Exam 12: The Extent of Contractual Rights

George was approached by a travelling salesperson,who convinced him to purchase an automatic weaving machine at a price of $900.To encourage the sale,the salesperson had verbally agreed to purchase,for a very modest price,any goods George wove which were up to a marketable standard.It was suitable for a home business,and George undertook a series of payments under a written agreement.The machine did a poor job,producing nothing marketable.The salesperson had disappeared in the meantime,having assigned the agreement to a finance company.The finance company was now looking to George for payment.George refused to pay.Explain the rights and liabilities of the parties.

Kathy sells her business to Lucy for $40,000 including the stock,the goodwill,and the remainder of the lease.The landlord agrees that Kathy may end her involvement with the leased premises and that Lucy may take over the remainder of the lease on the same terms,and a new lease reflecting this is drawn up and signed by the landlord and Lucy.This new lease is an example of

Chris was indebted to Kirk for a loan of $1,000.Kirk assigned Chris' promise to pay to Bryce.The assignment by Kirk to Bryce must be in writing to be an effective assignment.

On March 6^th,the Limestone Student Society entered into a contract with the "Stumbling Stones," a rock group,to give a performance at the Limestone U Students' Union on March 31^st.On March 29^th,the "Stumbling Stones" fell ill with the flu,and were unable to travel to Limestone City.Another rock group was contacted by the Stumbling Stones to appear in their place,and arrived at the Students' Union in time to perform.The Limestone Student Society must allow the substitute rock group to perform by virtue of the legal doctrine of vicarious performance.

The Four Guys Garage advertised automobile repairs by "Licensed Mechanics." Terry,a car owner,took his automobile to the Four Guys Garage for repairs.The garage owner,Todd,examined the car,and indicated that extensive repairs were required.Terry left his car with Todd,and the repairs were carried out by another licensed mechanic,Rod,an employee.Terry paid $150 for the repairs,but on his way home discovered that the repairs had been negligently made,and had ruined the engine.Money damages awarded by the court for the negligence would be approximately equal to Terry's loss

An expert landscape architect,known for special skill in designing Japanese gardens,is engaged under contract by a municipality for the creation of a public park with a Japanese theme.The architect becomes unable to fulfill the obligation,but to the satisfaction of the municipality can name a replacement architect who will agree to execute the same work on the same terms.The legal mechanism required to effect this will be an equitable assignment.

Harvey sold a quantity of his hand-carved birdhouses to Keaton's Ltd.,stipulating in the contract that they were not be to resold for less than a stated price,so that Keaton's would not cause him to lose business when he sold them direct at craft fairs and shows.Keaton's found they could not sell them,so they resold them to Tom Terrific,a discounter,for the minimum price stipulated in the Harvey-Keaton contract.Tom Terrific then sold them at an even lower price as a loss leader since they had just become very popular. Discuss whether or not Harvey,whose own sales are now slumping,can sue Tom Terrific.

Chris was indebted to Kirk for a loan of $1,000.Kirk assigned Chris' promise to pay to Bryce.The assignment must be of the entire agreement between Chris and Kirk.

York Co.assigns a conditional contract with Bevier to Zeno Finance on November 10^th.Zeno Finance notifies Bevier of the assignment on November 17^th.Bevier had mailed his cheque to York Co.,due on November 15^th,on November 12^th.If Zeno Finance gave Bevier notice on November 13^th that the November 15^th payment was to be made to them,but Bevier had already mailed the cheque on the 12^th to York Co.,then Bevier must put a stop payment on the cheque to York Co.and send a new one to Zeno Finance for the November 15^th payment.

Andrews,wished to sell his home and contacted Theo,one of the real estate agents associated with a busy local brokerage.Theo came to the home in order to prepare a specification sheet of the home's features,to take some photographs and to enter into a listing agreement with Andrews.The listing agreement provided that: "In consideration of your listing and agreeing to offer my property for sale,I hereby give you sole and exclusive authority to sell my said property at the price of $189,000 and upon the terms particularly set out below or at such other price or terms to which I may agree.I further agree to pay you a commission of 6% of the sale price." Theo held numerous open houses at Andrews' home and generated considerable interest among prospective buyers.Within a short period of time an acceptable agreement of purchase and sale for the home was entered into by Andrews with a purchaser.That agreement contained the following provision: "THE UNDERSIGNED (Andrews)accepts the above offer and agrees with the Agent above named (Theo)in consideration for his services in procuring the said Offer,to pay him on completion of the sale,a commission of 6% of the sale price which commission may be deducted from the deposit.I hereby irrevocably instruct my solicitor to pay direct to the Agent any unpaid balance of commission from the proceeds." On the day of closing,Andrews' solicitor received a certified cheque in the full amount from the purchaser.Before the solicitor disbursed the funds Andrews instructed him not to honour the direction in the agreement of purchase and sale to pay directly to the agent any unpaid commission from the proceeds.The solicitor complied with Andrews' instructions and did not pay the funds to the agent. What legal issues are raised in this situation and what are the rights and liabilities,if any,of the parties involved?

On March 6^th,the Limestone Student Society entered into a contract with the "Stumbling Stones," a rock group,to give a performance at the Limestone U Students' Union on March 31^st.On March 29^th,the "Stumbling Stones" fell ill with the flu,and were unable to travel to Limestone City.Another rock group was contacted by the Stumbling Stones to appear in their place,and arrived at the Students' Union in time to perform.The contract,by its nature,is not subject to vicarious performance.

Dev contracts to build a computerized printing press for Tyrone.He subcontracts some of the work on the computerized components to another company,Charlie Co.,which wired a vital component negligently.The repairs are very costly for Tyrone.He can sue Dev for the losses caused by Charlie Co.

Carten Printing receives an unexpectedly large order for shipping envelopes from one of its regular clients,a major Canadian CD-ROM retailer.In order to meet the order delivery date,Carten farms out part of the printing to another firm,Serger Printing.Serger,in an attempt to raise its own profit margin on the deal,uses lower grade adhesive and cuts corners on printing quality.The faulty shipping envelopes show up as returns made to the retailer from dissatisfied customers.The retailer takes action against Carten for damages.What is the most likely outcome?

Pulpco contracts for logs from A1 Timber Co.,who later made a statutory assignment of its rights and obligations to Forest Green Co.(FGC).The quality of FGC logs was less than the fine product usually delivered by A1 Timber,and for which they were known,and Pulpco brought suit against A1 Timber on the grounds that the contract was not assignable.The court would find that the contract was assignable.

Ace Engineering needed cash and assigned a block of its accounts receivable to Wellington Finance Company.A week later,it assigned another block to Bagot Finance Company.By an oversight,the second block contained an account,a receivable from Smith,which Ace had already assigned to Wellington.The notice of assignment from Bagot arrived at the Smith offices before that of Wellington.Smith should pay against the demand of Bagot Finance Co.

Gerry and Juanita agree that Tracey must pay each of them $10 per month.They sign a contract and show it to Tracey,who makes no objection to it.Either Gerry or Juanita may enforce the contract against Tracey if she fails to pay.

A student from another class says that assignments were originally common law concepts but are now a statutory process.You disagree with him.

If Martin bought a property from Nevin,knowing (because it was noted on the title deeds)that Nevin had agreed to a restrictive covenant in his contract to purchase the property from Olan,Martin must conform to the restrictive covenant even if it is not included in his contract with Nevin.

York Co.assigns a conditional contract with Bevier to Zeno Finance on November 10^th.Zeno Finance notifies Bevier of the assignment on November 17^th.Bevier had mailed his cheque to York Co.,due on November 15^th,on November 12^th.Bevier must put a stop payment on the cheque to York Co.and issue a new one to Zeno Finance for the November 15^th payment.

Transfer of rights can be accomplished through which of the following: