Question 1

What are the two main types of mistake in contract law?

Accepted Answer

The two main types of mistake

Question 2

Use this fact situation to answer the related questions that follow it. Marvin is an investment counsellor.Alice is one of Marvin's clients.Alice has no investment experience and relies on Marvin's advice in making her investments.Last night,while he was sleeping,Marvin had a dream that the shares of Very Big Company (VBC)would go up a great amount in value.As a result,without even checking to ensure that VBC was a good company to invest in,this morning Marvin called Alice and told her to put all of her money into VBC,which Alice did.Later that day VBC declared bankruptcy and Alice lost all of her money.
In these circumstances,Marvin's advice to Alice is

Accepted Answer

A) an example of undue influence. 
B) an innocent misrepresentation. 
C) a fraudulent misrepresentation. 
D) a mistake. 
E) a negligent misrepresentation. 
A) an example of undue influence. 
B) an innocent misrepresentation. 
C) a fraudulent misrepresentation. 
D) a mistake. 
E) a negligent misrepresentation.

Question 3

Kevin was desperate to save his business records and equipment from the rising flood waters.Just then,a stranger with a large truck drove by,and Kevin,feeling that he had little choice,said,"I'll give you your choice of my equipment if you help me save my business records and equipment." The stranger agreed and chose some equipment and a laptop computer.After the flood,Kevin demanded everything back.The stranger refused to return the new laptop computer.On what legal grounds can Kevin get his computer back?

Accepted Answer

A) undue influence 
B) duress 
C) coercion 
D) dire circumstances 
E) no basis;this is a valid contract that has fair consideration on both sides 
A) undue influence 
B) duress 
C) coercion 
D) dire circumstances 
E) no basis;this is a valid contract that has fair consideration on both sides

Question 4

A voidable contract is a contract that,

Accepted Answer

A) like a void contract,never exists so as to give rise to rights under it. 
B) unlike a void contract,cannot be rectified. 
C) unlike a void contract,exists but does not give rise to legal rights. 
D) unlike a void contract,exists but can only be set aside by agreement of the parties to it. 
E) unlike a void contract,exists but can be set aside at the option of one of the parties to it. 
A) like a void contract,never exists so as to give rise to rights under it. 
B) unlike a void contract,cannot be rectified. 
C) unlike a void contract,exists but does not give rise to legal rights. 
D) unlike a void contract,exists but can only be set aside by agreement of the parties to it. 
E) unlike a void contract,exists but can be set aside at the option of one of the parties to it.

Question 5

Explain the concept of rescission as it relates to mistake in contract law.

Accepted Answer

Rescission is an order of the court that

Question 6

Use this fact situation to answer the related questions that follow it. John lives with his wife,Mary,and regularly beats her,leaving Mary in a constant state of fear when John is around.John needs to borrow some money for his business,and so he goes to his bank and meets with the manager,who agrees to loan him the money,but only if both John and his wife sign a guarantee of the loan.John signs the guarantee in front of the manager and then takes it home to be signed by Mary.At home,John tells Mary to sign the guarantee "or else you know what will happen to you," so Mary signs the guarantee.
Mary's signing the guarantee under these circumstances is a classic example of

Accepted Answer

A) assault. 
B) fraud. 
C) duress. 
D) undue influence. 
E) diminished capacity. 
A) assault. 
B) fraud. 
C) duress. 
D) undue influence. 
E) diminished capacity.

Question 7

What is an entirety clause?

Accepted Answer

An entirety clause is a term in a contra

Question 8

Donna Brown owned a flower shop,which she was anxious to sell.Charles Blue visited her shop and discussed a possible purchase.During those discussions,Donna stated that she was sure 2013 sales would exceed $400 000 and that sales for 2012 were more than $360 000.Charles was impressed with those figures and offered to purchase the flower shop for $110 000 cash.The sale was completed one week later (November 24,2012)and was documented with a brief written agreement that did not include anything about past sales.In April 2013,Charles had the 2012 financial statement for the flower shop prepared and discovered that actual sales for 1997 were $320 000.In addition,Charles knew that 2013 sales were 5 percent below sales for the same period a year earlier.Charles confronted Donna with those figures and Donna was evasive and refused to accept any responsibility,saying only that the written agreement contained no mention of sales figures.Charles asks you the following questions:
a.Do I have a right to sue Donna,and if so,what is the legal basis for my action? What must I prove and what are my chances of success?
b.What remedies could I seek,and do I have different remedies from which I can choose?

Accepted Answer

(a)Because the representation about sale

Question 9

Jaime has agreed to buy Steve's 4x4 truck.When Steve used the truck last,it ran quite well,so he says "it is in good condition." Unfortunately,the truck sat in the humid weather for some time and the head gasket had rotted away to where the truck won't run.What,legally,should Jaime do?

Accepted Answer

A) nothing,since statements of opinion do not amount to misrepresentation 
B) sue for breach;the contract was corrupted by undue influence 
C) promptly demand rescission of the contract 
D) sue for fraudulent misrepresentation 
E) nothing,since this is a clear case of caveat emptor 
A) nothing,since statements of opinion do not amount to misrepresentation 
B) sue for breach;the contract was corrupted by undue influence 
C) promptly demand rescission of the contract 
D) sue for fraudulent misrepresentation 
E) nothing,since this is a clear case of caveat emptor

Question 10

With respect to sale of goods,the doctrine of caveat emptor offers buyers the right to rescind the contracts in situations where

Accepted Answer

A) both a dominant and subservient party exist. 
B) there is a clear title in the sale of goods. 
C) one party is in a vastly superior position of knowledge with respect to some matter that is of vital importance to the other party. 
D) there is an unconscionable transfer of goods. 
E) there is a failure to disclose a problem with the ownership of goods. 
A) both a dominant and subservient party exist. 
B) there is a clear title in the sale of goods. 
C) one party is in a vastly superior position of knowledge with respect to some matter that is of vital importance to the other party. 
D) there is an unconscionable transfer of goods. 
E) there is a failure to disclose a problem with the ownership of goods.

Question 11

When a court grants rectification of a contract,it

Accepted Answer

A) declares a contract to be unenforceable. 
B) changes the part of the document that was incorrect in the written document. 
C) sets aside the contract. 
D) declares the contract to be voidable. 
E) interprets the contract for the parties. 
A) declares a contract to be unenforceable. 
B) changes the part of the document that was incorrect in the written document. 
C) sets aside the contract. 
D) declares the contract to be voidable. 
E) interprets the contract for the parties.

Question 12

At common law,a mistake by an innocent party as to the identity of the other party usually involves

Accepted Answer

A) a mistaken assumption. 
B) fraud. 
C) the element of surprise. 
D) an ambiguous term. 
E) the element of risk. 
A) a mistaken assumption. 
B) fraud. 
C) the element of surprise. 
D) an ambiguous term. 
E) the element of risk.

Question 13

Regarding misrepresentation in a sale of land,

Accepted Answer

A) the purchaser must take it with all its faults. 
B) all defects must be revealed. 
C) rescission is liberally given for misrepresentation. 
D) caveat emptor. 
E) the seller is required to disclose all interests in ownership. 
A) the purchaser must take it with all its faults. 
B) all defects must be revealed. 
C) rescission is liberally given for misrepresentation. 
D) caveat emptor. 
E) the seller is required to disclose all interests in ownership.

Question 14

In law,"utmost good faith" means a level of trust in

Accepted Answer

A) not using undue influence. 
B) not making false assertions. 
C) disclosing all pertinent information concerning the contract. 
D) only giving factual statements. 
E) being aboveboard with all affairs. 
A) not using undue influence. 
B) not making false assertions. 
C) disclosing all pertinent information concerning the contract. 
D) only giving factual statements. 
E) being aboveboard with all affairs.

Question 15

In executing its discretion to grant relief when a party makes a mistake about terms,

Accepted Answer

A) the court will correct the document. 
B) the court will determine the burden of proof. 
C) the court will consider the hardship that will be suffered by each party. 
D) the court will adopt the position of the plaintiff. 
E) the court will determine each party's interpretation of the terms. 
A) the court will correct the document. 
B) the court will determine the burden of proof. 
C) the court will consider the hardship that will be suffered by each party. 
D) the court will adopt the position of the plaintiff. 
E) the court will determine each party's interpretation of the terms.

Question 16

Jonathan sells crates of tomatoes on board the SS Apapa to Margaret.At the time of the sale,both parties are unaware that the crates were washed overboard.What is the status of the contract between Jonathan and Margaret?

Accepted Answer

A) Jonathan is still the owner of the shipment.Jonathan bears the loss and will have to refund Margaret's money. 
B) Margaret has to pay the agreed price and recover from her insurance. 
C) The ownership passed to Margaret,but Jonathan is still in possession,and so he is liable. 
D) Margaret is the new owner of the tomatoes and has to bear the loss. 
E) Margaret may sue Jonathan for the tort of deceit. 
A) Jonathan is still the owner of the shipment.Jonathan bears the loss and will have to refund Margaret's money. 
B) Margaret has to pay the agreed price and recover from her insurance. 
C) The ownership passed to Margaret,but Jonathan is still in possession,and so he is liable. 
D) Margaret is the new owner of the tomatoes and has to bear the loss. 
E) Margaret may sue Jonathan for the tort of deceit.

Question 17

What is rectification? Explain its use by courts in situations involving mistake in law.

Accepted Answer

Rectification is the correction of a wri

Question 18

A contract that is void

Accepted Answer

A) is one that exists,but by reason of some mistake can be set aside. 
B) is one that exists,but is merely unenforceable. 
C) is one that does not exist,but can still be set aside. 
D) is one that does not exist unless a party wants it to,at which time it becomes enforceable. 
E) is one that never exists so as to give rise to rights under it. 
A) is one that exists,but by reason of some mistake can be set aside. 
B) is one that exists,but is merely unenforceable. 
C) is one that does not exist,but can still be set aside. 
D) is one that does not exist unless a party wants it to,at which time it becomes enforceable. 
E) is one that never exists so as to give rise to rights under it.

Question 19

Use this fact situation to answer the related questions that follow it. John Jones is an 80-year-old man who lives in Ontario.Two years ago,John made a will in which he left one-third of his entire estate (all of his assets)to each of his three children,Mary,George,and Edward.Harry told the children what he was leaving them just after he made his will.Since that time,Edward has been unhappy about getting only one-third of his father's estate,and for the past two years he has been telling his father that Mary and George really hate their father and cannot wait until he dies.Lately John has become ill,and because Edward is the only son in Ontario,he has been taking care of his father.Each time that Edward sees his father,which is two to three times a week,he reminds him about Mary's and George's feelings towards him and tells John that he is the only child who really loves his father.John,seeing how much care Edward is giving him,begins to believe Edward and decides to make a new will in which he leaves his entire estate to Edward and nothing to Mary and George.
George's changing his will under these circumstances is a classic example of

Accepted Answer

A) duress by Edward. 
B) fraud by Edward. 
C) deceit by Edward. 
D) undue influence by Edward. 
E) misrepresentation by Edward. 
A) duress by Edward. 
B) fraud by Edward. 
C) deceit by Edward. 
D) undue influence by Edward. 
E) misrepresentation by Edward.

Question 20

Mr.Chessman,an elderly man,is asking a prominent businessman,Mr.Ross,to sign a contract for the restoration of a downtown apartment building that Mr.Ross owns and that Mr.Chessman lives in.During the ensuing discussion,Mr.Chessman states,"And if you don't sign,your children may suffer." Mr.Ross reluctantly signs.Will this contract be enforceable against Mr.Ross? Explain.

Accepted Answer

Mr.Ross might try to declare this contra

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

What are the two main types of mistake in contract law?

A voidable contract is a contract that,

Explain the concept of rescission as it relates to mistake in contract law.

What is an entirety clause?

Jaime has agreed to buy Steve's 4x4 truck.When Steve used the truck last,it ran quite well,so he says "it is in good condition." Unfortunately,the truck sat in the humid weather for some time and the head gasket had rotted away to where the truck won't run.What,legally,should Jaime do?

With respect to sale of goods,the doctrine of caveat emptor offers buyers the right to rescind the contracts in situations where

When a court grants rectification of a contract,it

At common law,a mistake by an innocent party as to the identity of the other party usually involves

Regarding misrepresentation in a sale of land,

In law,"utmost good faith" means a level of trust in

In executing its discretion to grant relief when a party makes a mistake about terms,

Jonathan sells crates of tomatoes on board the SS Apapa to Margaret.At the time of the sale,both parties are unaware that the crates were washed overboard.What is the status of the contract between Jonathan and Margaret?

What is rectification? Explain its use by courts in situations involving mistake in law.

A contract that is void

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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