Exam 8: Factors Affecting the Contractual Relationship

Mary has a little scam most everywhere she goes. She sells by saying anything. Her buyers just have woes. Which of the following is true with regard to misrepresentation?

Back in the days when people in Vancouver sold houses as houses and not for demolition, Mrs. Reid prepared her house for the market by contracting with Silversteps Ltd. to have her front steps replaced for the sum of $2800. Warren, an employee of the company, worked for days framing the stairs and pouring the concrete. Unfortunately, he had done the framing wrong and, in addition, the concrete mix was faulty, so all of his efforts were in vain, and the stairs were not useable. On these facts, which of the following is true?

The facts of a case heard by the Supreme Court of Canada are as follows: Mr. and Mrs. H were induced to sign a mortgage in favour of M.C.R. Ltd. by Johnston, a man living with their daughter. Johnston led them to believe that the document was an unimportant amendment to an existing mortgage when, in reality, it was a second substantial mortgage on their home. Neither read the document or questioned it. When the payments were in arrears, the mortgagee took an action for foreclosure (to take their home). Mr. and Mrs. H. pleaded non est factum. Would this defence succeed? Why or why not?

Allen hired Beth to do a marketing survey. The contract provided that she would start the work on January 15 and finish it by March 15, the date for completion being a condition on the contract. She would be paid $2000. After one month of work, when the work was half completed, Beth assigned the $2000 contract price to Charlie, from whom she had bought computer hardware. Charlie gave written notice of the assignment to Allen on the same day. The second month's work went badly. Information entered into the computer was lost and Beth could not finish on time. She was five days late, and each day cost Allen $100. His total foreseeable loss was $500 because of her breach. On these facts, which of the following is true?

Explain what is meant by "vicarious performance."

If the person making the misrepresentation is in no way at fault, the misrepresentation is innocent, and the remedies are limited.

What is meant by the term "non est factum"?

In which scenario will the court likely find the contract void on the grounds of mistake?

A computer salesman innocently misrepresented a fact about a StarSystem computer to a customer. Although this fact was not about a term of the contract, it did induce the customer to buy the computer. The customer has now learned the true facts and wants to return the computer. If the store refuses to take it back, the customer would ask the court for which equitable remedy?

Distinguish between innocent and fraudulent misrepresentation, indicating why the distinction is important.

The major problem with ________ is the need to establish that the person being sued knowingly misled the victim.

Adam bought a boat from Charlie for $900 payable on November 6. On November 6, when Charlie came for the money, Adam didn't have it. Adam was, however, employed by Ms. Bey to do some market research. He was to be paid $1000 for his report, due on November 12. Charlie wanted an assignment of $900 of the amount Adam expected to receive November 12. Adam wrote out an assignment with all the essential information and signed it. Charlie gave written notice of the assignment with all pertinent information to Ms. Bey the next day, November 7. On November 12, Adam had not finished his report. The contract provided that he would lose $100 for every week he was late. Adam was two weeks late in submitting his report. Which of the following is true?

With regard to the law governing privity of contract and assignment, which of the following is true?

Explain what is meant by a "negotiable instrument."

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

In AMJ Campbell v. Kord Products Inc., a comma was inserted into the contract with the effect that both "freight" and "rebates" would be deducted from the sale price, rather than simply "freight rebates." This resulted in a difference of price amounting to $759,000. What was the result?

Joe agreed to paint Sam's house for $4000. Joe then assigned the $4000 claim to Harry, who served notice on Sam about the assignment. When it came time for payment, Harry was informed by Sam that he would not pay because the paint was peeling off his house. Harry said that that was nothing to do with him and demanded payment. Explain the legal position of the parties.

Duress takes place when one person takes advantage of another's vulnerability because of a special relationship with that person.

When a negotiable instrument is used, the drawer of the instrument cannot use the rule of privity to limit the claim of the holder.

An assignee is "subject to the equities," means that a negotiable instrument can never convey more than existed between the original parties.