Question 1

The BEST way for a company to manage the risk associated with standard form agreements is to

Accepted Answer

A)  require customers to clearly indicate their agreement to be bound by any onerous or unusual terms. 
B)  frequently redesign the standard form agreement to ensure that customers must read through the form each time they sign it. 
C)  conceal ambiguous language at the end of the agreement to avoid customer confusion. 
D)  teach employees the meaning of onerous and ambiguous contract terms. 
E)  all of the above 
A)  require customers to clearly indicate their agreement to be bound by any onerous or unusual terms. 
B)  frequently redesign the standard form agreement to ensure that customers must read through the form each time they sign it. 
C)  conceal ambiguous language at the end of the agreement to avoid customer confusion. 
D)  teach employees the meaning of onerous and ambiguous contract terms. 
E)  all of the above

Question 2

The possible consequences of actionable misrepresentation include

Accepted Answer

A)  the remedy of an injunction. 
B)  a damage award for breach of contract. 
C)  the remedy of an incision. 
D)  the remedy of rescission. 
E)  none of the above 
A)  the remedy of an injunction. 
B)  a damage award for breach of contract. 
C)  the remedy of an incision. 
D)  the remedy of rescission. 
E)  none of the above

Question 3

Why do insurance contracts require a duty of utmost good faith?

Accepted Answer

The duty of utmost good faith arises bec

Question 4

Which of the following best describes an implied term?

Accepted Answer

A)  It can be used to rectify a mistake in a contractual document. 
B)  It is a statement expressed by one of the parties. 
C)  It is sometimes inserted into a contract by a court. 
D)  It cannot create an enforceable legal obligation. 
E)  none of the above 
A)  It can be used to rectify a mistake in a contractual document. 
B)  It is a statement expressed by one of the parties. 
C)  It is sometimes inserted into a contract by a court. 
D)  It cannot create an enforceable legal obligation. 
E)  none of the above

Question 5

Diamond Dave decides to sell his donut franchise to Fast Freddie. Freddie has a number of questions about the receivables. Diamond Dave says that all of the answers to his questions can be found in the corporate ledger. Instead of inspecting the ledger, Fast Freddie hires an accounting firm to do a forensic audit of the business. Relying on the audit, Freddie buys the business. Which of the following explains why Freddie would fail to obtain rescission if he later decided he did not like the transaction?

Accepted Answer

A)  Diamond Dave was not reckless with his ledger. 
B)  Diamond Dave's corporate ledger was not relied upon by Freddie. 
C)  Diamond Dave was not careless with his ledger. 
D)  Diamond Dave did not make any false statements. 
E)  all of the above 
A)  Diamond Dave was not reckless with his ledger. 
B)  Diamond Dave's corporate ledger was not relied upon by Freddie. 
C)  Diamond Dave was not careless with his ledger. 
D)  Diamond Dave did not make any false statements. 
E)  all of the above

Question 6

Can an express term ever be overridden by an implied term? Explain your reasoning and provide an example.

Accepted Answer

Express terms can be overridden by terms

Question 7

A person who investigates rather than relying on a pre- contractual statement will usually succeed in an action for misrepresentation whenever the statement turns out to be untrue.

Accepted Answer

A) True 
 B)False

Question 8

What does it mean to say that an exclusion clause is always read contra proferentum? Why do you think that this is a consistent judicial practice?

Accepted Answer

It means that ambiguous aspects of an ex

Question 9

Reeni was interested in purchasing a car. After searching the classified ads, she found a car in which she was interested, being sold by Ethan whom she had never met. Ethan knew that his car was in need of new tires, a new muffler, and would soon need a new clutch and a brake job. Consequently, he was hoping that, when they met, Reeni wouldn't ask too many questions. When she wanted to go for a test drive, Ethan gave her the keys and said that he trusted her to go alone and that doing so would allow her to test it in a less inhibited fashion. Really, he just didn't want her to ask about any of the car's problems. Reeni took the car by herself and, on the basis of its performance, bought it at Ethan's listed price, no questions asked. Which of the following statements is most likely TRUE?

Accepted Answer

A)  Silence can never amount to a misrepresentation. 
B)  Ethan is not required to disclose the car's problems during pre- contractual negotiations. 
C)  Reeni would succeed in an action against Ethan for misrepresentation. 
D)  Ethan owed Reeni a special duty to disclose the problems with his car. 
E)  By failing to accompany Reeni in the test drive, Ethan breached a duty of utmost good faith. 
A)  Silence can never amount to a misrepresentation. 
B)  Ethan is not required to disclose the car's problems during pre- contractual negotiations. 
C)  Reeni would succeed in an action against Ethan for misrepresentation. 
D)  Ethan owed Reeni a special duty to disclose the problems with his car. 
E)  By failing to accompany Reeni in the test drive, Ethan breached a duty of utmost good faith.

Question 10

Justice Howe, a member of the Supreme Court of Canada, is deciding a case that deals with a complicated commercial agreement between two sophisticated and experienced companies. The resolution of the case depends upon the interpretation of several clauses in that agreement. Which of the following statements is TRUE?

Accepted Answer

A)  Given the nature of the parties and the contract, Justice Howe cannot decide that their agreement contains implied terms. 
B)  In order to decide the case, the judge may need to know which party drafted the agreement. 
C)  The golden rule of interpretation, which says "do unto others as you would have others do unto you," requires the judge to adopt whichever interpretation of the contract that favours both parties equally. 
D)  The contextual approach to interpretation requires a particular clause to be interpreted exclusively by reference to its own terms and the terms of the other clauses within the contract. 
E)  The general rules governing the interpretation of contracts do not apply in the Supreme Court of Canada because that court is expected to arrive at the fairest result regardless of the rules. 
A)  Given the nature of the parties and the contract, Justice Howe cannot decide that their agreement contains implied terms. 
B)  In order to decide the case, the judge may need to know which party drafted the agreement. 
C)  The golden rule of interpretation, which says "do unto others as you would have others do unto you," requires the judge to adopt whichever interpretation of the contract that favours both parties equally. 
D)  The contextual approach to interpretation requires a particular clause to be interpreted exclusively by reference to its own terms and the terms of the other clauses within the contract. 
E)  The general rules governing the interpretation of contracts do not apply in the Supreme Court of Canada because that court is expected to arrive at the fairest result regardless of the rules.

Question 11

Contracts of utmost good faith

Accepted Answer

A)  have no bearing on the law of misrepresentation. 
B)  arise when one party is uniquely situated to know the material facts. 
C)  do not require notification of any changes to previously supplied information. 
D)  are the only contracts that do not require any kind of disclosure. 
E)  none of the above 
A)  have no bearing on the law of misrepresentation. 
B)  arise when one party is uniquely situated to know the material facts. 
C)  do not require notification of any changes to previously supplied information. 
D)  are the only contracts that do not require any kind of disclosure. 
E)  none of the above

Question 12

A contractual term

Accepted Answer

A)  is made with the intention to induce a contract. 
B)  is a promissory statement. 
C)  is a form of misrepresentation. 
D)  does not impose a contractual obligation. 
E)  all of the above 
A)  is made with the intention to induce a contract. 
B)  is a promissory statement. 
C)  is a form of misrepresentation. 
D)  does not impose a contractual obligation. 
E)  all of the above

Question 13

Even if a lease does not expressly say that the item leased must come back in the same condition in which it went out (subject to reasonable wear and tear), a court will imply such a term. Courts will do so on the basis that such a term

Accepted Answer

A)  would improve the contract. 
B)  is in line with industry standards. 
C)  was clearly intended by both parties. 
D)  was clearly desirable. 
E)  all of the above 
A)  would improve the contract. 
B)  is in line with industry standards. 
C)  was clearly intended by both parties. 
D)  was clearly desirable. 
E)  all of the above

Question 14

Someone who signs a document when in a hurry is never bound by his signature.

Accepted Answer

A) True 
 B)False

Question 15

A contract requires reasonable notice of its terms

Accepted Answer

A)  only in the case of exclusion clauses. 
B)  only when its terms are onerous or unusual. 
C)  only when its terms are on the back of a ticket. 
D)  whenever a signature is required. 
E)  none of the above 
A)  only in the case of exclusion clauses. 
B)  only when its terms are onerous or unusual. 
C)  only when its terms are on the back of a ticket. 
D)  whenever a signature is required. 
E)  none of the above

Question 16

A misstatement of law is identical to a misstatement about the consequences of that law.

Accepted Answer

A) True 
 B)False

Question 17

Preetpal purchased a ticket to ride on a train from Toronto to Ottawa. After she had boarded the train, she was asked if she wished to place her outerwear and backpack into a storage unit on the train. Because she did not want to be encumbered during her journey, she accepted the offer. She was given a "small baggage claims" ticket before handing over her coat and belongings. When the train arrived in Ottawa, and Preetpal tried to collect her coat, she was told that it could not be found. When she threatened to sue, the person who was representing the train told Preetpal that the back of the "small baggage claims" ticket she received excluded liability for lost or stolen goods. Regardless of any other facts, Preetpal can be bound by the exclusion clause only if

Accepted Answer

A)  it was explained to her when she first bought her train ticket. 
B)  she actually read it. 
C)  was written in a font that was larger than the font that otherwise appeared on the ticket. 
D)  the clause was written in a language that she can read. 
E)  none of the above. 
A)  it was explained to her when she first bought her train ticket. 
B)  she actually read it. 
C)  was written in a font that was larger than the font that otherwise appeared on the ticket. 
D)  the clause was written in a language that she can read. 
E)  none of the above.

Question 18

Which of the following cannot result in a damage award?

Accepted Answer

A)  silence that distorts a previous assertion 
B)  fraudulent misrepresentation 
C)  innocent misrepresentation 
D)  negligent misrepresentation 
E)  breach of contract 
A)  silence that distorts a previous assertion 
B)  fraudulent misrepresentation 
C)  innocent misrepresentation 
D)  negligent misrepresentation 
E)  breach of contract

Question 19

A pre- contractual representation

Accepted Answer

A)  is a promissory statement. 
B)  creates a legally enforceable obligation. 
C)  is a voluntary agreement to do something in the future. 
D)  will always induce a contract. 
E)  can be made by words or conduct. 
A)  is a promissory statement. 
B)  creates a legally enforceable obligation. 
C)  is a voluntary agreement to do something in the future. 
D)  will always induce a contract. 
E)  can be made by words or conduct.

Question 20

Consumer protection laws in several jurisdiction including Manitoba, Northwest Territories, and the Yukon

Accepted Answer

A)  makes it a crime to sell used goods. 
B)  implies a term that goods being sold are new unless otherwise described. 
C)  makes it a tort to sell used goods. 
D)  has been repealed. 
E)  implies a term that goods being sold are used unless otherwise described. 
A)  makes it a crime to sell used goods. 
B)  implies a term that goods being sold are new unless otherwise described. 
C)  makes it a tort to sell used goods. 
D)  has been repealed. 
E)  implies a term that goods being sold are used unless otherwise described.

Exam 9: Representations and Terms

The BEST way for a company to manage the risk associated with standard form agreements is to

The possible consequences of actionable misrepresentation include

Why do insurance contracts require a duty of utmost good faith?

Which of the following best describes an implied term?

Can an express term ever be overridden by an implied term? Explain your reasoning and provide an example.

A person who investigates rather than relying on a pre- contractual statement will usually succeed in an action for misrepresentation whenever the statement turns out to be untrue.

What does it mean to say that an exclusion clause is always read contra proferentum? Why do you think that this is a consistent judicial practice?

Contracts of utmost good faith

A contractual term

Even if a lease does not expressly say that the item leased must come back in the same condition in which it went out (subject to reasonable wear and tear), a court will imply such a term. Courts will do so on the basis that such a term

Someone who signs a document when in a hurry is never bound by his signature.

A contract requires reasonable notice of its terms

A misstatement of law is identical to a misstatement about the consequences of that law.

Which of the following cannot result in a damage award?

A pre- contractual representation

Consumer protection laws in several jurisdiction including Manitoba, Northwest Territories, and the Yukon

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

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