Exam 7: An Introduction to the Legal Relationship

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Rahul nodded affirmatively.The two then went about their separate business.Later in the day,Rahul met Brown,who also had a canoe for sale,and Rahul offered to purchase Brown's canoe for $175.Brown agreed to sell Rahul his canoe.At 4 p.m.the same afternoon,after Rahul and Brown had made their arrangement,Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe.Rahul's offer was merely an invitation to do business.

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(True/False)

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Question 1

Correct Answer:

Verified

False

Ian offered to sell his horse to Wanda for $3,500.Wanda wanted to think about it and let Ian know by email.Ian agreed.Wanda emailed Ian at 11:45 that night.What type of contract was formed?

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(Multiple Choice)

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Question 2

Correct Answer:

Verified

At a computer fair,Porter saw a demonstration by Maxwell of an excellent new accounting software package published by Slyckbyte Co.,but he felt it was overpriced at $900."At $500," he said,"I would definitely buy it." Maxwell said that she was not authorized to give deals to anyone,not even such a good customer as Porter.Porter bought another package from a different company.Four days later,he received a package from Maxwell that contained the new software and a letter which said that Slyckbyte was happy to give him the discount he had wanted and that she looked forward to receiving his cheque within the next few days. Discuss whether Porter must pay for the software.

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(Essay)

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Question 3

Correct Answer:

Verified

If Maxwell meant that she was refusing Porter's counteroffer when she said she was not authorized to give him a deal,then she has caused his counteroffer to lapse,and her letter and the software is a new offer.This means that Porter can accept it or reject it.While generally,unsolicited goods sent to people create no liability for them,use of the goods here would be an acceptance of the contract.Failing to return it to Slyckbyte might also mean acceptance of their offer,since it had been sent to him because Maxwell thought she was accepting a counteroffer.It is probable however,that while Maxwell could argue that she never intended to reject his counteroffer,a court would say that she should have made that clear to Porter,especially since if no acceptance has been made of the counteroffer,it would normally lapse once they parted at the fair.

Franklin Motors Ltd.makes an agreement to buy 3,000 widgets for $1,000 from Stovely's Engineering Co.The law presumes that,unless one of them proves otherwise,they intended this agreement to be a legally binding one.

(True/False)

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Question 4

Giardetti,a retailer,placed an advertisement in a local newspaper on May 5^th that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10^th at a sale price of $100 each.Regular price $199.First come,first served!" Don was the 10^th customer in the store on May 10^th,but Giardetti refused to sell him a TV set for $100.If Don had seen the notice on the shop door on May 9^th; he could still accept the offer,because the offer was irrevocable.

(True/False)

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Question 5

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Rahul nodded affirmatively.The two then went about their separate business.Later in the day,Rahul met Brown,who also had a canoe for sale,and Rahul offered to purchase Brown's canoe for $175.Brown agreed to sell Rahul his canoe.At 4 p.m.the same afternoon,after Rahul and Brown had made their arrangement,Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe.Rahul and Brown established a binding contract which both parties are obliged to perform.

(True/False)

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Question 6

A computer software company advertised a new organizational program as one of the most "user friendly" programs of its kind on the market.The Smallville police department used the program and,during operation,the program collapsed,losing vital information related to the effectiveness of the department in carrying out its duties.Under the law of contract,what is the software company's position with respect to liability?

(Multiple Choice)

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Question 7

A trader on the floor of the Stock Exchange makes a deal with another trader by hand signals for the sale of a block of shares.This is a binding contract.

(True/False)

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Question 8

Discuss the significance of Carlill v.Carbolic Smoke Ball Co.[1893],1 Q.B.256 for modern day marketing practice.Give some examples to illustrate your points.

(Essay)

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Question 9

Jill has been negotiating the purchase of a speedboat with Sandi during the past two weeks.Two days ago,she wrote to Sandi,saying "I won't go any higher than $8,000.Take it or leave it,but that's my final offer." By coincidence,Sandi sent a letter the same day which said "I won't take less than $8,000,so if you can't accept that,I'll have to look elsewhere for a buyer." The letters have both arrived today at their destinations.There is a contract between Jill and Sandi.

(True/False)

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Question 10

The world of commerce requires that the intention to create a legal relationship be proven before any contract can be found to exist between the parties.

(True/False)

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Question 11

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Rahul nodded affirmatively.The two then went about their separate business.Later in the day,Rahul met Brown,who also had a canoe for sale,and Rahul offered to purchase Brown's canoe for $175.Brown agreed to sell Rahul his canoe.At 4 p.m.the same afternoon,after Rahul and Brown had made their arrangement,Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe.Brown's acceptance of Rahul's offer was unconditional.

(True/False)

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Question 12

Mike responds to Flavio's statement that he would like to buy Mike's motorbike for $3,000 by saying that he would want $4,000,given the work he has put into it.Flavio says OK.I'll give you that.Here's $2,000,and I'll give a promissory note for the balance payable at $500 a month for the next 4 months." 1)There is a contract. 2)There is no contract. 3)Flavio's first statement to Mike was an invitation to do business. 4)Mike's response was a counter offer. 5)Flavio's final statement to Mike was an acceptance.

(Multiple Choice)

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Question 13

Skinny You is a brand new "weight loss pill." It is being sold by a new company; Skinny Products Inc.Advertisements were placed in the back of Teen Beauty magazine that provided potential consumers with information about the success rate of the pills-"Weight Loss of 10 pounds in 10 days if used as instructed." Skinny Products Inc.guaranteed the weight loss by saying that if customers did not lose 10 pounds in 10 days then they would receive $100.To increase consumer confidence of the damages being paid Skinny Products Inc.stated that it had put money in trust.Latisha purchased Skinny You and used it for 10 days,as instructed,but only lost 4 pounds.Can she sue Skinny Products Inc for breach of contract?

(Multiple Choice)

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Question 14

Paulette Paulson Furs advertises mink coats for sale at 30% off.The demand was much greater than anyone could have predicted,and 14 people who came to the store could not be provided with one of the sale coats.Since they had accepted Paulson's offer,she will have to find coats for them or be in breach of their contracts.

(True/False)

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Question 15

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Rahul nodded affirmatively.The two then went about their separate business.Later in the day,Rahul met Brown,who also had a canoe for sale,and Rahul offered to purchase Brown's canoe for $175.Brown agreed to sell Rahul his canoe.At 4 p.m.the same afternoon,after Rahul and Brown had made their arrangement,Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe.Rahul's offer lapsed when Rahul agreed to purchase Brown's canoe.

(True/False)

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Question 16

Craig makes an offer to Josie by mail,because she cannot be reached by telephone.She replies by mail,accepting the offer.Canada Post mislays her reply for several weeks.Craig,who has given up waiting to hear from her,has entered into the contract with someone else after waiting for a reasonable time.Josie can sue Craig for breach of contract.

(True/False)

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Question 17

Rahul met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Rahul nodded affirmatively.The two then went about their separate business.Later in the day,Rahul met Brown,who also had a canoe for sale,and Rahul offered to purchase Brown's canoe for $175.Brown agreed to sell Rahul his canoe.At 4 p.m.the same afternoon,after Rahul and Brown had made their arrangement,Jones telephoned Rahul to say he would accept Rahul's offer to buy his canoe.The acceptance by Jones was ineffective because Jones did not reply to Rahul by way of a written acceptance.

(True/False)

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Question 18

As you are walking out of class one night,you discover a notebook,full of equations,belonging to a professor in your school.You write a note telling him who you are and where and when you found it,and you drop the note in an envelope,into one of the university's internal mail boxes.The next day the campus is covered with notices which say "$100 REWARD.A notebook containing mathematical explanation of the meaning of life has been lost.If found,please return to Professor Doddering in Room A123."

(Multiple Choice)

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Question 19

Alliston enters into an agreement with Berkley which,for $2,000,gives him the right to agree to purchase Berkley's screen printing business within the next 30 days for $50,000.If he decides to buy,they agree that the $2,000 will be the down payment on the purchase price.This agreement is an option.

(True/False)

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Question 20

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Exam 7: An Introduction to the Legal Relationship

Ian offered to sell his horse to Wanda for $3,500.Wanda wanted to think about it and let Ian know by email.Ian agreed.Wanda emailed Ian at 11:45 that night.What type of contract was formed?

Franklin Motors Ltd.makes an agreement to buy 3,000 widgets for $1,000 from Stovely's Engineering Co.The law presumes that,unless one of them proves otherwise,they intended this agreement to be a legally binding one.

A trader on the floor of the Stock Exchange makes a deal with another trader by hand signals for the sale of a block of shares.This is a binding contract.

Discuss the significance of Carlill v.Carbolic Smoke Ball Co.[1893],1 Q.B.256 for modern day marketing practice.Give some examples to illustrate your points.

The world of commerce requires that the intention to create a legal relationship be proven before any contract can be found to exist between the parties.

Alliston enters into an agreement with Berkley which,for $2,000,gives him the right to agree to purchase Berkley's screen printing business within the next 30 days for $50,000.If he decides to buy,they agree that the $2,000 will be the down payment on the purchase price.This agreement is an option.

The Law and the Legal System

The Judicial System and Alternative Dispute Resolution

Business Regulation

Intentional Torts

Negligence and Unintentional Torts

Special Tort Liabilities of Business Professionals

The Requirement of Consideration

Legal Capacity to Contract and the Requirement of Legality

The Requirements of Form,writing and Privacy

Failure to Create an Enforceable Contract

The Extent of Contractual Rights

Performance of Contractual Obligations

Breach of Contract and Remedies

Law of Agency

Law of Sole Proprietorship and Partnership

Corporation Law

Securities Regulation

Employment and Labour Relations

The Law of Bailment

The Sale of Goods

Interests in Land

The Law of Mortgages

Leasehold Interests

Commercial and Residential Real-Estate Transactions

Intellectual Property,patents,trademarks,copyright and Franchising

Consumer-Protection Legislation

Law of Negotiable Instruments

Security for Debt

Bankruptcy and Insolvency

Insurance Law

Restrictive Trade Practices

International Business Law

Environmental Law

What are the requirements under Canada's Anti-Spamming Legislation?

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