Exam 11: Failure to Create an Enforceable Contract

Wes,a neighbour of Stan,wished to borrow a sum of money from a local bank.Stan was quite wealthy,but elderly,with very poor eyesight.He frequently requested Wes to read his newspaper to him when Wes would drop by for a visit,because reading bothered his eyes.One evening,Wes placed a paper before Stan,and explained to him that he wished to borrow a sum of money,but required a letter of reference before the bank would make the loan.He requested Stan to sign the paper to satisfy this requirement.Stan trusted his friend Wes,and signed the paper at his request without reading it.Unknown to Stan,the paper was a guarantee of Wes's indebtedness,and not a letter of reference.Wes later defaulted on his debt.If Wes had told Stan that the paper was a guarantee for $1,500 when it was in fact for $2,000,Stan could still successfully plead non est factum as a defence.

Sarah Burns is suing her lawyer,Tom Lachey,for the return of property worth $20,000 that she had given him.She had signed a properly sealed document making the gift to him.She says she knew what she was signing but felt overwhelmed by his manner.If Sarah Burns is married to Tom Lachey,she cannot sue him for undue influence.

Brianne discovered that her younger sister,Alda,desperate to break her addiction to cocaine and unable to get into a Canadian addiction program for many months,has made a contract with a doctor from the U.S.A.The doctor will treat at his centre immediately,in return for which Alda has signed over to him the inheritance from her grandmother to which she will have access when she turns 22 next year.Since the cost of the treatment is only a fraction of the value of Alda's inheritance,Brianne promises to pay for the treatment if Alda can reimburse her next year.However,the doctor refuses to release Alda from their contract,and she does not know what to do.

Rob purchased an old glass vase,which Banya represented as an antique made by a famous Italian glassmaker in the 17^th century.As proof of its authenticity,Banya produced an old paper with a rough sketch of the vase on it,along with some writing,and what appeared to be the glassmaker's name.Rob later sold the vase to Castillo,after telling Castillo the story of the vase as told to him by Banya.After Castillo had purchased the vase,he discovered it to be a reproduction of the original,and of very little value.Castillo may take action against Rob to have the contract rescinded on the basis of fraudulent misrepresentation by Rob.

A met B while shopping,and in the course of conversation,mentioned that he had a motorcycle for sale.B was familiar with A's motorcycle,and offered to purchase it for $500.A accepted the offer,and A and B walked to A's home to get the motorcycle.When they reached A's house,they were told by A's father that the motorcycle had been stolen earlier in the day,and was subsequently found by the police in a badly damaged and burned condition in a local stone quarry.B is bound in contract,and must purchase the motorcycle even though it is badly damaged.

Where there has been rescission,there must have been reliance.

Given the degree to which courts are willing to enforce contracts subject to mutual mistake,cases of this sort tend to place greater hardship upon defendants than plaintiffs.

Sarah Burns is suing her lawyer,Tom Lachey,for the return of property worth $20,000 that she had given him.She had signed a properly sealed document making the gift to him.She says she knew what she was signing but felt overwhelmed by his manner.It is up to Tom Lachey,under these circumstances to prove that he did not unduly influence Sarah Burns,if she simply alleges that he did.

Sunjai,who is functionally illiterate,asks her friend Hahna to read a document aloud to her.She is to sign it in order to purchase chinchillas from Patrice to start a breeding farm.Actually it is a deed transferring ownership of Sunjai's farm to Patrice and,unknown to Sunjai,Patrice and Hahna have made a secret agreement to sell the farm and share the proceeds.Since Sunjai did what was reasonable to deal with her own inability to read,she could raise the defence of non est factum to an action by Patrice to get possession of the farm.

Sarah Burns is suing her lawyer,Tom Lachey,for the return of property worth $20,000 that she had given him.She had signed a properly sealed document making the gift to him.She says she knew what she was signing but felt overwhelmed by his manner.If Sarah Burns,through embarrassment,fails to do anything about the return of the property for several months,it is unlikely that she would then win an undue influence suit even if she might have done so if she had acted promptly.

Fronia,a neighbour of David,wished to borrow a sum of money from a local bank.David was quite wealthy but elderly,with very poor eye sight.He frequently requested Fronia to read his newspaper to him when Fronia would drop by for a visit because reading was exceedingly difficult for him. One evening,Fronia placed a paper before David and explained to him that he wished to borrow a sum of money but required a letter of reference before the bank would make the loan.She requested David to sign to the paper to satisfy this requirement.David trusted his friend Fronia,and signed the paper at his request without reading it. Unknown to David,the paper was a guarantee of Fronia's indebtedness,and not a letter of reference,and Fronia later defaulted on her debt.

.Red Stripe replied saying the $4 price is in Canadian currency,not Jamaican currency.When a contract does not specify the currency but only contains the $ symbol,the contract

Sunjai,who is functionally illiterate,asks her friend Hahna to read a document aloud to her.She is to sign it in order to purchase chinchillas from Patrice to start a breeding farm.Actually it is a deed transferring ownership of Sunjai's farm to Patrice and,unknown to Sunjai,Patrice and Hahna have made a secret agreement to sell the farm and share the proceeds.Sunjai could not raise the defence of non est factum if the document she signed was one to purchase chinchillas,but for a much higher price than Hahna read to her.

While George was visiting his physician,he mentioned to him that he wished to sell his expensive sailboat.The physician expressed an interest in buying the boat,and offered to pay George $10,000 for it.George had intended to advertise the boat for $12,000 in the local newspaper,but agreed to sell it to the physician for $10,000.Some weeks after the boat had been sold; George wished to avoid the contract.George may raise the claim of undue influence in an attempt to recover the sailboat.