Question 1

The doctrine of promissory estoppel operates only if the representor promised that an existing right would not be strictly enforced.

Accepted Answer

A) True 
 B)False  True

Question 2

In late May, Lovin was excited about his upcoming graduation ceremonies.Because he wanted to look his best, he visited a tailor and agreed to pay $500 for a new suit.The contract required Lovin to pay the full price on June 1 and entitled him to collect the finished product on June 10.As promised, Lovin paid the full amount on the first of June.At that point, it can be said that he gave "past consideration" in support of the contract.

Accepted Answer

A) True 
 B)False  False

Question 3

Laetitia agreed to provide certain services to Hans in exchange for a payment of $10 000.Although Laetitia fully performed her side of the agreement, Hans refuses to pay anything.He insists that Laetitia does not have a right to sue for breach of contract because, in performing the services, she was merely doing something that she had become obliged to do even before she entered into her agreement with Hans.Hans's position is correct if Laetitia's pre-existing obligation was

Accepted Answer

A) some type of public duty. 
B) supported by a seal rather than by consideration. 
C) a private obligation owed to a third party. 
D) for some reason unenforceable. 
E) subject to a quantum meruit. 
A) some type of public duty. 
B) supported by a seal rather than by consideration. 
C) a private obligation owed to a third party. 
D) for some reason unenforceable. 
E) subject to a quantum meruit. A

Question 4

Which of the following propositions is TRUE in the context of the doctrine of promissory estoppel?

Accepted Answer

A) The representee cannot rely on the representor's gratuitous promise if the representor was guilty of inequitable behaviour. 
B) Once legal rights are affected by the doctrine of promissory estoppel, they can never be revived. 
C) Promissory estoppel can only be based on representations of existing or past facts. 
D) Promissory estoppel can be used as a sword but not as a shield. 
E) The doctrine of promissory estoppel is relevant if the representor already has existing rights that can be enforced against the representee. 
A) The representee cannot rely on the representor's gratuitous promise if the representor was guilty of inequitable behaviour. 
B) Once legal rights are affected by the doctrine of promissory estoppel, they can never be revived. 
C) Promissory estoppel can only be based on representations of existing or past facts. 
D) Promissory estoppel can be used as a sword but not as a shield. 
E) The doctrine of promissory estoppel is relevant if the representor already has existing rights that can be enforced against the representee.

Question 5

"The law of contract assumes that people are generally capable of looking after their own interests.An agreement therefore may be enforceable even if the parties do not exchange things of equal value." Discuss that statement.Illustrate your answer with three business law examples.

Accepted Answer

This question asks students, in a fairly

Question 6

Which of the following situations involves the creation of a contractually enforceable promise?

Accepted Answer

A) Suneeta promised to pay $5000 to a firefighter who responded to a routine call to extinguish a fire at her house. 
B) Suneeta promised to pay $500 to her father for a birthday present that she had received from her parents two weeks earlier. 
C) Suneeta had a contract with a construction company to build a deck in her backyard.Halfway through the project, the cost of materials suddenly increased.Although the original agreement did not require her to do so, Suneeta agreed to pay an additional $2000 to the construction company to off-set the additional expenses that it would encounter in the remainder of the project. 
D) Suneeta borrowed money from a bank.Under the terms of that agreement, she was required to pay the bank $10 000 cash on June 1.On May 28, she explained to the bank that she would not be able to pay the full amount on schedule.On the same day, she also persuaded the bank to accept a cheque for $7500 in satisfaction of the full debt. 
E) Suneeta's brother, Arvid, had long promised that he would pay $10 000 to her when she turned 21.She was always skeptical, but a few weeks before her 21st birthday, she wanted to be sure that he would honour his promise.Suneeta therefore persuaded Arvid to write his promise on a piece of paper, and then she added her signature and seal to that document. 
A) Suneeta promised to pay $5000 to a firefighter who responded to a routine call to extinguish a fire at her house. 
B) Suneeta promised to pay $500 to her father for a birthday present that she had received from her parents two weeks earlier. 
C) Suneeta had a contract with a construction company to build a deck in her backyard.Halfway through the project, the cost of materials suddenly increased.Although the original agreement did not require her to do so, Suneeta agreed to pay an additional $2000 to the construction company to off-set the additional expenses that it would encounter in the remainder of the project. 
D) Suneeta borrowed money from a bank.Under the terms of that agreement, she was required to pay the bank $10 000 cash on June 1.On May 28, she explained to the bank that she would not be able to pay the full amount on schedule.On the same day, she also persuaded the bank to accept a cheque for $7500 in satisfaction of the full debt. 
E) Suneeta's brother, Arvid, had long promised that he would pay $10 000 to her when she turned 21.She was always skeptical, but a few weeks before her 21st birthday, she wanted to be sure that he would honour his promise.Suneeta therefore persuaded Arvid to write his promise on a piece of paper, and then she added her signature and seal to that document.

Question 7

Epsilon Inc and Delta Ltd entered into an agreement.Epsilon promised to pay $10 000 to Delta in March.Delta promised to deliver a piece of machinery to Epsilon in June.Epsilon paid the money in March.It is now April.The parties do not yet have a contract because while Delta has given a promise, it has not yet performed that promise.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is TRUE?

Accepted Answer

A) A Himalaya Clause creates a true exception to the privity rule. 
B) The decision in Vandepitte v Preferred Accident Insurance Co creates a special exception to the privity rule for employees. 
C) The decision in London Drugs Ltd v Kuehne & Nagel International Ltd is the reason why assignments are "subject to the equities." 
D) A contractual right can be transferred from one person to another because that right is classified as a chose in action, which is a type of property. 
E) If a person who holds a contractual right dies, that right automatically is transferred to a "trustee for performance." 
A) A Himalaya Clause creates a true exception to the privity rule. 
B) The decision in Vandepitte v Preferred Accident Insurance Co creates a special exception to the privity rule for employees. 
C) The decision in London Drugs Ltd v Kuehne & Nagel International Ltd is the reason why assignments are "subject to the equities." 
D) A contractual right can be transferred from one person to another because that right is classified as a chose in action, which is a type of property. 
E) If a person who holds a contractual right dies, that right automatically is transferred to a "trustee for performance."

Question 9

Which of the following statements is TRUE?

Accepted Answer

A) Under the doctrine of consideration, a contract exists only if both parties receive some type of benefit. 
B) The "peppercorn theory" demonstrates that consideration must be sufficient, but it does not have to be adequate. 
C) The "peppercorn theory" demonstrates that consideration must be adequate, but it does not have to be sufficient. 
D) The decision in Gilbert Steel Ltd v University Construction Ltd stands for the proposition that a person cannot give good consideration for a new contract by promising to perform a pre-existing obligation that is owed to a third party. 
E) The phrase "quantum meruit" (which means "you get what you deserve") is used in a case of promissory estoppel to explain that equity will not provide assistance to a person who acted inequitably. 
A) Under the doctrine of consideration, a contract exists only if both parties receive some type of benefit. 
B) The "peppercorn theory" demonstrates that consideration must be sufficient, but it does not have to be adequate. 
C) The "peppercorn theory" demonstrates that consideration must be adequate, but it does not have to be sufficient. 
D) The decision in Gilbert Steel Ltd v University Construction Ltd stands for the proposition that a person cannot give good consideration for a new contract by promising to perform a pre-existing obligation that is owed to a third party. 
E) The phrase "quantum meruit" (which means "you get what you deserve") is used in a case of promissory estoppel to explain that equity will not provide assistance to a person who acted inequitably.

Question 10

Canadian courts consistently hold that a promise to perform a pre-existing contractual obligation cannot provide consideration under a new contract with the same party.They apply that rule because it always reflects commercial reality.

Accepted Answer

A) True 
 B)False

Question 11

ABC Construction agreed to build a pool for Carmen in exchange for $100 000.The pool was to be built during the month of May, but payment was not due until the end of August.The pool was completed on schedule.However, because it was experiencing financial difficulties, ABC orally assigned its contractual rights against Carmen to Miranda in early June.In July, Carmen discovered that the pool leaked.Because ABC denied responsibility, Carmen had the problem fixed by another company at a cost of $20 000.The evidence now indicates that the problem was in fact caused by ABC's breach of contract.ABC failed to use appropriate materials when it constructed the pool.Which of the following statements is TRUE?

Accepted Answer

A) The assignment may be statutory, but it cannot be equitable. 
B) The assignment may be equitable, but it cannot be statutory based on the existing state of the statute law. 
C) Miranda can collect $100 000 from Carmen regardless of when she received notice of the assignment. 
D) Miranda can collect $100 000 from Carmen only if it notified her of the assignment before the pool began to leak in July. 
E) Because of the assignment, Carmen can sue Miranda on the basis of ABC's breach of contract. 
A) The assignment may be statutory, but it cannot be equitable. 
B) The assignment may be equitable, but it cannot be statutory based on the existing state of the statute law. 
C) Miranda can collect $100 000 from Carmen regardless of when she received notice of the assignment. 
D) Miranda can collect $100 000 from Carmen only if it notified her of the assignment before the pool began to leak in July. 
E) Because of the assignment, Carmen can sue Miranda on the basis of ABC's breach of contract.

Question 12

Because he was in love with her, Noriel promised to sell his car to Marina for $500 and Marina agreed to pay $500 for the car.At the time of that agreement, Marina stressed that the deal was purely commercial and made it clear that she did not share Noriel's hopes for an intimate relationship.Before the sale was performed, Noriel fell in love with another woman, Valerie.He therefore now refuses to transfer the car to Marina.The actual market value of the car is $7500.Which of the following statements is TRUE?

Accepted Answer

A) Marina cannot enforce Noriel's promise because her promise did not provide adequate consideration. 
B) Marina cannot enforce Noriel's promise to transfer the car because that promise was only supported by past consideration in the sense that it was based on the fact that Noriel was previously in love with Marina. 
C) Marina cannot enforce Noriel's promise because love and affection are not good consideration. 
D) Marina can enforce Noriel's promise to transfer the car, but only if she pays the actual market value of the car. 
E) Noriel and Marina exchanged consideration even though he has not transferred the car to her and she has not paid the money to him as they exchanged mutual promises. 
A) Marina cannot enforce Noriel's promise because her promise did not provide adequate consideration. 
B) Marina cannot enforce Noriel's promise to transfer the car because that promise was only supported by past consideration in the sense that it was based on the fact that Noriel was previously in love with Marina. 
C) Marina cannot enforce Noriel's promise because love and affection are not good consideration. 
D) Marina can enforce Noriel's promise to transfer the car, but only if she pays the actual market value of the car. 
E) Noriel and Marina exchanged consideration even though he has not transferred the car to her and she has not paid the money to him as they exchanged mutual promises.

Question 13

Parker Inc promised to pay $100 000 cash to Coltrane Ltd in exchange for a shipment of widgets.The widgets were delivered on October 1st and the price was to be paid on October 15.On October 13, Parker informed Coltrane that it would not be able to afford to pay any more than $75 000.Which of the following statements is TRUE?

Accepted Answer

A) Coltrane will be able to recover the full contract price even if it promises under seal to accept $75 000 in complete satisfaction of Parker's debt. 
B) Coltrane will not be able to recover the full contract price if it agrees to accept $75 000 from Parker to be paid on October 14 in complete satisfaction of the $100 000 debt, that was to be paid on October 15. 
C) If the parties are located in Alberta, Ontario, British Columbia, Manitoba, the Northwest Territories, Nunavut, Saskatchewan, or the Yukon, Coltrane will be able to recover the full contract price even if it has accepted Parker's offer to pay $75 000 in complete satisfaction of the $100 000 debt. 
D) Coltrane will be able to recover the full contract price even if it accepts Parker's offer to satisfy the $100 000 debt by both paying $75 000 in cash and delivering a used truck to Rollins Corp, which is another company with which Coltrane has close ties. 
E) There is no mutuality of consideration, and therefore the contract is invalid, because Coltrane actually delivered the widgets before Parker was required to pay the purchase price. 
A) Coltrane will be able to recover the full contract price even if it promises under seal to accept $75 000 in complete satisfaction of Parker's debt. 
B) Coltrane will not be able to recover the full contract price if it agrees to accept $75 000 from Parker to be paid on October 14 in complete satisfaction of the $100 000 debt, that was to be paid on October 15. 
C) If the parties are located in Alberta, Ontario, British Columbia, Manitoba, the Northwest Territories, Nunavut, Saskatchewan, or the Yukon, Coltrane will be able to recover the full contract price even if it has accepted Parker's offer to pay $75 000 in complete satisfaction of the $100 000 debt. 
D) Coltrane will be able to recover the full contract price even if it accepts Parker's offer to satisfy the $100 000 debt by both paying $75 000 in cash and delivering a used truck to Rollins Corp, which is another company with which Coltrane has close ties. 
E) There is no mutuality of consideration, and therefore the contract is invalid, because Coltrane actually delivered the widgets before Parker was required to pay the purchase price.

Question 14

Identify the circumstances in which an employee can take advantage of an exclusion clause that is contained in a contract that was created between an employer and a customer.

Accepted Answer

As a general rule, an employee cannot ta

Question 15

As a wedding anniversary present for himself and his wife, Louisa, Mario entered into an agreement with Stanislaus, a world famous pianist.Under the terms of that agreement, Mario promised to pay Stanislaus $52 000.Stanislaus promised that he would provide weekly lessons for one year for both Mario and Louisa.After two weeks of lessons, Mario completely lost interest, but Louisa is eager to continue.Stanislaus, however, refuses to go on.Louisa has the right to demand the remainder of the lessons from Stanislaus because the courts generally assume that if one party (such as Mario) enters into a contract for the benefit of another person (such as Louisa), the promise provided by the other contractual party (such as Stanislaus) is held on trust.

Accepted Answer

A) True 
 B)False

Question 16

In exchange for Miles's promise to pay $10 000 to the Society for Prevention of Cruelty to Animals, Fran promised to give up eating meat for one year.Which of the following statements is TRUE?

Accepted Answer

A) Fran's promise is gratuitous because Miles does not receive anything of value from her. 
B) Fran has not given consideration because she has only suffered a detriment. 
C) Because neither party will receive a direct benefit, a contract was created only if the parties' agreement was placed under seal. 
D) The facts demonstrate a mutual exchange of value. 
E) The facts demonstrate the doctrine of promissory estoppel. 
A) Fran's promise is gratuitous because Miles does not receive anything of value from her. 
B) Fran has not given consideration because she has only suffered a detriment. 
C) Because neither party will receive a direct benefit, a contract was created only if the parties' agreement was placed under seal. 
D) The facts demonstrate a mutual exchange of value. 
E) The facts demonstrate the doctrine of promissory estoppel.

Question 17

The word "estop" means

Accepted Answer

A) "to prove." 
B) "to deny." 
C) "to prevent." 
D) "to guess." 
E) "to promise." 
A) "to prove." 
B) "to deny." 
C) "to prevent." 
D) "to guess." 
E) "to promise."

Question 18

Fred owed a debt of $10 000 to Regina.Because he had lost his job and was experiencing financial difficulties, he hoped that she would take pity on him and would not insist upon payment.Fred therefore said to Tyra, who was Regina's colleague, "If you can get her to drop the matter, I'll make it worth your while." Tyra felt sorry for Fred and said that she would do her best.A week later, she called Fred and explained that Regina had agreed under seal to forgive the $10 000 debt.Fred replied by saying, "Many thanks.Come by my house and I'll pay you $500 for your effort." Which of the following statements is most likely to be TRUE?

Accepted Answer

A) Although Regina is no longer entitled to receive $10 000 from Fred, she can still recover a reasonable amount from him. 
B) Regina can still recover $10 000 from Fred because he did not use his own seal. 
C) Tyra would not be entitled to any payment from Fred if he did not state the specific amount of $500. 
D) The agreement between Tyra and Fred is enforceable because Fred's promise to pay $500 is past consideration. 
E) Regina cannot sue under the agreement that was created between Tyra and Fred as she was not privy to that agreement. 
A) Although Regina is no longer entitled to receive $10 000 from Fred, she can still recover a reasonable amount from him. 
B) Regina can still recover $10 000 from Fred because he did not use his own seal. 
C) Tyra would not be entitled to any payment from Fred if he did not state the specific amount of $500. 
D) The agreement between Tyra and Fred is enforceable because Fred's promise to pay $500 is past consideration. 
E) Regina cannot sue under the agreement that was created between Tyra and Fred as she was not privy to that agreement.

Question 19

"A promise to perform a pre-existing contractual obligation cannot provide consideration for a new contract.That rule is based on the fact that it would be undesirable if party A could threaten to break an existing contract in order to get party B to enter into a second agreement at a higher price." Is that statement true: (1) if the existing contract was created between A and B, or (2) if the existing contract was created between A and C? In each instance, provide two reasons for your answer.

Accepted Answer

The question is phrased in abstract term

Question 20

Dunlop sold tires to Mew.The parties' contract prohibited Mew from reselling the tires unless its sub-buyer agreed to abide by Dunlop's list price for the tires.Mew resold the tires to Selfridge.Under its contract with Mew, Selfridge agreed to (1) abide by Dunlop's list price, and (2) pay $50 to Dunlop for each tire that it sold in violation of that list price.Selfridge resold 10 of the tires to its own customers for less than Dunlop's list price.Which of the following statements is most likely to be TRUE?

Accepted Answer

A) Selfridge is required to pay $500 to Dunlop only if Selfridge's contract with Mew is under seal. 
B) Selfridge is required to pay $500 to Mew. 
C) Selfridge is required to pay $500 to Dunlop. 
D) As a result of the contract between Mew and Selfridge, privity of contract exists between Dunlop and Selfridge. 
E) Dunlop is not entitled to any payment from Selfridge because Dunlop was not privy to the agreement between Selfridge and Mew. 
A) Selfridge is required to pay $500 to Dunlop only if Selfridge's contract with Mew is under seal. 
B) Selfridge is required to pay $500 to Mew. 
C) Selfridge is required to pay $500 to Dunlop. 
D) As a result of the contract between Mew and Selfridge, privity of contract exists between Dunlop and Selfridge. 
E) Dunlop is not entitled to any payment from Selfridge because Dunlop was not privy to the agreement between Selfridge and Mew.

The doctrine of promissory estoppel operates only if the representor promised that an existing right would not be strictly enforced.

Which of the following propositions is TRUE in the context of the doctrine of promissory estoppel?

"The law of contract assumes that people are generally capable of looking after their own interests.An agreement therefore may be enforceable even if the parties do not exchange things of equal value." Discuss that statement.Illustrate your answer with three business law examples.

Which of the following situations involves the creation of a contractually enforceable promise?

Which of the following statements is TRUE?

Which of the following statements is TRUE?

Canadian courts consistently hold that a promise to perform a pre-existing contractual obligation cannot provide consideration under a new contract with the same party.They apply that rule because it always reflects commercial reality.

Identify the circumstances in which an employee can take advantage of an exclusion clause that is contained in a contract that was created between an employer and a customer.

In exchange for Miles's promise to pay $10 000 to the Society for Prevention of Cruelty to Animals, Fran promised to give up eating meat for one year.Which of the following statements is TRUE?

The word "estop" means

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

Representations and Terms

Contractual Defects

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Personal Property: Bailment and Insurance

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

Online: Special Contracts: Negotiable Instruments

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Exam 8: Consideration and Privity

The doctrine of promissory estoppel operates only if the representor promised that an existing right would not be strictly enforced.

Which of the following propositions is TRUE in the context of the doctrine of promissory estoppel?

"The law of contract assumes that people are generally capable of looking after their own interests.An agreement therefore may be enforceable even if the parties do not exchange things of equal value." Discuss that statement.Illustrate your answer with three business law examples.

Which of the following situations involves the creation of a contractually enforceable promise?

Which of the following statements is TRUE?

Which of the following statements is TRUE?

Canadian courts consistently hold that a promise to perform a pre-existing contractual obligation cannot provide consideration under a new contract with the same party.They apply that rule because it always reflects commercial reality.

Identify the circumstances in which an employee can take advantage of an exclusion clause that is contained in a contract that was created between an employer and a customer.

In exchange for Miles's promise to pay $10 000 to the Society for Prevention of Cruelty to Animals, Fran promised to give up eating meat for one year.Which of the following statements is TRUE?

The word "estop" means

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

Representations and Terms

Contractual Defects

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Personal Property: Bailment and Insurance

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

Online: Special Contracts: Negotiable Instruments

Filters