Exam 8: Factors Affecting the Contractual Relationship

Although Zlotnic had been in business 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 the Regal Bank called him in for a talk.Subsequently,Zlotnic sold his house for $250 000 to the Johnsons.He contracted to buy another from the Scotts.From the proceeds he anticipated receiving from the Johnsons,he assigned $200 000 to the Scotts,the purchase price of Scott's house,and assigned $50 000 to the 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.Johnson verified the assignment and paid out the $200 000 to the Scotts.On March 2,the 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 the Canada Revenue Agency for Zlotnic.Based on these facts,which of the following is true?

A and B entered into a contract for the purchase and sale of three grams of cocaine.B delivered the goods,but A didn't pay.If B sued for payment,the court would not enforce the contract because of which of the following?

In order to succeed in suing for a misrepresentation,that misrepresentation must have been in writing.

Indicate what must be present in order for an assignment to qualify as a statutory assignment.

A windfall that one party to a contract stands to make at the expense of the other is known as ________.

Explain what is meant by "vicarious performance."

What is privity of contract?

Susan sought to set aside a mortgage on the grounds of misrepresentation,undue influence,and non est factum.She had been persuaded to enter into that mortgage contract with a mortgage company by her doctor.Which of the following is true with regard to these challenges to the mortgage contract?

Len was behind in his work at the office.He decided to go in for a few hours on Sunday to catch up.He asked a secretary to come in for four hours.He turned on his office TV.Just then his secretary came in and asked him to sign four letters that she said concerned general office matters.He carelessly signed them without taking his eyes off the TV screen.One of the "letters" was,in fact,a cheque for $500 payable to the secretary.The secretary cashed the cheque at her bank,and when her bank presented the cheque for payment,Len instructed his bank not to honour it.He said that he had been tricked and that his signing it was all a big mistake.On these facts,which of the following is true?

Discuss the concept of an assignment,including an explanation of its significance in the modern business world.

Mr.Frank,a foreman supervising some 43 employees,was asked by his secretary to sign a form requesting additional supplies needed on the factory floor.He was not careless when he examined the form,but his secretary had cleverly arranged the signature line so that instead of signing a request for supplies he signed a cheque payable to his secretary.What plea,if any,would be used to defend against her action on the cheque?

Sam agreed to buy property from Joe to build a store of a certain design.Joe,the vendor,was aware of the design and knew that an easement across the back of the property would prevent such a building being erected,but said nothing.Sam purchased the property,later discovered the easement,and learned that Joe knew about it.He sued for misrepresentation.Discuss the likely outcome.

What does it mean that an assignee is "subject to the equities"?

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 second substantial mortgage on their home.Neither read the document nor questioned it.When the payments were in arrears,the mortgagee took an action for foreclosure (to take their home).Mr.and Mrs.H.pleaded non est factum.Would this defence succeed? If so,why; if not,why not?

Fraud does not exist if the victim of the misrepresentation could have found out the truth,but relied instead on the statement of the defendant.

A provision in equity whereby one person transfers property to a second person obligated to use it to the benefit of a third is known as ________.

In Moss v.Chin,Chin's insurer,ICBC,made an offer to settle a claim that was accepted by the public trustee representing Mrs.Moss.ICBC was not aware that Mrs.Moss had died in the interim.ICBC made a unilateral mistake and yet the Court ordered that the contract be rescinded.What was the rationale?

Indicate three situations where the courts will presume a relationship to involve undue influence.

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 he discovered Joe in the suite,he demanded that Joe leave.Explain the rights of the parties in terms of privity of contract.

Which of the following will have the likely consequence of the court finding the contract void on the grounds of mistake?