Exam 8: Factors Affecting the Contractual Relationship

It came to your attention that your great-grandmother had signed a contract pursuant to which she would be paying $5,000 for an electronic organ that retails in reputable stores for $3,000. Furthermore, the interest being charged is 18%, even though today's rate fell to a 20-year low. This debt is totally out of line with her pension income. It is apparent that she was misled by the door-to-door salesman who came to her place. On these facts, which of the following laws is the most likely to help her?

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

The doctrine of privity of contract is unique in that is has no exceptions.

Jenny went to the store and asked to see an AM-FM clock radio with a tape deck. The salesman brought out a clock that he said had all the features that she wanted. After looking at the price tag and little else, she said she would think about it. The salesman said that this was the most popular model sold, that they sold 1000 of them during the World Series alone, that it had the highest rating in Consumer Reports, and that he only had that one left. Jenny bought it. Later she found out that all the statements made to her by the salesman were false, including the statement that the clock had all the features that she wanted, because it did not have an AM band. Which of the following is true?

The facts of a case heard by the Supreme Court of Canada are as follows: Mr. and Mrs. H were induced to sign a mortgage in favour of M.C.R. Ltd. by Johnston, a man living with their daughter. Johnston led them to believe that the document was an unimportant amendment to an existing mortgage when, in reality, it was a second substantial mortgage on their home. Neither read the document nor questioned it. When the payments were in arrears, the mortgagee took an action for foreclosure (to take their home). Mr. and Mrs. H. pleaded non est factum. Would this defence succeed? If so, why; if not, why not?

Discuss the signs that the doctrine of privity may be breaking down. In your discussion, include a reference to the leading cases in this area.

Explain what is meant by a "trust".