Exam 8: Factors Affecting the Contractual Relationship

Misunderstanding occurs when each party has a different understanding of the terms of the agreement,in which case the courts apply a reasonable interpretation of the contract.

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

Tong hired Hocaloski to design an ad for her business.Hocaloski gave the job to Peppar,her employee.After the ad was run,it was noticed that Peppar had made a serious error.He gave the wrong address and phone number for the business.On these facts,which of the following is true?

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

What is the significance of an assignment being "statutory" rather than merely an "equitable" assignment?

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?

When there is clear evidence that both parties agreed to something different than what was in the written document,the courts will rectify the document.

A week after signing a contract,you became aware that you and the other party,Sheldon,seemed to have a different understanding of one of the provisions of the contract.Before you said anything to him,you reread it to see if your interpretation was valid.As you reread it,you noticed that not only was that provision vague,but also other terms and provisions were ambiguous or left out.Which of the following is false with regard to the methods used by the courts to interpret contracts?

Joe owned an apartment building and entered into a contract with Sam whereby Sam would operate the apartment building but the proceeds from the rent and profits would be distributed among Joe's children.If Joe were to die and Sam were to refuse to pay out any profits to the children,what could they do?

A victim of fraud cannot seek damages where rescission is not available.

The major problem with fraudulent misrepresentation is the need to establish that the person being sued knowingly misled the victim.

In which scenario will the court likely find the contract void on the grounds of mistake?

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

Len's new secretary came in and asked him to sign four letters that he 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 his bank,and when his 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?

The victim of fraudulent misrepresentation retains the right to have the parties to the contract returned to their original positions but not to be reimbursed for any out-of-pocket expenses.

For a contract to be unconscionable,it is necessary that the victim was particularly vulnerable and that the bargain was unfair.

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

"Joe received a cheque from Sam for work he had done painting Sam's house,and Joe passed that cheque onto Harry.Harry took it,not knowing that the work done was defective.Because of the principle that an assignee of contractual rights is in no better position than an assignor,Harry would not be able to demand payment on that cheque from Sam." Discuss the accuracy of this statement.

Explain what is meant by unjust enrichment.

In Works v.Works,what was the result where one party was mistaken about something significant in the contract?