Question 1

What are some of the primary goals of a court in interpreting a contract?

Accepted Answer

There are number of goals of the courts

Question 2

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.

Question 3

A and B enter into a lease whereby A is to lease a unit in a plaza from B to be used as a retail men's clothing store.When the lease is drawn up and signed,it simply says that A is leasing the unit as a store.A now takes the position that he can have any kind of store and decides to rent out videos and DVDs,just like the Video and DVD store already in the plaza.In this situation,

Accepted Answer

A) the court will attempt to resolve the ambiguity for A and B. 
B) the court will look to the intention of A and B in entering into the lease. 
C) the court will permit evidence that A intended to use the store as a retail men's clothing store and that B leased the unit to A on this basis. 
D) the term store in the written lease is ambiguous. 
E) all of the above 
A) the court will attempt to resolve the ambiguity for A and B. 
B) the court will look to the intention of A and B in entering into the lease. 
C) the court will permit evidence that A intended to use the store as a retail men's clothing store and that B leased the unit to A on this basis. 
D) the term store in the written lease is ambiguous. 
E) all of the above

Question 4

At common law,once the terms of a contract are determined,it is irrelevant that it is only a verbal 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

Which of the following is true with regard to a contract that has to be in writing?

Accepted Answer

A) If the contract is handwritten,it must be in ink. 
B) All implied terms must be carefully identified. 
C) If the contract is a guarantee,consideration must be identified. 
D) The parties must meet to discuss the terms. 
E) The contract does not have to be wholly within a single document.Several written notes may be taken together to satisfy the Statute of Frauds. 
A) If the contract is handwritten,it must be in ink. 
B) All implied terms must be carefully identified. 
C) If the contract is a guarantee,consideration must be identified. 
D) The parties must meet to discuss the terms. 
E) The contract does not have to be wholly within a single document.Several written notes may be taken together to satisfy the Statute of Frauds.

Question 7

A and B are negotiating a contract under which,if it is concluded,B will purchase A's land.A sends a fax to B stating,"I will sell you the 40 acres of land that I own at 1234 Concession Road 2,County of Simcoe for $100 000.00." B faxes the following response: "I can't pay $100 000.00.Will you take $92 000.00?" On receiving this fax,A responds by saying,"$92 000.00 is the lowest that I can go." After thinking about it for a time,B faxes back to A saying,"I'll pay the $92 000.00,but I want you to throw in your harvester machine." A then responds by fax,which says,"Done.But maybe we should put the agreement in writing." No further response is forthcoming from B and the agreement is never put into a formal written document.A few days later,B bumps into A and says,"I'm getting the money to pay you for your farm." To which A replies,"Oh,I changed my mind,and since we don't have written contract,the deal is off." In this situation,what will both A and B argue,and who is most likely to succeed?

Accepted Answer

A will argue that there is no formal wri

Question 8

Mercantile Limited,a corporation in Toronto,enters into an agreement with Jackson to advance $300 000 to Jackson for the purchase of farming equipment.Jackson agrees to give Mercantile Limited a mortgage over his home as security for the advance of the money.The terms of the agreement contain an appraisal provision that the commitment to make the loan is subject to an appraisal of Jackson's home of at least $350 000.The appraisal provision is known as

Accepted Answer

A) an implied term. 
B) a warranty. 
C) a condition term. 
D) a condition precedent. 
E) an appraisal warranty. 
A) an implied term. 
B) a warranty. 
C) a condition term. 
D) a condition precedent. 
E) an appraisal warranty.

Question 9

To determine the ordinary meaning of words in a contract,the court will consider

Accepted Answer

A) what the intention of the parties was. 
B) what the parties said during their negotiations. 
C) what the dictionary says. 
D) what is usual business practice. 
E) all of the above 
A) what the intention of the parties was. 
B) what the parties said during their negotiations. 
C) what the dictionary says. 
D) what is usual business practice. 
E) all of the above

Question 10

In what way does the Sale of Goods Act differ from the Statute of Frauds where there is no written contract?

Accepted Answer

In such a situation,the contract would b

Question 11

Edward and his wife,Mary,go into a bank.Edward wants to loan $10 000.00 from the bank,but the bank manager wants some kind of security.Because they are in a hurry,Mary says,"Give Edward the money and I will pay Edward's loan." The bank manager looks at her and,being afraid that the bank will not loan Edward the money,Mary says,"Please,if Edward does not pay the loan,I will." The bank manager has Mary sign a document with both of her statements in it.In this situation,

Accepted Answer

A) Mary is an indemnifier. 
B) Mary has indemnified the loan to the bank. 
C) Mary is a guarantor of Edward. 
D) Mary has guaranteed the loan to the bank. 
E) all of the above 
A) Mary is an indemnifier. 
B) Mary has indemnified the loan to the bank. 
C) Mary is a guarantor of Edward. 
D) Mary has guaranteed the loan to the bank. 
E) all of the above

Question 12

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 13

George owes Michael Moneybags $1000.Susan,George's sister,goes to Michael Moneybags and makes this statement: "I shall pay the debt of my brother." This statement is

Accepted Answer

A) a promise of indemnity. 
B) a promise of guarantee. 
C) a misrepresentation. 
D) a promise of guarantee and indemnity. 
E) a representation. 
A) a promise of indemnity. 
B) a promise of guarantee. 
C) a misrepresentation. 
D) a promise of guarantee and indemnity. 
E) a representation.

Question 14

An oral contract concerning land will always be unenforceable under the Statute of Frauds.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Under the Statute of Frauds,a "promise to answer for the miscarriage of another" has been interpreted to mean

Accepted Answer

A) a promise to pay for goods not paid for by a purchaser. 
B) a promise to pay for the injury caused by the tort of another. 
C) a promise to perform a contract that has been breached by another. 
D) a promise to pay for the injury caused by the tort of another and a promise to perform a contract that has been breached by another. 
E) a promise to settle a debt owed by another. 
A) a promise to pay for goods not paid for by a purchaser. 
B) a promise to pay for the injury caused by the tort of another. 
C) a promise to perform a contract that has been breached by another. 
D) a promise to pay for the injury caused by the tort of another and a promise to perform a contract that has been breached by another. 
E) a promise to settle a debt owed by another.

Question 17

What is the difference between a promise of guarantee and a promise of indemnity?

Accepted Answer

A promise of guarantee is a promise give

Question 18

The Statute of Frauds requires that contracts with minors must be in writing.

Accepted Answer

A) True 
 B)False

Question 19

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 20

What is an implied term? In what circumstances are the courts likely to find that an implied term is appropriate to the interpretation of the contract?

Accepted Answer

An implied term is a term not expressly

Exam 10: Writing and Interpretation

What are some of the primary goals of a court in interpreting a contract?

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,

At common law,once the terms of a contract are determined,it is irrelevant that it is only a verbal contract.

Which of the following is true with regard to a contract that has to be in writing?

To determine the ordinary meaning of words in a contract,the court will consider

In what way does the Sale of Goods Act differ from the Statute of Frauds where there is no written contract?

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

George owes Michael Moneybags $1000.Susan,George's sister,goes to Michael Moneybags and makes this statement: "I shall pay the debt of my brother." This statement is

An oral contract concerning land will always be unenforceable under the Statute of Frauds.

Implied terms usually result from

Under the Statute of Frauds,a "promise to answer for the miscarriage of another" has been interpreted to mean

What is the difference between a promise of guarantee and a promise of indemnity?

The Statute of Frauds requires that contracts with minors must be in writing.

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

What is an implied term? In what circumstances are the courts likely to find that an implied term is appropriate to the interpretation of the contract?

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

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

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

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

International Business Transactions

Electronic Commerce

Privacy

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