Exam 8: Factors Affecting the Contractual Relationship

The remedy of rescission is not available if the parties cannot be returned to their original positions because the subject matter of the contract has been destroyed or damaged.

Kassem was a real estate agent with his own firm.Because his agency was new in a competitive field,he hired the company of Barrett and Barrett Ltd.to advise on an advertising strategy and to design ads for the newspaper and for brochures.Jack Barrett,senior employee,was handling the market research,and the employee Armstrong was doing the illustrations.When the work was complete,the ads went to press; unfortunately,after the printing,it was discovered that in all the ads and in every brochure "Kassem" was spelled "Kassim." Armstrong had made the mistake in his copy.Based on these facts,which of the following is true?

In which of the following instances would the court most likely hold the contract to be void on the basis of a mistake?

With regard to the law governing privity of contract and assignment,which of the following is false?

Randal embezzled $6000 of his employer's money and then disappeared.The employer's accountant called at Randal's residence and found out that his wife had a $3500 term deposit.When the accountant threatened to have her husband arrested and imprisoned if she did not agree,she assigned the term deposit to the employer to help to defray the loss from the embezzlement.If the wife were later to sue for return of the term deposit,what would be her ground for avoiding the assignment?

Selling the contents of the house in preparation for a move to a condominium,Mr.Lotski sold an antique desk to a Mr.Rogers who paid by a cheque later returned N.S.F.(not sufficient funds).Lotski later learned that Rogers had sold the desk to Mrs.Lee for cash,which he took and then disappeared.Who is entitled to the desk if the court holds that the first contract between Lotski and Rogers is voidable?

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 percent,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 place.On these facts,which of the following laws is the most likely to help her?

The misleading statement being complained of was an expression of opinion rather than fact; it is not actionable,even if the person making the statement was an expert.

Fraudulent misrepresentation is intentionally misleading another person into a contract.

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

Only when the misrepresentation is truly innocent and without fault is the victim restricted to the remedy of rescission.

In what way is a trust an exception to the privity rule?

Discuss what happens when the parties to a contract make mistakes with respect to what they have agreed.

When two parties are involved in a mutual mistake (misunderstanding)as to the meaning of a term of the contract,which of the following is usually applied by the court to settle the matter?

Len's new secretary came in and asked him to sign four letters that she said concerned general office matters.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 refused to pay it.He said he had been tricked and it was all a mistake.On these facts,which of the following is true?

A unilateral mistake refers a breach of a unilateral contract.

When the courts find that undue influence is present,the resulting contract is

An assignee is in no better position than the original contractor.

With regard to the law governing privity of contract and assignment,which of the following is true?

With respect to having the court set aside a contract on the basis of undue influence,which of the following is false?