Question 1

Which of the following is false with regard to misrepresentation?

Accepted Answer

A) If the seller induces the buyer to buy by making a misrepresentation that she honestly thought was true,the buyer has no remedy in equity. 
B) A misrepresentation can be made about a term of a contract and result in an award of damages. 
C) For fraudulent misrepresentation,the buyer can be granted the equitable remedy of rescission. 
D) Fraudulent misrepresentation can result in the seller being sued for damages for the tort of deceit. 
E) In law,a misrepresentation is a false statement of fact that persuades someone to enter into a contract.

Question 2

On September 1,Beeton contracted to sell $4000 worth of specified Kenyan lumber to Cairns.Beeton expected the arrival of the lumber soon,so the delivery date was set for September 8.On September 5,Beeton assigned,in writing,his contractual right to receive the $4000 to his bank,which was pressing him to reduce his $17 000 debt.The bank sent a written notice to Cairns instructing him to forward the $4000 to the bank and not to pay Beeton directly.Unknown to either Beeton or Cairns,the lumber had been lost at sea in August,before they had even entered the contract.On these facts,which of the following is true?

Accepted Answer

A) The time for determining the "equities between the parties" is always the time that notice of the assignment is given. 
B) This assignment was not a statutory assignment (i.e.,it failed to satisfy the statutory requirements for enforcement by the assignee against the debtor). 
C) The assignee would receive whatever the assignor had assigned to him,namely,the $4000. 
D) Because the assignment was made by Beeton to his bank in good faith,Cairns must pay the bank $4000. 
E) Because the goods bargained for had perished before the parties had contracted for them,the court would hold the contract void.

Question 3

Which of the following is false with regard to privity of contract and assignments?

Accepted Answer

A) Assignments are modifications of the privity of contract rule since they do allow a stranger to the contract to receive benefits from the contract. 
B) The rules governing negotiation (an assignment of a negotiable instrument such as a cheque)differ from those governing regular assignments; the assignee may take more than the assignor was entitled to receive. 
C) A statutory assignment is harder to enforce in court than an equitable assignment. 
D) There is case law confirming the proposition that an employee can have the benefit of an exemption clause in the employer's contract with the customer. 
E) A computer programmer who signs a contract for services can assign his contractual rights but not his contractual obligations if the contract is silent on the matter of assignments.

Question 4

Discuss how and why promissory estoppel might come into play when a contract is being discharged or changed by agreement.

Accepted Answer

The answer of Discuss how and why promissory estoppel might...

Question 5

Keri went to Crandon's computer outlet with her brother Paul,who was buying a laser printer.While she was waiting for him,she saw a poster saying that the store was collecting funds for a special computer for a student recently disabled in an accident.The seller induced Paul to buy the model "X" printer by stating as a fact that the printer could interface with his Macintosh clone.Paul paid $900 for the printer.Also,Keri gave $15 to the student fund after the seller confirmed he was collecting for the student's computer.Later,Paul and Keri learned that neither statement was true (i.e.,the printer didn't interface with Paul's computer and the store was doing nothing for the student),and that the seller didn't believe that the statements were true when he made them.On these facts,which of the following is true?

Accepted Answer

A) Only Keri has a remedy because she had been fraudulently misrepresented. 
B) Paul could sue for damages due to an innocent misrepresentation. 
C) Keri could sue for damages due to a misunderstanding. 
D) The court would rescind Paul's contract only with proof that the seller knew his statement was false. 
E) Paul could sue for rescission because of the misrepresentation.

Question 6

"Where fraudulent misrepresentation is involved,the victim can obtain rescission and/or damages,but where innocent misrepresentation is involved,the only remedy is damages." Discuss the accuracy of this statement.

Accepted Answer

The answer of "Where fraudulent misrepresentation is involved,the victim can...

Question 7

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

Accepted Answer

A) Ms.Bey must honour the notice of assignment by paying out the $900 on the day the notice was received. 
B) The assignment fails to be an assignment at all because Adam failed to get the consent of Ms.Bey. 
C) Charlie,the assignee,would receive $800 from Ms.Bey and have to look to Adam for the other $100 owed. 
D) Charlie would get nothing because Ms.Bey owed less than the amount assigned. 
E) This assignment is a statutory assignment.

Question 8

Privity of contract applies in which of the following situations?

Accepted Answer

A) where an insurance contract is involved 
B) where a trust has been created 
C) where a trust is involved 
D) where an interest in land is involved 
E) where goods are being sold

Question 9

Identify the exception in one of the following situations,whereby the contract is discharged by frustration.

Accepted Answer

A) Rudolph is due to appear in a local variety theatre that has just been destroyed in a fire of unknown origin. 
B) Frank has contracted to ride Emperor,a prize horse,in the Canada Day races on July 1,but on June 28 the horse breaks a leg and has to be destroyed. 
C) Jack contracts with Bill to build a barn on his one-hectare lot,but before the permit is obtained,a new law prohibits barns on less than three hectares. 
D) Gregory,a trucker with whom you contracted last month to haul potatoes tomorrow,phones to tell you that his truck has broken down. 
E) Jerry,a doctor,is due to perform a heart transplant operation on Mary,and the night before the surgery his arthritis becomes so painful that he cannot hold a scalpel.

Question 10

When an outside,unforeseen event interferes with the performance of a contract,and there is some other way to fulfill the contract,performance is required.

Accepted Answer

A) True 
 B)False

Question 11

It came to your attention that your great-grandmother had signed a contract pursuant to which she would be paying $5000 for an electronic organ that retails in reputable stores for $3000.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 salesperson who came to her home.On these facts,which of the following laws is the most likely to help her?

Accepted Answer

A) non est factum 
B) misrepresentation only 
C) unconscionability only 
D) both unconscionability and misrepresentation 
E) undue influence only

Question 12

The purpose of damages in contract law is to put the victim in the position he or she would have been in had the contract been properly performed.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of duress?

Accepted Answer

A) Joe wants to purchase Smith's car from him,and Smith sells it to someone else. 
B) Joe refuses to sell Harry his car unless Harry offers him more money. 
C) Joe threatens to smash Harry's car if Harry won't sell it to him. 
D) Joe,knowing of Harry's financial situation,refuses to sell him his car. 
E) Joe counter-offers Harry's original offer.

Question 14

Adams signed a contract in which he promised to sell his house to Jefferson for $225 000.The "deposit" to be paid was set at $4000,and the liquidated damages clause provided that the deposit would be forfeited in the event that the buyer breached the contract.The buyer did breach the contract.Because the cost of housing was falling,it was difficult,even after a reasonable time had passed,to find a new buyer.The highest offer was $218 000.Adams accepted.Which of the following is true with regard to Adams's remedies?

Accepted Answer

A) Adams could sue for an injunction to stop Jefferson from buying another house. 
B) Adams would be entitled to the $4000 only,if the court held that the deposit was an honest attempt of the parties to estimate damages. 
C) Adams must sue for specific performance,which is the only remedy,an equitable remedy,available to the parties in land transactions. 
D) Adams would be entitled to damages for money lost-$7000 plus selling costs. 
E) Adams could ask the court to order an accounting.

Question 15

Discuss what happens when the parties to a contract make mistakes with respect to what they have agreed.

Accepted Answer

The answer of Discuss what happens when the parties to...

Question 16

Fraudulent misrepresentation is intentionally misleading another person into a contract.

Accepted Answer

A) True 
 B)False

Question 17

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10 000 to be forfeited in the event of Mike's failing to go through with the deal.This deposit was an honest estimate of the damages Rita would suffer.On these facts,which of the following is true?

Accepted Answer

A) If the contract price agreed upon was $150 000 and Rita,after Mike breaches the contract,sells the house in one week for $138 000,she will still be able to recoup all her losses. 
B) If Mike breaches the contract,he would not have to pay $10 000 even if Rita suffered a substantial loss. 
C) If Mike breaches the contract,he will have to pay Rita all damages that directly and naturally flow from the breach. 
D) If Mike breaches the contract,he would have to pay $10 000 even if Rita's actual loss was $40 000. 
E) A clause in a contract that provides for the forfeiture of a deposit is called an exemption clause.

Question 18

What is rescission?

Accepted Answer

The answer of What is rescission?...

Question 19

Simply put,with respect to contracts,what is the outcome of self-induced frustration?

Accepted Answer

The answer of Simply put,with respect to contracts,what is the...

Question 20

Distinguish between innocent and fraudulent misrepresentation,indicating why the distinction is important.

Accepted Answer

The answer of Distinguish between innocent and fraudulent misrepresentation,indicating why...

Exam 4: Enforcing Contractual Obligations

Which of the following is false with regard to misrepresentation?

Which of the following is false with regard to privity of contract and assignments?

Discuss how and why promissory estoppel might come into play when a contract is being discharged or changed by agreement.

"Where fraudulent misrepresentation is involved,the victim can obtain rescission and/or damages,but where innocent misrepresentation is involved,the only remedy is damages." Discuss the accuracy of this statement.

Privity of contract applies in which of the following situations?

Identify the exception in one of the following situations,whereby the contract is discharged by frustration.

When an outside,unforeseen event interferes with the performance of a contract,and there is some other way to fulfill the contract,performance is required.

The purpose of damages in contract law is to put the victim in the position he or she would have been in had the contract been properly performed.

Which of the following is an example of duress?

Discuss what happens when the parties to a contract make mistakes with respect to what they have agreed.

Fraudulent misrepresentation is intentionally misleading another person into a contract.

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10 000 to be forfeited in the event of Mike's failing to go through with the deal.This deposit was an honest estimate of the damages Rita would suffer.On these facts,which of the following is true?

What is rescission?

Simply put,with respect to contracts,what is the outcome of self-induced frustration?

Distinguish between innocent and fraudulent misrepresentation,indicating why the distinction is important.