Exam 8: Factors Affecting the Contractual Relationship

The purpose of contract law is to give effect to the reasonable expectations of the parties to an agreement.

________ attempts to return both parties to their original positions.The subject matter of the contract must be returned to the original owner,and any monies paid under the contract must also be returned.

Which of the following is false with regard to the law of contracts?

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

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.

When you went home for Thanksgiving dinner,your great aunt,now 80 years old,seemed very unhappy.You learned that she had just signed a contract to buy an expensive condominium in a retirement community.She had attended a real estate "seminar" with her friend.In trying to think of a way for her to get out from under this contract,you review mistake,duress,undue influence,and unconscionability.Which of the following is false?

A salesman innocently misrepresented a fact to a customer about a new printer.He honestly believed 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?

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

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.On these facts,which of the following is true?

Jenny went to the store and asked to see a Bluetooth headset.The salesman brought out a set that he said had all the features that she wanted.After looking at the price tag and little else,she said she would think about it.The salesman said that this was the most popular model sold,that they sold 1000 of them during the World Series alone,that it had the highest rating in Consumer Reports,and that he only had that one left.Jenny bought it.Later she found out that all the statements made to her by the salesman were false,including the statement that the headset had all the features that she wanted,because it did not have noise suppression.Which of the following is true?

"A misrepresentation involves one person making a false statement of fact that misleads another and induces that person to enter into the contract." Discuss the accuracy of this statement.

Discuss the signs that the doctrine of privity may be breaking down.In your discussion,include a reference to the leading cases in this area.

Explain what is meant by "privity of contract."

Where 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.

Mr.and Mrs.H were induced to sign a mortgage in favour of M Co.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 of their home.Neither read the document or questioned it.When the payments were in arrears,the mortgagee took an action for foreclosure (to take their home).Which of the following is correct with respect to the legal position of the parties?

The victim of intentional misrepresentation can sue for damages but cannot ask for rescission.

While selling the contents of his house in preparation for a move to a condominium,Mr.Lotski sold an antique desk to a Mr.Rogers,who paid by a cheque that was later returned N.S.F.(nonsufficient 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?

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?

Which of the following constitutes a misrepresentation that would not allow the courts to award the equitable remedy of rescission?

Damages are available as a remedy where the misrepresentation has become a term of the contract that is breached,where the misrepresentation is ________,and where there is negligence.