Deck 23: The Sale of Goods

Question 1

EcoDesign Inc.(Eco)purchased 200 weeping caragana trees for spring planting from Abbot Garden Centre Ltd.Two weeks later,planting was complete and payment forwarded to Abbot.Two months later,Eco was served with a claim issued by Misty Tree Farms Ltd.,alleging non-payment for the goods by Abbot Garden Centre and naming Eco as a third party to the claim.How was the Sale of Goods Act violated in this instance?

A) breach of contract
B) breach of innominate term
C) breach of implied term
D) breach of implied warranty

Answer 1

D

Question 2

A judge has found that Clear View Windows Inc.is liable to pay damages to a client for breach of one of its implied obligations under the Sale of Goods Act.Which of the following statements best describes the nature of the implied term breached by Clear View?

A) condition
B) pre-contractual term
C) warranty
D) covenant

Answer 2

C

Question 3

Which of the following is a criticism of the strict application of the common law maxim,caveat emptor?

A) It was not codified.
B) It unfairly favours the purchaser.
C) It is too costly to enforce.
D) It often produces unfair results.

Answer 3

D

Question 4

Which of the following is recognized as a term that cannot be easily classified under the Sale of Goods Act?

A) implied term
B) innominate term
C) condition
D) warranty

Question 5

Which of the following prohibits the defence of privity of contract?

A) provincial sale of goods legislation
B) federal and provincial consumer protection legislation
C) provincial consumer protection legislation
D) federal,provincial,and municipal sale of goods legislation

Question 6

Goodhealth Farms Inc.was sued by a customer,and the court has now ordered that the plaintiff is entitled to a reduction in the price initially agreed to in the contract.What is the most likely reason for the court's decision?

A) breach of a condition expressed in a contract for the sale of goods
B) breach of an innominate term of a contract for sale of goods
C) breach of warranty under sale of goods legislation
D) breach of a condition under sale of goods legislation

Question 7

Which of the following roughly approximates the meaning of the term caveat emptor?

A) voluntary assumption of risk
B) let the buyer beware
C) the thing speaks for itself
D) haste makes waste

Question 8

Which of the following transactions would NOT fall under the Sale of Goods Act?

A) barter of a car for a motorcycle
B) sale of a bag of soil
C) sale of microwave oven
D) sale of office supplies

Question 9

What is the role placed by law on the purchaser of a product with respect to securing the entitlement to a common law remedy?

A) to facilitate the transfer of ownership of goods
B) to be aware of federal and provincial regulations
C) to ensure product expectations are contractual
D) to report incidents of unfair selling practices

Question 10

Marta went to the local office supply store to buy a few packages of grey linen bond paper.The clerk showed Marta laminated covered samples but refused to let her open the wrapped packages for comparison purposes.She made the purchase but was asked by her office manager to return the paper because it was too thin.According to the Sale of Goods Act,why will the merchant likely have to accept the return of the product?

A) The seller refused the opportunity to compare goods with a sample.
B) The buyer relied on the description of goods by the seller.
C) The buyer made the intended use known at the time of purchase.
D) Goods sold by description must correspond to the description.

Question 11

What is the name given to goods that are identified and agreed on at the time a contract of sale is made?

A) specific goods
B) appropriated goods
C) ascertained goods
D) specified goods

Question 12

Which of the following would most strongly influence the remedies available to a consumer under consumer protection legislation?

A) the reasonable foreseeability of damages
B) the seriousness of the breach of implied warranty
C) the onus on the party at fault to act quickly
D) the onus on the party at fault to correct the breach

Question 13

Which of the following would be essential to determining a remedy with respect to the breach of a term under the sale of goods legislation?

A) product safety classification
B) the classification of the term
C) anticompetitive practices
D) disclosure on packaging

Question 14

Which of the following strongly supported the creation of principles set out in a specialized branch of contract law intended to provide a measure of protection for the purchaser of goods?

A) the need for modern law concerning the sale of goods and services
B) historic legislation titled the Sale of Goods Act,enacted in England in 1893
C) the civil code set of exceptions to the doctrine of caveat emptor
D) unfair results of the strict application of the doctrine of caveat emptor

Question 15

Which of the following terms describes a minor term in a contract for the sale of goods?

A) warranty
B) innominate term
C) implied term
D) condition

Question 16

Why would a buyer be relieved of the implied statutory requirement to make its intended purpose of purchasing goods known to the seller of those goods?

A) The goods will be used in their ordinary purpose.
B) The buyer is reliant on the inspection of goods.
C) The goods will be bought by description.
D) The seller's goods are being sold by description

Question 17

Which of the following is an implied term when goods are sold "by description"?
a.
The buyer will enjoy quiet possession of the goods.
b.

Question 18

In the case of Chalmers Suspensions International Ltd.v.B&B Automation Equipment Inc.,2008 CanLII 15767 (ON S.C.),the court determined,among other things,that the plaintiff's rejection of equipment and its claim for return of payments was justified.Which of the following most likely formed the basis for the court's finding?

A) the defendant's awareness of the plaintiff's past and present reliance on its expertise
B) the defendant's complete knowledge of the plaintiff's intended purpose for the machine
C) the breach of an implied warranty under sale of goods legislation
D) the breach of an implied condition that went to the root of the contract

Question 19

Which of the following is relevant to a determination of what is reasonable with respect to the nature,intended purpose,and price paid for goods under consumer protection legislation?

A) warranty of quality and fitness
B) seller's express warranties
C) warranty of durability
D) warranty of acceptable quality

Question 20

Alison advised the sales manager at SpudsRUs Ltd.that she had rejected the shipment of potatoes received from Spuds that morning.As this was the second consecutive shipment from Spuds contaminated with blight,Alison also advised Spuds she was cancelling the contract.Why is Alison able to do so?

A) because of the breach of innominate term
B) because of the right of repudiation
C) because of the breach of warranty
D) because of the doctrine of caveat emptor

Question 21

When did the British Parliament enact the first Sale of Goods Act upon which modern legislation continues to be based?

A) 1800
B) 1843
C) 1893
D) 1900

Question 22

Ariafyn Equestrian Farm ordered a maximum of $1200 worth of oats for delivery by October 30 from Mike,a local farmer.On October 12,Mike stopped at the grain elevator scales to weigh the truckload of oats,which indicated Ariafyn would owe $1293 for the load.Mike was inside the office obtaining the certificate of weight when a passing train derailed,sending a rail car colliding into Mike's truck.Which party will have the right to sue the railway company for the loss of the oats?

A) Ariafyn; risk transfers with the appropriation of unascertained goods
B) Mike; the buyer must be notified once the price is ascertained
C) Ariafyn; the goods are weighed and the price has been ascertained
D) Mike; Ariafyn must signal its adoption of the transaction

Question 23

With which of the following is the determination of the normal measure of damages for non-acceptance synonymous under the sale of goods legislation?

A) the seller's obligation to mitigate
B) the seller's action for price
C) the buyer's action for price
D) the buyer's duty to mitigate

Question 24

Which of the following is a warranty implied by the Sale of Goods Act?

A) that the goods will be of merchantable quality
B) that the goods are free of liens and encumbrances
C) that the goods are fit for their intended purpose
D) that goods sold by sample will correspond with the sample

Question 25

Which of the five transfer of title rules would mostly likely be applied to determine when title passed in the case of a standing order contract?

A) Rule 1
B) Rule 2
C) Rule 3
D) Rule 4

Question 26

What is the legal term for an unpaid seller's right to claim under sale of goods legislation in circumstances where the title to goods has transferred to the buyer?

A) account for profits
B) breach of contract
C) action for price
D) stoppage in transit

Question 27

Which of the following would be considered immaterial with respect to the series of rules contained in the provincial sale of goods legislation that determine when title transfers?

A) under Rule 2,whether the contract for specific goods is unconditional
B) under Rule 5,whether goods are sold on approval or on "sale or return"
C) under Rule 3,the putting of goods into a deliverable state
D) under Rule 1,the postponement of time of payment or delivery

Question 28

Which of the following would strongly influence a seller's ability to exercise its right to stoppage in transit with respect to the sale of goods?

A) the goods have not been delivered to the carrier
B) the goods remain undelivered,and the buyer has become insolvent
C) the buyer of the goods has become insolvent
D) the seller is unable to arrange for insurance for the goods

Question 29

Which of the following best describes the common law position with respect to the purchase of goods?

A) Purchasers are expected to make appropriate investigations before buying.
B) Sellers are liable for all defects in their goods.
C) Sellers are liable only for major defects in their goods.
D) Purchasers have a duty to ensure the goods are fit for their purpose.

Question 30

Floor Experts Inc.agreed to refinish a customer's wood floor for a fee of $3000.What impact will the Sale of Goods Act have on this transaction?

A) The Act will result in a duty to provide a new finish that is fit for its intended purpose.
B) The Act will have no application to the transaction.
C) The Act will impose a statutory duty on the customer to provide payment immediately upon delivery of the services.
D) The provisions of the Act governing merchantability will apply.

Question 31

At what point will title to goods pass to the buyer when the contract involves the sale of future or unascertained goods?

A) when the goods are accepted by the buyer
B) when the goods are unconditionally appropriated to the contract
C) when the goods are delivered
D) when the goods come into existence

Question 32

How are promotional statements that are alleged to be either false or misleading to consumers assessed with respect to ascertaining their truth?

A) with Consumer Packaging and Labelling Act regulations
B) with an objective test to judge falsity
C) by definition under the federal Competition Act
D) with Canadian Standards Association guidelines

Question 33

In what way do international sale of goods contracts regulated by CISG differ from domestic sale of goods contracts?

A) International contracts require writing.
B) International contracts do not require consideration.
C) They can be business-to-business contracts.
D) The CISG can apply to leases and services.

Question 34

Which of the following is a condition implied by the Sale of Goods Act?

A) that the seller has the right to sell the goods
B) that the goods will correspond to the sample
C) that the goods are free from liens and encumbrances
D) that delivery will occur in a reasonable period of time

Question 35

SolarPrime Energy Inc.has just delivered five solar power converters to a homeowner who is adding solar power her electrical service for her home.Which of the following best describes the legal position of SolarPrime now that it has completed delivery?

A) Title has now passed to the homeowner.
B) Payment is now due from the homeowner.
C) Risk has now passed to the homeowner.
D) It is impossible to say whether title has passed without more information.

Question 36

The owner of ToolShack Rentals Ltd.loaned (free of charge)a carpet steamer to an acquaintance.What impact will the Sale of Goods Act have on this transaction?

A) It will only apply if ToolShack attempts to sue the borrower for damages to its equipment.
B) It will import an implied condition of merchantability into the arrangement.
C) It will not apply to the transaction.
D) It will require ToolShack to supply goods that are fit for their intended purpose.

Question 37

Why is it is important to determine when the title to goods passes from the seller to the buyer?

A) because payment is due when title passes
B) because the party with title is responsible for delivery costs
C) because risk usually passes with title
D) because the seller can no longer be sued once title has passed to the buyer

Question 38

EcoGreen Garden Centre Inc.will pay $2400 for the two tons of organic fertilizer it ordered for delivery in March.The fertilizer is to be packaged in 20 kilogram bags and then packed onto two separate one-ton pallets for shipment.What rule under sale of goods legislation will dictate when title to the goods passes to EcoGreen?

A) Rule 1
B) Rule 2
C) Rule 3
D) Rule 4

Question 39

Which of the following statements is a distinguishing feature of the Sale of Goods Act?

A) It does not apply to leases of goods.
B) It applies to intangible and tangible property.
C) Its terms are mandatory and cannot be contracted out of.
D) It does not apply to consumer transactions.

Question 40

Which of the following should a legal risk manager insist upon with respect to advertising performance claims about a new product the company is promoting?

A) keeping improper practices secret
B) implementing a cynical marketing strategy to cover a lack of due diligence
C) establishing a justification through scientific evidence
D) speedily retracting false statements

Question 41

Unfair trade practices are considered by consumer protection legislation to involve false,misleading,and unconscionable representations made during any of the various forms of transactions for consumer products.

Question 42

What is the term for advertising a product at a very low price when you have an insufficient supply to meet expected demand?

A) falsity of advertising
B) bait and switch
C) unfair practices
D) misleading advertising

Question 43

A customer who has made its purpose for a particular product known to the seller will be deemed to have relied on the advice of the seller in selecting a product fit for that purpose.

Question 44

The transfer of ownership of goods and the principles relating to delivery of the goods are among the key aspects of the contract of sale that are the focus of marketing laws.

Question 45

Unascertained goods must be identified and agreed on at the time a contract is made.

Question 46

A warranty is implied under sale of goods legislation that requires the seller to have the right to sell the goods.

Question 47

The Latin phrase caveat emptor forms the foundation of common law's expectation of purchasers to be aware of what they are purchasing and to make appropriate investigations before buying.

Question 48

Once goods are delivered to a carrier under a

Question 49

In the event of a breach of an implied condition,the buyer will be limited to suing for damages.

Question 50

The concept of protecting the consumer implicitly assumes that the commercial purchaser is better able to take care of itself and does not require any kind of safeguards.

Question 51

It is an implied warranty of the Sale of Goods Act that that the seller has the right to sell the goods.

Question 52

Generally speaking,the Sale of Goods Act does not apply to the provision of commercial software.

Question 53

The parties to a sale of goods transaction may agree to exclude,or vary,the terms implied by the Sale of Goods Act.

Question 54

The rules contained in the sale of goods legislation that determine when title to goods shifts also affect the seller's right to claim damages for non-acceptance.

Question 55

In a free on board contract,the seller specifies the type of transportation to be used.

Question 56

A number of terms are automatically implied by the Sale of Goods Act into the contracts of parties,even though they may have expressly agreed to exclude the operation of this legislation with regard to their transaction.

Question 57

When a condition in a sale of goods contract is breached,the sale of goods legislation permits the buyer to ask the court to reduce the purchase price due to the breach.

Question 58

Tinsel X-Mas Trees received 200 trees from Misty Tree Farms Ltd.for sale during the holiday season.Tinsel paid a deposit of $500,and Misty granted payment terms of 30 days from the date of delivery.Should Tinsel sell all of the trees but neglect to remit payment within the 30 days,Misty will be entitled to claim an action for the price.

Question 59

Goods not yet set aside and identifiable as the subject of the contract are to be specifically ascertained at the time the contract is formed.

Question 60

Classification of the relevant term of the contract for sale of goods is essential to determining whether the goods sold by description actually correspond with the description.

Question 61

Briefly discuss the right of repudiation with respect to the sale of goods.

Question 62

With respect to the sale of goods legislation,briefly discuss the remedies for breach of warranty.

Question 63

Briefly discuss how the Sale of Goods Act enacted in 1893 protected buyers historically.

Question 64

Identify the warranties that are implied in sales transactions by the Sale of Goods Act.

Question 65

Explain the difference between the shipping terms "c.i.f." and "f.o.b." Which shipping term imposes the most obligations on the seller?

Question 66

The initials c.i.f. stand for “cost, insurance, freight”.

Question 67

In the case of Chalmers Suspensions International Ltd. v. B&B Automation Equipment Inc., 2008 CanLII 15767 (ON S.C), the court was asked to answer the following:
i) Was there a condition implied in the contract that the robotic machine be suitable for the purpose specified by Chalmers?
ii) If so, was the condition breached?
iii) If the condition was breached, what was Chalmers’ remedy?

How did the court respond, and why?

Question 68

Describe how the Sale of Goods Act determines when title passes between the seller and buyer.

Question 69

Provinces have legislated to address selling practices that generally can be described as unfair.Explain the context under which unfairness typically arises,and list unfair practices affected by this legislation.

Question 70

Briefly discuss the role of a bill of lading.

Question 71

Briefly outline some of the limitations of sale of goods legislation.