Deck 27: Interests in Land

Question 1

Consumer information legislation protects consumers by

A) prohibiting false or misleading statements and advertising.
B) providing for standards.
C) requiring elaborate testing procedures for certain consumer goods.
D) prohibiting false or misleading statements and advertising and requiring elaborate testing procedures for certain consumer goods.
E) prohibiting false or misleading statements and advertising and providing for standards.

Answer 1

E

Question 2

Consumer protection legislation

A) is a response to modern changes in technology and marketing practices.
B) attempts to inject an element of fairness into contracts between buyers and sellers where bargaining power is unequal.
C) does not attempt to protect careless buyers.
D) can be reconciled with the Common Law principle of caveat emptor.
E) All of the responses are correct.

Answer 2

E

Question 3

Phil entered into an agreement with Marina Boats for the purchase of a new sail boat for $21,000. The purchase was to be on credit, subject to a favourable credit report on Phil. Marina Boats checked with Credit Reporting Company, and was informed that Phil had defaulted on a number of debts, and presently had judgments in the amount of $30,000 against him. If the information in the credit report is accurate, Marina Boats may deny credit to Phil on the strength of the report.

Answer 3

True

Question 4

Jelly candies are shaped like rounded-off coffee creamers and filled with flavoured gelatin and a chunk of fruit. How is this product regulated?

A) Food and Drugs Act
B) Hazardous Products Act
C) Health Canada Act
D) Food Inspection Act
E) The product is unregulated.

Question 5

Consumer protection legislation may be instituted as a result of which of the following business activities:

A) Increased technological complexity of goods
B) Merchants and manufacturers increasing dishonesty
C) More consumer credit was being granted
D) Technological complexity of goods and increase in the granting of consumer credit
E) All of the responses are correct.

Question 6

Phil entered into an agreement with Marina Boats for the purchase of a new sail boat for $21,000. The purchase was to be on credit, subject to a favourable credit report on Phil. Marina Boats checked with Credit Reporting Company, and was informed that Phil had defaulted on a number of debts, and presently had judgments in the amount of $30,000 against him. Persons using credit who have reason to believe that the files of a credit reporting agency contain inaccurate information, may have their files corrected, or include their own explanatory notes concerning the information.

Question 7

Common law remedies available to consumers

A) arise only after injury occurs.
B) arise from the obligations of sellers and manufacturers under the Sale of Goods Act.
C) arise where the seller and manufacturer had a duty not to injure.
D) arise only after injury occurs and where the seller and manufacturer had a duty not to injure.

Question 8

Deceptive labelling is prohibited under

A) the Food and Drugs Act.
B) the Sale of Goods Act.
C) various penal statutes in the provinces.
D) all of the responses are correct.

Question 9

One of the first types of sellers to be regulated by consumer protection legislation in 1260 was

A) butchers.
B) bakers.
C) candlestick makers.
D) dairies.
E) fishmongers.

Question 10

Bedford operates a collection agency, which has as its primary clients discount furniture and stereo equipment retailers. His customers are typically owed amounts under $2 000. Bedford often finds himself under considerable pressure from his clients to recover outstanding monies quickly.

A) Bedford may seek payment from a debtor's spouse if the debtor cannot or will not pay.
B) Bedford may inform debtors that they will face legal action if they fail to pay.
C) One of Bedford's most successful methods is to send a document to the debtor's employer which resembles a Garnishment of Wages order issued from the court. This often results in the employer deducting the amount owed from the employee's wages and sending it to Bedford. This approach does not offend consumer protection legislation as long as it states at the bottom of the form that it is not an official court document.
D) Bedford will not be required to obtain a licence to operate the collection agency unless he repeatedly violates the legislation governing collection agency business practices.
E) All of the responses are correct.

Question 11

Consumer protection in respect of credit aims to

A) assist consumers who undertake substantial liability for large purchases such as homes.
B) assist lenders offering innovative financing to facilitate consumer credit purchases.
C) ensure credit rates remain stable.
D) ensure clear disclosure of credit charges.
E) All of the responses are correct.

Question 12

Consumer protection laws have taken the following approaches:

A) disclosure of information.
B) expanded consumer rights.
C) minimum standards for safety, quality and performance.
D) registration, and prohibition of certain unethical practices.
E) All of the responses are correct.

Question 13

Arbitration is available to resolve disputes over manufacturing defects in what kind of product?

A) Electronics
B) Computers
C) Internet purchases
D) Automobiles
E) Investments

Question 14

Itinerant sellers

A) sell door to door.
B) pose problems in maintaining fair competition among merchants.
C) pose problems because of their short term employment.
D) all of the responses are correct.

Question 15

The Hazardous Products Act

A) prohibits the manufacture of any product that has the potential to cause injury.
B) controls the possession and application of drug and food products.
C) requires certain products to carry a written warning including a depiction of the type of inherent danger.
D) All of the responses are correct.

Question 16

Phil entered into an agreement with Marina Boats for the purchase of a new sail boat for $21,000. The purchase was to be on credit, subject to a favourable credit report on Phil. Marina Boats checked with Credit Reporting Company, and was informed that Phil had defaulted on a number of debts, and presently had judgments in the amount of $30,000 against him. If credit is denied because of an unfavourable credit report, in most jurisdictions, the seller must inform the buyer of the reason for the refusal of credit.

Question 17

The Province of Ontario, in 2005, brought into effect new consumer protection legislation that incorporated the Consumer Protection Act, the Consumer Protection Bureau Act, the Law Brokers Act, as well as which other Act(s)?

A) The Motor Vehicle Repair Act.
B) The Prepaid Services Act.
C) The Business Practices Act.
D) The Consumer Reporting Act.
E) The Motor Vehicle Repair Act, the Prepaid Services Act and the Business Practices Act.

Question 18

Phil entered into an agreement with Marina Boats for the purchase of a new sail boat for $21,000. The purchase was to be on credit, subject to a favourable credit report on Phil. Marina Boats checked with Credit Reporting Company, and was informed that Phil had defaulted on a number of debts, and presently had judgments in the amount of $30,000 against him. In most jurisdictions, credit reporting legislation requires either the permission of the debtor, or notice to the debtor of an intention to obtain a consumer credit report on the debtor.

Question 19

The labelling of disposable propane cylinders is regulated under which legislation?

A) Sale of Goods Act
B) Consumer Products Act
C) Flammable Gas and Liquids Act
D) Food and Drugs Act
E) Hazardous Products Act

Question 20

Consumers are protected against deficient product performance by legislation that

A) qualifies or limits Sale of Goods Act implied conditions and warranties in respect of consumer purchases.
B) imposes heavy burdens on manufacturers, sellers and consumers who fail to provide products capable of meeting advertised performance claims.
C) defines consumer warranties to ensure protections are afforded to the appropriate class of persons.
D) expands sellers' obligations with respect to deficient consumer goods.
E) All of the responses are correct.

Question 21

All commissions of unfair business practices entitle consumers to receive exemplary damages or to rescind the agreement entered into.

Question 22

The Strong Arm Collection Agency had a number of debts to collect from Sam, a delinquent debtor. The agency sent Harry to see Sam, and present him with a demand for payment that was drawn to resemble a court summons. Harry delivered the demand, but before he departed, threatened to "beat up" Sam, and inform Sam's employer that he was a "deadbeat," if he did not pay the debt promptly. Harry is not entitled to use any physical threats, force, or pressure against Sam.

Question 23

The Strong Arm Collection Agency had a number of debts to collect from Sam, a delinquent debtor. The agency sent Harry to see Sam, and present him with a demand for payment that was drawn to resemble a court summons. Harry delivered the demand, but before he departed, threatened to "beat up" Sam, and inform Sam's employer that he was a "deadbeat," if he did not pay the debt promptly. If Sam does not pay, Harry is free to inform Sam's employer that Sam is a delinquent debtor.

Question 24

Info Services Ltd. in Regina is a retailer of new and used computer products. Most of its customers are businesses, although it offers discounts to students on most models.
Info Services will be liable to the purchaser of a used printer if it fails to provide repair facilities one week after the sale unless it explicitly excludes the statutory warranties at the time of sale.

Question 25

The Strong Arm Collection Agency had a number of debts to collect from Sam, a delinquent debtor. The agency sent Harry to see Sam, and present him with a demand for payment that was drawn to resemble a court summons. Harry delivered the demand, but before he departed, threatened to "beat up" Sam, and inform Sam's employer that he was a "deadbeat," if he did not pay the debt promptly. If Sam does not pay the debt, Harry is entitled to demand payment of the debt from other members of Sam's immediate family.

Question 26

Contracts with itinerant sellers may be repudiated after the offer has been accepted.

Question 27

The Strong Arm Collection Agency had a number of debts to collect from Sam, a delinquent debtor. The agency sent Harry to see Sam, and present him with a demand for payment that was drawn to resemble a court summons. Harry delivered the demand, but before he departed, threatened to "beat up" Sam, and inform Sam's employer that he was a "deadbeat," if he did not pay the debt promptly. A collection agency may use any form it wishes as a demand for payment, provided that it does not use an official court form.

Question 28

Common Law remedies are available to consumers injured by defective goods, in addition to legislative provisions that hold manufacturers strictly liable.

Question 29

Phil entered into an agreement with Marina Boats for the purchase of a new sail boat for $21,000. The purchase was to be on credit, subject to a favourable credit report on Phil. Marina Boats checked with Credit Reporting Company, and was informed that Phil had defaulted on a number of debts, and presently had judgments in the amount of $30,000 against him. Marina Boats would be classed as an itinerant seller under the legislation of most provinces, even though it sells only from a fixed place of business. It must, therefore, be registered as such.

Question 30

John purchased a compact car from Riser Used Cars in Toronto. When John test drove the car he noticed it had brand new tires, but the interior upholstery was quite worn. John was informed by Riser's salesman that the car had been exclusively owned by an elderly lady who drove only in the summer months. The car was sold with a 40-day warranty on safety items only. Within a week after picking up the car John experienced two flat tires, which he discovered were completely bald, and the windshield wipers and heater stopped working. The car dealership is subject to a statutory warranty that the car will be durable for a reasonable period of time.

Question 31

Info Services Ltd. in Regina is a retailer of new and used computer products. Most of its customers are businesses, although it offers discounts to students on most models.
Info Services' liability to customers will be either in statute or Common Law.

Question 32

John purchased a compact car from Riser Used Cars in Toronto. When John test drove the car he noticed it had brand new tires, but the interior upholstery was quite worn. John was informed by Riser's salesman that the car had been exclusively owned by an elderly lady who drove only in the summer months. The car was sold with a 40-day warranty on safety items only. Within a week after picking up the car John experienced two flat tires, which he discovered were completely bald, and the windshield wipers and heater stopped working. John may invoke the warranty for repair of the defects in the car.

Question 33

Phil entered into an agreement with Marina Boats for the purchase of a new sail boat for $21,000. The purchase was to be on credit, subject to a favourable credit report on Phil. Marina Boats checked with Credit Reporting Company, and was informed that Phil had defaulted on a number of debts, and presently had judgments in the amount of $30,000 against him. The credit arrangement for the purchase of the boat by Phil must disclose only the amount borrowed, the terms of loan, the monthly payments, and the true interest rate.

Question 34

John purchased a compact car from Riser Used Cars in Toronto. When John test drove the car he noticed it had brand new tires, but the interior upholstery was quite worn. John was informed by Riser's salesman that the car had been exclusively owned by an elderly lady who drove only in the summer months. The car was sold with a 40-day warranty on safety items only. Within a week after picking up the car John experienced two flat tires, which he discovered were completely bald, and the windshield wipers and heater stopped working. Remedies may be available to John under the Sale of Goods Act or Common Law principles.

Question 35

The Strong Arm Collection Agency had a number of debts to collect from Sam, a delinquent debtor. The agency sent Harry to see Sam, and present him with a demand for payment that was drawn to resemble a court summons. Harry delivered the demand, but before he departed, threatened to "beat up" Sam, and inform Sam's employer that he was a "deadbeat," if he did not pay the debt promptly. The Strong Arm Collection Agency must be licensed in the province in which it operates, and if it repeatedly uses methods of collection prohibited by the statute, its licence to operate may be revoked.

Question 36

Info Services Ltd. in Regina is a retailer of new and used computer products. Most of its customers are businesses, although it offers discounts to students on most models.
Jennifer, who receives a computer purchased at Info Services as a gift from her father for university, may only enforce the performance warranties against the seller by including her father in the action.

Question 37

Intending to purchase laundry detergent, Wendy went to her neighbourhood supermarket where her favourite brand was advertised on sale for $4.99 for a 5-kilogram box. When she arrived there were no boxes of her brand left but the store's house brand was prominently displayed for sale also at $4.99 for the same size box. At the checkout the price appears as $4.59 when the clerk scans the UPC bar code. A violation of the Competition Act has occurred.

Question 38

A seller of goods may be found to be in breach of the Business Practices Act if it charges too much for its goods.

Question 39

The Strong Arm Collection Agency had a number of debts to collect from Sam, a delinquent debtor. The agency sent Harry to see Sam, and present him with a demand for payment that was drawn to resemble a court summons. Harry delivered the demand, but before he departed, threatened to "beat up" Sam, and inform Sam's employer that he was a "deadbeat," if he did not pay the debt promptly. Harry is entitled to use reasonable force to collect the money, provided that the force is used only against the debtor, Sam.

Question 40

A manufacturer may be found liable for damages under the Food and Drugs Act only when a consumer has been injured by an improperly labelled product.

Question 41

Eli is a door to door salesman with Cleanco, a household cleaning manufacturer. James was approached by Eli and agreed to buy many items. James discussed his purchase with a friend. During the discussion James learned of the poor quality inherent in Cleanco's goods. James' friend also informed him that the provincial Consumer Protection legislation did contain a "cooling-off" period clause under which he can repudiate the contract without liability. James contacted Eli at his office and informed him of his decision to return the goods. Eli informed him that he is only entitled to do so when a product is bought in a store and not from a travelling salesman. Eli is mistaken.

Question 42

Taylor, a young salesman with a pharmaceutical company, wished to purchase some furnishings for the new home he and his wife had recently acquired. To do so he visited a local branch of the Consumer Finance Co. Ltd. to arrange a suitable loan. Taylor made regular payments on the loan for a number of months. In September he received a promotional pamphlet from the finance company offering, as a Christmas bonus, three months relief of payments for October, November and December without interest or penalty charges. To obtain the benefit Taylor telephoned his loans officer and made the arrangements
In mid-December he received a call from the branch manager. He went to see the manager who told him he was in arrears for three months and, as far as the finance company was concerned, his loan contract was voided. The manager then gave him three choices: to pay the balance in full with interest and penalty charges, to sign a new loan contract with different terms, or do neither and be sued immediately. The manager also told Taylor that if he were sued, his credit rating would be destroyed and insisted that Taylor decide which choice he wanted before he left the office. Taylor did not have sufficient resources to pay the balance in full nor did he wish to be sued. He signed a new loan agreement with a substantially higher interest rate. Discuss the issues raised by this case. What are the rights and liabilities of the parties?

Question 43

Debt is a situation that arises with many consumer-retailer transactions. However, in some cases unpaid debt becomes a serious problem forcing some retailers to use collection agencies to gather monies owed to them by consumers. As a result, the Consumer Protection Act includes specific provisions to govern these agencies. Although it requires them to be licensed, it imposes very few restrictions on the manner in which the agencies collect the money.

Question 44

Mike visits an electronics store having seen an advertisement for a computer at a very attractive price. The salesperson shows him the computer willingly and describes the attributes. With a whisper, the salesperson says "I'm not supposed to point this out, 'cause the manager would kill me, but even though this computer is cheaper, it's a real dog. No quality. This computer over here, while it costs more, you are looking at much more value for money." Mike is impressed at the forthrightness and the fact that the employee is taking a risk to help him make a good choice He buys the computer. The following week he notices advertisements for the model of computer he has just purchased, at prices between 20% and 30% below the price he paid. Not only may the store face a fine, but Mike may rescind the transaction.

Question 45

Mike visits an electronics store having seen an advertisement for a computer at a very attractive price. The salesperson shows him the computer willingly and describes the attributes. With a whisper, the salesperson says "I'm not supposed to point this out, 'cause the manager would kill me, but even though this computer is cheaper, it's a real dog. No quality. This computer over here, while it costs more, you are looking at much more value for money." Mike is impressed at the forthrightness and the fact that the employee is taking a risk to help him make a good choice He buys the computer. The following week he notices advertisements for the model of computer he has just purchased, at prices between 20% and 30% below the price he paid. The store, by virtue of the actions of its employee, is in violation of the Federal Competition Act.

Question 46

Mike visits an electronics store having seen an advertisement for a computer at a very attractive price. The salesperson shows him the computer willingly and describes the attributes. With a whisper, the salesperson says "I'm not supposed to point this out, 'cause the manager would kill me, but even though this computer is cheaper, it's a real dog. No quality. This computer over here, while it costs more, you are looking at much more value for money." Mike is impressed at the forthrightness and the fact that the employee is taking a risk to help him make a good choice He buys the computer. The following week he notices advertisements for the model of computer he has just purchased, at prices between 20% and 30% below the price he paid. The store is in violation of the Business Practices Act of the province where the act took place.

Question 47

Explain the scope of and the penalties for commissions of unfair business practices.

Question 48

The case of Donaghue v. Stevenson represented a dramatic change in the law regarding defective products. Discuss the similarities and differences between the legal principles established by this case and the operation of modern legislation in this area.
D. v. S., an injured consumer may sue a manufacturer for damages suffered
- Under federal legislation (Food and Drugs Act and Hazardous Products Act), strict liability and penalties are imposed on manufacturers in breach of the Acts' provisions
- The purpose of the legislation is to protect the public from harm but not to compensate injured consumers, its role being regulatory as well as criminal
- Manufacturers may be required to pay penalties for breaches of the legislation whether any injury occurred or not

Question 49

Six months ago, Henri's consumer debt of $3,000 was referred to a collection agency. The first thing the agency did was to phone Henri's employer and confirm his employment. Like clockwork thereafter, every Monday afternoon Henri could expect to return home to a message on his answering machine asking for payment on account. Equally, he could expect a letter from the agency to arrive each Friday, complete with a printed return envelope for his "payment." Finally, on a monthly basis, he would receive a statement of his account, together with accruing interest, and the advice that "prompt payment will avoid our placing this matter in the hands of our lawyers for collection." A collection agency may not telephone a debtor's employer on any pretext.

Question 50

Sale of Goods Act warranties and conditions are made unavailable to manufacturers by consumer protection legislation.

Question 51

Six months ago, Henri's consumer debt of $3,000 was referred to a collection agency. The first thing the agency did was to phone Henri's employer and confirm his employment. Like clockwork thereafter, every Monday afternoon Henri could expect to return home to a message on his answering machine asking for payment on account. Equally, he could expect a letter from the agency to arrive each Friday, complete with a printed return envelope for his "payment." Finally, on a monthly basis, he would receive a statement of his account, together with accruing interest, and the advice that "prompt payment will avoid our placing this matter in the hands of our lawyers for collection." At least two of the actions undertaken by the agency were in violation of the statute.

Question 52

Six months ago, Henri's consumer debt of $3,000 was referred to a collection agency. The first thing the agency did was to phone Henri's employer and confirm his employment. Like clockwork thereafter, every Monday afternoon Henri could expect to return home to a message on his answering machine asking for payment on account. Equally, he could expect a letter from the agency to arrive each Friday, complete with a printed return envelope for his "payment." Finally, on a monthly basis, he would receive a statement of his account, together with accruing interest, and the advice that "prompt payment will avoid our placing this matter in the hands of our lawyers for collection." Provincial legislation governs the behaviour of this type of financial agency.

Question 53

Intending to purchase laundry detergent, Wendy went to her neighbourhood supermarket where her favourite brand was advertised on sale for $4.99 for a 5-kilogram box. When she arrived there were no boxes of her brand left but the store's house brand was prominently displayed for sale also at $4.99 for the same size box. At the checkout the price appears as $4.59 when the clerk scans the UPC bar code. Wendy has substituted the house brand for her favourite brand, but is entitled to pay $4.59.

Question 54

Explain why one type of purchase transaction allows a buyer a "cooling-off" period, yet it is a privilege not accorded to buyers in other types of purchase transactions.

Question 55

Consumer credit-reporting agencies need only inform debtors of the names of creditors using the service, but need not reveal the information it has collected.

Question 56

Elliot purchased a bicycle helmet for his son, Michael. Elliot had seen a sticker on the box with large CSSA letters on it. Elliot mistook this for the Canadian Standards Association mark of approval. In reality, the sticker represented that the product had passed the Company Safety Standard Application. Using the mistaken labelling as the basis for his purchase, Elliot bought the helmet. After an accident on his bike, Elliot's son Michael, who was wearing the helmet, suffered many cuts and injuries to his head. Upset with the helmet's safety performance, Elliot brought legal action against the manufacturer and the Canadian Standards Association. Discuss all the issues that this scenario raises under Consumer Protection Legislation.

Question 57

Intending to purchase laundry detergent, Wendy went to her neighbourhood supermarket where her favourite brand was advertised on sale for $4.99 for a 5-kilogram box. When she arrived there were no boxes of her brand left but the store's house brand was prominently displayed for sale also at $4.99 for the same size box. At the checkout the price appears as $4.59 when the clerk scans the UPC bar code. Wendy is no longer entitled to a box of her favourite brand at the advertised price since she substituted the house brand.

Question 58

Some Canadian provinces have enacted comprehensive legislation for the protection of consumers. Explain how such legislation arose in our legal system, emphasizing in your answer notions of freedom of contract and caveat emptor
Do you agree with such legislation?

Question 59

Ming-Yu and her husband, Dan, ran a dry-cleaning company, which also provided a conventional "wash, fluff, and fold" laundry service to its customers. The laundry facilities were located at the rear of the building and consisted of several large-size washing machines and dryers. Also located in this part of the building was a standard floor drain into which spills would flow. The drain had been working poorly and a succession of plumbers and their various methods had not succeeded in making it work properly. Ming-Yu had become frustrated with the drain and purchased a liquid drain opener, "Drainthru." She poured two cups of the liquid into the drain and waited
On the bottle of the product appeared the following small print:
DIRECTIONS: Floor Drains - Use 8 oz. of contents and let stand for 5 minutes. Flush. Repeat if necessary. FOR YOUR OWN SAFETY: Contains sulphuric acid. Do not use where other drain chemicals are present. Avoid contact with eyes, skin and clothing. Do not breathe fumes.
The following morning, Ming-Yu saw no appreciable difference in the state of the drain. She purchased another drain opener, this time a tin of lye. After putting on rubber gloves, she pored two spoonfuls of the lye flakes into the drain and stirred it about. The lye container bore the following label:
GENERAL USES: For Clogged drains - insert 3 tablespoons of lye past the grid of the drain and add two cups of warm water. Let solution stand for 1/2 hour and then flush with boiling water. CAUTION: Contains Sodium Hydroxide. Avoid contact with eyes, skin and clothing.
There were no hazardous products symbols on either container of drain opener. Just as Ming-Yu had finished adding the lye into the drain, she noticed a strong burning odour. Suddenly a violent eruption occurred in the drain, spewing liquid out of the drain directly into Ming-Yu's face. The explosion was a result of combining the chemicals of the different drain openers in the trap of the drain. As a result, Ming-Yu was permanently blinded.
What action may Ming-Yu take in these circumstances? What is the nature of liability faced by the manufacturers of the two products?