Question 1

To avoid a contract on the basis of non est factum, the mistake must have gone to the entire nature of the agreement, not just to some aspect of it.

Accepted Answer

A) True 
 B)False

Question 2

Mr.Rice purchased software online from a major software company based in Ontario, accepting the terms of the standard-form contract when he clicked on "Agree." When the software failed to perform as advertised, Rice complained but his complaints were ignored.When he threatened the software company with legal action, it was then pointed out to him that the contract contained a number of exemption clauses that would preclude Rice from winning in any legal action.Rice filed a lawsuit in Ontario.What is the court's likely approach to this situation?

Accepted Answer

A) The court would likely refuse to interfere with the terms of the contract based on the "principle of freedom to contract." 
B) The courts would consider this a fundamental breach if it found the clauses to be "unconscionable, unfair, and unreasonable." 
C) The court would determine that Rice had equal bargaining power and therefore the court could not support his position. 
D) The court would support the software company's policy due to "an overriding policy reason." 
E) The court is likely to interpret the exemption clauses very narrowly due to the nature of standard-form contracts. 
A) The court would likely refuse to interfere with the terms of the contract based on the "principle of freedom to contract." 
B) The courts would consider this a fundamental breach if it found the clauses to be "unconscionable, unfair, and unreasonable." 
C) The court would determine that Rice had equal bargaining power and therefore the court could not support his position. 
D) The court would support the software company's policy due to "an overriding policy reason." 
E) The court is likely to interpret the exemption clauses very narrowly due to the nature of standard-form contracts.

Question 3

The contract for the Surrey property had been signed by both parties.Which of the following is necessary for the contract to be set aside on the grounds of misrepresentation?

Accepted Answer

A) The misrepresentation must have been a false statement of a fact; false statements of opinion are never misrepresentations. 
B) The misrepresentation must have been in writing. 
C) The misrepresentation must have been a term of the contract. 
D) The misrepresentation must have been made recklessly or wilfully. 
E) The misrepresentation must have induced the party to enter the contract. 
A) The misrepresentation must have been a false statement of a fact; false statements of opinion are never misrepresentations. 
B) The misrepresentation must have been in writing. 
C) The misrepresentation must have been a term of the contract. 
D) The misrepresentation must have been made recklessly or wilfully. 
E) The misrepresentation must have induced the party to enter the contract.

Question 4

Although Zlotnic had been in business for a long time, he had been forced to borrow heavily in the last few years.When his debt reached the limit of his line of credit, $100 000, the manager of Regal Bank called him in for a talk.Subsequently, Zlotnic sold his house for $250 000 to the Johnsons.He contracted to buy another house from the Scotts.From the proceeds he anticipated receiving from the Johnsons, he assigned $200 000 to the Scotts, the purchase price of their house, and assigned $50 000 to Regal Bank to reduce his debt.The assignment to the Scotts was in writing; the assignment to the bank was not.The Scotts gave written notice of the assignment to the Johnsons on March 1, the day the money was owed to Zlotnic.The Johnsons verified the assignment and paid out the $200 000 to the Scotts.On March 2, Regal Bank gave written notice of its assignment to the Johnsons.Unfortunately, at that time only $45 000 was owing to Zlotnic because the Johnsons had paid $5000 to Canada Revenue Agency for Zlotnic.On these facts, which of the following is true?

Accepted Answer

A) The assignment to the bank is a statutory assignment. 
B) Regal Bank has no claim since the Johnsons didn't owe Zlotnic the specified $50 000 at the time of the assignment. 
C) Regal Bank must take "subject to the equities" between Zlotnic and the Johnsons (i.e., it can't receive the whole $50 000). 
D) Zlotnic needed the permission of the Johnsons, the debtors, before he could make any assignments. 
E) The assignment to the bank is not enforceable because it was not in writing. 
A) The assignment to the bank is a statutory assignment. 
B) Regal Bank has no claim since the Johnsons didn't owe Zlotnic the specified $50 000 at the time of the assignment. 
C) Regal Bank must take "subject to the equities" between Zlotnic and the Johnsons (i.e., it can't receive the whole $50 000). 
D) Zlotnic needed the permission of the Johnsons, the debtors, before he could make any assignments. 
E) The assignment to the bank is not enforceable because it was not in writing.

Question 5

The facts of a case heard by the Supreme Court of Canada are as follows: Mr.and Mrs.H were induced to sign a mortgage in favour of M.C.R.Ltd.by Johnston, a man living with their daughter.Johnston led them to believe that the document was an unimportant amendment to an existing mortgage when, in reality, it was a substantial second mortgage on their home.Neither read the document nor questioned it.When the payments were in arrears, the mortgage company took an action for foreclosure (to take the home).Mr.and Mrs.H.pleaded non est factum.Would this defence succeed? If so, why; if not, why not?

Accepted Answer

The defence would not succeed

Question 6

A real estate agent, Mr.Jones, was owed a $7000 commission, having sold property for Mr.Quick.Quick couldn't be found, but Jones did find Quick's wife and learned that she had over $20 000 in treasury bills.Jones told her that if she didn't assign to him $7000 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 $7000 but later tried to void the agreement, she would argue which of the following?

Accepted Answer

A) Privity 
B) Statutory assignment 
C) Duress 
D) Mistake 
E) Non est factum 
A) Privity 
B) Statutory assignment 
C) Duress 
D) Mistake 
E) Non est factum

Question 7

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10 000 to be forfeited in the event of Mike's failing to go through with the deal.This deposit was an honest estimate of the damages Rita would suffer.On these facts, which of the following is true?

Accepted Answer

A) If the contract price agreed upon was $150 000 and Rita, after Mike breaches the contract, sells the house in one week for $138 000, she will still be able to recoup all her losses. 
B) If Mike breaches the contract, he would not have to pay $10 000 even if Rita suffered a substantial loss. 
C) If Mike breaches the contract, he will have to pay Rita all damages that directly and naturally flow from the breach. 
D) If Mike breaches the contract, he would have to pay $10 000 even if Rita's actual loss was $40 000. 
E) A clause in a contract that provides for the forfeiture of a deposit is called an exemption clause. 
A) If the contract price agreed upon was $150 000 and Rita, after Mike breaches the contract, sells the house in one week for $138 000, she will still be able to recoup all her losses. 
B) If Mike breaches the contract, he would not have to pay $10 000 even if Rita suffered a substantial loss. 
C) If Mike breaches the contract, he will have to pay Rita all damages that directly and naturally flow from the breach. 
D) If Mike breaches the contract, he would have to pay $10 000 even if Rita's actual loss was $40 000. 
E) A clause in a contract that provides for the forfeiture of a deposit is called an exemption clause.

Question 8

Adam bought a boat from Charlie for $900 payable on November 6.On November 6, when Charlie came for the money, Adam didn't have it.Adam was, however, employed by Ms.Bey to do some market research.He was to be paid $1000 for his report, due on November 12.Charlie wanted an assignment of $900 of the amount Adam expected to receive November 12.Adam wrote out an assignment with all of the essential information and signed it.Charlie gave written notice of the assignment with all pertinent information to Ms.Bey the next day, November 7.On November 12, Adam had not finished his report.The contract provided that he would lose $100 for every week he was late.Adam was two weeks late in submitting his report.Which of the following is true?

Accepted Answer

A) Ms.Bey must honour the notice of assignment by paying out the $900 on the day the notice was received. 
B) The assignment fails to be an assignment at all because Adam failed to get the consent of Ms.Bey. 
C) Charlie, the assignee, would receive $800 from Ms.Bey and have to look to Adam for the other $100 owed. 
D) Charlie would get nothing because Ms.Bey owed less than the amount assigned. 
E) This assignment is a statutory assignment. 
A) Ms.Bey must honour the notice of assignment by paying out the $900 on the day the notice was received. 
B) The assignment fails to be an assignment at all because Adam failed to get the consent of Ms.Bey. 
C) Charlie, the assignee, would receive $800 from Ms.Bey and have to look to Adam for the other $100 owed. 
D) Charlie would get nothing because Ms.Bey owed less than the amount assigned. 
E) This assignment is a statutory assignment.

Question 9

Able Company contracted to sell to Baker Company 400 barrels of chemical C for $1200.Able Company assigned the entire $1200 in writing to Mr.Long, who sent a letter informing Baker Company of the assignment and directing Baker Company to forward money to him instead of Able Company.Unbeknown to both companies, at the time of the contract, the ship carrying the chemical had sunk and all cargo was lost.Which of the following is true?

Accepted Answer

A) The assignment to Mr.Long would fail to be a statutory assignment. 
B) Mr.Long will receive nothing from Baker Company because nothing is owed to Able Company. 
C) Mr.Long will receive part payment. 
D) Mr.Long, the assignee, will receive $1200 from Baker Company. 
E) Since Able Company has breached the contract, it pays compensation for the damages of both Baker Company and Mr.Long. 
A) The assignment to Mr.Long would fail to be a statutory assignment. 
B) Mr.Long will receive nothing from Baker Company because nothing is owed to Able Company. 
C) Mr.Long will receive part payment. 
D) Mr.Long, the assignee, will receive $1200 from Baker Company. 
E) Since Able Company has breached the contract, it pays compensation for the damages of both Baker Company and Mr.Long.

Question 10

Novation is the term used when a new party is substituted for an original party to the contract.

Accepted Answer

A) True 
 B)False

Question 11

Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.

Accepted Answer

Normal contractual r

Question 12

"In contract law, warranty is a promise by the manufacturer of a product to be responsible to make repairs on that product, if it's defective." Discuss the accuracy of this statement.

Accepted Answer

The statement is inaccurate.A warranty i

Question 13

Which of the following is true with respect to the law of negotiable instruments?

Accepted Answer

A) The Bills of Exchange Act is controlled by both federal and provincial legislation. 
B) A holder in due course is in a better position than he or she would be as the receiver of contractual rights through assignment. 
C) A bill of exchange involves two parties. 
D) The Bills of Exchange Act governs the area of bankruptcy and insolvency. 
E) Negotiable instruments are controlled by provincial legislation. 
A) The Bills of Exchange Act is controlled by both federal and provincial legislation. 
B) A holder in due course is in a better position than he or she would be as the receiver of contractual rights through assignment. 
C) A bill of exchange involves two parties. 
D) The Bills of Exchange Act governs the area of bankruptcy and insolvency. 
E) Negotiable instruments are controlled by provincial legislation.

Question 14

Damages as a remedy will not be available in which of the following situations?

Accepted Answer

A) Jones makes a negligent misstatement, persuading Smith to enter a contract with him. 
B) Jones, although being careful, makes an innocent misrepresentation, persuading Smith to enter a contract with him. 
C) Jones makes a fraudulent misrepresentation, persuading Smith to enter a contract with him. 
D) A false statement made by Jones becomes a term of the contract. 
E) None of the above 
A) Jones makes a negligent misstatement, persuading Smith to enter a contract with him. 
B) Jones, although being careful, makes an innocent misrepresentation, persuading Smith to enter a contract with him. 
C) Jones makes a fraudulent misrepresentation, persuading Smith to enter a contract with him. 
D) A false statement made by Jones becomes a term of the contract. 
E) None of the above

Question 15

Jones offers to sell Smith his car.Smith thinks Jones is selling his 2009 Toyota, and Jones thinks he is selling his 2012 Pontiac.This is an example of which of the following?

Accepted Answer

A) A mistake 
B) Fraudulent misrepresentation 
C) Shared mistake 
D) Misunderstanding 
E) One-sided mistake 
A) A mistake 
B) Fraudulent misrepresentation 
C) Shared mistake 
D) Misunderstanding 
E) One-sided mistake

Question 16

Define the term quantum meruit.

Accepted Answer

Quantum meruit is the court requirement

Question 17

On September 1, Beeton contracted to sell $4000 worth of specified Kenyan lumber to Cairns.Beeton expected the arrival of the lumber soon, so the delivery date was set for September 8.On September 5, Beeton assigned, in writing, his contractual right to receive the $4000 to his bank, which was pressing him to reduce his $17 000 debt.The bank sent a written notice to Cairns instructing him to forward the $4000 to the bank and not to pay Beeton directly.Unknown to either Beeton or Cairns, the lumber had been lost at sea in August, before they had even entered the contract.On these facts, which of the following is true?

Accepted Answer

A) The time for determining the "equities between the parties" is always the time that notice of the assignment is given. 
B) This assignment was not a statutory assignment (i.e., it failed to satisfy the statutory requirements for enforcement by the assignee against the debtor). 
C) The assignee would receive whatever the assignor had assigned to him, namely, the $4000. 
D) Because the assignment was made by Beeton to his bank in good faith, Cairns must pay the bank $4000. 
E) Because the goods bargained for had perished before the parties had contracted for them, the court would hold the contract void. 
A) The time for determining the "equities between the parties" is always the time that notice of the assignment is given. 
B) This assignment was not a statutory assignment (i.e., it failed to satisfy the statutory requirements for enforcement by the assignee against the debtor). 
C) The assignee would receive whatever the assignor had assigned to him, namely, the $4000. 
D) Because the assignment was made by Beeton to his bank in good faith, Cairns must pay the bank $4000. 
E) Because the goods bargained for had perished before the parties had contracted for them, the court would hold the contract void.

Question 18

Keri went to Crandon's computer outlet with her brother Paul, who was buying a laser printer.While she was waiting for him, she saw a poster saying that the store was collecting funds for a special computer for a student recently disabled in an accident.The seller induced Paul to buy the model "X" printer by stating as a fact that the printer could interface with his Macintosh clone.Paul paid $900 for the printer.Also, Keri gave $15 to the student fund after the seller confirmed he was collecting for the student's computer.Later, Paul and Keri learned that neither statement was true (i.e., the printer didn't interface with Paul's computer and the store was doing nothing for the student), and that the seller didn't believe that the statements were true when he made them.On these facts, which of the following is true?

Accepted Answer

A) Only Keri has a remedy because she had been fraudulently misrepresented. 
B) Paul could sue for damages due to an innocent misrepresentation. 
C) Keri could sue for damages due to a misunderstanding. 
D) The court would rescind Paul's contract only with proof that the seller knew his statement was false. 
E) Paul could sue for rescission because of the misrepresentation. 
A) Only Keri has a remedy because she had been fraudulently misrepresented. 
B) Paul could sue for damages due to an innocent misrepresentation. 
C) Keri could sue for damages due to a misunderstanding. 
D) The court would rescind Paul's contract only with proof that the seller knew his statement was false. 
E) Paul could sue for rescission because of the misrepresentation.

Question 19

When a condition is breached, the victim can only sue for damages but must continue to perform his or her obligations under the contract.

Accepted Answer

A) True 
 B)False

Question 20

What is the significance of determining that the misrepresentation was negligent rather than innocent?

Accepted Answer

The remedy of damage

To avoid a contract on the basis of non est factum, the mistake must have gone to the entire nature of the agreement, not just to some aspect of it.

The contract for the Surrey property had been signed by both parties.Which of the following is necessary for the contract to be set aside on the grounds of misrepresentation?

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10 000 to be forfeited in the event of Mike's failing to go through with the deal.This deposit was an honest estimate of the damages Rita would suffer.On these facts, which of the following is true?

Novation is the term used when a new party is substituted for an original party to the contract.

Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.

"In contract law, warranty is a promise by the manufacturer of a product to be responsible to make repairs on that product, if it's defective." Discuss the accuracy of this statement.

Which of the following is true with respect to the law of negotiable instruments?

Damages as a remedy will not be available in which of the following situations?

Jones offers to sell Smith his car.Smith thinks Jones is selling his 2009 Toyota, and Jones thinks he is selling his 2012 Pontiac.This is an example of which of the following?

Define the term quantum meruit.

When a condition is breached, the victim can only sue for damages but must continue to perform his or her obligations under the contract.

What is the significance of determining that the misrepresentation was negligent rather than innocent?

The Canadian Legal System

Torts and Professional Liability

Formation of Contracts

Legislation in the Marketplace

Agency and Employment

Methods of Carrying on Business

Property

Ideas and Information

Electronic Commerce and International Trade

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Exam 4: Enforcing Contractual Obligations

To avoid a contract on the basis of non est factum, the mistake must have gone to the entire nature of the agreement, not just to some aspect of it.

The contract for the Surrey property had been signed by both parties.Which of the following is necessary for the contract to be set aside on the grounds of misrepresentation?

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10 000 to be forfeited in the event of Mike's failing to go through with the deal.This deposit was an honest estimate of the damages Rita would suffer.On these facts, which of the following is true?

Novation is the term used when a new party is substituted for an original party to the contract.

Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.

"In contract law, warranty is a promise by the manufacturer of a product to be responsible to make repairs on that product, if it's defective." Discuss the accuracy of this statement.

Which of the following is true with respect to the law of negotiable instruments?

Damages as a remedy will not be available in which of the following situations?

Jones offers to sell Smith his car.Smith thinks Jones is selling his 2009 Toyota, and Jones thinks he is selling his 2012 Pontiac.This is an example of which of the following?

Define the term quantum meruit.

When a condition is breached, the victim can only sue for damages but must continue to perform his or her obligations under the contract.

What is the significance of determining that the misrepresentation was negligent rather than innocent?

The Canadian Legal System

Torts and Professional Liability

Formation of Contracts

Legislation in the Marketplace

Agency and Employment

Methods of Carrying on Business

Property

Ideas and Information

Electronic Commerce and International Trade

Filters