Exam 8: Factors Affecting the Contractual Relationship

Rules of interpretation are guidelines used by the court to correct simple misunderstandings in relation to the contract.

Lars Jepsen, a fisherman from Tofino, regularly sells his catch to packing plants in Steveston. His shipment had already left dock last Monday, but he didn't contract for its sale until yesterday. He sold this shipment for $10,000 to B.C. Packers. Jepsen still owes Sam $3,000, part of his commission for having sold one of his waterfront properties. This morning he assigned to Sam, in writing, $3,000 of the $10,000 owed under the contract with B.C. Packers. Unknown to Jepsen or B.C. Packers, at the time they made the contract, his transporter had gone down in a storm and all the cargo was lost. Jepsen had no insurance for loss of his boat. Which of the following is correct with respect to his legal position?

With regard to the law governing privity of contract and assignment, which of the following is false?

A week after signing a contract, you became aware that you and the other party, Sheldon, seemed to have a different understanding of one of the provisions of the contract. Before you said anything to him, you reread it to see if your interpretation was valid. As you reread it, you noticed that not only was that provision vague, but also other terms and provisions were ambiguous or left out. Which of the following is false with regard to the methods used by the courts to interpret contracts?

Negotiable instruments can sometimes convey better rights than existed between the original parties. SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

Adam bought a boat from Charlie for $900 payable on November 6. On November 6, when Charlie came for the money, Adam didn't have it. Adam was, however, employed by Ms. Bey to do some market research. He was to be paid $1000 for his report, due on November 12. Charlie wanted an assignment of $900 of the amount Adam expected to receive November 12. Adam wrote out an assignment with all the essential information and signed it. Charlie gave written notice of the assignment with all pertinent information to Ms. Bey the next day, November 7. On November 12, Adam had not finished his report. The contract provided that he would lose $100 for every week he was late. Adam was two weeks late in submitting his report. Which of the following is true?

Sam agreed to buy property from Joe to build a store of a certain design. Joe, the vendor, was aware of the design and knew that an easement across the back of the property would prevent such a building being erected, but said nothing. Sam purchased the property, later discovered the easement, and learned that Joe knew about it. He sued for misrepresentation. Discuss the likely outcome.

Which of the following situations gives rise to the application of the equitable remedy of rectification?

Which of the following is an example of duress?

What is the significance of determining that the misrepresentation was negligent rather than innocent?

Tong hired Hocaloski to design an ad for her business. Hocaloski assigned the work to Peppar, her employee. After the ad was run, it was noticed that Peppar made a serious error; he gave the wrong address and phone number of the business. On these facts, which of the following is true?

Patrick paid the seller of a car with a worthless cheque. He then sold the car to an innocent person who paid him good consideration. Patrick took the money and left the country. The original seller found out who had the car and wanted it back. Who is entitled to the car if the court holds that the contract between the original seller and Patrick is voidable?

The office manager of a real estate agency was at an office supply store to replace a filing cabinet when he saw a demonstration of a new Xerox copier. Undoubtedly, the agency would benefit from the copier, especially since it had the capability of enlarging the original a good feature when dealing with the small print of contracts. The next day, he called the manager of the store to discuss the machine further. The seller said that it was "ten years ahead of the competition," that it "was rated as maintenance-free by an independent consumer research group," and that he had "sold five to other real estate agencies in this area" and "had only one left." The agency, relying on these statements, asked to have it delivered. When it arrived, the office manager had learned that every statement made by the seller had been false; furthermore, the seller did not send out the machine discussed, but the old model. Which of the following is true?

Which of the following constitutes a misrepresentation that would not allow the courts to award the equitable remedy of rescission?

A windfall that one party to a contract stands to make at the expense of the other is known as ________. ESSAY. Write your answer in the space provided or on a separate sheet of paper.

With regard to the law governing privity of contract and assignment, which of the following is false?

A separate contractual obligation that can stand alone, independent of the written contract, is known as ________.

Damages as a remedy will not be available in which of the following situations?

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

Mike is given a bottle of wine as a gift. Josh, a neighbour, sees it and recognizes it as a very rare bottle. Knowing that Mike doesn't drink, Josh offers him $300 for it, which he believes to be a fair price. Mike happily agrees. Later, when Josh is looking up the price of the bottle on eBay, he realizes that it is not a valuable bottle of wine at all. He had confused it with another vintage. Josh, who is taking a law class, wonders whether or not he could have the contract set aside. Which of the following statements is true?