need to ensure compliance with NI 43-101 (see also NI 43-101CP). We need special disclosure for mining projects and we should add a section to reflect our consultation with technical experts and their respective reports. Here is some language to get us started: “Unless otherwise indicated, all mineral resource included in this Prospectus Supplement (including the Prospectus and the documents incorporated herein by reference) have been prepared in accordance with NI 43-101. NI 43-101 contains the rules and codes of practice developed by the Canadian Securities Administrators that established minimum standards for all public disclosure of scientific and technical information an issuer makes concerning mineral projects  Statements relating to “mineral resources” and “mineral reserves” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral resources described can be profitably produced in the future. If, after the date of this Prospectus, the Corporation is required by Section 4.2 of NI 43-101 to file a technical report to support scientific or technical information that relates to a mineral project on a property that is material to the Corporation, the Corporation will file such technical report in accordance with Section 4.2(5)(a)(i) of NI 43-101.”

TAX CONSIDERATIOSN AND ELIGIBILITY FOR INVESTMENT

We should seek advice from our tax law specialists to ensure that our Offering is compliant with tax laws. We should elaborate on the language in the short form base shelf prospectus. While we should largely defer to the expertise of our tax specialists, we should be wary of some standard provisions. For example, there should be language around shareholders in Canada with respect to dividends on Common Shares, disposition of Common Shares, and the taxation of capital gains and losses. Here is some language to get us started: “In the opinion of legal counsel, the following summary describes, as of the date hereof, the principal Canadian federal income tax considerations generally applicable under the Tax Act to a holder who acquires Common Shares pursuant to this Offering. This summary only applies to a holder who, for the purposes of the Tax Act and at all relevant times: (i) deals at arm’s length with, and is not affiliated with, the Corporation and the Underwriters, and (ii) holds, as beneficial owner, Common Shares as capital property. This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Proposed Amendments, does not otherwise take into account or anticipate any changes in the law, whether by legislative, governmental or judicial action or interpretation, nor does it address any provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein or take into account any changes in the administrative practices or assessing policies of the CRA. This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any prospective shareholder, and no representations with respect to the income tax consequences to any prospective shareholder are made.”

Subsequent to our consultation with our tax law specialists, we should add the following language to explicitly state that our shares will be qualified investments, as applicable: “In the opinion of legal counsel, based on the current provisions of the Income Tax Act (Canada) (the “Tax Act”), provided that the Common Shares are listed on a “designated stock exchange” as defined in the Tax Act (which currently includes the TSX), the Common Shares will be, on the date of closing of the Offering, qualified investments under the Tax Act at the time of their acquisition by a trust governed by a registered retirement savings plan, registered retirement income fund, deferred profit sharing plan, registered disability savings plan, registered education savings plan or tax-free savings account, each as defined in the Tax Act. Prospective holders who intend to hold Common Shares in a Deferred Plan should consult their own tax advisors to ensure that the Common Shares that they may acquire will not be a “prohibited investment” in their particular circumstances.”

General Comments

There may be some possible additional sections to add pursuant to the regulations. While it should be spelled out in the underwriting agreement, we should check for termination clauses which allow for the underwriter to terminate their obligations under the agreement. This is important for us to keep track of any material changes or circumstances which could affect this deal. We should also clarify if we deviate from International Financial Reporting Standards; if so, we should have a section explaining this under “Non-IFRS Measures.”

I assume that we are compliant with the surrounding procedural requirements, but we should doublecheck to ensure that we have all of our bases covered. I assume we are an electronic filer (NI 13-101), and we are a reporting issuer with current financials and AIF, filed continuous disclosure documents (NI 51-102), and filed the required documents (see s. 4 of NI 44-101) on SEDAR (e.g., documents affecting the rights of security holders, valuation reports, or template marketing materials). We should check that all filing materials (see s. 12 of NI 51-102), signature pages are in order (see NP 11-202), and that the underwriting agreement is filed (s. 7.4 NI 44-102).

More generally, we should ensure that the underwriter’s compliance departments fulfil the Investment Industry Regulatory Organization of Canada requirements on bought deals. We should also confirm that confirm at least one member of the underwriting syndicate is registered in each offering jurisdiction and has signed a certificate (see s. 7.2 of NP 11-202). We should ensure compliance with general prospective requirements, especially relating to over-allotment and underwriters (see s. 11 of NI 41-101; see also s. 2 and 6 of NI 41-101CP). We should ensure that we have a notice of intention to be qualified to file a short form perspective (see s. 26 of NI 44-101) and we should confirm that all unaudited financial statements have been reviewed by our auditor (s. 4.3 of NI 44-101).

During distributions, we need to have a plan to be compliant with rules around trading during distributions (see s. 3 of OSC Rule 48-501). We should also check that any material change reports we have filed do not contain any confidential information. A possible issue to investigate with the underwriters is that the issued and outstanding shares are 104,810,000 and this bought deal is for 50,000,000 shares; as such, an underwriter’s beneficial ownership of more than 20% of the shares could trigger an inadvertent take-overbid (see NI 62-104). We should also check our website to ensure that any promotion materials are deleted.

In case we want to do some pre-marketing, we can rely on the bought deal exemption (see s. 7 of NI 44-101). We should doublecheck that no exemptions apply (s. 5.5 & 11.2 of NI 44-102). We should also ensure that any term sheets prior to an issuance of a receipt for a preliminary prospectus conform with the regulatory requirements (see s. 7.5 and 7.6 of NI 44-101).

The short form base shelf prospectus dated June 1, 2021 and accompanying documents filed by you on behalf of the above-noted issuer(s) have been selected for a full review. Please note that responsibility for compliance with applicable securities legislation, policies and practices remains with the Issuer and its advisors, and is in no way mitigated by staffs review or the issuance of a final receipt. Our comments are as follows:

Over-allotment Option

1. Please include details about any over-allotment option.
   1. Please see the requirements around disclosure statement for allot-allotment options (see s 1.6.2.1 of NI 44-101F).
2. Please ensure any omissions in this prospectus are contained in a subsequent prospectus supplement.

Marketing Material

1. Please clarify whether any marketing materials or template versions are part of this short form prospectus, and ensure compliance with the general prospectus requirements on adverting and marketing (see s. 13.7 of NI 41-101).
   1. If there is marketing material, please include a section under the heading “Marketing Materials” (see s. 11.6 of NI 44-101F1).
   1. If there is marketing material, please submit them as a part of the “filing requirements” described below (see s. 4 of NI 44-101).
   1. If there is any pre-marketing, please list any applicable exemptions that are sought (see s. 7 and 8 of NI 44-101).

Principal Purpose

1. Please describe in reasonable detail the principal purposes for the net proceeds (see s. 4.2 of NI 44-101F), including business objectives (see s. 4.7 of NI 44-101F).
   1. Please include the reasonable possibility of acquisition, as described below in “updated information,” as a purpose for these proceeds (see s. 4.4 of NI 44-101F).

Mining Terms

1. Please review the Canadian reporting requirements for the disclosure of mineral properties (see NI 43-101; see also s. 9.1 of NI 44-101F1).
   1. Please file any technical mining reports as a part of the below “filing requirements” (see s. 4 of NI 44-101).
   1. Please name any person(s) who provided technical or scientific information regarding mining or mineral resources.
   1. Please file any valuations reports for which consent is required (see s. 10.1 of NI 41-101) of any mineral projects.
2. Please ensure that you are registered as a mining company in Quebec.
   1. Please ensure you have satisfied any regulatory requirements for offerings in Quebec.

Financial Measures

1. Please state whether the financial measures in this prospectus are standardized under the meaning of International Financial Reporting Standards.
   1. If not, please elaborate under a new section, “Non-IFRS Measures.”

Information about the Company

1. Please elaborate on the details of the Company and its business, and any recent updates as applicable.
   1. Please include updated details such as any subsidiaries, the corporate structures, or recent developments.
   1. Please disclose any material contracts in connection with the offering.

Interest of Experts

1. Please name each person or company who is named as preparing a report, valuation, statement or opinion (see s. 15 NI 44-101F1) and ensure they are a qualified person (see s. 5.1 of NI 43-101), as applicable (see s. 4.2.1 of NI 44-101).
   1. Please name any person(s) in filings relating to the Company’s financial year end for continuous disclosure obligations (see s. 4 of NI 51-102).
   1. Please file any expert’s consents as a part of the below “filing requirements” (see s. 4 of NI 44-101; see also s 10.1 of NI 41-101).

Tax Considerations

1. Please expand on this section to include a summarized opinion on the compliance with the Tax Act and any other applicable Canadian tax laws. 
   1. Please provide a summary of the taxation of the Company.
   1. Please provide a summary of the taxation of shareholders.
2. Please include a statement of the Company’s eligibility for investment.

Filing Requirements

1. Please ensure that all filing requirements are met (see s. 4 of NI 44-101).
   1. Please include any documents affecting the rights of securityholders are filed (see s 12.1 of NI 51-102 or s. 16.4 of NI 81-106, as applicable.
   1. Please include copies of any material contracts (see s. 12.2 of NI 51-102 or 16.6 of NI 81-106).
   1. Please include a signed comfort letter with the unsigned auditor’s report.

Updated Information

1. Please ensure that all personal information forms for directors and officers are up to date (see s. 4 of NI 44-101).
   1. Please include personal information forms for promoters and executives of the promotors, as applicable.
   1. Please include any lock-up provisions, options to purchase securities, or insider trading policies (see NI 55-104 and NI 55-104CP)
2. Please disclose any reasonably probable acquisitions (see s. 10.2 of NI 44-101F1).
   1. Please consider your acquisition mentioned in your October 2021 press release.
3. Please ensure that there are no other material facts (see s. 18 of NI 44-101) and no exemptions (see s. 19 of NI 44-101).
   1. Please provide a description of any policies or procedures relating to continuous disclosure of material information.
   1. Please provide an update on the status of any pending applications.

Language

1. Please ensure that a French translation is available (or an exemption is sought).
2. Please ensure that there are no untrue material facts or omissions which would reasonably be expected to have a significant effect on market price (see s. 130-138.14 of OSA).
3. Please ensure the use of everyday language without vagueness or jargon (see s. 56 of OSA; see also s. 4.2 NI 44-101CP).
4. Please ensure that language around future oriented financial information and financial outlook is not problematic (see NI 51-102).

Relationship with Underwriters

1. Please disclose the relationship between the Company and the Underwriters (see NI 33-105).
   1. Please state the independence of the Underwriters and the arrangement between the Company and the Underwriters, and any potential conflicts of interest.

Please deliver a copy of this letter to the Issuer, the Issuer’s auditors, each member of the issuer’s audit committee, the underwriters and the underwriters’ counsel. Please also forward a copy of the issuer’s response to the Issuer’s auditors, each member of the Issuer’s audit committee, the underwriters and the underwriters’ counsel.

We would appreciate receiving your written response to the above comments and all subsequent correspondence addressed to the attention of the undersigned. Additional comments may be raised by staff of the Commission as a result of your responses to the above comments and our continuing review of the file.