Exam 10: Contractual Defects

Contracts are part of private law.A key concept of private law is that parties are at liberty to create and define the legal obligations they owe to one another.Discuss whether you agree that judges should be able to step in and set aside certain transactions on the basis that they think an agreement is unjust.Does this interfere with the core concept of private law? Explain your answer.

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Question 1

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Agree: Those who agree will argue that judges should continue to set aside transactions where there has been a material mistake, fraud, or unfairness during bargaining.To hold parties to their contracts one hundred percent of the time is not practical in these situations.Judges should not interfere with "unwise" or "imprudent" bargains, but if the bargaining process is so flawed that it cannot plausibly be said that the parties truly consented to the arrangement, courts should strike down such deals.The purpose of freedom to contract is to ensure that people are making voluntary undertakings.

Disagree: Those who disagree will argue that anyone who enters into a contract does so because they perceive it to their advantage to do so.Because each person can choose whether to enter into the agreement or not, the system of commerce and free enterprise should not be compromised just because things do not go the way of one party as opposed to the other.This view, they will argue, is crucial for commercial stability.Business cannot succeed unless parties are able to rely on their contracts being enforced by the courts without minute inquiries into the fairness of the process by which those contracts are obtained.A free enterprise system is premised on some parties have advantages that other parties do not, and some businesses being wealthier and more powerful than others.The courts cannot interfere with this system by changing freely bargained contracts.

Pam entered into a contract with Dave.A court will declare that the contract was frustrated if

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Question 2

Correct Answer:

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An unconscionable transaction

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Question 3

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Nora was furious that his neighbours allowed their dog, Asta, to bark long into the night.She therefore hired Nick to steal Asta.Nora paid Nick according to the terms of the contract, but he did not follow through with his end of the bargain.Can Nora get her money back?

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Question 4

Which of the following statements regarding the Statute of Frauds is TRUE?

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Question 5

Adrian and Darah entered into a contract.After the agreement was partially performed, Adrian successfully claimed that the contract is voidable.Which of the following statements is most likely to be TRUE?

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Question 6

On Tony's 21st birthday, he spent the afternoon in a pub with his friends and then visited a car dealership.Although Tony exhibited clear signs of intoxication, the dealership persuaded him to sign a contract to buy an expensive new car.Which of the following is most likely to be TRUE?

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Question 7

Selma recently signed a contractual document with Olaf.She now believes, however, that she should be entitled to walk away from the agreement as a matter of fairness.She has phrased her argument in terms of the doctrine of non est factum.A court is most likely to agree with that argument

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Question 8

Jerry and four of his friends form the Inventor's Club, a private club that allows inventors to get together and share new ideas.This organization is

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Question 9

Wilma had worked for Acme Inc for more than ten years.Unfortunately, she fell out of favour with the company after she began to complain, on behalf or herself and her co-workers, about working conditions.Eventually, the relationship became intolerable and Wilma reluctantly agreed to leave.Acme provided a severance package, but only after Wilma contractually promised that she would not sue the company in connection with her dismissal.Wilma now believes that her employment was improperly terminated.She cannot sue the company, however, unless she can escape from the severance contract.Which of the following statements is most likely to be TRUE?

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Question 10

Having recently made a fortune by inventing and selling a new piece of software, Matt heard that his friend, Lois, was having a hard time obtaining a bank loan.Matt therefore generously promised the bank that he would be responsible for the debt if Lois failed to repay a loan.That promise will be enforceable against Matt if

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Question 11

Charlie has bipolar disorder (also known as manic-depression).Usually, medication helps to control her disorder.Lately, Charlie stopped taking her medication and started drinking heavily.During a manic (up) phase, she dressed in an elegant suit, went to a BMW dealership and signed a contract for the purchase of a new sports car.She financed the transaction by putting a large deposit on her credit card, and drove the car off the lot that same day.Charlie's family became very concerned.Describe the law as it pertains to Charlie's capacity to contract.What should Charlie do? What should the car dealer do?

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Question 12

Shogun Used Cars Ltd supposedly sold a car to Alan Rogue.Shogun, however, has discovered that Rogue was not who he pretended to be and the company wants the court to declare that the apparent contract is invalid because of the mistake of identity.A judge will agree

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Question 13

Ling is about to enter into a contract that will be carried out over the next year and a half.Is it safe for her to assume that the contract will not be enforced if it is not evidenced in writing in a jurisdiction where the Statute of Frauds applies?

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Question 14

Which of the following is most likely an improvident bargain?

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Question 15

Sarah bought a stereo system in Vancouver under a payment plan that must be completed within two years.Technically speaking, the contract is enforceable only if it is evidenced in writing.

(True/False)

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Question 16

Malkit sold a house to Amanda.The evidence indicates that Amanda owed fiduciary obligations to Malkit both before and after the agreement was signed.Which of the following statements is TRUE?

(Multiple Choice)

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Question 17

The form and content requirements of the Statute of Frauds requires a signature from each of the parties.

(True/False)

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Question 18

Unconscionable transactions can be characterized as one-sided transactions obtained by unfair use of power.

(True/False)

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Question 19

As part of a large multinational corporation, you are working on a deal to buy a small company from a group of young upstarts who will all benefit handsomely from the transaction.It is your custom to include a restrictive covenant in such contracts to prevent such young upstarts from directly competing with the company they just sold.Explain the approach taken by courts to covenants in restraint of trade and then provide an example of a restrictive covenant that is likely to be upheld if challenged in court, and an example of one that is likely to be struck down if challenged in court.

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Question 20

Showing 1 - 20 of 75

Exam 10: Contractual Defects

Pam entered into a contract with Dave.A court will declare that the contract was frustrated if

An unconscionable transaction

Nora was furious that his neighbours allowed their dog, Asta, to bark long into the night.She therefore hired Nick to steal Asta.Nora paid Nick according to the terms of the contract, but he did not follow through with his end of the bargain.Can Nora get her money back?

Which of the following statements regarding the Statute of Frauds is TRUE?

Adrian and Darah entered into a contract.After the agreement was partially performed, Adrian successfully claimed that the contract is voidable.Which of the following statements is most likely to be TRUE?

On Tony's 21st birthday, he spent the afternoon in a pub with his friends and then visited a car dealership.Although Tony exhibited clear signs of intoxication, the dealership persuaded him to sign a contract to buy an expensive new car.Which of the following is most likely to be TRUE?

Selma recently signed a contractual document with Olaf.She now believes, however, that she should be entitled to walk away from the agreement as a matter of fairness.She has phrased her argument in terms of the doctrine of non est factum.A court is most likely to agree with that argument

Jerry and four of his friends form the Inventor's Club, a private club that allows inventors to get together and share new ideas.This organization is

Shogun Used Cars Ltd supposedly sold a car to Alan Rogue.Shogun, however, has discovered that Rogue was not who he pretended to be and the company wants the court to declare that the apparent contract is invalid because of the mistake of identity.A judge will agree

Ling is about to enter into a contract that will be carried out over the next year and a half.Is it safe for her to assume that the contract will not be enforced if it is not evidenced in writing in a jurisdiction where the Statute of Frauds applies?

Which of the following is most likely an improvident bargain?

Sarah bought a stereo system in Vancouver under a payment plan that must be completed within two years.Technically speaking, the contract is enforceable only if it is evidenced in writing.

Malkit sold a house to Amanda.The evidence indicates that Amanda owed fiduciary obligations to Malkit both before and after the agreement was signed.Which of the following statements is TRUE?

The form and content requirements of the Statute of Frauds requires a signature from each of the parties.

Unconscionable transactions can be characterized as one-sided transactions obtained by unfair use of power.

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

Representations and Terms

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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