Question 1

Which of the following cannot result in a damage award?

Accepted Answer

A) innocent misrepresentation 
B) negligent misrepresentation 
C) fraudulent misrepresentation 
D) breach of contract 
E) silence that distorts a previous assertion 
A) innocent misrepresentation 
B) negligent misrepresentation 
C) fraudulent misrepresentation 
D) breach of contract 
E) silence that distorts a previous assertion

Question 2

Which of the following does not provide a rule or an approach that a court may rely upon for the interpretation of a contractual document?

Accepted Answer

A) the literal approach 
B) the contextual approach 
C) the recidivist approach 
D) the contra proferentum rule 
E) the golden rule 
A) the literal approach 
B) the contextual approach 
C) the recidivist approach 
D) the contra proferentum rule 
E) the golden rule

Question 3

Name a shortcoming of the literal approach to contractual interpretation.Provide an example to illustrate your point.How might this difficulty be overcome?

Accepted Answer

The most obvious shortcoming of the lite

Question 4

An express term

Accepted Answer

A) is only enforceable if one of the parties agrees to it in writing. 
B) is a statement made by one of the parties to the other party of a contract that a reasonable person would believe was intended to create an enforceable obligation. 
C) is a statement made by one party to induce the other party to enter into an agreement. 
D) sometimes arises as a result of an operation of law. 
E) is a term made by the court ascertaining the industry custom when interpreting the contract. 
A) is only enforceable if one of the parties agrees to it in writing. 
B) is a statement made by one of the parties to the other party of a contract that a reasonable person would believe was intended to create an enforceable obligation. 
C) is a statement made by one party to induce the other party to enter into an agreement. 
D) sometimes arises as a result of an operation of law. 
E) is a term made by the court ascertaining the industry custom when interpreting the contract.

Question 5

A court will find an implied term

Accepted Answer

A) when it is necessary to bring the contract in accordance with the objectively reasonable intentions of the parties. 
B) in order to rewrite the contract so that it is a better deal. 
C) only if the parties had expressed it but forgot to write it down. 
D) only if a statute tells it to do so. 
E) whenever it wants and whatever term the court thinks would be useful. 
A) when it is necessary to bring the contract in accordance with the objectively reasonable intentions of the parties. 
B) in order to rewrite the contract so that it is a better deal. 
C) only if the parties had expressed it but forgot to write it down. 
D) only if a statute tells it to do so. 
E) whenever it wants and whatever term the court thinks would be useful.

Question 6

Business people often sign written agreements on the oral assurance that some of the terms of the written agreement will not be enforced.To sign under written agreements in these circumstances is imprudent because of

Accepted Answer

A) the golden rule. 
B) the parol evidence rule. 
C) the contra proferentum rule. 
D) the absurdity rule. 
E) the fact that oral terms of contracts are never enforceable. 
A) the golden rule. 
B) the parol evidence rule. 
C) the contra proferentum rule. 
D) the absurdity rule. 
E) the fact that oral terms of contracts are never enforceable.

Question 7

A contractual representation that is used to induce a contract must not be deliberately false.

Accepted Answer

A) True 
 B)False

Question 8

Can an express term ever be overridden by an implied term? Explain your reasoning and provide an example.

Accepted Answer

Express terms can be overridden by terms

Question 9

If Vasaliki is induced to enter into a contract as a consequence of a statement made by Lampros with reckless indifference as to its truth, Vasaliki has an automatic right to rescission and may also get damages if the statement is fraudulent.

Accepted Answer

A) True 
 B)False

Question 10

Molly decides to sell her house by way of a private sale.After advertising and showing the house, she receives a written offer from an interested purchaser using a standard form document assembled from a do-it-yourself legal kit.Molly studied the offer and wished to change two of its terms.The interested purchaser agreed to the changes and reflected those changes in the document.Molly signed the document and cashed the down payment cheque.Two days later, Molly spotted an extremely onerous and somewhat unusual term that was not brought to her attention when reading the document.As a result, Molly wishes to cancel the contract.Which of the following is most likely TRUE?

Accepted Answer

A) Molly will fail because she is bound by her signature to the written agreement. 
B) Molly will fail but only because she cashed the cheque. 
C) Molly will succeed because the term was onerous and unusual. 
D) Molly will succeed because she was not given reasonable notice of the onerous and unusual term. 
E) Molly will succeed unless the purchaser expressly drew her attention to the clause. 
A) Molly will fail because she is bound by her signature to the written agreement. 
B) Molly will fail but only because she cashed the cheque. 
C) Molly will succeed because the term was onerous and unusual. 
D) Molly will succeed because she was not given reasonable notice of the onerous and unusual term. 
E) Molly will succeed unless the purchaser expressly drew her attention to the clause.

Question 11

What is an exclusion clause? Why would a business want one included in a contract?

Accepted Answer

An exclusion clause is a contractual ter

Question 12

The BEST way for a company to manage the risk associated with standard form agreements is to

Accepted Answer

A) frequently redesign the standard form agreement to ensure that customers must read through the form each time they sign it. 
B) teach employees the meaning of onerous and ambiguous contract terms. 
C) require customers to clearly indicate their specific agreement to be bound by any onerous or unusual terms. 
D) conceal ambiguous language at the end of the agreement to avoid customer confusion. 
E) draft the form in a manner which is ambiguous to your customers but could be literally interpreted in your favour by a clever lawyer. 
A) frequently redesign the standard form agreement to ensure that customers must read through the form each time they sign it. 
B) teach employees the meaning of onerous and ambiguous contract terms. 
C) require customers to clearly indicate their specific agreement to be bound by any onerous or unusual terms. 
D) conceal ambiguous language at the end of the agreement to avoid customer confusion. 
E) draft the form in a manner which is ambiguous to your customers but could be literally interpreted in your favour by a clever lawyer.

Question 13

Kara and Randall created a contract.After a dispute arose, a court interpreted the agreement and found that it contained a term that neither party had expressly mentioned during negotiations.With respect to that term, which of the following statements is most likely to be TRUE?

Accepted Answer

A) One of the parties must have expressly affirmed the term in court. 
B) Both parties must have expressly affirmed the term in court. 
C) The term must have been implied. 
D) The court must have made a mistake because every term must be expressly created by the parties. 
E) A term can be implied only if it is required by some form of legislation. 
A) One of the parties must have expressly affirmed the term in court. 
B) Both parties must have expressly affirmed the term in court. 
C) The term must have been implied. 
D) The court must have made a mistake because every term must be expressly created by the parties. 
E) A term can be implied only if it is required by some form of legislation.

Question 14

Damages for actionable misrepresentation may be available depending on the type of misrepresentation that was made.

Accepted Answer

A) True 
 B)False

Question 15

Tyra was looking to buy her first motorcycle.She saw one listed online and contacted Graham, the owner.Graham knew that the transmission was faulty and the bike often failed to shift properly.He decided not to mention that problem, however, because it did not happen all the time.He also decided that he did not want to deal with any of Tyra's questions.He therefore asked her to come by, for her test dive, when he knew that he would be out of the house but his mother would be home.Tyra enjoyed the test ride, did not ask any questions, and bought the bike for the full price.Which of the following statements is most likely to be TRUE?

Accepted Answer

A) Silence can never be misrepresentation. 
B) Graham's silence was misrepresentation because the contract required utmost good faith. 
C) Graham's actions constituted a misrepresentation because he was not present for the test drive, which means that he was actively concealing the damage. 
D) Graham's silence constituted a half-truth. 
E) Graham was not required to disclose the problem in pre-contractual relations. 
A) Silence can never be misrepresentation. 
B) Graham's silence was misrepresentation because the contract required utmost good faith. 
C) Graham's actions constituted a misrepresentation because he was not present for the test drive, which means that he was actively concealing the damage. 
D) Graham's silence constituted a half-truth. 
E) Graham was not required to disclose the problem in pre-contractual relations.

Question 16

Restitution requires both sides to be returned to their pre-contractual positions.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is FALSE? The use of plain language instead of legalese

Accepted Answer

A) can reduce the amount of time a company spends answering questions from customers about confusing terminology. 
B) is required by the official Communications Policy of the Government of Canada. 
C) can be mandated by law. 
D) makes it more difficult for businesses to enforce contracts. 
E) was strategically avoided in the past. 
A) can reduce the amount of time a company spends answering questions from customers about confusing terminology. 
B) is required by the official Communications Policy of the Government of Canada. 
C) can be mandated by law. 
D) makes it more difficult for businesses to enforce contracts. 
E) was strategically avoided in the past.

Question 18

Which of the following is NOT true of the contra proferentum rule?

Accepted Answer

A) It is a rule of contractual interpretation. 
B) It is always the best means of resolving an ambiguous term. 
C) It attributes to a term the meaning least favourable to its author. 
D) It provides an incentive for the author of a term to draft it in clear and unambiguous language. 
E) It applies to contracts where the other side did not draft the contract nor have any meaningful input into the contractual terms. 
A) It is a rule of contractual interpretation. 
B) It is always the best means of resolving an ambiguous term. 
C) It attributes to a term the meaning least favourable to its author. 
D) It provides an incentive for the author of a term to draft it in clear and unambiguous language. 
E) It applies to contracts where the other side did not draft the contract nor have any meaningful input into the contractual terms.

Question 19

What is meant by the contra proferentum rule?

Accepted Answer

The contra proferendum rule is a default

Question 20

Asha sells bottled spring water.Unlike other water vendors who purify their water, Asha is marketing her product to those who want to drink spring water in its natural state.Although her water source is pure and clean, she is concerned that some consumers might have allergic reactions to trace elements in the unpurified water, so she designs a clause to exclude her company from liability.The clause indicates that, by opening and drinking the water, consumers are indicating that they have read and understood the warning that the water has not been purified and, as such, waive all liability claims against the company for any allergic reactions resulting from drinking the water.Which of the following is most likely to be TRUE of Asha's strategy?

Accepted Answer

A) It will fail because it is never possible to exclude tort liability by way of contract. 
B) It will only succeed if the distributor personally points out to the consumer that by drinking the water they are waiving their right to sue. 
C) Regardless of any other fact, the exclusion clause will apply if consumers are given reasonable notice. 
D) The exclusion clause will be enforceable only if it is unambiguous, only if there was reasonable notice, and only if the plaintiff objectively agreed to it. 
E) Exclusion clauses are not enforceable in a court of law. 
A) It will fail because it is never possible to exclude tort liability by way of contract. 
B) It will only succeed if the distributor personally points out to the consumer that by drinking the water they are waiving their right to sue. 
C) Regardless of any other fact, the exclusion clause will apply if consumers are given reasonable notice. 
D) The exclusion clause will be enforceable only if it is unambiguous, only if there was reasonable notice, and only if the plaintiff objectively agreed to it. 
E) Exclusion clauses are not enforceable in a court of law.

Exam 9: Representations and Terms

Which of the following cannot result in a damage award?

Which of the following does not provide a rule or an approach that a court may rely upon for the interpretation of a contractual document?

Name a shortcoming of the literal approach to contractual interpretation.Provide an example to illustrate your point.How might this difficulty be overcome?

An express term

A court will find an implied term

Business people often sign written agreements on the oral assurance that some of the terms of the written agreement will not be enforced.To sign under written agreements in these circumstances is imprudent because of

A contractual representation that is used to induce a contract must not be deliberately false.

Can an express term ever be overridden by an implied term? Explain your reasoning and provide an example.

If Vasaliki is induced to enter into a contract as a consequence of a statement made by Lampros with reckless indifference as to its truth, Vasaliki has an automatic right to rescission and may also get damages if the statement is fraudulent.

What is an exclusion clause? Why would a business want one included in a contract?

The BEST way for a company to manage the risk associated with standard form agreements is to

Kara and Randall created a contract.After a dispute arose, a court interpreted the agreement and found that it contained a term that neither party had expressly mentioned during negotiations.With respect to that term, which of the following statements is most likely to be TRUE?

Damages for actionable misrepresentation may be available depending on the type of misrepresentation that was made.

Restitution requires both sides to be returned to their pre-contractual positions.

Which of the following statements is FALSE? The use of plain language instead of legalese

Which of the following is NOT true of the contra proferentum rule?

What is meant by the contra proferentum rule?

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

Consideration and Privity

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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