Exam 9: Representations and Terms

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 TRUE of Asha's strategy?

A misrepresentation is

Orson is looking to hedge his portfolio perfectly.He is deciding between entering the futures markets and creating a forward contract.His broker says that he thinks he could get him in a forward contract that would not only hedge his portfolio,but also make him a lot of money.The forward contract does not perform and Orson loses everything.What should Orson do?

Why are boilerplate provisions of potential value to businesses generating standard form agreements?

Personal opinions are not usually treated as misrepresentations.Very briefly explain why they are not and describe a situation where it is risky to offer a personal opinion.

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

Nate wanted to rent a car.The attendant gives him a standard form agreement to sign.She tells him to sign three places,telling him these areas indicated exclusion clauses,but not saying what the clauses were.He signs the agreement anyway.If Nate breeches one of these exclusion clauses,which of the following is true?

Samuel and Ben are negotiating the sale of a sailboat.Samuel expresses an interest in the boat but emails Ben a list of five questions that he wants answered before agreeing to purchase it.Ben responds with full answers to four of the questions.Samuel emails back and says he will buy the boat on Saturday as long as his remaining question (about the state of its hull)checks out okay.Ben promises to check with his boat mechanic and respond before they are scheduled to meet on Saturday.Both men get busy.Ben checks with his mechanic but innocently forgets to report back to Samuel that there is a crack in the hull.Samuel forgets that there was one question outstanding.Saturday comes and the transaction takes place.If it turns out that there is a significant problem with the hull of the boat,which of the following is TRUE?

The possible consequences of actionable misrepresentation include

Reeba is signing an employment contract that states she will perform the actions as required of the job daily for 2 years or until she is terminated by management.Reeba asks if this means she does not get weekends off and her manager verbally assures her that she will not be asked to work weekends.Which of the following statements is most likely false?

A misstatement of the law is identical to a misstatement about the existing factual consequences of the application of that law.

A person who investigates a condition or state of facts for themselves,rather than relying on a pre-contractual statement of the other side,will usually succeed in an action for misrepresentation whenever the investigation that they made turns out to be untrue.

A ticket contract is

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 term

An ambiguous contractual term

Which of the following best describes an implied term?

A pre-contractual representation

A standard form contract contains a term that reads,"Henceforth,all dealings between the Purchaser and the Seller shall be conducted on the grounds of a working relationship and,as such,shall be conducted with professionalism.Any conduct contrary to the Agreement (as construed by one of either the management of the parties involved or the lawyers of these parties)shall be met with termination of the contract and all sums previously paid as liquidated damages and not as penalty shall be retained." In plain English,this means

Which of the following statements is TRUE with respect to misrepresentations?