Exam 4: Enforcing Contractual Obligations

Clive and Bill were not friends but worked in the same firm.Both worked with computers and had computers at home.They entered a contract in which Clive agreed to sell Bill his "Apple,printer,and a compatible word processing program for $3000." When Bill went to take delivery of the goods,he realized that there had been a great mistake.He thought Clive was selling his Apple Macintosh.By "Apple" Clive meant his Apple IIe.Furthermore,unknown to both of them at the time of the contract,the program disk had been destroyed by some coffee accidentally spilled on it by a friend of Clive's wife.Bill refused to go through with the deal.On these facts,which of the following is true if Clive sues Bill?

A misrepresentation must be a false statement of fact unless it is a statement by an expert.

Distinguish between duress and undue influence.

When there is disagreement over the meaning of a term in a contract,the normal approach taken by the courts is to apply the most reasonable interpretation,although the courts will refuse to imply terms into the agreement that the parties have left out.

A breach of warranty allows a victim to sue for damages,but he or she must go through with his or her obligations under the contract.

Specific performance is an equitable remedy that requires the breaching party to perform his or her part of the contract.

Kassem is a real estate agent with his own firm.Because his agency is new in a competitive field,he hired the company of Barrett and Barrett Ltd.to advise on an advertising strategy and to design newspaper ads and brochures.Jack Barrett,senior employee,was handling the market research,and the employee Armstrong was doing the illustrations.When the work was complete,the ads went to press; unfortunately,after the printing,it was discovered that in all of the ads and in every brochure,"Kassem" was spelled "Kassim." Armstrong had made the mistake in his copy.On these facts,which of the following is true?

Mr.Rice purchased software online from a major software company based in Ontario,accepting the terms of the standard-form contract when he clicked on "Agree." When the software failed to perform as advertised,Rice complained but his complaints were ignored.When he threatened the software company with legal action,it was then pointed out to him that the contract contained a number of exemption clauses that would preclude Rice from winning in any legal action.Rice filed a lawsuit in Ontario.What is the court's likely approach to this situation?

Although Zlotnic had been in business for a long time,he had been forced to borrow heavily in the last few years.When his debt reached the limit of his line of credit,$100 000,the manager of Regal Bank called him in for a talk.Subsequently,Zlotnic sold his house for $250 000 to the Johnsons.He contracted to buy another house from the Scotts.From the proceeds he anticipated receiving from the Johnsons,he assigned $200 000 to the Scotts,the purchase price of their house,and assigned $50 000 to Regal Bank to reduce his debt.The assignment to the Scotts was in writing; the assignment to the bank was not.The Scotts gave written notice of the assignment to the Johnsons on March 1,the day the money was owed to Zlotnic.The Johnsons verified the assignment and paid out the $200 000 to the Scotts.On March 2,Regal Bank gave written notice of its assignment to the Johnsons.Unfortunately,at that time only $45 000 was owing to Zlotnic because the Johnsons had paid $5000 to Canada Revenue Agency for Zlotnic.On these facts,which of the following is true?

A person who breaches a contract is responsible for all loss that flows from the breach,no matter how unforeseeable.

Discuss unconscionability with respect to contract law.

With regard to the law concerning misrepresentation,which of the following is true?

Jones offers to sell Smith his car.Smith thinks Jones is selling his 2009 Toyota,and Jones thinks he is selling his 2012 Pontiac.This is an example of which of the following?

Explain what is meant by the term remote with respect to damages awarded in contract disputes.

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.

A holder in due course is in the same position as the person from whom a negotiable instrument was received.

A condition subsequent is an example of a contract being ended by agreement.

When Gary went into Computer Heaven,Ltd.to get a better manual for the program he was trying to master,he was caught by a demonstration of a computer created by Next,Mr.Job's new firm.He was fascinated by its performance.The salesman,Ross,told Gary that he should have this machine; that "it was the latest computer; no other will ever be better"; that "UBC,Simon Fraser,and BCIT just ordered over 1000 of them"; that he only had "a few left and the demand is so great it will take almost a year for the next shipment to arrive." When Gary said he needed a computer with at least 1000K memory,Ross said this model had 2000K.Gary was persuaded and contracted for the computer.Later,Gary learned that every statement made by Ross was untrue,including the one about the memory capacity; the model had only 800K.On these facts,which of the following is true?

The victim of a breach cannot recover damages that he or she could have avoided if he or she had made a reasonable effort.

Joe owed Harry $500,but Harry was confused when Joe came to pay it back and refused to take the money for the payment.Explain Joe's legal position.