Question 1

Explain the difference between a deposit and a down payment.

Accepted Answer

A deposit is a sum of money paid by the buyer to the seller to be forfeited if the buyer does not perform the buyer's part of the bargain,while a down payment is a sum of money paid by a buyer as an initial part of the purchase price.Generally speaking,the distinction is important,because a deposit is meant to protect a seller at least to that extent in the event of the buyer's non-acceptance,while the effect of a down payment will depend on whether title to the goods has passed at the time of the buyer's repudiation.

Question 2

Absent any agreement to the contrary between the parties where there is an unconditional contract for the sale of specific goods in a deliverable state,title passes when the goods are ultimately delivered or picked up by the purchaser.

Accepted Answer

A) True 
 B)False  False

Question 3

A cooling-off period in door-to-door selling

Accepted Answer

A) is for a period of 48 hours. 
B) applies to goods but not services. 
C) has the same provisions throughout Canada. 
D) departs from an established common law rule. 
E) only applies to sales over $100. 
A) is for a period of 48 hours. 
B) applies to goods but not services. 
C) has the same provisions throughout Canada. 
D) departs from an established common law rule. 
E) only applies to sales over $100. D

Question 4

Risk of loss and title to goods go hand in hand.Explain.

Accepted Answer

Where the contract is silent a

Question 5

Caveat emptor is a worthwhile argument for the seller when

Accepted Answer

A) it is under the scope of Sales of Goods Act. 
B) the goods are not specific. 
C) the goods are not in existence. 
D) the seller has made some misrepresentation. 
E) the seller does not have title. 
A) it is under the scope of Sales of Goods Act. 
B) the goods are not specific. 
C) the goods are not in existence. 
D) the seller has made some misrepresentation. 
E) the seller does not have title.

Question 6

Donald visited the premises owned by Mary's Hay Farm Ltd.and viewed a stack of more than 4000 bales of hay.He agreed to purchase 800 bales for $2.00 per bale.He paid the $1600 and advised that he was going to get his truck and would return in about three hours.When Donald returned three hours later he noticed that there was a smoldering pile of debris where the stack of bales had previously been.The entire stack had been destroyed.Who is entitled to the $1600? Give the legal basis for your answer.What additional fact do you need to know in order to confirm your answer?

Accepted Answer

Title to unascertained goods does not pa

Question 7

Amos has purchased a discontinued radio clock from the local discount electronics outlet.Upon arriving home,he notices that the timer is not functional.He wonders if he could legally demand his money back and consults you.You tell him that

Accepted Answer

A) sellers are strictly liable for what they sell,so simply bring it back for a refund. 
B) there is an implied condition that the goods will be of "merchantable quality." 
C) since the item was discontinued,all sales are final,and the store does not need to return his money. 
D) title has not passed until the seller has "put item into a deliverable state." 
E) he should first consult the bill of sale for any exemption clauses. 
A) sellers are strictly liable for what they sell,so simply bring it back for a refund. 
B) there is an implied condition that the goods will be of "merchantable quality." 
C) since the item was discontinued,all sales are final,and the store does not need to return his money. 
D) title has not passed until the seller has "put item into a deliverable state." 
E) he should first consult the bill of sale for any exemption clauses.

Question 8

Shannon Smith sold her five-year-old Toyota to Doris Night on February 3.On the contract of sale,which both signed,she put the words "as is".Doris had test-driven the car with Shannon present on February 1 and had commented on a rattle in the front end and some noises in the transmission.Shannon replied to those inquiries as follows: "I think the rattle is from a loose heater cable and I know there are no transmission problems." On February 5,Doris telephoned Shannon and advised her that the car was inoperable because the transmission had seized up and Doris wanted to know what Shannon was going to do about it.That evening in the bar Shannon told her friends the above and they had the following comments and advice:
(a)Don't pay any attention to Doris,caveat emptor applies.
(b)Since the car has been delivered the contract is discharged by performance.
(c)Since you allowed Doris to examine the car and test drive it the transmission failure is solely Doris' problem.
(d)You shouldn't have said anything about the transmission but because you did you must fix the car or take it back and refund the purchase price.Shannon does not know what to do and asks for your advice.Comment on each of the (a)to (d)above with respect to the legal basis for each comment and its accuracy.Express your opinion of the liability (if any)of Shannon.

Accepted Answer

Statements (a),(b),and (c)are inaccurate

Question 9

What is wrongful detention,and what does it entitle a buyer to do?

Accepted Answer

Wrongful detention is a tort t

Question 10

Exemption clauses are not capable of excluding liability for breach of the implied Sale of Goods Act warranties if the purchaser is a consumer.

Accepted Answer

A) True 
 B)False

Question 11

When goods are sold by sample as well as description,which of the following statements is correct?

Accepted Answer

A) If the goods all correspond with the description,the bulk need not correspond with the sample. 
B) The description must be in expressed terms,otherwise we go by the sample. 
C) The goods must be of merchantable quality. 
D) The bulk of the goods must correspond with the sample only. 
E) The goods must correspond to the description and the bulk must correspond with the sample. 
A) If the goods all correspond with the description,the bulk need not correspond with the sample. 
B) The description must be in expressed terms,otherwise we go by the sample. 
C) The goods must be of merchantable quality. 
D) The bulk of the goods must correspond with the sample only. 
E) The goods must correspond to the description and the bulk must correspond with the sample.

Question 12

Every year a convention is held in Ontario by manufacturers and suppliers of after-market automobile accessories.Bill Sampson of Sampson Motors in Toronto attends the convention with the intention of purchasing new and innovative after-market products.On the first day of the convention Sampson sees two custom-made bike racks suitable for his in-stock pickup trucks.He purchases both bike racks from Bob Kerr of Kerr's Bikes & Accessories.Kerr agrees to accept payment by way of cheque.Kerr also allows Sampson the opportunity to pick the bike racks up on Friday morning.After the convention closes Thursday evening for the night,the bike racks are stolen.Having regard to the Sale of Goods Act rules for passing of title,had title to the goods passed to Sampson at the time of the theft?

Accepted Answer

Unless otherwise agreed to,the Sale of G

Question 13

The definition of chattels includes all of the below EXCEPT

Accepted Answer

A) animals. 
B) buildings. 
C) pieces of land. 
D) goods that derive their value intrinsically. 
E) furniture. 
A) animals. 
B) buildings. 
C) pieces of land. 
D) goods that derive their value intrinsically. 
E) furniture.

Question 14

Every year at the end of the selling season in September,Jones & Co.,a furniture manufacturer,offers special discounts on wholesale prices for the furniture it has not sold.S Co.goes to Jones & Co.'s warehouse and buys all remaining leather sofas and pays for them.In the presence of S Co.'s representative,the sofas are immediately set aside on the warehouse loading dock for pick up by S Co.the next day.That night,the sofas are destroyed by a warehouse fire.In this case

Accepted Answer

A) title of the sofas does not pass to S Co.until the sofas are actually on S Co.'s truck. 
B) title of the sofas passed to S Co.when the sofas were set aside on the loading dock. 
C) title of the sofas does not pass to S Co.until it comes to pick them up. 
D) title of the sofas did not pass to S Co.because leather sofas were not specified in the contract. 
E) title of the sofas does not pass to S Co.because the contract for the sofas is a conditional contract. 
A) title of the sofas does not pass to S Co.until the sofas are actually on S Co.'s truck. 
B) title of the sofas passed to S Co.when the sofas were set aside on the loading dock. 
C) title of the sofas does not pass to S Co.until it comes to pick them up. 
D) title of the sofas did not pass to S Co.because leather sofas were not specified in the contract. 
E) title of the sofas does not pass to S Co.because the contract for the sofas is a conditional contract.

Question 15

Colin had been having trouble with wild animals.He asked the sales associate at Hardware Sales what kind of motion detection light would be best to install in his pump house.According to the Sale of Goods Act,Colin should expect a light that

Accepted Answer

A) would not be restricted by the usual exemption clauses. 
B) will need careful installation for the product to be warranteed. 
C) meets his description. 
D) requires skill and labour for installation,therefore is not protected by the Act. 
E) is reasonably fit for the purpose. 
A) would not be restricted by the usual exemption clauses. 
B) will need careful installation for the product to be warranteed. 
C) meets his description. 
D) requires skill and labour for installation,therefore is not protected by the Act. 
E) is reasonably fit for the purpose.

Question 16

The vendor's remedy of lien only exists in certain circumstances.List three circumstances in which a contract of sale creates a right of lien for the seller.

Accepted Answer

The right of a vendor to maintain a vend

Question 17

Jack is a sales agent.He takes delivery of motor vehicles and sells them from his dealership.When Jack makes a sale,the property in the goods passes between Jack and the buyer.

Accepted Answer

A) True 
 B)False

Question 18

ABC Ltd.enters into a contract on the sale of a filing cabinet,which was located in their Halifax warehouse.If the filing cabinet was destroyed while being transported from Halifax to the purchaser's business premises in Moncton,who would bear the loss if the terms of the contract were:
(a)FOB Halifax
(b)COD
(c)CIF Moncton

Accepted Answer

(a)FOB (free on board)Halifax means that

Question 19

Janice purchased a new home and entered into a rental contract for a sprinkler system.There were no services provided by the lawn care company,only the sprinkler system itself which was installed by Janice.One of the sprinkler heads did not function properly and ran continuously after hours.Janice's basement flooded and she sued the company for damages.The contract contained an exemption clause restricting the lawn care company's liability for water damage to $100.Additionally the contract did not include any express term with respect to fitness for purpose.In these circumstances,given that services were not provided by the seller in relation to a consumer contract,Janice would likely

Accepted Answer

A) fail at trial because exemption clauses are permitted by sale of goods legislation. 
B) succeed at trial because sellers cannot escape liability in relation to consumer contracts by requiring buyers to sign exemption clauses. 
C) fail because the contract was not breached by the seller. 
D) fail because the damages sustained by Janice were too remote and did not flow from the loss. 
E) succeed because Janice installed the sprinkler system on her own and likely was not given proper instructions from seller. 
A) fail at trial because exemption clauses are permitted by sale of goods legislation. 
B) succeed at trial because sellers cannot escape liability in relation to consumer contracts by requiring buyers to sign exemption clauses. 
C) fail because the contract was not breached by the seller. 
D) fail because the damages sustained by Janice were too remote and did not flow from the loss. 
E) succeed because Janice installed the sprinkler system on her own and likely was not given proper instructions from seller.

Question 20

One of the remedies of a seller is to maintain a lien on the goods.When does the right to a lien end?

Accepted Answer

A seller only has a right to maintain a

Exam 14: Sale of Goods and Consumer Contracts

Explain the difference between a deposit and a down payment.

Absent any agreement to the contrary between the parties where there is an unconditional contract for the sale of specific goods in a deliverable state,title passes when the goods are ultimately delivered or picked up by the purchaser.

A cooling-off period in door-to-door selling

Risk of loss and title to goods go hand in hand.Explain.

Caveat emptor is a worthwhile argument for the seller when

Amos has purchased a discontinued radio clock from the local discount electronics outlet.Upon arriving home,he notices that the timer is not functional.He wonders if he could legally demand his money back and consults you.You tell him that

What is wrongful detention,and what does it entitle a buyer to do?

Exemption clauses are not capable of excluding liability for breach of the implied Sale of Goods Act warranties if the purchaser is a consumer.

When goods are sold by sample as well as description,which of the following statements is correct?

The definition of chattels includes all of the below EXCEPT

Colin had been having trouble with wild animals.He asked the sales associate at Hardware Sales what kind of motion detection light would be best to install in his pump house.According to the Sale of Goods Act,Colin should expect a light that

The vendor's remedy of lien only exists in certain circumstances.List three circumstances in which a contract of sale creates a right of lien for the seller.

Jack is a sales agent.He takes delivery of motor vehicles and sells them from his dealership.When Jack makes a sale,the property in the goods passes between Jack and the buyer.

One of the remedies of a seller is to maintain a lien on the goods.When does the right to a lien end?

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

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

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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