Deck 14: Sale of Goods and Consumer Contracts

Question 1

Under the Sale of Goods Act,the seller of stolen goods can be sued by their recipient (the buyer)for breach of

A)an express condition.
B)a duty.
C)a warranty.
D)a guarantee.
E)an implied condition.

Answer 1

E

Question 2

Caveat emptor is a worthwhile argument for the seller when

A)it is under the scope of Sales of Goods Act.
B)the goods are not specific.
C)the goods are not in existence.
D)the seller has made some misrepresentation.
E)the seller does not have title.

Answer 2

A

Question 3

A,a thief,steals 100 stereo amplifiers from B's warehouse and takes them to a flea market,where he sets up a stand that makes it appear that his business is selling stereo equipment.B finds out that A has sold an amplifier to C,an amplifier dealer.In this case,under the Ontario Sale of Goods Act

A)B can retake possession of the amplifier from C only if A accompanies him.
B)the title to the amplifier has passed to C,against whom B has no recourse.
C)B's only recourse is against C.
D)B can retake possession of the amplifier from C.
E)B has no recourse against A or C.

Answer 3

B

Question 4

When goods are sold by sample as well as description,which of the following statements is correct?

A)If the goods all correspond with the description,the bulk need not correspond with the sample.
B)The description must be in expressed terms,otherwise we go by the sample.
C)The goods must be of merchantable quality.
D)The bulk of the goods must correspond with the sample only.
E)The goods must correspond to the description and the bulk must correspond with the sample.

Question 5

Tom has an above ground swimming pool.The pool temperature average is 18 degrees Celsius even though there is a great deal of sunlight cast on the pool during the day.Tom attends at Gray's Pool & Accessories to see what he can do about raising the pool temperature without incurring the costs of purchasing a heater.It is suggested to him by a salesperson that he buy the latest version of a "Let the Heat Begin" pool cover which uses rays of light from the sun to heat the pool.Tom agrees and purchases the cover.In the circumstances,which of the following is TRUE

A)there is an implied term that the cover is suitable for the purpose for which it has been bought.
B)there is no implied term of merchantable quality.
C)there is an implied term as to description.
D)there is an implied term that goods correspond with the sample.
E)there is no implied term as to title.

Question 6

In the sale of goods

A)passing of title and passing of ownership are separate concepts.
B)ownership and possession are separate concepts.
C)the change in possession and a transfer of title are the same thing.
D)the buyer has title when goods are paid for.
E)the seller has title until delivery.

Question 7

A Co.,a local importer of steel ingots,enters into a contract with B Co.,a large wholesaler of steel,to supply B Co.with ten 50-pound steel ingots,which B Co.will try to sell on behalf of A Co.; B Co.is to return to A Co.any unsold ingots.In this situation,the agreement is

A)an option agreement.
B)a consignment agreement.
C)an agreement to sell.
D)a sale agreement.
E)an agreement of purchase and sale.

Question 8

Caveat emptor,which means "let the buyer beware," functions to limit the liability of sellers.However,it is not a rigid rule.An situation in which a seller would NOT be able to use this defence would be if

A)the goods are in existence and are specific items that may be inspected by the buyer.
B)the buyer had every opportunity to inspect the goods.
C)the seller appeared to be knowledgeable about the product.
D)the seller made no misrepresentation concerning the goods.
E)the seller has made misrepresentations about the goods.

Question 9

When a buyer relies on a catalogue and a sample in placing an order,the Sale of Goods Act implies

A)warranty of suitability.
B)condition of fitness.
C)condition of merchantability.
D)condition that the goods will correspond with the description.
E)warranty of fitness.

Question 10

Plastics Ltd.manufactures heavy duty plastic cogs and wheels for elevators and just received an order from Elevators Inc.for 10 cogs and 10 wheels,all heavy duty and tested for specified strength before shipment.Plastics Ltd.has already manufactured the cogs and wheels,but before it has a chance to test them,it receives an order from another company for cogs and wheels and decides to fill that order instead.In this case

A)title in the cogs and wheels passed to Elevators Inc.at the time of the contract.
B)title in the cogs would pass as soon as the cogs and wheels were set aside for Elevators Inc.
C)title in the cogs and wheels passed to Elevators Inc.at the time they were manufactured by Plastics Ltd.
D)title in the cogs and wheels would not pass to Elevators Inc.until the cogs and wheels were set aside for Elevators Inc.and tested.
E)title in the cogs and wheels passed to Elevators Inc.when Plastics Ltd.sold the cogs and wheels to the other company.

Question 11

Amos has purchased a discontinued radio clock from the local discount electronics outlet.Upon arriving home,he notices that the timer is not functional.He wonders if he could legally demand his money back and consults you.You tell him that

A)sellers are strictly liable for what they sell,so simply bring it back for a refund.
B)there is an implied condition that the goods will be of "merchantable quality."
C)since the item was discontinued,all sales are final,and the store does not need to return his money.
D)title has not passed until the seller has "put item into a deliverable state."
E)he should first consult the bill of sale for any exemption clauses.

Question 12

Jack buys a second-hand car from Charles,who is not a retail seller.The province in which the sale takes place does not require that the car be certified.After two months,Jack finds that the car requires substantial repairs.In this case

A)there is a breach of the implied condition of fitness for purpose.
B)there is a breach of the implied condition of merchantable quality.
C)there is a fundamental breach of contract.
D)there is a breach of the implied warranties under the Sale of Goods Act.
E)the maxim caveat emptor applies.

Question 13

Playgrounds Inc.manufactures playgrounds for children of all ages.After discussions with a representative of Playgrounds Inc.,and relying on those discussions,Happy High School orders a playground from Playgrounds Inc.,specifying that the playground is for older children and teenagers,age 9 and over.Playgrounds Inc.delivers a playground that,when assembled,is only 1.25 metres high and cannot be used by Happy High School's children.Happy High School refuses to keep the playground and will say that under the Sale of Goods Act

A)the playground does not meet the sale by description test.
B)the playground meets the sale by description test.
C)the playground does not meet the fitness for purpose test.
D)the playground meets the fitness for purpose test.
E)the playground meets both the fitness for purpose and the sale by description tests.

Question 14

John purchases a 2009 Pontiac automobile from Car Dealers Inc.Within three weeks,the car's transmission fails to work.Assuming that the car was not warranted against such an event,under the Sale of Goods Act,the failure of the transmission would amount to a breach of the implied condition of

A)description.
B)merchantable quality.
C)seller's title.
D)fitness for purpose.
E)none of the above

Question 15

Jones Ltd.places an order with Playgoods Ltd.for 100 children's playhouses.The contract provides that Playgoods Ltd.will pack the playhouses in boxes carrying the Jones Ltd.name and its "J" logo,which Jones Ltd.will supply.Jones Ltd.supplies the boxes,but before Playgoods Ltd.has had an opportunity to pack the playhouses into the boxes,the playhouses are destroyed by a fire in its warehouse.In this case

A)title had not yet passed to Jones Ltd.because Playgoods Ltd.failed to notify Jones Ltd.that the playhouses had not been packed in the appropriate boxes.
B)title to the playhouses passed to Jones Ltd.at the time Jones Ltd.supplied the boxes.
C)title to the playhouses would have passed to Jones Ltd.when Playgoods Ltd.packed the playhouses in the appropriate boxes.
D)title to the playhouses did not yet pass to Jones Ltd.because Playgoods Ltd.failed to set the playhouses aside.
E)title to the playhouses passed to Jones Ltd.at the time of the contract.

Question 16

The definition of chattels includes all of the below EXCEPT

A)animals.
B)buildings.
C)pieces of land.
D)goods that derive their value intrinsically.
E)furniture.

Question 17

Colin had been having trouble with wild animals.He asked the sales associate at Hardware Sales what kind of motion detection light would be best to install in his pump house.According to the Sale of Goods Act,Colin should expect a light that

A)would not be restricted by the usual exemption clauses.
B)will need careful installation for the product to be warranteed.
C)meets his description.
D)requires skill and labour for installation,therefore is not protected by the Act.
E)is reasonably fit for the purpose.

Question 18

Every year at the end of the selling season in September,Jones & Co.,a furniture manufacturer,offers special discounts on wholesale prices for the furniture it has not sold.S Co.goes to Jones & Co.'s warehouse and buys all remaining leather sofas and pays for them.In the presence of S Co.'s representative,the sofas are immediately set aside on the warehouse loading dock for pick up by S Co.the next day.That night,the sofas are destroyed by a warehouse fire.In this case

A)title of the sofas does not pass to S Co.until the sofas are actually on S Co.'s truck.
B)title of the sofas passed to S Co.when the sofas were set aside on the loading dock.
C)title of the sofas does not pass to S Co.until it comes to pick them up.
D)title of the sofas did not pass to S Co.because leather sofas were not specified in the contract.
E)title of the sofas does not pass to S Co.because the contract for the sofas is a conditional contract.

Question 19

Plastics Ltd.,which manufactures plastic bottles,has a contract with Carbonation Inc.under which it ships boxes of bottles to Carbonation Inc.at specified times and in specific quantities.The contract goes on to state that Carbonation Inc.can return any boxes of bottles that are not sold.Pursuant to the contract,Plastics Ltd.ships the specified number of boxes of bottles to Carbonation Ltd.'s warehouse.Two weeks later there is a fire in the warehouse and the boxes of bottles are destroyed.In this case

A)title to the boxes of bottles passed to Carbonation Inc.at the time of the contract.
B)title to the boxes of bottles passed to Carbonation Inc.at the time they were delivered to Carbonation Inc.'s warehouse.
C)title to the boxes of bottles passed to Carbonation Inc.at the time they were destroyed by fire.
D)title in the boxes of bottles did not pass to Carbonation Inc.because the boxes of bottles had not yet been set aside by Carbonation Inc.
E)title to the boxes of bottles did not pass to Carbonation Inc.because Carbonation Inc.did not give notice of its acceptance and no fixed time for return was specified.

Question 20

The principle of caveat emptor applies only to situations where

A)the seller has made no misrepresentation about the goods.
B)the goods can be inspected by the buyer.
C)the goods are specific items.
D)the goods are in existence.
E)all of the above

Question 21

Which of the following is a remedy of the seller under the Sale of Goods Act?

A)resale
B)chattel title
C)order bill of lading
D)wrongful withholding or disposition
E)caveat emptor

Question 22

Legislation governing consumer contracts does not ban the use of standard form contracts.Rather,it controls the use of standard form contracts employing various techniques including all of the following EXCEPT

A)controls the use of pressure sales tactics.
B)requires notice and disclosure of onerous terms.
C)gives the consumer a statutory right to claim triple damages,i.e.three times the actual loss.
D)provides the consumer with a chance to "back out" once they have had time to consider onerous terms.
E)inserts terms into the contract.

Question 23

The Sale of Goods Act deals with the sale of goods by sample and/or description.Which of the following statements is correct?

A)If goods are sold by sample,there is an implied term of suitability.
B)It is an implied condition that goods by description alone be of merchantable quality.
C)If goods are sold by sample and description,it is a breach of implied warranty if the goods do not correspond with both the sample and the description.
D)If goods are sold by sample only,there is an implied condition that the buyer must have a reasonable opportunity of comparing the bulk to the sample.
E)It is an implied warranty that the goods sold by sample alone be of merchantable quality.

Question 24

International Shippers Corp.wants your advice on the legal implications of international trade.Business has been developing in parts of the Middle East where it's sometimes hard to collect from customers.You advise International Shippers that they should

A)ensure all of their shipments are covered by an order bill of lading.
B)first clear each contract through the relevant government department.
C)ensure all of their shipments are COD.
D)retain a lien on the goods.
E)ensure all of their shipments are covered by a straight bill of lading.

Question 25

John returned home from work and checked his mailbox to see if anything had been delivered that day.To his surprise,he received a package of magazines from a magazine distributor.John proceeded to open the package and over the course of the next several days,read through the magazines.He then gave them to his dentist for use by patients at the dental office.Approximately thirty days later John received a demand letter from the magazine distributor requesting payment of the magazines which John had not requested.In a subsequent Small Claims action brought by the magazine distributor for payment,the following would likely be the outcome

A)the magazine distributor would succeed because John used the magazines.
B)as a recipient of unsolicited goods John can use them without becoming liable for their price.
C)John only became liable when he removed the magazines from his residence and took them to the dentist's office.
D)John would not be liable because he did not sign a contract.
E)John would be liable because he did not immediately package up the magazines and return them to the magazine distributor before reading them.

Question 26

If in respect of a contract for the sale of goods there is a breach of warranty,the remedy available pursuant to the Sale of Goods Act is

A)damages but not repudiation of the contract.
B)damages and repudiation of the contract.
C)rescission of the contract.
D)repudiation of the contract but not damages.
E)damages or repudiation of contract.

Question 27

Samuel incorporated a company federally in order to sell fire prevention equipment to consumers across Canada.His lawyers have told him that he can use the same standard form contract across the entire country.However,because each of the provinces have different legislation with respect to consumer contracts,some terms may be valid and enforceable in some provinces and yet void and unenforceable in others.In order to employ the use of a single standard form contract while at the same time protecting his interests,Samuel should

A)include a term in the contract that states that any term deemed to be illegal,void or unenforceable may be severed or cut out of the contract leaving the balance of the contract to be in force.
B)draft separate standard form contracts for each province taking into account the different legislation in force.
C)employ the use of oral contracts with consumers which are at common law equally as enforceable as written contracts.
D)forget the idea of selling his product to all Canadians and focus on one particular province.
E)ensure that the standard form contract has an airtight exemption clause.

Question 28

Janice purchased a new home and entered into a rental contract for a sprinkler system.There were no services provided by the lawn care company,only the sprinkler system itself which was installed by Janice.One of the sprinkler heads did not function properly and ran continuously after hours.Janice's basement flooded and she sued the company for damages.The contract contained an exemption clause restricting the lawn care company's liability for water damage to $100.Additionally the contract did not include any express term with respect to fitness for purpose.In these circumstances,given that services were not provided by the seller in relation to a consumer contract,Janice would likely

A)fail at trial because exemption clauses are permitted by sale of goods legislation.
B)succeed at trial because sellers cannot escape liability in relation to consumer contracts by requiring buyers to sign exemption clauses.
C)fail because the contract was not breached by the seller.
D)fail because the damages sustained by Janice were too remote and did not flow from the loss.
E)succeed because Janice installed the sprinkler system on her own and likely was not given proper instructions from seller.

Question 29

The Carlsons were preparing for a four-day family reunion in their home starting on June 19.On June 15 they ordered a large new dining room table from Levitts Furniture to accommodate the expected relatives.Levitts promised delivery out of their local warehouse three different mornings during the week,but each time they gave feeble reasons why they couldn't do it.On the afternoon of June 18,the Carlsons phoned Levitts,cancelled their order,and demanded their money back.What is the Carlsons' legal remedy?

A)damages for breach of warranty
B)tort damages for wrongful disposition of goods
C)remedies under consumer protection legislation
D)rescission for breach of condition
E)specific performance because of the uniqueness of the situation

Question 30

Billy goes to a yard sale and looks for old car stereos.He finds a system that he has been looking for.Billy believes it is worth a lot more money than the $25 the owner is asking for.Billy asks the owner whether or not the system is in good working condition.The owner tells him that he knows nothing about the quality of the tuner and speakers and is not prepared to comment further.Billy purchases the system for $25.Later he finds out that the system is stolen and did not belong to the owner at the time he purchased it.Billy's action for recovery of his money against the owner will

A)fail because of the caveat emptor principle.
B)fail because the owner would not comment on the quality of the system.
C)succeed because the actual owner told Billy he would pay him a reward.
D)succeed because the owner breached an implied term as to title.
E)fail because Billy only learned of the problem after both parties performed their obligations under the agreement of purchase and sale.

Question 31

A sanction intended to compel acceptance upon delivery of goods is called a

A)injunction.
B)guarantee.
C)deposit.
D)partial payment.
E)lien.

Question 32

While in the shopping mall,Mabel special ordered a $29.95 DVD from VistaVideo.She was asked to place a $10 deposit on the order because it was "store policy." A little while later,before leaving the mall,Mabel changed her mind about ordering the video because she needed the $10 for something else.VistaVideo refused to return the money.Is Mabel entitled to get the $10 back?

A)No,she is not,since the $10 was a deposit.
B)Yes,she is,because it is liquidated damages.
C)Yes,she is,since as of yet no costs were accrued in ordering the DVD.
D)Yes,she is,because the $10 was intended to be part payment.
E)No,she is not,because the $10 was not a genuine estimate of the probable loss resulting from a breach.

Question 33

A seller may include in a standard form contract of sale of goods an express term exempting it from the liability normally imposed by the implied terms.Which of the following statements is correct?

A)The courts interpret such terms broadly.
B)Clear and direct language need not be used.
C)Even if the words used in the clause do not precisely describe the type of liability disclaimed,the courts will usually imply a term so as to protect the seller.
D)If the purchaser is a consumer as defined by consumer protection legislation,the seller cannot "contract out" of the implied terms.
E)Any agreement exempting the seller needs to be in writing or it will not be enforced.

Question 34

In relation to consumer contracts and the protections provided by legislation,a consumer is defined as an individual (not an organization)purchasing a product or service for the following use

A)personal.
B)family.
C)household.
D)non-business.
E)all of the above

Question 35

George goes to his neighbourhood hardware store and asks for a four-foot by eight-foot piece of plywood.He also requests that it be "thick and strong." George purchases the plywood and proceeds to use it as a makeshift bridge on his driveway over a small ditch.The first time he attempts to drive his tractor over the makeshift bridge,the plywood collapses,causing damage to the tractor.George's suit against the hardware store will

A)succeed for breach of implied term of fitness because George specifically asked for the plywood to be "thick and strong."
B)succeed because George has likely incurred consequential losses as well.
C)fail because George did not expressly state the particular purpose for which he intended to use the plywood and therefore the hardware store did not breach any implied term of fitness.
D)fail because there was no breach of the implied term as to description.
E)succeed because the hardware store breached the implied term of merchantable quality by selling the plywood to George in these circumstances.

Question 36

Standard form contracts employed by sellers are carefully regulated by legislation when it comes to the sale of goods or services to consumers.Some businesses attempt to prevent consumers by applying to the court to enforce their rights through class actions.This is done by inserting a term requiring that disputes be resolved by way of arbitration.In essence,the consumer is precluded from participating in any class action.Three provinces,Ontario,Alberta and Quebec,have legislated away this benefit to sellers by

A)allowing arbitrators to hear class proceedings.
B)by legislating that arbitration clauses in consumer contracts are void and unenforceable.
C)by increasing the damages that can be awarded against sellers at arbitration.
D)by requiring sellers to bring these onerous terms to the attention of the consumer prior to signing the contract.
E)by forcing sellers to incorporate federally.

Question 37

Which of the following is NOT a remedy of the buyer?

A)action for the price
B)sue for breach of contract
C)sue for damages in tort
D)rescission of contract
E)specific performance

Question 38

Ted goes to his neighborhood hardware store and asks for a six foot by two foot piece of plywood.He also requests that it be "sturdy".Ted purchases the plywood and proceeds to use it as a makeshift bridge for his dog,a 75 pound black lab,to cross over a small ditch in the backyard.The first time his lab attempts to cross the bridge it breaks and the dog falls into the ditch fracturing a bone.Ted's suit against the hardware store for the vet bills will

A)succeed for breach of implied term of fitness because Ted specifically asked for the plywood to be "sturdy".
B)fail because Ted did not expressly state the particular purpose for which he intended to use the plywood and therefore the hardware store did not breach any implied term of fitness.
C)succeed because the hardware store meets the implied term of merchantable quality by selling the plywood to Ted in these circumstances.
D)fail because there was no breach of the implied term as to description.
E)none of the above

Question 39

"The sole warranty between the seller and buyer is the warranty set out in this contract." This written statement is an example of

A)a statement of suitability.
B)a condition of fitness.
C)a bill of lading.
D)a condition of merchantability.
E)an exemption or disclaimer clause.

Question 40

Henry stops at a yard sale to look for old musical equipment.He sees an amplifier that is exactly what he has been looking for.Henry believes it is worth a lot more money than the $50 the owner is requesting.Henry asks the owner whether or not the amplifier is in good working condition.The owner tells him that he knows nothing about the amplifier and is not prepared to comment further.Henry purchases the amplifier for $50.Later he finds out that it is stolen from a nearby music store and did not belong to the seller at the time he purchased it.Henry's action for recovery of his money against the seller will

A)succeed because the owner breached an implied term as to title.
B)succeed because the music store will likely pay him a reward.
C)fail because of the principle of caveat emptor.
D)fail because the owner made no representations about the amplifier.
E)none of the above

Question 41

A buyer who specifies goods purchased under a trade name can always rely on the implied condition of fitness for purpose in the Sale of Goods Act.

Question 42

Philip lives in a small apartment in Toronto along with his elderly mother.He has a phone in his name.Although she is ill and requires regular care from Philip,he is routinely distracted by telemarketing communications from one particular business attempting to sell him travel packages.Philip asked them not to call back but the telephone communications continued.He decided to look into the matter and found that a recently established "National Do Not Call List" had been established by the Canadian Radio-television and Telecommunications Commission.Philip proceeded to register his number.As a result,telemarketers must not call to solicit.Which of the following is not an exception permitting telemarketers to call Philip's number?

A)The telemarketer is a registered charity.
B)The call is made on behalf of a political party.
C)The call is made by a business with whom Philip has an existing relationship.
D)The telemarketer directs the telephone inquiries to Philip's mother.
E)The telemarketer calls more than three years after the initial registration.

Question 43

Title in goods purchased by an innocent purchaser outside the ordinary course of business from a third party who did not own those goods does not pass to the innocent purchaser.

Question 44

Absent any agreement to the contrary between the parties where there is an unconditional contract for the sale of specific goods in a deliverable state,title passes when the goods are ultimately delivered or picked up by the purchaser.

Question 45

Nasty Travel is a company that sells vacation time share packages.To do this,first it contacts potential customers,telling them that if they come to one of its meetings,they will receive a prize.Once a person comes to the meeting,Nasty's representatives use very high pressure tactics to virtually force this person to buy a time share package and sign the documents.They then give this person a very inexpensive gift.In fact,this happened to John just two days ago.Under present-day consumer legislation

A)if John decides to go ahead with the purchase,he is bound to do so.
B)if Nasty does not give John back his money,John can sue Nasty for its return.
C)John has a cooling-off period to decide if he wants to go ahead with the purchase.
D)if during the cooling-off period,John decides to terminate the contract,Nasty must give his money back to him.
E)all of the above

Question 46

The War Veterans League sent Martha five sheets of labels with her name and address on them.The enclosure also had a request for a $5.00 payment.If Martha is going to use the self-addressed stickers,is she legally required to send in the payment?

A)No,she is not,since legislation prohibits the sending of unsolicited goods.
B)No,she is not,since this would be a gratuitous donation anyway.
C)Yes,she is,since use gives the consideration for a binding agreement.
D)Yes,she is,because there is a moral obligation when benefits are obtained.
E)No,she is not,since consumer protection statutes expressly state that use of goods does not amount to an acceptance of a seller's offer.

Question 47

Jack is a sales agent.He takes delivery of motor vehicles and sells them from his dealership.When Jack makes a sale,the property in the goods passes between Jack and the buyer.

Question 48

Exemption clauses are not capable of excluding liability for breach of the implied Sale of Goods Act warranties if the purchaser is a consumer.

Question 49

The implied conditions in the Sale of Goods Act apply to any and all sales of goods.

Question 50

Paper Products Ltd.sold paper to Lillian to use in brochures she was producing for a client.Before making the contract,Paper Products Ltd.showed Lillian a sample of the paper it was going to sell her,and Lillian approved of the choice.The paper provided to Lillian matched the sample she had been shown.One month after she bought the paper,Lillian found that it had yellowed and that it was useless for the brochures.Paper Products Ltd.is not liable to Lillian for breach of an implied term under the Sale of Goods Act because Lillian approved a sample of the paper she bought.

Question 51

George Shifty is not a very nice guy.In fact,George has just incorporated a telemarketing company solely to make money off of the unsuspecting people his company contacts.For the next six months,the company's telemarketers will be selling funeral caskets and marketing to people over the age of 70.Once a person is contacted,the telemarketer tells him or her that before a casket can be sold,the person must send in an administrative deposit equal to one-fifth of the value of a casket.If they do this,they will receive a casket within eight months.At the end of six months of telemarketing the caskets,the company has received $1 500 000.00 in administrative charges,which George immediately pockets,leaving the company insolvent.Then George gets on a plane for an extended vacation in a South American country that has no extradition treaty with Canada and loses himself in that country.In this case

A)the company has committed the offence of deceptive telemarketing.
B)since the company is insolvent and George cannot be found,there is no practical recourse.
C)had George stayed in Canada,he could have been convicted as a director of the company.
D)the company can be fined in the millions of dollars.
E)all of the above

Question 52

Explain the difference between a deposit and a down payment.

Question 53

A cooling-off period in door-to-door selling

A)is for a period of 48 hours.
B)applies to goods but not services.
C)has the same provisions throughout Canada.
D)departs from an established common law rule.
E)only applies to sales over $100.

Question 54

Under the Sale of Goods Act,when a person possesses goods,she or he is also the owner of the goods.

Question 55

What is wrongful detention,and what does it entitle a buyer to do?

Question 56

The Sale of Goods Act makes it possible for a seller to exempt itself from the implied conditions by making the exclusions express terms of the contract.

Question 57

The Criminal Code of Canada sets a maximum "legal" interest rate,and the federal Interest Act requires that interest rates in written contracts be expressed in annual percentages.

Question 58

Under the Sale of Goods Act,defects in goods sold in accordance with a sample that has been provided need not be apparent on reasonable examination.

Question 59

Risk of loss and title to goods go hand in hand.Explain.

Question 60

The Sale of Goods Act applies to provision of services.

Question 61

Albert sells collectibles.He received a telephone call from Penelope White,who was looking for cranberry glass.Albert advised her that he had several sets of cranberry glass.After describing them to her over the phone,she agreed to purchase them.He shipped them to Penelope and when they arrived she refused to accept them.What remedies,if any,is Albert entitled to?

Question 62

Every year a convention is held in Ontario by manufacturers and suppliers of after-market automobile accessories.Bill Sampson of Sampson Motors in Toronto attends the convention with the intention of purchasing new and innovative after-market products.On the first day of the convention Sampson sees two custom-made bike racks suitable for his in-stock pickup trucks.He purchases both bike racks from Bob Kerr of Kerr's Bikes & Accessories.Kerr agrees to accept payment by way of cheque.Kerr also allows Sampson the opportunity to pick the bike racks up on Friday morning.After the convention closes Thursday evening for the night,the bike racks are stolen.Having regard to the Sale of Goods Act rules for passing of title,had title to the goods passed to Sampson at the time of the theft?

Question 63

What type of a sale of goods is subject to an implied condition that the goods shall be of merchantable quality,and under what circumstances is that implied condition avoided by the seller?

Question 64

Janice Stone wanted to go rock climbing and needed some rope.She went to Bill's Hardware Store,told the sales associate that she wanted some rope,and described to him what she was going to use it for.The sales associate recommended a polypropylene rope,and on the basis of this recommendation,Janice bought the rope.Janice used the rope for rock climbing and was injured when the rope broke.She subsequently learned that polypropylene rope is unsuitable for rock climbing because it wears wherever it is bent and is hence subject to breakage.
(a)Janice sued Bill's Hardware Store.What must she prove to be successful,and what are her chances of success?
(b)If Janice brought in a sample of polypropylene rope and asked specifically for that type of rope,would the result be different than (a)above?

Question 65

Discuss the difference between title to goods,ownership,and possession of goods,using a consignment agreement to illustrate your point.

Question 66

Jack viewed a 1995 Mustang on the lot of Tim's Quality Autos Ltd.(Tim's).Jack approached Tim's and enquired about purchasing a vehicle.On January 5th,Jack signed a purchase agreement with Tim's to purchase the vehicle.
(a)Tim's was required to fix the lock on the driver's door before delivering the vehicle to Jack.They then did fix the lock and notified Jack the car was ready.However,just prior to Jack's picking up the vehicle,it was mysteriously damaged.Who is responsible to fix the damages as between Tim's and Jack?
(b)If the agreed-upon purchase price for the vehicle was $9000 and Jack paid a $5000 deposit when the agreement was signed and thereafter discovered that the vehicle was encumbered with a $6000 chattel mortgage,what courses of action are available to Jack,and what is the best one?

Question 67

One of the remedies of a seller is to maintain a lien on the goods.When does the right to a lien end?

Question 68

The vendor's remedy of lien only exists in certain circumstances.List three circumstances in which a contract of sale creates a right of lien for the seller.

Question 69

ABC Ltd.enters into a contract on the sale of a filing cabinet,which was located in their Halifax warehouse.If the filing cabinet was destroyed while being transported from Halifax to the purchaser's business premises in Moncton,who would bear the loss if the terms of the contract were:
(a)FOB Halifax
(b)COD
(c)CIF Moncton

Question 70

Brent Cook owns and operates a farm supply store selling feed and hardware for the farm.
(a)Mary Martin wants to buy a type of mink feed that must be ordered from Regina Brent has a sample,which he shows Mary.What rights does Mary have before she is bound to accept the feed when it arrives at Brent's store,and under what circumstances can she reject the goods?
(b)Donald Jones enters the store and buys 15 metres of marine rope used primarily by water skiers.The rope breaks while being used by Donald to raise bales of hay from a truck to the hay loft of Donald's barn.The bales fell onto the truck,damaging it and injuring Donald who was sitting in the cab.Donald sues Brent on the basis of breach of implied condition of fitness for the rope.What must Donald establish in order to be successful? What defences does Brent have? What is the likely outcome?

Question 71

Shannon Smith sold her five-year-old Toyota to Doris Night on February 3.On the contract of sale,which both signed,she put the words "as is".Doris had test-driven the car with Shannon present on February 1 and had commented on a rattle in the front end and some noises in the transmission.Shannon replied to those inquiries as follows: "I think the rattle is from a loose heater cable and I know there are no transmission problems." On February 5,Doris telephoned Shannon and advised her that the car was inoperable because the transmission had seized up and Doris wanted to know what Shannon was going to do about it.That evening in the bar Shannon told her friends the above and they had the following comments and advice:
(a)Don't pay any attention to Doris,caveat emptor applies.
(b)Since the car has been delivered the contract is discharged by performance.
(c)Since you allowed Doris to examine the car and test drive it the transmission failure is solely Doris' problem.
(d)You shouldn't have said anything about the transmission but because you did you must fix the car or take it back and refund the purchase price.Shannon does not know what to do and asks for your advice.Comment on each of the (a)to (d)above with respect to the legal basis for each comment and its accuracy.Express your opinion of the liability (if any)of Shannon.

Question 72

Hugo agreed to purchase all the oil contained in a tank for $1 per litre.He paid a deposit of $400 and agreed to participate in measuring the quantity contained by the tank.While Hugo and the owner of the tank were walking towards the tank with the measuring equipment,the tank burst and all the oil was lost.The owner's records indicated there were 962 litres in the tank.Who had title to the spilled oil?

Question 73

Is there any difference between unascertained goods and future goods? Explain.

Question 74

In consumer transactions in Ontario,it may not be possible to contract out of the terms implied by the Sale of Goods Act.Explain what this means and its significance.

Question 75

Donald visited the premises owned by Mary's Hay Farm Ltd.and viewed a stack of more than 4000 bales of hay.He agreed to purchase 800 bales for $2.00 per bale.He paid the $1600 and advised that he was going to get his truck and would return in about three hours.When Donald returned three hours later he noticed that there was a smoldering pile of debris where the stack of bales had previously been.The entire stack had been destroyed.Who is entitled to the $1600? Give the legal basis for your answer.What additional fact do you need to know in order to confirm your answer?

Question 76

Herman agreed to sell his entire model railway to Dixie Grant for $1700.Dixie signed an agreement that stated that the goods were available for pickup on September 1st and that she had paid a deposit of $500.Dixie refused to pick up the goods on September 1,and Herman shortly thereafter sold the goods to a third party for $1650.What right does Dixie have to the recovery of her deposit?

Question 77

Amanda sold goods at a flea market.She displayed her goods on a large table and marked the price with a label on each item.Dalton chose a piece of china from Amanda's table and paid her the labelled price of $59.Two days later,he returned and demanded his money back based on the fact that the piece of china was not "Royal Crown" but "Crowne Royale." Does Amanda have to return his money? What principle of law governs in this case?

Question 78

What is a bill of lading and what is its purpose?

Question 79

John and Jane entered into an agreement for the sale and purchase of an ornate oak table.The purchase price was $450.The contract was silent as to the time for payment.John,the vendor,insisted that the $450 be paid to him before he would deliver the table.Jane insisted that the table be delivered to her before she paid the $450.Who has taken the correct position? Give the legal basis for your answer.

Question 80

Describe four common law remedies a buyer may have against a seller of goods.