Question 1

Restitution requires a giving back and a taking back on both sides.

Accepted Answer

A) True 
 B)False

Question 2

Parol evidence cannot be used to resolve ambiguous terms.

Accepted Answer

A) True 
 B)False

Question 3

Cavell is selling his CD burner to an acquaintance. Cavell knows that the CD burner has a defect, generating CDs that skip. The acquaintance asks Cavell for his opinion of the machine just before the purchase is to take place. All Cavell says is "I think it is totally awesome." Cavell has made a misrepresentation.

Accepted Answer

A) True 
 B)False

Question 4

Name a shortcoming of the literal approach to contractual interpretation. Provide an example to illustrate your point. How might this difficulty be overcome?

Accepted Answer

The most obvious shortcoming of the lite

Question 5

Molly decides to sell her house by way of a private sale. After advertising and showing the house, she receives a written offer from an interested purchaser using a standard form document assembled from a do- it- yourself legal kit. Molly studied the offer and wished to change two of its terms. The interested purchaser agreed to the changes and reflected those changes in the document. Molly signed the document and cashed the down payment cheque. Two days later, Molly spotted an extremely onerous and somewhat unusual term that was not brought to her attention when reading the document. As a result, Molly wishes to cancel the contract.Which of the following is most likely TRUE?

Accepted Answer

A)  Molly will fail but only because she cashed the cheque. 
B)  Molly will succeed because she was not given reasonable notice of the onerous and unusual term. 
C)  Molly will succeed because the term was onerous and unusual. 
D)  Molly will fail because she is bound by her signature. 
E)  none of the above 
A)  Molly will fail but only because she cashed the cheque. 
B)  Molly will succeed because she was not given reasonable notice of the onerous and unusual term. 
C)  Molly will succeed because the term was onerous and unusual. 
D)  Molly will fail because she is bound by her signature. 
E)  none of the above

Question 6

Entering into a collateral contract is sometimes done for evidentiary reasons (reasons of proof).

Accepted Answer

A) True 
 B)False

Question 7

Jacqui purchased a business from Dickie. During the pre- contractual negotiations, Dickie said, based on past experience, he expected that the business would earn approximately $1 000 000 per year. After that statement was made, but before the contract was signed, Dickie learned that the manufacturer that supplied his business with the materials that it needed was going out of business. Dickie realized that, because of the need to purchase materials from another manufacturer, his business could only be expected to earn $700 000 per year, regardless of whether it was run by himself or by Jacqui. Afraid that that news would scare off Jacqui, Dickie decided to keep the new information to himself. Jacqui completed the purchase of Dickie's business, but was very disappointed when it earned only $700 000 in its first year. She now wants to sue Dickie. Which of the following statements is TRUE?

Accepted Answer

A)  Dickie cannot be held liable because Jacqui ought to have independently confirmed his statements. 
B)  Jacqui cannot successfully sue unless she can prove that Dickie's statements regarding the business's profits became a term of their contract. 
C)  Dickie cannot be held liable because his statement was an opinion about the future. 
D)  While Jacqui probably is entitled to damages, she cannot possibly receive rescission because the contract has already been completed. 
E)  none of the above 
A)  Dickie cannot be held liable because Jacqui ought to have independently confirmed his statements. 
B)  Jacqui cannot successfully sue unless she can prove that Dickie's statements regarding the business's profits became a term of their contract. 
C)  Dickie cannot be held liable because his statement was an opinion about the future. 
D)  While Jacqui probably is entitled to damages, she cannot possibly receive rescission because the contract has already been completed. 
E)  none of the above

Question 8

In what sense might a standard form agreement be beneficial to consumers? Briefly explain the downside of standard forms.

Accepted Answer

The economic strategy of a standard form

Question 9

Suppose that a term is not the result of a statement expressed by either of two negotiating parties. Which of the following is TRUE?

Accepted Answer

A)  It could only be a term of a contract between them if it is implied by a court. 
B)  It could only be a term of a contract between them if both parties subsequently affirm the term. 
C)  It could only be a term of a contract between them if it is an implied term. 
D)  It could only be a term of a contract between them if one party subsequently affirms the term. 
E)  It could never be a term of any contract between them. 
A)  It could only be a term of a contract between them if it is implied by a court. 
B)  It could only be a term of a contract between them if both parties subsequently affirm the term. 
C)  It could only be a term of a contract between them if it is an implied term. 
D)  It could only be a term of a contract between them if one party subsequently affirms the term. 
E)  It could never be a term of any contract between them.

Question 10

"It is imperative that all business contracts be in writing." Assess this statement. Is it accurate from a legal perspective? It is accurate from the perspective of risk management? Explain your reasoning.

Accepted Answer

Strictly speaking, it is not legally acc

Question 11

If Vasaliki is induced to enter into a contract as a consequence of a statement made by Lampros with reckless indifference as to its truth, Vasaliki has an automatic right to rescission and may also get damages if the statement is fraudulent.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is TRUE with respect to a contractual clause that protects one party from the consequences of breach?

Accepted Answer

A)  Such clauses may reduce or limit liability, but they cannot entirely exclude liability. 
B)  Depending upon the circumstances, such clauses may be enforced even if the party who wants to sue for breach did not read the clause. 
C)  Such clauses are enforced only if they appear in written and signed contracts. 
D)  Such clauses are invalid if they are written in ambiguous language. 
E)  Such clauses are enforced only if they are the product of equal bargaining power. 
A)  Such clauses may reduce or limit liability, but they cannot entirely exclude liability. 
B)  Depending upon the circumstances, such clauses may be enforced even if the party who wants to sue for breach did not read the clause. 
C)  Such clauses are enforced only if they appear in written and signed contracts. 
D)  Such clauses are invalid if they are written in ambiguous language. 
E)  Such clauses are enforced only if they are the product of equal bargaining power.

Question 13

A contractual promise cannot be false at the time it is uttered.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is NOT true of the contra proferentum rule?

Accepted Answer

A)  It attributes to a term the meaning least favourable to its author. 
B)  It is a rule of contractual interpretation. 
C)  It provides an incentive for the author of a term to draft it in clear and unambiguous language. 
D)  It is always the best means of resolving an ambiguous term. 
E)  none of the above statements are true. 
A)  It attributes to a term the meaning least favourable to its author. 
B)  It is a rule of contractual interpretation. 
C)  It provides an incentive for the author of a term to draft it in clear and unambiguous language. 
D)  It is always the best means of resolving an ambiguous term. 
E)  none of the above statements are true.

Question 15

An ambiguous contractual term

Accepted Answer

A)  never results in litigation. 
B)  will always have only one plausible meaning. 
C)  always results in litigation. 
D)  will always have more than one plausible meaning. 
E)  none of the above 
A)  never results in litigation. 
B)  will always have only one plausible meaning. 
C)  always results in litigation. 
D)  will always have more than one plausible meaning. 
E)  none of the above

Question 16

Which of the following statements is TRUE with respect to misrepresentations?

Accepted Answer

A)  A pre- contractual misrepresentation may trigger relief in contract but not relief in tort. 
B)  A negligent misrepresentation may trigger damages but not rescission. 
C)  An innocent misrepresentation may trigger an award of damages. 
D)  An innocent misrepresentation may be rescinded. 
E)  A fraudulent misrepresentation may trigger rescission but not damages. 
A)  A pre- contractual misrepresentation may trigger relief in contract but not relief in tort. 
B)  A negligent misrepresentation may trigger damages but not rescission. 
C)  An innocent misrepresentation may trigger an award of damages. 
D)  An innocent misrepresentation may be rescinded. 
E)  A fraudulent misrepresentation may trigger rescission but not damages.

Question 17

Samuel and Ben are negotiating the sale of a sailboat. Samuel expresses an interest in the boat but emails Ben a list of five questions that he wants answered before agreeing to purchase it. Ben responds with full answers to four of the questions. Samuel emails back and says he will buy the boat on Saturday as long as his remaining question (about the state of its hull) checks out okay. Ben promises to check with his boat mechanic and respond before they are scheduled to meet on Saturday. Both men get busy. Ben checks with his mechanic but innocently forgets to report back to Samuel that there is a crack in the hull. Samuel forgets that there was one question outstanding. Saturday comes and the transaction takes place. If it turns out that there is a significant problem with the hull of the boat, which of the following is TRUE?

Accepted Answer

A)  If he sues, Samuel will likely succeed in a tort action. 
B)  Samuel is stuck with the boat. 
C)  Ben may seek to get his boat back even if Samuel wants to keep it. 
D)  Ben may have to take the boat back and return Samuel's money. 
E)  If he sues, Samuel will likely obtain a damage award. 
A)  If he sues, Samuel will likely succeed in a tort action. 
B)  Samuel is stuck with the boat. 
C)  Ben may seek to get his boat back even if Samuel wants to keep it. 
D)  Ben may have to take the boat back and return Samuel's money. 
E)  If he sues, Samuel will likely obtain a damage award.

Question 18

What does it mean to say that a pre- contractual representation is NOT promissory in nature?

Accepted Answer

A statement that is promissory in nature

Question 19

A purchaser explains to his real estate agent that he wants to buy a house containing a suite that would generate rental income. The agent showed and sold to him a house with a basement suite. After taking possession of the house, the purchaser discovered that the previous owner had been renting the basement unlawfully. No permit to build the suite had been obtained, nor could it have been obtained because the ceiling was too low and the lot too small. It turned out that the agent knew about these legal requirements and knew that they had not been met. She said nothing. Is the law of misrepresentation actionable? Explain your reasoning.

Accepted Answer

Because the agent knew that the purchase

Question 20

Which of the following approaches to contractual interpretation will ONLY SOMETIMES give words their plain, ordinary meaning?

Accepted Answer

A)  the contextual approach 
B)  the golden rule 
C)  the contra proferentum rule 
D)  the literal approach 
E)  none of the above 
A)  the contextual approach 
B)  the golden rule 
C)  the contra proferentum rule 
D)  the literal approach 
E)  none of the above

Exam 9: Representations and Terms

Restitution requires a giving back and a taking back on both sides.

Parol evidence cannot be used to resolve ambiguous terms.

Name a shortcoming of the literal approach to contractual interpretation. Provide an example to illustrate your point. How might this difficulty be overcome?

Entering into a collateral contract is sometimes done for evidentiary reasons (reasons of proof).

In what sense might a standard form agreement be beneficial to consumers? Briefly explain the downside of standard forms.

Suppose that a term is not the result of a statement expressed by either of two negotiating parties. Which of the following is TRUE?

"It is imperative that all business contracts be in writing." Assess this statement. Is it accurate from a legal perspective? It is accurate from the perspective of risk management? Explain your reasoning.

If Vasaliki is induced to enter into a contract as a consequence of a statement made by Lampros with reckless indifference as to its truth, Vasaliki has an automatic right to rescission and may also get damages if the statement is fraudulent.

Which of the following statements is TRUE with respect to a contractual clause that protects one party from the consequences of breach?

A contractual promise cannot be false at the time it is uttered.

Which of the following is NOT true of the contra proferentum rule?

An ambiguous contractual term

Which of the following statements is TRUE with respect to misrepresentations?

What does it mean to say that a pre- contractual representation is NOT promissory in nature?

Which of the following approaches to contractual interpretation will ONLY SOMETIMES give words their plain, ordinary meaning?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

The Nature and Creation of Contracts

Consideration and Privity

Contractual Defects

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Special Contracts: Negotiable Instruments

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Personal Property: Bailment and Insurance

Knowledge-Based Businesses and Intellectual Property

Electronic Commerce

Agency and Other Methods of Carrying on Business

Basic Forms of Business Organizations

Legal Rules for Corporate Governance

Secured Transactions

Dealing With Bankruptcy and Insolvency

Government Regulation of Business

Individual Employment

Organized Labour

Doing Business in a Global Economy

Filters