Exam 8: Factors Affecting the Contractual Relationship

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

Indicate three situations where the courts will presume a relationship to involve undue influence.

In what way is a trust an exception to the privity rule?

A misrepresentation must be a False statement of fact unless it is a statement by an expert.

An 80-year-old woman signed, in the presence of a solicitor, a contract for land by which she sold property to her daughter. She later asked the court to set the contract aside on the grounds of non est factum (mistake) and undue influence. Which of the following is true with regard to these grounds for the contract?

It came to your attention that your great-grandmother had signed a contract pursuant to which she would be paying $5000 for an electronic organ that retails in reputable stores for $3000. Furthermore, the interest being charged is 18%, even though today's rate fell to a 20-year low. This debt is totally out of line with her pension income. It is apparent that she was misled by the door-to-door salesman who came to her place. On these facts, which of the following laws is the most likely to help her?

Which one of the following will be excluded by the parol evidence rule?

On September 1, Beeton contracted to sell $4000 worth of specified Kenyan lumber to Cairns. Beeton expected the arrival of the lumber soon, so the delivery date was set for September 8. On September 5, Beeton assigned, in writing, his contractual right to receive the $4000 to his bank, which was pressing him to reduce his $17,000 debt. The bank sent a written notice to Cairns instructing him to forward the $4000 to the bank and not to pay Beeton directly. Unknown to either Beeton or Cairns, the lumber had been lost at sea in August, before they had even entered the contract. On these facts, which of the following is true?

Mr. Zink hired Bruce Dorne to create a payroll program for his business. Bruce was to be paid $4000 for the program. When Bruce was half finished, a creditor to whom he owed $2000 pressed so hard for payment that Bruce assigned him $2000 of the contract price, an amount he felt he had earned already. The creditor, Mr. Pressing, gave written notice that very day to Mr. Zink. On these facts, which of the following is true? (Read each statement separately.)

Mr. and Mrs. H were induced to sign a mortgage in favour of M Co. 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 of 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). Which of the following is correct with respect to the legal position of the parties?

You and your parents were both surprised when grandmother said the doctor told her to come for weekly checkups, because she didn't seem sick. Nevertheless, you dutifully took her to and from her appointments for a period of about six months. She never talked about these sessions, but loved to go. Now she has come to the family and said that she is sorry that she gave him the oil paintings and sold him the farm. On these facts, which of the following is False?

When it has been clearly established that one of the parties to the contract has been the victim of undue influence, that contract is void.

What's the effect of a court determining that undue influence has been present in a contractual relationship?

In Moss v. Chin, Chin's insurer, ICBC, made an offer to settle a claim that was accepted by the public trustee representing Mrs. Moss. ICBC was not aware that Mrs. Moss had died in the interim. ICBC made a unilateral mistake and yet the Court ordered that the contract be rescinded. What was the rationale?

Where the misrepresentation is innocent, explain the remedies available to the victim.

Jones offers to sell Smith his car. Smith thinks Jones is selling his 2015 Toyota, and Jones thinks he is selling his 2014 Buick. This is an example of which of the following?

The principle that courts will not permit outside evidence to contradict clear wording of a contract is known as ________.

A trust inferred by the courts to benefit a third party to a contract is known as ________.

Randal embezzled $6000 of his employer's money and then disappeared. The employer's accountant called at Randal's residence and found out that his wife had a $3500 term deposit. When the accountant threatened to have her husband arrested and imprisoned if she did not agree, she assigned the term deposit to the employer to help to defray the loss from the embezzlement. If the wife were later to sue for return of the term deposit, what would be her ground for avoiding the assignment?

The remedy of rescission is not available if the parties cannot be returned to their original positions because the subject matter of the contract has been destroyed or damaged.