Byline: Jeremy Costin

Do we care about being fair?

In its decision on Uber Technologies Inc. v. David Heller, the Supreme Court of Canada determined that the freedom of contract is not so absolute in its technical application as to undermine its purpose of allowing people to craft their own destinies. (photo from wikipedia)

Does fairness play a role in how we interpret and apply law? After all, doesn’t a person have the right to make bad decisions?

The Torah gives us the written law, similar to legislation, and the Talmud gives us the oral law and commentary, similar to the doctrines and jurisprudence of common law.

So, are we to interpret and apply law strictly, even if it seems unjust? Is there authority to temper the interpretation of law based on the circumstances? The Talmud tells us, yes. In June, the Supreme Court of Canada agreed.

Every businessperson knows that it’s a good idea to get an agreement in writing. We use written agreements to make a record of what the parties have agreed is their shared vision of their business relationship. Part of that shared vision might include agreeing that certain rights ordinarily afforded by the law of the land won’t apply to this relationship. The right to give up a right is central to the freedom of contract.

The freedom of contract is based on the idea that a person knows what’s best for them and wouldn’t agree to something if the bargain weren’t to their liking. The law doesn’t protect you from your own bad decisions, but it is supposed to protect you from bad decisions that you didn’t make freely.

In June of this year, the Supreme Court of Canada decided the case of Uber Technologies Inc. v. David Heller. Heller was an Uber food delivery driver. As such, he signed a standard agreement with Uber – the kind of agreement that is a “take it or leave it” proposition. Very few people read such contracts and, even if they do take the time to read and understand them, they don’t have the opportunity to create the “shared vision” that the freedom of contract is supposed to protect.

One of the terms of the Uber contract was that any dispute would be dealt with through a mediation and arbitration process in the Netherlands, rather than through the court system in Canada. Doing so would require up-front fees of $14,500 US, not including the cost of lawyers and travel. Heller’s annual earnings from Uber are between $20,000 and $30,000 Cdn. In other words, it would cost at least half of his annual earnings just to file his dispute, let alone pursue it.

The Supreme Court of Canada found in Heller’s favour.

If this had been a freely negotiated contract, Heller would have made a bad decision, but it would have been his decision to make and thus enforceable. However, it was clear to the court that Uber put this clause into the contract to make sure their drivers simply could not bring any dispute against them.

The court could have said that, according to the strict letter of the law, Heller agreed to the contract and is, therefore, bound by it. It doesn’t matter if you now find unfair a contract that you freely agreed to.

Instead, the court said the law in its strictest form is not always applicable, and we must determine whether it is inhumane to apply it strictly or whether circumstances demand we temper it. The court found that, rather than providing an alternative means to justice (i.e. arbitration), Uber imposed an unreasonable barrier to justice; they found a way to make sure that their drivers could not access justice no matter the merit of their complaint.

Many of us are familiar with the first three verses of parshat Shoftim in Devarim (Deuteronomy 16:18-16:20). First, a system of judges is established. Second, the judges are commanded to judge fairly on the merits of the cases. The third verse contains one of the most well-known phrases in the Torah: “Justice, justice shall you pursue.”

Why is the third verse there, and why does it use the word “justice” twice? The second verse has commanded the judges to follow the law without prejudice. Why then tell us to pursue justice? Isn’t that implicit in the establishment of a rule-of-law justice system? And what is “justice, justice” as opposed to “justice”?

In Chapter 2 of tractate Avot in the Mishnah, we are told, “warm thyself by the fire of the sages, but beware of their glowing coals, lest thou be burnt, for their bite is the bite of a fox, and their sting is the sting of a scorpion, and their hiss is the hiss of a serpent, and all their utterances are like coals of fire.”

At the distance where coals keep you warm, you can learn. At this distance, you can also see the coals in the context of providing warmth. If you are close enough that they can bite, sting and hiss, you lose sight of their purpose (warmth) and will be burnt. This applies to law.

Chapter 1 of Avot provides three interpretations of law’s purpose in the olam, world – olam also means the universe and everything in it.

Verse 2 of Chapter 1 says that the world stands on Torah (law), work (the practice of law) and kindness.

Verse 12 directs us to love peace, to pursue peace and to love all creatures bringing them closer to the Torah (law).

Verse 18 tells us that the world stands on justice, truth and peace.

The inclusion of kindness and peace alongside law tells us not to get so close to the coals that we forget their purpose is warmth.

“Justice, justice” is not only law, but law with purpose. Law without purpose may wear a badge of justice, but it is not truly just. Law used for the purpose of subverting justice is not just.

The court determined, in the Uber decision, that the freedom of contract is not so absolute in its technical application as to undermine its purpose of allowing people to craft their own destinies. In this case, Uber’s contract precisely contradicted that purpose: Uber imposed a contract that expressly denied Heller the right to craft his own destiny without his freely given consent.

Jeremy Costin is a business and estates lawyer practising in Vancouver. He sits on the board of directors and the governance committee of the Vancouver Holocaust Education Centre, and is a frequent guest instructor at the Law Society of British Columbia.

Basics of writing a contract

The other day, I finished the contract for an interesting project. There are half-a-dozen people involved in the project. Each of them has something to put in and is getting something out, but there is no direct relationship between one thing in and one thing out. In other words, I couldn’t say, “Mrs. Schwartz pays $100 and Mrs. Goldfarb treats her sciatica.” We were working with a pool of things being exchanged. It was more like, “Mrs. Schwartz pays $50 and provides physiotherapy equipment. Mr. Rosenblum takes $20 and provides a physiotherapy space. Mrs. Goldfarb treats Mrs. Schwartz, takes $30, and tells her other clients that she has space and equipment for physiotherapy.”

In Genesis, Chapter 9, we have the Covenant between G-d and Noah and with all of his descendants, being humankind; it also includes obligations between people. It is not set out as an item-by-item exchange, such as you pay your fare and the bus takes you along its route. It is a pool of obligations, promises and considerations among several parties, being G-d, Noah and each of the people who will descend from him.

This concept of a collection of promises was the structure I needed to put that project to paper the other day. It reinforced a basic technique in writing contracts that makes it possible to write a contract on a napkin.

A binding agreement is made by answering the questions, “Who’s doing what, and when are they doing it?”

The Torah distinguishes between the agreement (brit) and the token – or evidence – of the agreement (ot-habrit).

The agreement itself is the exchange of obligations: humankind will multiply and replenish the earth, will not murder (directly or indirectly) and will not eat meat that is still alive; G-d will provide to humankind the right and ability to hunt and eat meat, will establish the foundation of a justice system and will not flood the earth again.

The token of the agreement is the rainbow. This serves as a reminder both to G-d (verses 14 and 15) and to humankind and all creatures of the earth who can see it.

Today, we make this distinction by using a signed, written contract. The signed, written contract is evidence of the agreement between the parties. This brings us back to the napkin.

You’ll notice that, in my description of the arrangement between Mrs. Schwartz, Mrs. Goldfarb and Mr. Rosenblum, I state what each person does and expects to receive. Nothing happens without someone doing it. The only critical statement missing is the “when.” There are also a few details that would be quite helpful, such as where the money is being exchanged, what equipment is involved, the location of the therapy space, and the length of the therapy session.

In the questions “Who’s doing what, and when are they doing it?” the “what” also includes the “how” and the “where.” In this example, we could say:

“On the 15th day of Kislev, 5780, Mrs. Schwartz will put $50 in the old pickle jar behind the desk at Mr. Rosenblum’s office, which is at 12345 Oak St. She will also deliver, at the same time, an electric stimulation machine and the gel and pads needed for it. She won’t pick it up until the end of Chanukah.

“Mr. Rosenblum will take $20 of the $50 now in the pickle jar and let Mrs. Goldfarb use the therapy cubicle in his office for physiotherapy until the end of Chanukah.

“Mrs. Goldfarb will take the remaining $30 from the pickle jar and will treat Mrs. Schwartz’s sciatica for an hour on the 19th of Kislev and an hour on the 21st of Kislev.

“Mr. Rosenblum and Mrs. Schwartz will let Mrs. Goldfarb use the equipment and space for her other clients until the end of Chanukah.”

In this example, we now know who is responsible for what, when they’re going to do it, and how they’re going to do it.

There are far more details that we could put in, but this would be enough to move forward on its own if Mrs. Schwartz, Mrs. Goldfarb and Mr. Rosenblum don’t get around to writing out something more complicated.

If they expanded from a napkin to a couple of pieces of paper, they could also add in the kinds of details that lawyers argue over: what happens when things go wrong?

The first part of dealing with things going wrong is having everyone promise that it won’t. These are called, in Legalese, the representations and warranties.

Mr. Rosenblum will promise that he has an appropriate space for the therapy, including whatever licences and permits are needed. He also might promise certain details about what is an appropriate space, such as size, privacy, therapy bed, etc.

Mrs. Goldfarb will promise that she has the training, skills, certification and the valid licence required to carry out her obligations. She will also promise to do the therapy in a professional manner to the standards expected by her profession.

Mr. Rosenblum and Mrs. Goldfarb will both promise that they have the appropriate insurance.

Mrs. Schwartz will promise that she has the equipment needed for her therapy and that it works properly.

Now that we know who is going to do what, when and how they’re going to do it, and that they’ve all promised that everything is above board, we can discuss what happens if something goes wrong. Here we get into things like limitations of liability and indemnities. We also might have dispute resolution tools built right into the agreement.

If something goes wrong, no one wants to pay for someone else’s mistakes.

If Mrs. Schwartz trips on the doorstep, Mrs. Goldfarb doesn’t want to be responsible for Mr. Rosenblum not having a smooth entrance to his office.

If Mrs. Goldfarb injures Mrs. Schwartz during treatment, just because it happened in his office, Mr. Rosenblum doesn’t think he should be responsible.

If the electrical equipment causes a fire, neither Mr. Rosenblum nor Mrs. Goldfarb wants to be responsible for the damage caused by Mrs. Schwartz’s faulty machine.

Each will indemnify the others for liability arising from his or her own actions or negligence. In other words, each person promises to pay for the others’ damages for anything that is his or her own fault, whether or not it was intentional.

Dispute resolution is often overlooked because, when people are excited to enter a project together, they tend to think fights aren’t going to happen. But thinking about how to deal with an argument not only makes it easier should an argument arise, it also reduces the likelihood of the argument getting serious.

There are many flavours of dispute resolution tools, but here’s an easy one: the people involved pick an outside person whom they all trust, perhaps their rabbi, and they write in the agreement that, if they can’t resolve an argument between themselves, they’ll ask Rabbi Fogel to help them resolve it.

Remember that a good contract is a clear, written statement of a shared vision.

Jeremy Costin is a business and estates lawyer practising in Vancouver. He sits on the board of directors and the governance committee of the Vancouver Holocaust Education Centre, is a founding director of the Jewish Lawyers Association of British Columbia and is a frequent guest instructor at the Law Society of British Columbia.