Question 1

A legal mistake is an error in judgment.

Accepted Answer

A) True 
 B)False

Question 2

The cooling-off period is a time during which a consumer may cancel or rescind a contract without any reason whatsoever.

Accepted Answer

A) True 
 B)False

Question 3

Mistake about terms does NOT include

Accepted Answer

A) the attribution by the parties of different meanings to words used in a contract. 
B) errors that are made in the recording of an agreement between parties. 
C) the error of judgment that a party makes when he or she enters into a bad contract. 
D) misunderstandings about the meanings of words used in a contract. 
E) words used inadvertently in stating the terms of a contract. 
A) the attribution by the parties of different meanings to words used in a contract. 
B) errors that are made in the recording of an agreement between parties. 
C) the error of judgment that a party makes when he or she enters into a bad contract. 
D) misunderstandings about the meanings of words used in a contract. 
E) words used inadvertently in stating the terms of a contract.

Question 4

Which of the following is not a condition that must be met by a plaintiff who request rectification of a contract?

Accepted Answer

A) The plaintiff must satisfy the court that there was a complete agreement between the parties,free from ambiguity. 
B) The plaintiff must establish that the parties did not engage in further negotiations to amend the contract. 
C) The plaintiff must satisfy the court that the agreement is not subject to,or conditional on,any further adjustments. 
D) The plaintiff must satisfy the court that all attempts to reach some understanding between the parties have failed. 
E) The plaintiff must establish that the change in the written document appears to be an error in the recording of the document and is easily explained as such. 
A) The plaintiff must satisfy the court that there was a complete agreement between the parties,free from ambiguity. 
B) The plaintiff must establish that the parties did not engage in further negotiations to amend the contract. 
C) The plaintiff must satisfy the court that the agreement is not subject to,or conditional on,any further adjustments. 
D) The plaintiff must satisfy the court that all attempts to reach some understanding between the parties have failed. 
E) The plaintiff must establish that the change in the written document appears to be an error in the recording of the document and is easily explained as such.

Question 5

McKenzie purchases goods from Dormond.Later McKenzie goes to court and the court declares that the contract between McKenzie and Dormand is void.This means that

Accepted Answer

A) Dormond has to return all money received from McKenzie,but McKenzie does not have to return the goods. 
B) the court has declared that there was a valid contract between Dormond and McKenzie from the date of the purchase until the date of the Court ruling. 
C) the court has declared that Dormond breached the contract. 
D) McKenzie can return all or the remainder of the goods to Dormond in exchange for reimbursement of payment. 
E) McKenzie can keep the goods and can demand his money back from Dormond. 
A) Dormond has to return all money received from McKenzie,but McKenzie does not have to return the goods. 
B) the court has declared that there was a valid contract between Dormond and McKenzie from the date of the purchase until the date of the Court ruling. 
C) the court has declared that Dormond breached the contract. 
D) McKenzie can return all or the remainder of the goods to Dormond in exchange for reimbursement of payment. 
E) McKenzie can keep the goods and can demand his money back from Dormond.

Question 6

Paul,a poor farmer,has just learned he has a serious medical problem.The medication needed is extremely expensive and not covered by medical insurance.Hearing of his plight,the next-door neighbour offers to buy Paul's prize steer,but at half its value.Paul feels he has no choice but to sell the steer,because he needs the money,so he agrees to sell it for half its value.Legally speaking,what has this neighbour done?

Accepted Answer

A) failed to act in the "utmost good faith" 
B) committed a morally objectionable,yet perfectly legal,act 
C) exerted undue influence over Paul 
D) coerced Paul into selling under duress 
E) exploited a "special relationship" 
A) failed to act in the "utmost good faith" 
B) committed a morally objectionable,yet perfectly legal,act 
C) exerted undue influence over Paul 
D) coerced Paul into selling under duress 
E) exploited a "special relationship"

Question 7

A contract entered into by reason of a mistake as to identity of a third party usually has an element of fraud.Explain.

Accepted Answer

This statement deals with contracts that

Question 8

A has a Tom Thomson painting that he wishes to sell.A has heard that B is an art lover and takes very good care of the paintings of Canadian masters.As a result,A decides that he will only contract with B.So he calls B and they make a deal over the telephone.Unfortunately,B's servant C overhears the conversation and before B can get to A's house,C arrives there pretending to be B.A sells the painting to C believing that C is B.Just after C leaves A's house,B shows up and A realizes his error.This situation is a classic example of

Accepted Answer

A) breach of contract. 
B) fraud or deceit. 
C) mistake by both parties as to the subject matter of the contract. 
D) unilateral mistake as to identity. 
E) all of the above 
A) breach of contract. 
B) fraud or deceit. 
C) mistake by both parties as to the subject matter of the contract. 
D) unilateral mistake as to identity. 
E) all of the above

Question 9

Explain the difference in approach of common law and equity to a contract that is entered into by a party under a mistake as to identity caused by the fraud or deceit of the other party.

Accepted Answer

The approach of common law to this situa

Question 10

Misrepresentation never gives rise to damages for torts as well as rescission in contract.

Accepted Answer

A) True 
 B)False

Question 11

James has an old car for sale.Betty views the car and in response to a question about the age of the car,James replies,"I think it is a 1929 Ford." Betty purchases the car,but the written contract makes no mention of the year of the car.Actually,the car is a 1932 Ford.What remedy does Betty have? What defenses are available to James?

Accepted Answer

Betty would have no remedy in this case.

Question 12

An innocent party can lose her or his right to repudiate a contract made with undue influence by

Accepted Answer

A) declaring that the special relationship between the parties no longer exists. 
B) not repudiating promptly after coming out from under the undue influence. 
C) tearing up the contract before its execution. 
D) physical retaliation after the contract's formation. 
E) reversing the role of the dominant party. 
A) declaring that the special relationship between the parties no longer exists. 
B) not repudiating promptly after coming out from under the undue influence. 
C) tearing up the contract before its execution. 
D) physical retaliation after the contract's formation. 
E) reversing the role of the dominant party.

Question 13

Common mistake is a situation in which both parties believe the same misunderstanding or mistake about the contract.

Accepted Answer

A) True 
 B)False

Question 14

The threat by one party that unless the other party enters into the contract,he will harm the other's child constitutes undue influence.

Accepted Answer

A) True 
 B)False

Question 15

Some current consumer protection legislation offers consumers a cooling-off period.If a consumer elects to cancel or rescind a contract during the cooling-off period,what reasons must she or he provide?

Accepted Answer

A consumer who exercises the right to ca

Question 16

An innocent party can lose her or his right to repudiate a contract formed as a result of undue influence by

Accepted Answer

A) physical retaliation after the contract's formation. 
B) not repudiating promptly after being freed from the domination. 
C) tearing up the contract before its execution. 
D) reversing the role of the dominant party. 
E) declaring that the special relationship between the parties no longer exists. 
A) physical retaliation after the contract's formation. 
B) not repudiating promptly after being freed from the domination. 
C) tearing up the contract before its execution. 
D) reversing the role of the dominant party. 
E) declaring that the special relationship between the parties no longer exists.

Question 17

When describing the car he had for sale,Jack told Jill it had genuine cowhide seat covers.The car in fact had imitation leather seat covers.Jill decided to buy the car,in part because she liked cowhide seat covers.The written contract made no mention of the type of seat covers.When Jill took possession of the car,she discovered that the seat covers were not cowhide and asked you the following questions:
a.What is the name of all potential causes of action that I have has against Jack?
b.What remedy or remedies can I seek?
c.What elements must I be able to prove in order to be successful?
Answer the above questions providing reasons for your answers.Express an opinion about the probable outcome of Jill's action.

Accepted Answer

a.Jill's potential cause of action again

Question 18

Cindy bought a car from Ben,who had bought it from John.When Ben bought the car,John lied to Ben and told him that the car had a new engine.As a result,believing that the engine was new,Ben told this to Cindy.Before she bought the car,Cindy had her mechanic inspect it and when Cindy asked him about the engine,he got her car confused with another customer's car and told her that it did indeed have a new engine.Cindy,who has owned the car for two months,has just discovered that the engine is not new and will need to be replaced soon.What remedy or remedies would Cindy most likely be entitled to and why?

Accepted Answer

A) rescission only from Ben for breach of contract 
B) damages from the mechanic for negligent misrepresentation 
C) rescission and damages from Ben for fraudulent misrepresentation 
D) rescission from the mechanic for negligent misrepresentation 
E) damages only from Ben for fraudulent misrepresentation 
A) rescission only from Ben for breach of contract 
B) damages from the mechanic for negligent misrepresentation 
C) rescission and damages from Ben for fraudulent misrepresentation 
D) rescission from the mechanic for negligent misrepresentation 
E) damages only from Ben for fraudulent misrepresentation

Question 19

Brandy wants to buy a car.Her credit rating will not allow her to borrow from a bank,so she goes to a private lender.This lender asks her to sign a contract that has lots of restrictive terms,which he rushes by without explaining or allowing her to read them.What is the issue?

Accepted Answer

A) innocent misrepresentation 
B) undue influence 
C) misrepresentation by omission 
D) fraudulent misrepresentation 
E) duress 
A) innocent misrepresentation 
B) undue influence 
C) misrepresentation by omission 
D) fraudulent misrepresentation 
E) duress

Question 20

Use the fact situation in Q30 to answer the related question that follows. Assume that before Mary signs the guarantee,she sees a lawyer for independent legal advice.Assume also that just before she signs the guarantee,the lawyer asks her if she is signing the guarantee freely and without threat of harm,duress,or undue influence and that Mary replies,"Yes,I am signing it freely and without threat of harm,duress,or undue influence." In these circumstances,if Mary changes her mind and does not want to be bound by the guarantee,

Accepted Answer

A) she will succeed because the bank cannot rely on the independent legal advice she received. 
B) she will succeed because the guarantee is void for duress. 
C) she will not succeed because of the doctrine of caveat emptor. 
D) she will succeed because the guarantee is voidable for duress. 
E) she will not succeed because the bank can rely on the independent legal advice she received. 
A) she will succeed because the bank cannot rely on the independent legal advice she received. 
B) she will succeed because the guarantee is void for duress. 
C) she will not succeed because of the doctrine of caveat emptor. 
D) she will succeed because the guarantee is voidable for duress. 
E) she will not succeed because the bank can rely on the independent legal advice she received.

Exam 9: Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

A legal mistake is an error in judgment.

The cooling-off period is a time during which a consumer may cancel or rescind a contract without any reason whatsoever.

Mistake about terms does NOT include

Which of the following is not a condition that must be met by a plaintiff who request rectification of a contract?

McKenzie purchases goods from Dormond.Later McKenzie goes to court and the court declares that the contract between McKenzie and Dormand is void.This means that

A contract entered into by reason of a mistake as to identity of a third party usually has an element of fraud.Explain.

Explain the difference in approach of common law and equity to a contract that is entered into by a party under a mistake as to identity caused by the fraud or deceit of the other party.

Misrepresentation never gives rise to damages for torts as well as rescission in contract.

An innocent party can lose her or his right to repudiate a contract made with undue influence by

Common mistake is a situation in which both parties believe the same misunderstanding or mistake about the contract.

The threat by one party that unless the other party enters into the contract,he will harm the other's child constitutes undue influence.

Some current consumer protection legislation offers consumers a cooling-off period.If a consumer elects to cancel or rescind a contract during the cooling-off period,what reasons must she or he provide?

An innocent party can lose her or his right to repudiate a contract formed as a result of undue influence by

Brandy wants to buy a car.Her credit rating will not allow her to borrow from a bank,so she goes to a private lender.This lender asks her to sign a contract that has lots of restrictive terms,which he rushes by without explaining or allowing her to read them.What is the issue?

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

Writing and Interpretation

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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