nership, by death or insolvency of a partner, illegality of business, application to court, bankruptcy and fraud, provided the fraud was not committed by a nonmember of the partnership. Notice must be served at the time of dissolution; otherwise the old members are responsible to the creditors. Losses are paid first out of profits, next out of capital, and, if necessary, by the partners. In settling accounts, the assets are used to pay debts to third persons, the amount due to each partner for advances, apart from capital, the amount due to each partner in respect to capital; and the balance, if any, is divided among the partners. LIMITED PARTNERSHIP All of the Provinces have acts for the establishment of a limited partnership, which is composed of one or more general partners, whose liability is the same as in an ordinary partnership, and limited partners whose liability is limited to the amount of their contributions. AGENCY AND DEALER AGREEMENTS After selecting a suitable representative or agent, the American firm should prepare a contract specifying the terms of the agreement. It is advisable for the firm to have this contract drawn up by an attorney who is well versed in the laws of both Canada and the United States. Such an agreement should be drawn in clear and nontechnical language and should cover as many points of possible controversy as can be foreseen. Provision should be made as to what law should govern in case of litigation arising under the contract, whether the law of the United States or that of Canada should govern. Probably an American firm would wish to provide that the laws of the United States should govern all such controversies. It might also be advisable to provide in the contract for the situation which arises where another agent innocently sells goods within the territory of an exclusive agent. A provision stipulating which agent should receive the commission in such a case would anticipate any dissatisfaction which might arise if such a sale were made and the contract contained no provision concerning such. It is essential that the manufacturer definitely ascertain that the prospective representative has adequate facilities and sales staff to cover the territory allotted to him. Adequacy depends largely on the kind of goods to be sold. An organization with branches in the principal distributing centers should be able to render proper distribution. Individuals or firms maintaining but one office with salesmen traveling throughout the Dominion may lose some business. If the manufacturer is uncertain, it might be advisable for him to appoint agents in each distributing center. In considering this matter, it should be taken into consideration that Canada's population is spread over an area greater than that of the United States, including Alaska. The importance of obtaining information about the financial standing and business integrity of consignees needs strong emphasis. Although it may seem almost incredible, considering the advantages available for securing credit particulars, several cases are known where American firms have, in recent months, extended 30 days' credit without investigation and the entire value of the shipment has been lost. Whether it is a cash-on-delivery or a credit transaction, the manufacturer should procure this information. It is also essential that periodical reports on steady customers should be obtainedsay, once a year, preferably after their annual statements of affairs are available to their bankers and the mercantile agencies. There is no Dominion law which requires that exclusive-agency contracts be recorded, nor is there, a Federal register of exclusive agents or distributors. Provincial governments may demand registration of such contracts. The law of Canada governing such agreements considers the public interest as well as the private interest, and the parties to such contracts must operate in a manner which is not against the public interest. Exclusive sales agreements are not contrary to law as being in restraint of trade so long as they do not fall within the "combines investigation act" of 1923. The term "combine" as used in the act refers to such combinations as are defined in the act as being operated to the detriment of or against the interests of the public-that is, consumers, producers, or others. The act prohibits the formation and operation of trusts and monopolies and agreements having the effect of preventing or lessening competition or substantially controlling within a given area the production, purchase, sale, or supply of any product, or of fixing a common resale price. The control of prices and of the market is not considered unlawful unless the restraint upon commerce is unreasonable and results in detriment to the public. The exclusive agent has no remedy against the importation by an independent dealer of the goods which he handles under the contract, unless the exporter under contract with the exclusive agent is responsible for the importation. Every person is free to purchase whatever he desires and import it into Canada unless prohibited by the customs laws. An exclusive agent can not prevent the sale of goods so imported unless he holds the patent rights, and even then he can not make use of these rights to limit, restrain, or injure trade unduly. The "combines investigation act" specifically provides in section 24 that in case a patent holder does make unreasonable use of his patent rights the patent may be revoked. If the manufacturer is responsible for importations by an independent dealer in Canada, ordinarily the exclusive agent may sue in the courts for breach of contract. [NOTE.-Trade Promotion Series No. 45, Exclusive Sales Agreements in Foreign Trade, prepared in the Division of Commercial Laws, contains a discussion of this subject, with individual treatment for some 60 countries. This publication may be obtained for 10 cents from the Superintendent of Documents, Government Printing Office, Washington, D. C., or from any district or cooperative office of the Bureau of Foreign and Domestic Commerce.] POWERS OF ATTORNEY A power of attorney may be general, giving the agent power to transact all the usual business of the principal, or special, contain 92483-28-3 ing authority only for particular acts. The following form is used quite extensively in Canada in commercial circles: Know all men by these presents that I (or we). of the of in the of in the Province of do hereby make, nominate, constitute, and appoint of the of my (or our) true and lawful attorney for me (or us) and in my (or our) name, place, and stead, and for my (or our) sole use and benefit to (Here state powers intended to be granted) and for all and every of the purposes aforesaid do hereby give and grant unto my (or our) said attorney full and absolute power and authority to do and execute all acts, deeds, matters, and things necessary to be done in and about the premises, and also to commence, institute, and prosecute all actions, suits, and other proceedings which may be necessary or expedient in and about the premises as fully and effectually to all intents and purposes as I (or we) would do if personally present and acting therein, and also with full power and authority for my (or our) said attorney to appoint a substitute or substitutes and such substitution at pleasure to revoke, I (or we) hereby ratifying and confirming and agreeing to ratify and confirm and allow all and whatsoever my (or our) said attorney or such substitute or substitutes shall lawfully do or cause to be done in the premises by virtue hereof. In witness whereof I (or we) have hereunto set my (or our) hand and seal this day of one thousand nine hundred and Signed, sealed, and delivered If the power of attorney is granted by a partnership, it should contain so much of the partnership agreement as shows the date, place of organization, and domicile of the partnership and, most important, the clauses which authorize the particular individual to execute the power of attorney in behalf of the partnership, unless all of the members execute the instrument. In the case of a power of attorney given by a corporation, the instrument should contain facts showing the existence of the corporation and other facts such as the date and purpose of organization. Portions of the charter may be set out to accomplish this end. The instrument must also show that the official who executes it had authority from the corporation to do so. This may be done by transscribing the portion of the by-laws or the resolution of the board of directors, as the case may be, wherein such authority is found. The notary should also state in the instrument that he saw the originals of the portions of the by-laws or resolutions and that the transcriptions correspond exactly to the originals. CONTRACTS As in American law, all contracts involve an offer and its acceptance, consideration, and legal capacity to contract; and the object must be legitimate. Simple or parol contracts, verbal or in writing, must be supported by consideration. Verbal agreements for one year or less between an employer and employee are binding. If the agreements are for over one year they must be in writing. As regards parol contracts, the statute of frauds requires that no action can be brought charging an executor or administrator upon a promise to pay debts apart from his own estate; demanding a person upon a promise to settle the debt or default of someone else; upon an agreement made in consideration; upon a contract for sale of lands; or upon any agreement not to be executed within one year unless it is in writing. SALES, PERSONAL PROPERTY All of the Provinces have a "sale-of-goods act" except Quebec, where the sale of goods is governed by the civil code. A contract of sale is subject to the general rules governing all contracts. It is defined as the transfer from the seller to the buyer of property in the merchandise. It may be either absolute or conditional. If the transaction is to take place in the future, it is called an agreement to sell. An agreement to sell becomes a sale when the specified time has elapsed or the condition has been fulfilled. Verbal or oral contracts are binding in all of the Provinces, the amount varying from $30 to $50. In Ontario, Nova Scotia, and New Brunswick a contract for the sale of goods, $40 or up, is not binding unless a note or memorandum of contract is made in writing and signed by the buyer or his agent, or the purchaser accepts and actually receives part of the goods or gives something to bind the contract. In Manitoba, Saskatchewan, Alberta, British Columbia, the Northwest Territories, and the Yukon, the amount is $50 or up. In Prince Edward Island it is $30 or up. In Quebec the amount must be more than $50. The conditions of sale determine when the merchandise is transferred. The intention must be clearly defined. Courts and legislatures have ruled, in cases where the goods were definitely ascertained, that the parties intended an immediate sale and transfer of ownership, but when the goods have not been identified, the property in them does not pass until they are definitely known or, if the products are to be improved or the price is to be determined, it is not assumed that the property has passed until such be done. The goods ordinarily remain at the seller's risk until the transfer has been completed. Where products are shipped f. o. b., the buyer has the responsibility regardless of whether the goods are known or unknown, unless a contrary agreement is declared. In Quebec the law states that if the goods are sold by weight, number, or measurement, and not in lump, the sale is not completed until the conditions have been carried out; but the buyer has personal right against the seller and can demand delivery or damages in default for failure to send the shipment to his plant. If the goods are delivered in a deteriorated state, through no fault of the seller, the buyer must accept them. If the seller is responsible, the buyer may refuse the shipment or accept it and claim damages. Where articles are shipped "on approval" or "sale or return," or on similar terms, the ownership accrues to the buyer when he makes known his intention of accepting or when he retains the shipment without serving notice of rejection, beyond the fixed time for return and, if this is not established, beyond a reasonable time. In Quebec these transactions fall under the "suspensive condition," which assumes that the buyer approves unless otherwise stated in the contract. Misrepresentation invalidates a contract. It must be distinguished from fraud and representations which are later included by the way of terms. In this case the contract is not vitiated but an action can be taken for breach of terms. In some instances, if the terms are broken the contract is discharged. An innocent misrepresentation justifies setting the contract aside but is not sufficient for action to claim damages. Where fraud exists the contract is vitiated and the injured person has separate action for damages. A contract may be discharged by waiver, substituted contract in accordance with a clause contained in the contract, merger, alteration or loss of a written instrument, and bankruptcy. If one of the parties refuses to carry out his end of the agreement, the other party may institute an action for breach of contract. There is a sale by sample only where the contract expressly or impliedly says so, and the mere exhibition of a sample can not make the sale one by sample. The purpose of the sample is to express what it would be difficult to express in words, but can not be treated as conveying more information than words would. The following conditions are implied in sales by sample: (1) That the bulk shall correspond with the sample. (2) That the goods are free from any defect-rendering them unmerchantable-which would not be apparent on reasonable examination of the sample. (3) That the buyer shall have a reasonable opportunity to compare the bulk with the sample. CONDITIONAL SALES ALBERTA The laws of Alberta regarding the recognition of a conditional sale, wherein title passes to the buyer on payment of the last installment, require that within 30 days after the sale the contract must be registered in the office of the registration clerk of chattel mortgages in the district in which the buyer resides; also in the registration district where the goods are delivered; and, if they are later removed, registration must take place within 60 days after removal. In every case there must be an accompanying verified affidavit of the seller or buyer setting forth that the writing is a true statement of the agreement and that it is bona fide and not to protect the goods from the buyer's creditors. If the seller fails to comply with the foregoing conditions, he can not establish his rights against purchaser or mortgagee for valuable consideration in good faith or against any judgment, execution, or attachment. Following payment of the amount due, the seller must, upon request, furnish a written memorandum stating that his claims have been satisfied, thereby divesting his interest. If rolling stock or railway equipment is sold to a railway company, the contract must be certified by the president or vice president and |