Question 1

Which of the following would most likely result in the court finding the contract had been discharged by frustration?

Accepted Answer

A) Cooper contracts to deliver ten bushels of ripe tomatoes to Haig's restaurant,but Cooper's tomato crop is destroyed by hail a few days before the delivery date. 
B) McGee contracts to give a lecture at a convention on modern marketing,but the convention is cancelled because of an epidemic. 
C) Moore,a sculptor,was delivering a $15,000 work when he lost control of the car and the work was crushed.He had been drinking heavily and had not bothered to wrap or box the work. 
D) Binks agreed to purchase a business from Kealy,but Binks suffered such great losses in the recent stock market crash that he couldn't afford to go through with it. 
E) McDonald agreed to buy Thornburn's horse,but unknown to both of them,at the time the contract was made the horse was dead. 
A) Cooper contracts to deliver ten bushels of ripe tomatoes to Haig's restaurant,but Cooper's tomato crop is destroyed by hail a few days before the delivery date. 
B) McGee contracts to give a lecture at a convention on modern marketing,but the convention is cancelled because of an epidemic. 
C) Moore,a sculptor,was delivering a $15,000 work when he lost control of the car and the work was crushed.He had been drinking heavily and had not bothered to wrap or box the work. 
D) Binks agreed to purchase a business from Kealy,but Binks suffered such great losses in the recent stock market crash that he couldn't afford to go through with it. 
E) McDonald agreed to buy Thornburn's horse,but unknown to both of them,at the time the contract was made the horse was dead.

Question 2

On the February 1,Smyth contracted to buy Dupont's van.They had agreed that Smyth would pay the price of $7000 on March 1 and take delivery and the risk on that date.Smyth then contracted to sell the van to Smithers on March 5 for $7600.On February 22,Dupont called Smyth and said he wasn't going to sell because he had decided to keep the van.On these facts,which of the following is false?

Accepted Answer

A) Dupont's call is an express repudiation of the contract and is an anticipatory breach. 
B) Smyth could agree to call off the contract; neither of them had yet performed. 
C) Smyth could refuse to acknowledge a breach,but that would result in the possibility that the contract could be breached later. 
D) Smyth could acknowledge that Dupont was in breach but has to wait until after the performance date to sue him for breach of contract. 
E) Smyth could refuse to acknowledge a breach and press Dupont to complete the contact. 
A) Dupont's call is an express repudiation of the contract and is an anticipatory breach. 
B) Smyth could agree to call off the contract; neither of them had yet performed. 
C) Smyth could refuse to acknowledge a breach,but that would result in the possibility that the contract could be breached later. 
D) Smyth could acknowledge that Dupont was in breach but has to wait until after the performance date to sue him for breach of contract. 
E) Smyth could refuse to acknowledge a breach and press Dupont to complete the contact.

Question 3

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

Accepted Answer

A) A contract can be ended by the happening of a "condition subsequent" provided for in the contract. 
B) A contract can be ended by one party if he finds a better deal (e.g.,by cancelling an order that has been accepted),as long as this is done before performance. 
C) A contract can be ended by agreement if neither party to the contract has performed his or her obligation. 
D) A contract can be ended by agreement if one party has performed his obligation and agrees to take something as satisfaction from the other although that other hasn't performed according to the contract. 
E) A contract can be ended by agreement by "mutual release." 
A) A contract can be ended by the happening of a "condition subsequent" provided for in the contract. 
B) A contract can be ended by one party if he finds a better deal (e.g.,by cancelling an order that has been accepted),as long as this is done before performance. 
C) A contract can be ended by agreement if neither party to the contract has performed his or her obligation. 
D) A contract can be ended by agreement if one party has performed his obligation and agrees to take something as satisfaction from the other although that other hasn't performed according to the contract. 
E) A contract can be ended by agreement by "mutual release."

Question 4

Which of the following would most likely result in the court's finding that the contract had been discharged by frustration?

Accepted Answer

A) Lowe contracted to purchase a business from Lerner,but the interest rates jumped so quickly that,even before closing,he realized he would lose money,so he told Lerner he couldn't go ahead with it. 
B) Thornburn agreed to buy Patterson's tulip crop,but unknown to both of them,at the time of the contract the crop had been destroyed by frost. 
C) Lee Ltd.agrees to haul lumber for Len Lumberjack,but a few days before the delivery date the company's best truck,the one they wanted to use,broke down. 
D) N.Yung contracts to give a performance at Etobicoke stadium,but the performance was cancelled because Yung was poisoned by contaminated food at a local restaurant. 
E) Mellowcream Ltd.contracted to deliver 40 dozen donuts to Pat's Place,but called Pat and told her it couldn't deliver because another customer needed another 40 dozen for an unexpected event. 
A) Lowe contracted to purchase a business from Lerner,but the interest rates jumped so quickly that,even before closing,he realized he would lose money,so he told Lerner he couldn't go ahead with it. 
B) Thornburn agreed to buy Patterson's tulip crop,but unknown to both of them,at the time of the contract the crop had been destroyed by frost. 
C) Lee Ltd.agrees to haul lumber for Len Lumberjack,but a few days before the delivery date the company's best truck,the one they wanted to use,broke down. 
D) N.Yung contracts to give a performance at Etobicoke stadium,but the performance was cancelled because Yung was poisoned by contaminated food at a local restaurant. 
E) Mellowcream Ltd.contracted to deliver 40 dozen donuts to Pat's Place,but called Pat and told her it couldn't deliver because another customer needed another 40 dozen for an unexpected event.

Question 5

An injunction is designed to punish someone for breaching a contract.

Accepted Answer

A) True 
 B)False

Question 6

Mikael recently started a home-based business selling custom fishing lures.He decided that he could make a lot more money selling his homemade lures on the Internet.Mikael is not the least bit technologically-inclined,but he knows that his next-door neighbour,Perm,does web design on the side.He decides to hire her to create a website for his new venture.Perm has him sign an agreement that includes an exemption clause that limits her liability in cases of negligence.In the course of designing the website,Perm becomes annoyed at Mikael because his dog keeps digging up her rose bushes.Rather than confront Mikael directly,Perm deliberately puts the wrong pricing information on Mikael's website to get him back.If Mikael suffers damages as a result and wants to sue Perm,what would the likely result be?

Accepted Answer

A) The exemption clause would protect Perm because of the principle of "freedom to contract." 
B) The exemption clause would be severed as being an illegal restraint of trade. 
C) Perm's actions were outside the scope of the contract,so Mikael would have no claim in law. 
D) Perm only did freelance web design; as a non-professional she would not face liability. 
E) Perm's acts were deliberate,not negligent,so Perm would not be protected by the exemption clause. 
A) The exemption clause would protect Perm because of the principle of "freedom to contract." 
B) The exemption clause would be severed as being an illegal restraint of trade. 
C) Perm's actions were outside the scope of the contract,so Mikael would have no claim in law. 
D) Perm only did freelance web design; as a non-professional she would not face liability. 
E) Perm's acts were deliberate,not negligent,so Perm would not be protected by the exemption clause.

Question 7

Ibolya entered into an employment contract with a Toronto advertising firm,VertaNet Ltd.The agreement included a non-competition clause that prevented her from participating in the advertising field in Toronto for five years after termination of her employment.In the event of a breach,the contract provided that Ibolya would have to pay VertaNet the sum of $500,000 as liquidated damages.Ibolya worked for VertaNet for a period of time,then took another job in Vancouver where she worked for four and half years.Six months before the expiry of the five-year period in her VertaNet contract,Ibolya returned to Toronto to take a part-time position at a small advertising firm.Although VertaNet did not suffer any damage,VertaNet sued Ibolya claiming $500,000.What is the likely outcome?

Accepted Answer

A) The non-competition clause is likely a penalty and therefore unenforceable. 
B) Although the amount claimed is unconscionable,the clause will be enforced as it is writing. 
C) Non-competition clauses generally are void as not being in the public interest. 
D) Liquidated damages clauses are illegal and therefore void. 
E) Unless the $500,000 had been prepaid,Ibolya has no good defence. 
A) The non-competition clause is likely a penalty and therefore unenforceable. 
B) Although the amount claimed is unconscionable,the clause will be enforced as it is writing. 
C) Non-competition clauses generally are void as not being in the public interest. 
D) Liquidated damages clauses are illegal and therefore void. 
E) Unless the $500,000 had been prepaid,Ibolya has no good defence.

Question 8

Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action?

Accepted Answer

A) This clause requires the injured party to take all reasonable steps to lessen (mitigate)his losses. 
B) The plaintiff will likely be awarded a judgment for all the damages that naturally and directly flow from the breach. 
C) The court will award the amount specified only if it accurately reflects the losses that actually took place. 
D) The court will likely award the amount set out in the clause if it considers that to be a genuine estimate by the parties of the likely consequences of a breach. 
E) Liquidated damages only apply to losses caused by excess water,such as floods or tidal waves. 
A) This clause requires the injured party to take all reasonable steps to lessen (mitigate)his losses. 
B) The plaintiff will likely be awarded a judgment for all the damages that naturally and directly flow from the breach. 
C) The court will award the amount specified only if it accurately reflects the losses that actually took place. 
D) The court will likely award the amount set out in the clause if it considers that to be a genuine estimate by the parties of the likely consequences of a breach. 
E) Liquidated damages only apply to losses caused by excess water,such as floods or tidal waves.

Question 9

What is a force majeure clause?

Accepted Answer

A force majeure clause is a co

Question 10

A student bought an elaborate smartphone for the stated purpose of listening to his taped notes while he went for his daily run.The contract he signed with the seller included a clause excusing the seller from liability for the breach of "any term of the contract,whether a breach of condition or warranty whether express,implied,statutory,or otherwise." After only 30 days,the smartphone failed to function at all.It was totally useless for the student's purpose,so he took it back to the seller.The seller refused to take it back and pointed out the exemption clause in the signed contract.On these facts,which of the following could be true?

Accepted Answer

A) The student could get around the exemption clause by arguing insufficient notice. 
B) The student could get around the exemption clause by the court's strict interpretation (construction)of the clause. 
C) The student could be awarded damages if the exemption clause were found invalid by the court on the grounds that the clause could not be interpreted to mean it would forgive such a fundamental breach. 
D) The student is out of luck because the contract with the exemption clause was in writing. 
E) All exemption clauses are illegal,and therefore the student would not be bound by this one. 
A) The student could get around the exemption clause by arguing insufficient notice. 
B) The student could get around the exemption clause by the court's strict interpretation (construction)of the clause. 
C) The student could be awarded damages if the exemption clause were found invalid by the court on the grounds that the clause could not be interpreted to mean it would forgive such a fundamental breach. 
D) The student is out of luck because the contract with the exemption clause was in writing. 
E) All exemption clauses are illegal,and therefore the student would not be bound by this one.

Question 11

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10,000 to be forfeited in the event of Mike's failing to go through with the deal.This deposit was an honest estimate of the damages Rita would suffer.On these facts,which of the following is true?

Accepted Answer

A) If Mike breaches the contract,he will have to pay Rita all the damages that directly and naturally flow from the breach. 
B) If Mike breaches the contract,he would not have to pay $10,000,even if Rita suffered a substantial loss. 
C) If Mike breaches the contract,he would have to pay $10,000 even if Rita's actual loss was $40,000. 
D) If the contract price agreed upon was $150,000 and Rita,after Mike breaches the contract,sells the house in one week for $138,000,she will still be able to recoup all her losses. 
E) A clause in a contract that provides for the forfeiture of a deposit is called an exemption clause. 
A) If Mike breaches the contract,he will have to pay Rita all the damages that directly and naturally flow from the breach. 
B) If Mike breaches the contract,he would not have to pay $10,000,even if Rita suffered a substantial loss. 
C) If Mike breaches the contract,he would have to pay $10,000 even if Rita's actual loss was $40,000. 
D) If the contract price agreed upon was $150,000 and Rita,after Mike breaches the contract,sells the house in one week for $138,000,she will still be able to recoup all her losses. 
E) A clause in a contract that provides for the forfeiture of a deposit is called an exemption clause.

Question 12

Jones entered into a contract to purchase a 1957 Edsel automobile from Smith for $2000.Unknown to Smith,Jones had an opportunity to resell that car for $5000 to Brown,who wanted to use it as a prop in a movie being shot in town.Before the car was delivered and payment made,it was destroyed by fire when one of Smith's employees carelessly spilled a can of gasoline in the garage where the car was kept.If the court found that the normal market value for such a vehicle was only $3000,which of the following statements is correct with respect to the appropriate remedy that should be awarded by the court for such a breach of contract?

Accepted Answer

A) Because of the uniqueness of the vehicle,the court should award specific performance. 
B) In these circumstances,the court should award $5000,representing the lost profits. 
C) In these circumstances,there should be no remedy since the contract has been frustrated. 
D) The court should award only $1000,the difference between the market price and the purchase price. 
E) The court could award $3000. 
A) Because of the uniqueness of the vehicle,the court should award specific performance. 
B) In these circumstances,the court should award $5000,representing the lost profits. 
C) In these circumstances,there should be no remedy since the contract has been frustrated. 
D) The court should award only $1000,the difference between the market price and the purchase price. 
E) The court could award $3000.

Question 13

Explain the limitations on the ability to request and receive equitable remedies in breach of contract cases.

Accepted Answer

Students should begin by noting that equ

Question 14

Indicate the various ways that the contractual relationship can come to an end.

Accepted Answer

A contractual relationship can end by pe

Question 15

Adams signed a contract in which he promised to sell his house to Jefferson for $225,000.The deposit to be paid was set at $4000,and the liquidated damages clause provided that the deposit would be forfeited in the event that the buyer breached the contract.The buyer did breach the contract.Because the cost of housing was falling,it was difficult,even after a reasonable time had passed,to find a new buyer.The highest offer was $218,000.Adams accepted.Which of the following is true with regard to Adams' remedies?

Accepted Answer

A) He would be entitled to damages for money lost-$7000 plus selling costs. 
B) He would be entitled to the $4000 only,if the court held that the deposit was an honest attempt of the parties to estimate damages. 
C) He could sue for an injunction to stop Jefferson from buying another house. 
D) He could ask the court to order an accounting. 
E) Adams must sue for specific performance,which is the only remedy,an equitable remedy,available to the parties in land transactions. 
A) He would be entitled to damages for money lost-$7000 plus selling costs. 
B) He would be entitled to the $4000 only,if the court held that the deposit was an honest attempt of the parties to estimate damages. 
C) He could sue for an injunction to stop Jefferson from buying another house. 
D) He could ask the court to order an accounting. 
E) Adams must sue for specific performance,which is the only remedy,an equitable remedy,available to the parties in land transactions.

Question 16

In a jurisdiction other than B.C.,Mr.Buyer sued Mr.Seller for breach of contract because Mr.Seller failed to deliver a computer system on time in accordance with their contract.Mr.Seller argued that he was not in breach and that the contract had been frustrated.The computer had been destroyed by water when a careless driver knocked over a fire hydrant outside the warehouse holding the computer.No deposit had been paid.The court held that the contract was frustrated.Based on this ruling,how does the court handle the situation?

Accepted Answer

A) Buyer will succeed against Seller for damages because the court will treat it as if it were an anticipatory breach. 
B) The court will let the losses lie where they fell,despite any of Seller's costs in preparing the computer system. 
C) Buyer will not have to pay anything to Seller unless Seller had requested a deposit at the time of contract. 
D) The court will look at the costs incurred and any payments made,and will apportion the losses between the parties. 
E) The court will treat the contract as if there were a common mistake about the existence of the subject matter. 
A) Buyer will succeed against Seller for damages because the court will treat it as if it were an anticipatory breach. 
B) The court will let the losses lie where they fell,despite any of Seller's costs in preparing the computer system. 
C) Buyer will not have to pay anything to Seller unless Seller had requested a deposit at the time of contract. 
D) The court will look at the costs incurred and any payments made,and will apportion the losses between the parties. 
E) The court will treat the contract as if there were a common mistake about the existence of the subject matter.

Question 17

What is the result of a breach of a significant term of a contract where there is a minor failure to perform?

Accepted Answer

The other party must

Question 18

________ occurs when the court orders the defaulting party to live up to the terms of the contract.

Accepted Answer

A) An injunction 
B) Specific performance 
C) An accounting 
D) Quantum meruit 
E) Compensation 
A) An injunction 
B) Specific performance 
C) An accounting 
D) Quantum meruit 
E) Compensation

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Rick was a talented computer programmer and had agreed to work for Bill in his successful computer software business,signing a one-year contract to that effect.On the day he was to start work,and after a week of training where he learned a considerable amount of confidential information about Bill's operation,he phoned Bill and announced that he was going to work for Bill's competitor instead.Which of the following is the appropriate remedy in these circumstances?

Accepted Answer

A) Specific performance 
B) Accounting 
C) Injunction 
D) No remedy 
E) Rescission 
A) Specific performance 
B) Accounting 
C) Injunction 
D) No remedy 
E) Rescission

Which of the following would most likely result in the court finding the contract had been discharged by frustration?

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

Which of the following would most likely result in the court's finding that the contract had been discharged by frustration?

An injunction is designed to punish someone for breaching a contract.

Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action?

What is a force majeure clause?

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10,000 to be forfeited in the event of Mike's failing to go through with the deal.This deposit was an honest estimate of the damages Rita would suffer.On these facts,which of the following is true?

Explain the limitations on the ability to request and receive equitable remedies in breach of contract cases.

Indicate the various ways that the contractual relationship can come to an end.

What is the result of a breach of a significant term of a contract where there is a minor failure to perform?

________ occurs when the court orders the defaulting party to live up to the terms of the contract.

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

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: The Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence,Professional Liability,and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

Agency and Partnership

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters

Exam 9: The End of the Contractual Relationship

Which of the following would most likely result in the court finding the contract had been discharged by frustration?

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

Which of the following would most likely result in the court's finding that the contract had been discharged by frustration?

An injunction is designed to punish someone for breaching a contract.

Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action?

What is a force majeure clause?

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10,000 to be forfeited in the event of Mike's failing to go through with the deal.This deposit was an honest estimate of the damages Rita would suffer.On these facts,which of the following is true?

Explain the limitations on the ability to request and receive equitable remedies in breach of contract cases.

Indicate the various ways that the contractual relationship can come to an end.

What is the result of a breach of a significant term of a contract where there is a minor failure to perform?

________ occurs when the court orders the defaulting party to live up to the terms of the contract.

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

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: The Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence,Professional Liability,and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

Agency and Partnership

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters