Académique Documents
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(a)
PEO has enforcement as one of its regulating functions. What does the
term enforcement mean?
(5)
(b)
(5)
(c)
(5)
(d)
(5)
(e)
Question 2
TranTech, a manufacturing firm, has contracted to develop and produce a fullyautomated mass-transportation system to serve residents of a large city. During the
installation and testing phase, a major part of the control system did not appear to
function satisfactorily. Kappa, P.Eng. one of TranTechs mechanical engineers is
concerned that that a failure could have catastrophic consequences for the residents of
the city. Kappa reported the apparent malfunction to the project manager, who is also a
P.Eng., and recommended that the firm engage a licensed software engineering
practitioner to look into the problem. However, the project manger advised Kappa that
there was no budget available and that it was important for TranTech to make delivery
in order to meet its contractual commitments to the client.
Kappa strenuously expressed his concerns to the project manger and learned
subsequently that shipment to the client had already been made.
(20)
(a) Does Kappa have any obligation to take further actions under the
circumstances? Discuss.
(5)
ChemEng, a large engineering firm, was hired to prepare the design for a chemical
production plant for MajorCo. In addition to preparing the plant design,
ChemEng's duties included providing inspection services during the construction
stage of the project. The project was completed successfully.
You are a P.Eng. and have been employed on a full-time basis by ChemEng for
several years. You work in the Process Division and are involved on several
process design projects. You were an important member of the design team that
prepared the design for MajorCo's plant. In addition to working for ChemEng, you
supplement your income by occasionally undertaking work on weekends and
during evenings for EngInc, another engineering company. A colleague of yours,
who is a P.Eng. at EngInc, assigns you such work and assumes responsibility for it.
A few years after the plant was completed, MajorCo decided to restructure its
operations and sell the plant. BuyerCo has agreed to buy the plant, but before it
does so, BuyerCo wants to satisfy itself (and its bank) that the plant was built to
proper standards and is in good physical condition. BuyerCo hires EngInc to
inspect the physical plant and to review relevant documents (including the original
plans and specifications, "as-built" drawings, and operations and maintenance
logs). EngInc is very busy on several projects and asks you to assist with the plant
inspection and document review.
(10)
(10)
(b) Assuming that your employment arrangements have not changed since the plant
was designed and constructed, discuss how you respond to EngInc's request for
assistance?
(5)
(a) Discuss the conduct of both Honcho and Zeta. What, if anything, should they
be concerned about?
(10)
(b) Could Honcho and/or Zeta be subject to a disciplinary hearing by the Discipline
Committee of PEO? Discuss
(5)
(c) Is there anything about Honchos conduct relative to the Code of Ethics that is
commendable?
In your answer, please assume that A. Zetas report would have no impact on
public safety or welfare.
1(a) Enforcement means to legally prosecute, persons or companies, who are not licensed to
offer professional engineering services in the public marketplace, but who lead members of the
general public to believe they are so licensed, or hold a Certificate of Authorization (C of A), PE
Act 12.(1) and 12.(2).
1(b) Requirement recently removed - be a citizen or permanent resident of Canada,
PE Act 14.(1)(a).
1(c) Licence et al, when revoked - items shall be delivered to the Registrar, PE Act 36.,
Reg. 941, 54.
1(d) Consulting Engineer, 3 Requirements: 1) a P.Eng. member of PEO; 2) Five (5) years of
experience beyond P.Eng.; and 3) Two (2) years of the foregoing in independent practice
meaning major project responsibility, Reg 941, sections 56. and 60. A privilege is to use the title
Consulting Engineer, Reg 941, section 59.
1(e) Licence differences the only members of PEO are P.Eng. licence holders. They have
met specific requirements to use the P.Eng., PE Act 14. and Reg 941 / 33. Temporary licence
holders may use the P.Eng. but they are not members, PE Act 40.(2). Provisional and limited
licence holders are not members, PE Act 18.(5). The only members of PEO are P.Engs, the
other licensees are not. This is the difference.
2(a) Transportation system - Kappa P.Eng. does have an obligation to take further actions
beyond expressing concerns to the project manager P.Eng. If the system were installed with a
software problem, it could cause a major loss for the city, and injuries or deaths to the public
users of the system.
Kappa has wisely recommended engaging a software engineer for competence in services,
77.1.v., and has not offered to undertake work outside Kappas training and experience,
72.(2)(h).
Kappa clearly and strenuously expressed concerns to the project manager, and especially a
P.Eng. project manager, but has been overruled, 72.(2)(f). The potential dangers need more
attention.
The matter should be brought to a higher authority in TranTech, showing a true loyalty to the
employer, and to the client, 77.1.i. To avoid a potential problem may enhance regard for the
profession, 77.2.ii.
Although it would violate a responsibility to keep an employers information confidential, 77.3.,
also it would be whistle blowing, the paramount duty of a P.Eng. is to protect the public, 77.2.i.,
PE Act 2.(3).
If TranTech does not address the problem, Kappa must report the danger to city authorities,
72.(2)(c), and to any related others, e.g., safety, in the city and province, 72.(2)(d). Actions
must be taken to ensure safe guarding of life health and property, 72.(2)(b), and to show fidelity
to public needs, 77.1.ii.
To not take these actions is a compromise in devotion to high ideals of personal honour and
professional integrity, 77.1.iii. Shipment to the client has been made and the danger is
imminent.
2(b) Project manager actions contract delivery and availability of budget is a secondary
priority under public welfare, 77.2.i. An excuse of 'budget' by a P.Eng. project manager, fails to
maintain reasonable standards, 72.(2)(a), and therefore is professional misconduct, 72.(2)(j).
Other TranTech P.Eng. superiors could be charged as well. Although Kappa would not want to
injure the reputation of another P.Eng, 77.7.iii., Kappa must expose this conduct to the proper
tribunals, 77.8., even if Kappa loses employment.
3(a) Employment arrangements - this is moonlighting and is only appropriate, providing I
have:
1) satisfied myself that my work at EngInc will not conflict or interfere with my duty to
ChemEng
2) informed ChemEng of my interest, and ChemEng does not object to my work at EngInc
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1.
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
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1.(i) Duress - threatened or actual, violence or imprisonment used to persuade a party to enter
into a contract. Such a contract is voidable, page 110.
1.(ii) Consideration an essential element of an enforceable contract and is a payment or
promise given by one party in exchange for an undertaking or promise of another party,
pages 79 & 91.
1.(iii) Employment rights, equal treatment - meaning without discrimination regardless of (list
only 5 of the 14 given here) race, ancestry, place of origin, colour, ethnic origin, citizenship,
creed / religion, sex, sexual orientation, age, marital status, family status, record of offences, or
handicap, page 322.
1.(iv) Arbitration awards - in 1958 a New York Convention under United Nations auspices,
was signed by over 135 nations including Canada. By the terms of this convention, arbitration
decisions are internationally enforceable. International contracts should be with a party from a
signing nation, page 30.
1.(v) Contract A in tendering is an agreement by the parties to adhere to the terms and
conditions of a tender. A request for proposals is an offer, and the submission of a bid that is
compliant with the terms is acceptance. Any violation of the terms is a breach of Contract A.
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There are as many Contract A's as there are bidders. Contract B is one signed agreement with
the one successful bidder, pages 119 - 134.
1.(vi) Contra proferentem, rule of - where a contract provision is ambiguous, it will be
construed or interpreted against the party who drafted the provision. Who drafted what, should
be noted, page 136.
1.(vii) Discoverability concept - is a point in time when a limitation period begins. For the 2year basic limitation period, it begins when the damage or loss is discovered, or ought
reasonably to have been discovered. For the 15-year ultimate limitation period, it begins when
the act or omission took place, e.g., when a building was built. A tort action or an action for
breach of contract must be commenced within these limitation periods, otherwise it will be
statute barred, pages 71 - 73.
1.(viii) Common law, judge-made - precedent court decisions used to establish predictability,
page 2.
2. Tort, potential liabilities - the purpose of tort law is to compensate an aggrieved party for
damages, so far as money will suffice. The 3 essential principles of tort law are relevant,
and they are 1) a duty of care 2) a breach of that duty and 3) damage or injury as a result of the breach.
The owner (TO) has contracts with the architect (TA) and the experienced contractor (EC) but
does not have contracts (privity) with the engineer (TE) or the roofing subcontractor (RS).
Therefore legal action(s) by TO against TE and RS, would be in tort.
Although only responsible for the structural aspects, a TE working in this field, ought to be
competent about the characteristics of membranes. So also should the EC and especially the
RS. Expert testimony by the second engineering firm would establish that TA and TE should
have objected to the substitution.
TA, TE, EC and RS all had a duty of care 1) to provide a podium deck roof membrane which
would perform under colder temperatures. This duty was breached 2) since a significant
number of leaks occurred in the podium deck. There was resulting damage or loss 3) since the
substitute membrane had to be replaced by the rubberized membrane originally specified in the
contract.
Potential liabilities might be, TA 30%, TE 20%, EC 20% and RS 30%. They are concurrent tortfeasors.
The TE and RS liabilities are in tort. TA and EC liabilities are in contract and there may be some in tort.
A relevant case precedent is Unit Farm Concrete vs. Eckerlea Acres, page 46.
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3. Equitable estoppel - the information technology firm (ITF) was not entitled to terminate the
contract. ITF was exposed to significant loss, and was trying to use the default of a 4th payment
from the airlines finance department (AFD) within 15 days of certification, as an excuse to break
the contract.
If ITF insists on the express wording of the contract, AFD could invoke the relevant legal
principle or concept of "promissory" or "equitable estoppel", which is to ensure the result would
be equitable.
A "gratuitous promise" had been made by the ITF representative to AFD. The promise to AFD
was, to be given additional information relating to an invoice from a sub-contractor to ITF, before
AFD would make the fourth progress payment. The contract was not amended, the promise
was not in writing, and it was freely made. This makes the promise "gratuitous". AFD was
clearly depending on the promise.
The contract stays in force and ITF takes the loss. Strict contractual rights are not followed
because the equitable estoppel remedy makes an exception to those rights. Any other result
would be inequitable.
A similar case precedent is Conwest Exploration vs. Letain, page 92.
4. Contract, breach of and liability - Pulpco could make a claim against the industrial
contractor (IC) for excess costs, including lost profits and production delays.
Pulpco had paid $27,000,000 of a contract price of $30,000,000 and paid another contractor
(AC) an additional $15,000,000 that is $12,000,000 more than expected to achieve the desired
result. Therefore the IC is apparently liable to return $12,000,000 to Pulpco, which is well above
the $5,000,000 for 'maximum' liability.
This is a case of fundamental breach going to the root of the contract. Based on case history,
a clause(s) to limit liability is not enforceable, and IC would be responsible to pay $12,000,000.
The clause may be enforceable if the cause is unknown or there is ambiguity, but neither is
evident here.
Some Canadian courts have allowed enforceability of liability clauses. If the construction of
wording of a contract clause which determines the liquidated damages, is clear and true, and is
a genuine pre-estimate of damages, then a 'true construction approach' to the wording of that
clause is considered to have taken place. Therefore the clause is enforceable, all of which
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means the law has changed in this area. In this case IC would be liable only for the calculated
liquidated damages of $4,000,000.
Relevant case precedents are Harbutt's Plasticene vs. Wayne Tank and Pump, where the
clause was not enforceable, and Hunter Engineering vs. Syncrude Canada, where it was,
pages 155 to 162.
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