Exam 8: Factors Affecting the Contractual Relationship

A real-estate agent, Jones, was owed a $17,000 commission, having sold property for Mr. Quick. Mr. Quick couldn't be found, but Jones did find his wife and learned that she had over $20,000 in treasury bills. Mr. Jones told her that if she didn't assign to him $17,000 of the $20,000, he would make sure her husband was imprisoned for his debts and "for other crimes" he knew about. If she did make an assignment in writing to Jones of the $17,000 but later tried to void the agreement, she would argue which of the following?

Mr. Copperfield, a collector of movie memorabilia, bid $250,000 on the Batmobile. After taking delivery, he discovered the car was not the car actually used in the film "Batman," it was merely one of five cars used to promote the film. He is suing the seller, Mr. Eisenberg. In which of the following cases would Mr. Copperfield not be entitled to a remedy? (Assume that in each case the facts could be proven.)

Discuss what happens when the parties to a contract make mistakes with respect to what they have agreed.

Damages are available as a remedy where the misrepresentation has become a term of the contract that is breached, where the misrepresentation is ________, and where there is negligence.

When the courts find that undue influence is present, the resulting contract is

The victim of ________ can seek monetary compensation as well as rescission for any loss incurred.

Jenny went to the store and asked to see a Bluetooth headset. The salesman brought out a set that he said had all the features that she wanted. After looking at the price tag and little else, she said she would think about it. The salesman said that this was the most popular model sold, that they sold 1000 of them during the World Series alone, that it had the highest rating in Consumer Reports, and that he only had that one left. Jenny bought it. Later she found out that all the statements made to her by the salesman were False, including the statement that the headset had all the features that she wanted, because it did not have noise suppression. Which of the following is true?

Discuss the concept of an assignment, including an explanation of its significance in the modern business world.

Fraud does not exist if the victim of the misrepresentation could have found out the truth, but relied instead on the statement of the defendant.

Only when the misrepresentation is truly innocent and without fault is the victim restricted to the remedy of rescission.

Mike is given a bottle of wine as a gift. Josh, a neighbour, sees it and recognizes it as a very rare bottle. Knowing that Mike doesn't drink, Josh offers him $300 for it, which he believes to be a fair price. Mike happily agrees. Later, when Josh is looking up the price of the bottle on eBay, he realizes that it is not a valuable bottle of wine at all. He had confused it with another vintage. Josh, who is taking a law class, wonders whether or not he could have the contract set aside. Which of the following statements is true?

Discuss the various remedies that are available where one of the parties to the contract is a victim of misrepresentation.

Often a party to a contract wants to avoid his obligations by arguing that the contract was entered into because of a mistake, misrepresentation, undue influence, or duress. Which of the following is true with regard to these areas of the law?

Where a heavy-duty equipment supplier sells a truck claiming it can haul ten tonnes of gravel but its actual capacity is only five tonnes, this is misrepresentation even where the seller believes what he said was true.

The office manager of a real estate agency was at an office supply store to replace a filing cabinet when he saw a demonstration of a new Xerox copier. Undoubtedly, the agency would benefit from the copier, especially since it had the capability of enlarging the original-a good feature when dealing with the small print of contracts. The next day, he called the manager of the store to discuss the machine further. The seller said that it was "ten years ahead of the competition," that it "was rated as maintenance-free by an independent consumer research group," and that he had "sold five to other real estate agencies in this area" and "had only one left." The agency, relying on these statements, asked to have it delivered. When it arrived, the office manager had learned that every statement made by the seller had been False. Furthermore, the seller did not send out the machine discussed, but the old model. Which of the following is true?

"Where fraudulent misrepresentation is involved, the victim can obtain rescission and/or damages but where innocent misrepresentation is involved, the only remedy is damages." Discuss the accuracy of that statement.

Which of the following is true with regard to the law of contract?

An assignee is in no better position than the original contractor.

A victim of fraud cannot seek damages where rescission is not available.

What is the significance of an assignment being "statutory" rather than merely an "equitable" assignment?