April 21, 2017 marked one year since the death of the beloved recording artist, Prince. We have previously blogged about the legal issues surrounding Prince’s Estate that have emerged since his death. Although more than a year has now passed, the Estate continues to be engaged in litigation.
According to media reports, producer George Ian Boxill tried to release an EP containing previously unreleased songs by Prince to coincide with the first anniversary of his death. Boxill asserted that he had the right to release the music. In a lawsuit commenced by Paisley Park Enterprises, Prince’s Estate disagreed and alleged that Boxill was in breach of the recording agreement that he had signed with Prince.
The Estate was initially successful in blocking Boxill’s attempts to release the EP of new music. However, according to a new report in TMZ, Boxill has now filed additional legal documents that state that the unreleased music was not the subject of a nondisclosure agreement.
Separately, as we have previously blogged, Prince died without a Will and any known children, resulting in claims from a number of possible heirs.
According to a recent news report, the Minnesota judge presiding over the proceedings had indicated that he would not make a declaration regarding the heirs of Prince’s Estate until appeals by other potential heirs whose claims had been rejected were allowed to run their course. Lawyers for Prince’s sister and half-siblings have now argued that this delay will unnecessarily increase costs and hinder the proper administration of the Estate.
We have previously blogged about the importance of carefully addressing issues regarding intellectual property and any possible rights the estate may have after the testator’s death in a testator’s estate plan. Deceased writers, musicians and other artists may be parties to agreements that bind their estates and affect the rights and control over their intellectual property.
It is generally advisable for drafting solicitors to ensure that such legal documents are reviewed as part of a creative professional’s estate planning. It may also be prudent to obtain the advice of a lawyer who specializes in intellectual property law, to ensure that the estate plan adequately addresses any possible rights the estate may have after the testator’s death. Disputes over the beneficial ownership and control of a testator’s intellectual property can result in protracted and expensive litigation.
The legal issues surrounding Prince’s Estate reiterate the importance of careful estate planning while the testator is still alive. Lack of certainty regarding the beneficiaries of the estate, the deceased’s intentions and the property/rights of the estate can significantly increase the risk that the estate will become embroiled in protracted litigation.
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An estate trustee may be bound to a contract previously entered into by the deceased. This duty is distinct from the duty of an estate trustee to discharge all debts of the deceased.
There are four main elements of a contract:
- Intention (consensus ad idem/meeting of the minds)
Prior to the formation of a contract, it is possible for an offer to be revoked by death, if the contract has not been accepted by the surviving party. If performance of a contract has already been initiated by the surviving party, the contract may not be able to be revoked. This is due to the fact that part-performance of a contract may validate a contract. The doctrine of part-performance has been upheld in cases such as Lensen v. Lensen, 1984 CanLII 2424 (Sask CA), and Thompson v Guaranty Trust Co.,  S.C.R. 1023.
In general, contracts often will have a clause stating that the terms are binding on the estate of a contracting party. Therefore, if a contract is found to be valid, the estate of a deceased may be bound by a contract entered into by the deceased. It is important to note that a contract need not be formally executed and signed in order to be considered enforceable by the court.
In Bayer Estate v. Blue Button Club, 2007 BCSC 517, the British Columbia Superior Court upheld a contract on the death of a party. In this case, the deceased, Bernard Bayer, and his employer, Blue Button Club, entered into an employment agreement for 10 years, with an annual base salary of $60,000.00 plus benefits. The contract provided that, upon the death of Bayer, the Club would pay into deceased’s estate an amount equal to the salary and benefits that the deceased would have earned. The amount paid into the estate was to be based on how much time was left in the employment contract. The contract also had a provision naming the Club as a beneficiary of the deceased’s insurance policy, so long as the Club was to maintain insurance on the life of Bernard. Upon the death of Bayer, the Club tried to submit that the employment contract was not enforceable. The Court rejected the Club’s submissions and upheld the contract, requiring the Club to pay the deceased’s salary into his estate.
Aside from part-performance of a contract or having a formally executed contract, it is possible to enter into a verbal contract prior to the formal contract being executed. Where a tentative agreement is reached from oral negotiations, the intentions of the parties are the key factor in determining if a contract is in existence. In attempting to enforce a contract in which one of the parties is deceased, the Court will look to the intention of the deceased in order to determine whether or not they intended for a contract to be formed.
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All too often we hear stories of older persons suffering from cognitive decline who have unwittingly entered into long-term and disadvantageous contracts for services or equipment they do not even need. Sometimes, despite the best efforts of friends and family, loved ones with conditions such as dementia cannot be completely shielded from aggressive sales tactics that prey on vulnerability. This scenario has arisen repeatedly in the case of door-to-door sales and Councillors in several Ontario cities have set out to put a stop to it.
On Monday, Etobicoke Centre MPP Yvan Baker introduced a private member’s bill, the Door-to- Door Sales Prohibition Act, 2016, which seeks to ban door-to-door sales of water heaters, furnaces, water treatment devices, and the leasing or rental of air conditioners. These four products were selected as they have the highest number of complaints from consumers and have cost Ontarians over $3.1 million in 2015 alone. However, these numbers are based only on consumers who have made a report to the Ministry of Government and Consumer Services and therefore may, in fact, be much higher. The bill would also allow the Ministry of Government and Consumer Services to add additional products to the list as required. In large part, the motivation behind this bill has been to protect vulnerable people, particularly those with health issues, from being duped into contracts with no way out.
The bill itself would not lead to an outright prohibition on knocking on someone’s door for sales purposes; however, it would ensure that any contract executed as a result of
a door-to-door sale of any of the products listed, would be void. Furthermore, the bill contemplates implementing fines to be levied against both individual and commercial sellers in increasing amounts per offence. In this sense, the bill would act as a deterrent to salespersons engaging in these sorts of unscrupulous practices.
The bill still has a long way to go before it becomes law. It still must go to a second reading in June and if it passes, then to committee. From there, it would return back to the legislature for third reading.
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