Question 1

The parol evidence rule does not permit evidence of oral contracts entered into between the parties after they enter into a written agreement.

Accepted Answer

A) True 
 B)False  False

Question 2

The dictionary meaning of a word does not always clarify its meaning.Explain.

Accepted Answer

One of the approaches to interpretation is the plain or ordinary meaning approach.This requires that in interpreting a contract,the courts adopt the dictionary or ordinary meaning of the words.However,the ordinary meaning does not always clarify its meaning.This is because words may have more than one meaning even in the dictionary.As well,the ordinary meaning of words,as found in the dictionary,could change depending on the context.

Question 3

A agrees to buy a share in B's invention for a certain sum on the condition that C first approves the invention.However,the written contract makes no reference to C's approval.C never gives his approval.B now sues A for the purchase price.In this situation,

Accepted Answer

A) whether or not C gives his approval is not relevant to the main contract between A and B. 
B) C's approval is a condition precedent that must be met before there is a contract between A and B 
C) the parol evidence rule applies to exclude the condition of C's approval. 
D) C's approval would be a warrantee used to overcome the parol evidence rule. 
E) A cannot rely on C's approval as a condition to the contract with B,because C is not a party to the contract. 
A) whether or not C gives his approval is not relevant to the main contract between A and B. 
B) C's approval is a condition precedent that must be met before there is a contract between A and B 
C) the parol evidence rule applies to exclude the condition of C's approval. 
D) C's approval would be a warrantee used to overcome the parol evidence rule. 
E) A cannot rely on C's approval as a condition to the contract with B,because C is not a party to the contract. B

Question 4

The parol evidence rule excludes evidence about the formation of a contract.

Accepted Answer

A) True 
 B)False

Question 5

A business contract includes a term saying that a manufacturer will use "smooth-grained sand" in a construction project "if this quality is available.The court will most likely imply that the terms of the contract require the manufacturer to put reasonable efforts into trying to find the specified materials.This is an example of the court introducing an implied term based on

Accepted Answer

A) statutory requirements. 
B) previous dealings between the parties. 
C) business efficacy. 
D) principles of statutory interpretation. 
E) the nature of the trade. 
A) statutory requirements. 
B) previous dealings between the parties. 
C) business efficacy. 
D) principles of statutory interpretation. 
E) the nature of the trade.

Question 6

The dictionary meaning of a word does not always clarify its meaning.Explain.

Accepted Answer

One of the approaches to interpretation

Question 7

The contra proferentem rule is used against the party who made the contract in favour of the party who did not.

Accepted Answer

A) True 
 B)False

Question 8

What is the parol evidence rule?

Accepted Answer

A) the rule that requires that persons on parole seek the approval of a court before entering into any contract 
B) the rule that requires a party to a contract from adducing evidence from a third party regarding discussions he or she may have had with such a third party about the provisions of a contract 
C) a rule that prevents convicted persons on parole from entering into contractual obligations 
D) the rule that prevents a party from adding to a contract a term that was previously agreed upon but was not included in the final written contract. 
E) The rule that prevents a court from interpreting a contract that is illegal. 
A) the rule that requires that persons on parole seek the approval of a court before entering into any contract 
B) the rule that requires a party to a contract from adducing evidence from a third party regarding discussions he or she may have had with such a third party about the provisions of a contract 
C) a rule that prevents convicted persons on parole from entering into contractual obligations 
D) the rule that prevents a party from adding to a contract a term that was previously agreed upon but was not included in the final written contract. 
E) The rule that prevents a court from interpreting a contract that is illegal.

Question 9

Evidence regarding certain oral terms that were discussed between the parties to a contract that has been reduced to writing

Accepted Answer

A) cannot be introduced into court because of the rule of express terms. 
B) cannot be introduced into court because there were no prior dealings between the parties. 
C) cannot be introduced into court because of the parol evidence rule. 
D) cannot be introduced into court because of the rule regarding consideration. 
E) cannot be introduced into court because of the rule of implied terms. 
A) cannot be introduced into court because of the rule of express terms. 
B) cannot be introduced into court because there were no prior dealings between the parties. 
C) cannot be introduced into court because of the parol evidence rule. 
D) cannot be introduced into court because of the rule regarding consideration. 
E) cannot be introduced into court because of the rule of implied terms.

Question 10

The plaintiffs were growers of oranges in Spain and the defendants were ship owners.The plaintiffs wished to export their oranges to England and shipped them to the defendants' vessel,relying on an oral promise by the defendants' agent that the vessel would sail straight to London.In fact,the vessel went first to Antwerp,so that the oranges arrived late in London and the plaintiffs lost a favourable market.When the plaintiffs claimed damages for breach of contract,the defendant owners relied on the bill of lading,which expressly allowed them to proceed "by any route whether directly or indirectly" to London.In this case,

Accepted Answer

A) the bill of lading is evidence of the entire contract between the plaintiffs and ship owners. 
B) the bill of lading contains an express term,and the defendants are bound by that term. 
C) the contract consists of both the written bill of lading and the oral promise by the defendant's agent. 
D) evidence of the oral promise of the defendant's agent cannot be admitted because of the parol evidence rule. 
E) the court will find that there is no contract at all. 
A) the bill of lading is evidence of the entire contract between the plaintiffs and ship owners. 
B) the bill of lading contains an express term,and the defendants are bound by that term. 
C) the contract consists of both the written bill of lading and the oral promise by the defendant's agent. 
D) evidence of the oral promise of the defendant's agent cannot be admitted because of the parol evidence rule. 
E) the court will find that there is no contract at all.

Question 11

The consideration for a main contract can be a collateral contract.

Accepted Answer

A) True 
 B)False

Question 12

Implied terms usually result from

Accepted Answer

A) a decision of the court. 
B) a decision of the promisee. 
C) long-established customs of a particular trade. 
D) a decision of the promisor. 
E) agreement between the parties. 
A) a decision of the court. 
B) a decision of the promisee. 
C) long-established customs of a particular trade. 
D) a decision of the promisor. 
E) agreement between the parties.

Question 13

The parol evidence rule does not permit evidence of oral contracts entered into between the parties before they enter into a written agreement.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is NOT a usual source of implied terms?

Accepted Answer

A) terms that are reasonably necessary,in accordance with the expectation of the parties,to promote business efficacy 
B) long-established customs in particular types of trades 
C) long-established customs in particular types of transactions 
D) what the parties discussed prior to entering the contract 
E) none of the above 
A) terms that are reasonably necessary,in accordance with the expectation of the parties,to promote business efficacy 
B) long-established customs in particular types of trades 
C) long-established customs in particular types of transactions 
D) what the parties discussed prior to entering the contract 
E) none of the above

Question 15

The contra proferentem rule establishes a form of equality among the parties to a contract.Explain.

Accepted Answer

Normally there is equal bargaining stren

Question 16

A collateral contract is

Accepted Answer

A) an unenforceable agreement that is related to another written agreement. 
B) a separate agreement between the parties included in a written contract. 
C) an agreement between parties to a contract that precedes another written agreement. 
D) a separate agreement between the parties made at the same time as a main agreement between the parties,but not included in the written document. 
E) a void agreement that is related to another written agreement. 
A) an unenforceable agreement that is related to another written agreement. 
B) a separate agreement between the parties included in a written contract. 
C) an agreement between parties to a contract that precedes another written agreement. 
D) a separate agreement between the parties made at the same time as a main agreement between the parties,but not included in the written document. 
E) a void agreement that is related to another written agreement.

Question 17

Explain how courts choose between conflicting testimony.

Accepted Answer

Since a court is reluctant to accept the

Question 18

A judge is in the best position to assess credibility.

Accepted Answer

A) True 
 B)False

Question 19

A and B have just signed a written agreement for the purchase by A of B's house.During the negotiations,A made it clear to B that his purchase was conditional on A conducting a building inspection of house within five days of the date of the agreement,which was satisfactory to A.However,this condition is not included in the agreement.In this situation,

Accepted Answer

A) evidence of the building inspection would be admissible because it is a collateral agreement,the consideration for which is the agreement of purchase and sale. 
B) evidence of the building inspection would not be admissible because,since this is an agreement for land,the Statute of Frauds applies to bar evidence of the building inspection. 
C) evidence of the building inspection cannot be given because of the parol evidence rule. 
D) evidence of the building inspection would be admissible because it is a subsequent agreement. 
E) evidence of the building inspection would be admissible because it is a condition precedent to the agreement of purchase and sale. 
A) evidence of the building inspection would be admissible because it is a collateral agreement,the consideration for which is the agreement of purchase and sale. 
B) evidence of the building inspection would not be admissible because,since this is an agreement for land,the Statute of Frauds applies to bar evidence of the building inspection. 
C) evidence of the building inspection cannot be given because of the parol evidence rule. 
D) evidence of the building inspection would be admissible because it is a subsequent agreement. 
E) evidence of the building inspection would be admissible because it is a condition precedent to the agreement of purchase and sale.

Question 20

In the formation of a contract,the intention of the parties may be just as important as the essential elements of the contract.

Accepted Answer

A) True 
 B)False

Exam 10: The Interpretation of Contracts

The parol evidence rule does not permit evidence of oral contracts entered into between the parties after they enter into a written agreement.

The dictionary meaning of a word does not always clarify its meaning.Explain.

A agrees to buy a share in B's invention for a certain sum on the condition that C first approves the invention.However,the written contract makes no reference to C's approval.C never gives his approval.B now sues A for the purchase price.In this situation,

The parol evidence rule excludes evidence about the formation of a contract.

The dictionary meaning of a word does not always clarify its meaning.Explain.

The contra proferentem rule is used against the party who made the contract in favour of the party who did not.

What is the parol evidence rule?

Evidence regarding certain oral terms that were discussed between the parties to a contract that has been reduced to writing

The consideration for a main contract can be a collateral contract.

Implied terms usually result from

The parol evidence rule does not permit evidence of oral contracts entered into between the parties before they enter into a written agreement.

Which of the following is NOT a usual source of implied terms?

The contra proferentem rule establishes a form of equality among the parties to a contract.Explain.

A collateral contract is

Explain how courts choose between conflicting testimony.

A judge is in the best position to assess credibility.

In the formation of a contract,the intention of the parties may be just as important as the essential elements of the contract.

Law, society, and Business

The Machinery of Justice

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

The Requirement of Writing

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Sale of Goods

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

Government Regulation of Business

International Business Transactions

Electronic Commerce

Privacy

Breach of Contract and Its Remedies

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