Exam 4: Enforcing Contractual Obligations

When a negotiable instrument is used, the drawer of the instrument cannot use the rule of privity to limit the claim of the holder.

A salesman innocently misrepresented a fact about a new printer to a customer.He honestly believed that his statement was true and was not careless.Although this fact was not about a term of the contract, it did induce the customer to buy that printer.The next day, the customer learned the true facts and wanted to return the printer.If the store refused to take it back and the customer sued, which of the following would be the most likely result?

Joe, a student at the local college, had a one-year lease on a suite in a house owned by Sam.Sam sold that house to Jones without telling him about the lease.When Jones discovered Joe in the suite, he demanded that Joe leave.Explain the rights of the parties in terms of privity of contract.

A condition precedent is a term of a contract that will bring that contract to an end when the specified condition is met.

It came to your attention that your great-grandmother had signed a contract pursuant to which she would be paying $5000 for an electronic organ that retails in reputable stores for $3000.Furthermore, the interest being charged is 18%, even though today's rate fell to a 20-year low.This debt is totally out of line with her pension income.It is apparent that she was misled by the door-to-door salesperson who came to her home.On these facts, which of the following laws is the most likely to help her?

Privity of contract is a principle that holds that a contract can affect only the immediate parties to it.

Often a party to a contract wants to avoid his or her obligations by arguing that the contract was entered into because of a mistake, misrepresentation, undue influence, or duress.Which of the following is true with regard to these areas of the law?

Discuss the development and importance of the principle of unconscionable contracts.In your answer, compare unconscionability to insanity, duress, and undue influence.

Which of the following is true with regard to ending a contract by agreement?

Injunction is an example of an equitable remedy.

Discuss unconscionability with respect to contract law.

In which of the following would the court find that the contract is void (i.e., not a binding agreement)?

Harry agreed to make a new violin for Ted at a particularly attractive price.Before he finished crafting it, however, an opportunity arose to work as a salesman for Joe's Fine Cars.Since it was clear that he could never make a living as a violin maker, Harry took the job and refused to finish the violin for Ted.Which of the following is the appropriate remedy in these circumstances?

Specific performance is an equitable remedy that requires the breaching party to perform his or her part of the contract.

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

With regard to exemption clauses, which of the following is true?

When an outside, unforeseen event interferes with the performance of a contract, and there is some other way to fulfill the contract, performance is required.

Discuss frustration in contract law and indicate when it is available and how and why it has been modified by statute.

When there is disagreement over the meaning of a term in a contract, the normal approach taken by the courts is to apply the most reasonable interpretation, although the courts will refuse to imply terms into the agreement that the parties have left out.

With regard to the law concerning misrepresentation, which of the following is true?