Exam 8: Factors Affecting the Contractual Relationship

What is the term used to describe a claim that results in a court declaring a contract void because a party is unaware of the nature of the contract?

An assignee can be in no better position than was the assignor.

Explain why agency is not really an exception to the privity rule.

Explain what is meant by a "constructive trust."

Explain what is meant by "privity of contract."

Al sells gravel to Bob on credit, and Bob sells it to Chuck, an innocent purchaser. Then Bob runs away with the money, without paying Al. Who will get the gravel if the court holds that the contract between Al and Bob was "void"?

For a contract to be unconscionable, it is necessary that the victim was particularly vulnerable and that the bargain was unfair.

Although Zlotnic had been in business a long time, he had been forced to borrow heavily in the last few years. When his debt reached the limit of his line of credit, $100,000, the manager of the Regal Bank called him in for a talk. Subsequently, Zlotnic sold his house for $250,000 to the Johnsons. He contracted to buy another house from the Scotts. From the proceeds he anticipated receiving from the Johnsons, he assigned $200,000 to the Scotts, the purchase price of Scott's house, and assigned $50,000 to the Regal Bank to reduce his debt. The assignment to the Scotts was in writing; the assignment to the bank was not. The Scotts gave written notice of the assignment to the Johnsons on March 1, the day the money was owed to Zlotnic. Johnson verified the assignment and paid out the $200,000 to the Scotts. On March 2, the Regal Bank gave written notice of its assignment to the Johnsons. Unfortunately, at that time only $45,000 was owing to Zlotnic because the Johnsons had paid $5000 to the Canada Revenue Agency for Zlotnic. On these facts, which of the following is true?

Explain what is meant by a "statutory assignment."

The law attempts to help persons who may feel forced to enter contracts. Which of the following is False with regard to the law of undue influence, duress, etc.?

A salesman innocently misrepresented a fact to a customer about a new printer. He honestly believed his statement was true and was not careless. Although this fact was not about a term of the contract, it did induce the customer to buy that printer. The next day, the customer learned the true facts and wanted to return the printer. If the store refused to take it back and the customer sued, which of the following would be the most likely result?

According to Braut v. Stec, what is the Courts' position when one enters into a contract where a claim is made that a bargain is unconscionable?

Explain what is meant by unjust enrichment.

Undue influence takes place when one person uses violence to force another to enter into a contract.

A fraudulent misrepresentation which induces another person to enter into a contract can result in which of the following remedies?

What is the significance of an assignment qualifying as a statutory assignment?

What is the significance of determining that the misrepresentation was negligent rather than innocent?

To avoid a contract on the basis of non est factum, the mistake must have gone to the entire nature of the agreement, not just some aspect of it.

The victim of fraudulent misrepresentation retains the right to have the parties to the contract returned to their original positions but not to be reimbursed for any out-of-pocket expenses.

Discuss how privity of contract affects the position of people who are not parties to a contract. In your discussion, include an examination of the Supreme Court decision in London Drugs Ltd. v. Kuehne & Nagel International Ltd.