Deck 9: Representations and Terms

Question 1

A pre-contractual representation

A)creates a legally enforceable obligation.
B)is a promissory statement.
C)will always induce a contract.
D)is a voluntary agreement to do something in the future.
E)can be made by words or conduct.

Answer 1

E

Question 2

A contractual term

A)is made with the intention to induce a contract.
B)is a promissory statement.
C)does not impose a contractual obligation.
D)is a form of misrepresentation.

Answer 2

B

Question 3

Negligent misrepresentation occurs when a person deliberately lies about a material fact inducing a contract.

Answer 3

False

Question 4

A misrepresentation is

A)a kind of mistake.
B)an opinion that turns out to be untrue.
C)actionable whenever it turns out to be false.
D)actionable if it induces a contract by falsely characterizing the factual consequences of a past legal action.
E)actionable if it induces a contract by misdescribing another's future action.

Question 5

A misstatement of the law is identical to a misstatement about the existing factual consequences of the application of that law.

Question 6

A contractual representation relied upon to induce a contract,cannot be made deliberately false.

Question 7

Someone who signs a document in a hurry is never bound by his signature.

Question 8

The proof of a collateral contract not in contradiction to the written contract is an exception to the parol evidence rule.

Question 9

Restitution requires both sides to be returned to their pre-contractual positions.

Question 10

When will silence distort a previous assertion?

A)whenever a change in circumstances occurs
B)whenever a change in circumstances does not affect the accuracy of a representation
C)when a contract requires a duty of utmost good faith
D)when a change in circumstances affects the accuracy of an earlier pre-contractual representation
E)when a statutory provision requires disclosure

Question 11

If Vasaliki is induced to enter into a contract as a consequence of a statement made by Lampros with reckless indifference as to its truth,Vasaliki has an automatic right to rescission and may also get damages if the statement is fraudulent.

Question 12

Damages for actionable misrepresentation are available in the contract law depending on the type of misrepresentation that was made.

Question 13

Cavell is selling his CD burner to an acquaintance.Cavell knows that the CD burner has a defect,generating CDs that skip.The acquaintance asks Cavell for his opinion of the machine just before the purchase is to take place.All Cavell says is "I personally like it,but I am not too picky about quality.You should try the machine out before you buy it." Cavell has made a misrepresentation about the quality of the machine.

Question 14

Reeni was interested in purchasing a car.After searching the classified ads,she found a car in which she was interested,being sold by Ethan,whom she had never met.Ethan knew that his car was in need of new tires,a new muffler,and would soon need a new clutch and a brake job.Consequently,he was hoping that,when they met,Reeni wouldn't ask too many questions.When she wanted to go for a test drive,Ethan gave her the keys and said that he trusted her to go alone and that doing so would allow her to test it in a less inhibited fashion.Really,he just didn't want her to ask about any of the car's problems.Reeni took the car by herself and,on the basis of its performance,bought it at Ethan's listed price,no questions asked.Which of the following statements is most likely TRUE?

A)Ethan is not required to disclose the car's problems during pre-contractual negotiations if Reeni does not ask about them.
B)Silence can never amount to a misrepresentation.
C)Ethan owed Reeni a special duty to disclose the problems with his car.
D)By failing to accompany Reeni in the test drive,Ethan breached a duty of utmost good faith.
E)Reeni would succeed in an action against Ethan for misrepresentation.

Question 15

Parol evidence cannot be used to resolve ambiguous terms of a written contract.

Question 16

A person who investigates a condition or state of facts for themselves,rather than relying on a pre-contractual statement of the other side,will usually succeed in an action for misrepresentation whenever the investigation that they made turns out to be untrue.

Question 17

Steve,Sheryl's doctor,is selling some of the artwork from his office.Sheryl says she has always been interested in his Thomson piece and asks how much he wants for it.Although the painting is not actually a Thomson original,Steve knows which one she means and tells her that he paid $3000 but will take $1000.(That much is true,but he doesn't say anything at all to indicate that it is NOT a Thomson original).By his silence,Steve has engaged in actionable misrepresentation.

Question 18

Restitution is always possible for any misrepresentation regardless of the circumstances.

Question 19

The golden rule always requires an adoption of the contextual approach to contractual interpretation.

Question 20

Pre-contractual representations are always part of the terms of all contracts.

Question 21

In order to get Susannah to buy his cottage,Paul tells her that he has recently spent $100 000 in repairs that make its foundations flawless.In love with the cottage and in reliance on Paul's representation,Susannah impulsively trades her condo in the city for the cottage without asking for a home inspection.Two months after she moves into the cottage,Susannah hears a creaking noise during a windy evening.The next morning,she has a home inspector over to take a look.He tells her that there have been no repairs on the house in the last 20 years and that the foundation is in a dangerous state of disrepair.She calls Paul to try to get her condo back but finds out that he has sold the unit and has moved to Bermuda with all of his assets.In seeking orders for rescission and restitution,

A)Susannah will most likely succeed in obtaining rescission and restitution,as Paul's misrepresentation is clearly actionable and the parties can be put back their same position by evicting the person to whom Paul sold the condo.
B)Susannah will likely succeed,and the court will therefore award damages for breach of contract,which is the usual award granted when a party seeks rescission.
C)Susannah will most likely fail,as Paul's misrepresentation is clearly not actionable.
D)Susannah will most likely fail because her living in the cottage for two months is an affirmation of Paul's misrepresentation.
E)Susannah will most likely fail because courts are unlikely to grant rescission when the rights of third parties are affected.

Question 22

Denise is a farmer in Prince Edward Island.Recently she purchased a new tractor from her local dealer.Although her contract of sale contained a large number of standard terms and conditions,it did not guarantee that the tractor would function properly.Assume that the tractor malfunctions and Denise tries to sue for breach of contract.Which of the following is most likely TRUE?

A)Denise would fail because no term in the contract was breached.
B)Denise would fail unless the court was willing to imply a term.
C)Denise would fail unless she was able to prove a collateral contract.
D)Denise would fail no matter what.
E)If a term was implied into the contract by statute or by common law,that the tractor would function properly then Denise may succeed in her lawsuit for breach of contract.

Question 23

Which of the following is NOT true of the contra proferentum rule?

A)It is a rule of contractual interpretation.
B)It is always the best means of resolving an ambiguous term.
C)It attributes to a term the meaning least favourable to its author.
D)It provides an incentive for the author of a term to draft it in clear and unambiguous language.
E)It applies to contracts where the other side did not draft the contract nor have any meaningful input into the contractual terms.

Question 24

The possible consequences of actionable misrepresentation include

A)a damage award for breach of contract.
B)the remedy of rescission.
C)the remedy of an injunction.
D)the remedy of an incision.
E)a fine for breach of contract.

Question 25

An express term

A)is only enforceable if one of the parties agrees to it in writing.
B)is a statement made by one of the parties to the other party of a contract that a reasonable person would believe was intended to create an enforceable obligation.
C)is a statement made by one party to induce the other party to enter into an agreement.
D)sometimes arises as a result of an operation of law.
E)is a term made by the court ascertaining the industry custom when interpreting the contract.

Question 26

Even if a lease does not expressly say that the item leased must come back in the same condition in which it went out (subject to reasonable wear and tear),a court will imply such a term.Courts will do so on the basis that such a term

A)was clearly intended by both parties.
B)was clearly desirable.
C)would improve the contract.
D)is in accordance with the usual industry standard practice in the industry the parties are engaged in,if that implied term is proved by admissible evidence at trial.
E)is found in some leases.

Question 27

Diamond Dave decides to sell his donut franchise to Fast Freddie.Freddie has a number of questions about the receivables.Diamond Dave says that all of the answers to his questions can be found in the corporate ledger.Instead of inspecting the ledger,Fast Freddie hires an accounting firm to do a forensic audit of the business.Relying on the audit,Freddie buys the business.Which of the following explains why Freddie would fail to obtain rescission if he later decided he did not like the transaction?

A)Freddie affirmed Dave's misrepresentation.
B)Freddie did not rely on the fraudulent misrepresentation that Dave made.
C)Diamond Dave was not careless with his ledger,but by not conducting his own forensic audit Diamond Dave misled Freddie into thinking he needed to conduct a forensic audit;however,this was not the cause of Freddie's damages.
D)Diamond Dave made an innocent misrepresentation,but it is impossible to restore the parties to their previous positions.
E)Diamond Dave did not make any misrepresentation in any way,and Freddie relied entirely upon his own investigations.

Question 28

Standard form agreements

A)always balance the interests of both parties.
B)are rarely offered on a take-it-or-leave-it basis.
C)often are more time-consuming than negotiating the terms of a new contract.
D)often contain language that has been refined and tested over the years.
E)are not binding if the party signing them does not bother to read them.

Question 29

Samuel and Ben are negotiating the sale of a sailboat.Samuel expresses an interest in the boat but emails Ben a list of five questions that he wants answered before agreeing to purchase it.Ben responds with full answers to four of the questions.Samuel emails back and says he will buy the boat on Saturday as long as his remaining question (about the state of its hull)checks out okay.Ben promises to check with his boat mechanic and respond before they are scheduled to meet on Saturday.Both men get busy.Ben checks with his mechanic but innocently forgets to report back to Samuel that there is a crack in the hull.Samuel forgets that there was one question outstanding.Saturday comes and the transaction takes place.If it turns out that there is a significant problem with the hull of the boat,which of the following is TRUE?

A)If he sues,Samuel will likely obtain a damage award.
B)If he sues,Samuel will likely succeed in a tort action.
C)Samuel is stuck with the boat.
D)Ben may have to take the boat back and return Samuel's money.
E)Ben may seek to get his boat back even if Samuel wants to keep it.

Question 30

Which of the following is NOT an example of a disclosure required by statute?

A)disclosure of a serious medical condition when obtaining life insurance
B)disclosure of material facts by a financial officer of a publically traded corporation
C)disclosure of significant liabilities that exist when making a domestic (family law)contract
D)disclosure of material facts pertaining to the sale of securities
E)disclosure of material facts by an accountant when she sells her car to one of her clients

Question 31

Suppose that a term is not the result of a statement expressed by either of two negotiating parties.Which of the following is TRUE?

A)It could never be a term of any contract between them.
B)It could only be a term of a contract between them if it is implied by a court.
C)It could only be a term of a contract between them if it is an implied term.
D)It could only be a term of a contract between them if one party subsequently affirms the term.
E)It could only be a term of a contract between them if both parties subsequently affirm the term.

Question 32

Business people often sign written agreements on the oral assurance that some of the terms of the written agreement will not be enforced.To sign under written agreements in these circumstances is imprudent because of

A)the golden rule.
B)the parol evidence rule.
C)the contra proferentum rule.
D)the absurdity rule.
E)the fact that oral terms of contracts are never enforceable.

Question 33

Contracts of utmost good faith

A)arise when one party is uniquely situated to know the material facts such as an insurance contract.
B)are the only contracts that do not require any kind of disclosure.
C)do not require notification of any changes to previously supplied information.
D)have no bearing on the law of misrepresentation.
E)allow parties to lie to each other prior to entering into a contract without any legal consequence attaching to those lies.

Question 34

Ejay wants a court to consider oral evidence about a written contract in order to resolve a dispute about an ambiguous term in one of her client's contracts.She decides that she will characterize the facts as giving rise to a collateral contract.Which of the following is TRUE?

A)Ejay is doing this because the collateral contract doctrine is the only way to have her oral evidence heard.
B)Ejay is a doing this because a collateral contract can never circumvent the rule preventing oral evidence from being used to prove the terms of a written contract.
C)Ejay is doing this because the collateral contract doctrine was overturned years ago.
D)Ejay is likely mistaken because there is a more direct method of having the court consider her oral evidence under the circumstances as oral evidence is often admissible to interpret written but ambiguous terms of a contract,without a collateral contract being proved.
E)Once a contract is in writing,oral evidence is never admitted to interpret the contract.

Question 35

Which of the following best describes an implied term?

A)It is a statement expressed by one of the parties.
B)It is sometimes inserted into a contract by a court.
C)It cannot create an enforceable legal obligation.
D)It can be used to rectify a mistake in a contractual document.
E)It is always based on the standard in the industry that the parties are engaged in.

Question 36

Which of the following approaches to contractual interpretation will ONLY SOMETIMES give words their plain,ordinary meaning?

A)the literal approach
B)the contextual approach
C)the golden rule
D)the contra proferentum rule
E)the parol evidence rule

Question 37

A court will find an implied term

A)when it is necessary to bring the contract in accordance with the objectively reasonable intentions of the parties.
B)in order to rewrite the contract so that it is a better deal.
C)only if the parties had expressed it but forgot to write it down.
D)only if a statute tells it to do so.
E)whenever it wants and whatever term the court thinks would be useful.

Question 38

An ambiguous contractual term

A)always results in litigation.
B)never results in litigation.
C)will have more than one plausible meaning.
D)will always have only one plausible meaning.
E)will always have six possible meanings.

Question 39

Consumer protection laws in several jurisdictions including Manitoba,Northwest Territories,and the Yukon

A)make it a crime to sell used goods.
B)make it a tort to sell used goods.
C)imply a term in consumer transactions that goods being sold are new unless otherwise described.
D)imply a term that goods being sold are used unless otherwise described.
E)have been repealed.

Question 40

Which of the following cannot result in a damage award?

A)innocent misrepresentation
B)negligent misrepresentation
C)fraudulent misrepresentation
D)breach of contract
E)silence that distorts a previous assertion

Question 41

A ticket contract is

A)never enforceable.
B)enforceable only if the terms on the back of the ticket have actually been read by the customer.
C)enforceable only if the customer knew about the terms on the back of the ticket.
D)enforceable only if the terms on the back of the ticket are initialed by the customer.
E)enforceable only if reasonable notice of the terms was given when the contract was made.

Question 42

Logan would like to purchase Susanne's car.He asks her two questions - if the car has new tires and if there is any structural damage to the car.Susanne answers the first question immediately and truthfully,but she is unsure of the second answer and tells Logan that she will have it inspected to find out and will get back to him on Thursday.Susanne forgets to get the car checked,so when Logan calls she lies and says the inspector told her the car was in perfect condition.Logan buys the car.If it turns out there is something wrong with the car,which of the following is true?

A)Susanne may only have to take the car back and return Logan's money.
B)Logan is stuck with the car.
C)Susanne may try to get the car back even if Logan wants to keep it.
D)Susanne may be sued for damages.
E)Susanne has committed innocent misrepresentation.

Question 43

A standard form business contract requires independent legal advice to the party agreeing to the terms in order to be contractually binding

A)whenever a signature is required.
B)only when its terms are onerous or unusual.
C)only when its terms are on the back of a ticket.
D)only in the case of exclusion clauses.
E)not in any circumstances.

Question 44

Reeba is signing an employment contract that states she will perform the actions as required of the job daily for 2 years or until she is terminated by management.Reeba asks if this means she does not get weekends off and her manager verbally assures her that she will not be asked to work weekends.Which of the following statements is most likely false?

A)As interpreted by the golden rule,Reeba may be asked to work weekends.
B)As per the parol evidence rule,the verbal assurance is not part of the contract.
C)The contra proferentem rule may apply if the judge thinks the term is unreasonable.
D)If not working weekends is a term that induces Reeba to sign the contract,it may create a collateral contract.
E)Having all weekends off is a term implied by statute.

Question 45

Which of the following statements is FALSE? The use of plain language instead of legalese

A)can reduce the amount of time a company spends answering questions from customers about confusing terminology.
B)is required by the official Communications Policy of the Government of Canada.
C)can be mandated by law.
D)makes it more difficult for businesses to enforce contracts.
E)was strategically avoided in the past.

Question 46

Orson is looking to hedge his portfolio perfectly.He is deciding between entering the futures markets and creating a forward contract.His broker says that he thinks he could get him in a forward contract that would not only hedge his portfolio,but also make him a lot of money.The forward contract does not perform and Orson loses everything.What should Orson do?

A)Sue his broker for negligence
B)Sue his broker for misrepresentation
C)Sue his broker for deceit
D)Orson has no remedy;his broker was stating an opinion
E)Orson has no remedy;his broker was making a statement of future conduct

Question 47

Jacqui purchased a business from Dickie.During the pre-contractual negotiations,Dickie said,based on past experience,he expected that the business would earn approximately $1 million per year.After that statement was made,but before the contract was signed,Dickie learned that the manufacturer that supplied his business with the materials that it needed was going out of business.Dickie realized that,because of the need to purchase materials from another manufacturer,his business could only be expected to earn $700 000 per year,regardless of whether it was run by himself or by Jacqui.Afraid that that news would scare off Jacqui,Dickie decided to keep the new information to himself.Jacqui completed the purchase of Dickie's business,but was very disappointed when it earned only $700 000 in its first year.She now wants to sue Dickie.Which of the following statements is TRUE?

A)While Jacqui probably is entitled to damages,she cannot possibly receive rescission because the contract has already been completed.
B)Dickie cannot be held liable because his statement was an opinion about the future.
C)Dickie cannot be held liable because Jacqui ought to have independently confirmed his statements.
D)Jacqui cannot successfully sue unless she can prove that Dickie's statements regarding the business's profits became a term of their contract.
E)Jacqui may be able to successfully sue Dickie for misrepresentation,on the legal theory that Dickie made a statement of fact then by his silence distorted his previous assertion of fact.However,Dickie may have a defence on the basis that he was not stating a fact about the past but an opinion about the future.

Question 48

Asif purchased a business from Olga.During negotiations leading up to the contract,Olga made an innocent misrepresentation.As a result of that statement,Asif has discovered that the business is far less valuable than he expected.Which of the following statements is TRUE?

A)Asif is not entitled to rescind the contract if,before entering into the contract,he carelessly failed to discover the error contained in Olga's innocent misrepresentation.
B)Rescission is not available for an innocent misrepresentation.
C)Asif is entitled to rescission even if,before entering into the contract,he investigated the true state of affairs that Olga addressed in her innocent misrepresentation.
D)Asif is not entitled to rescission unless he can prove that Olga's innocent misrepresentation was the only,or at least the most important,reason for him entering into the contract.
E)The only legal remedy available to Asif is rescission.

Question 49

Ranjit purchased a complex computer system from Compu-Less.Although Compu-Less had specially manufactured the computer to Ranjit's personal specifications,the sale was created on the basis of a standard form agreement that the company uses when customers buy mass-produced computer units.A dispute has now arisen between Ranjit and Compu-Less.Which of the following statements is TRUE?

A)The strict terms of the contract will not be enforced if,before Ranjit signed the agreement,the company's sales manager said,"Don't worry about the legal mumbo-jumbo.We stand behind our products."
B)Because of the parol evidence rule,the parties' contract will not include the warranties contained in the Sale of Goods Act unless the contract either repeats those warranties or at least refers to them.
C)As long as the language of the contract is sufficiently clear,the parties may have excluded all possible statutory conditions and warranties.
D)The court may refuse to add an implied term to the contract even if that term would make the contract,in the court's opinion,fairer to Ranjit.
E)The golden rule of contract interpretation states that an ambiguous term must be interpreted in the way that most benefits the party that did not draft the contract.

Question 50

Leilani purchased a business from Troy.She is now interested in the possibility of taking legal action on the basis of an alleged misrepresentation that occurred during the negotiations leading up to the contract.Which of the following statements is TRUE?

A)The contract can be rescinded only if Troy made a fraudulent misrepresentation.
B)If Troy made a negligent misrepresentation,and Troy owed a duty of care to Leilani in making that representation,Leilani may choose to sue in tort rather than rescind the contract.
C)Because the courts will not punish a person who did not breach an obligation,rescission is not available if Troy merely made an innocent misrepresentation
D)Because the purpose of rescission is to reverse the effects of a transaction,Leilani will not be able to receive court costs if she rescinds the agreement
E)Leilani cannot obtain rescission because she can only sue in tort.

Question 51

Victor has been found guilty of misrepresentation in a contract.Victor failed to tell a handicapped person that the electric wheelchair he sold her had no brakes,though he did not know this fact.The judge says that he is a disgusting person and should be punished to the full extent of the law.This punishment would likely constitute

A)rescission and compensatory damages.
B)rescission and punitive damages.
C)rescission only.
D)restitution and compensatory damages.
E)restitution and punitive damages.

Question 52

Molly decides to sell her house by way of a private sale.After advertising and showing the house,she receives a written offer from an interested purchaser using a standard form document assembled from a do-it-yourself legal kit.Molly studied the offer and wished to change two of its terms.The interested purchaser agreed to the changes and reflected those changes in the document.Molly signed the document and cashed the down payment cheque.Two days later,Molly spotted an extremely onerous and somewhat unusual term that was not brought to her attention when reading the document.As a result,Molly wishes to cancel the contract.Which of the following is most likely TRUE?

A)Molly will fail because she is bound by her signature to the written agreement.
B)Molly will fail but only because she cashed the cheque.
C)Molly will succeed because the term was onerous and unusual.
D)Molly will succeed because she was not given reasonable notice of the onerous and unusual term.

Question 53

Which of the following statements is TRUE with respect to a contractual clause that protects one party from the consequences of breach (exclusion or limitation of liability clauses)?

A)Such clauses are enforced only if they are the product of equal bargaining power.
B)Such clauses may reduce or limit liability,but they cannot entirely exclude liability.
C)Such clauses are enforced only if they appear in written and signed contracts.
D)Depending upon the circumstances,such clauses may be enforced even if the party who wants to sue for breach did not read the clause.
E)Such clauses are invalid if they are written in language that is difficult for a consumer to understand.

Question 54

Preetpal purchased a ticket to ride on a train from Toronto to Ottawa.After she had boarded the train,she was asked if she wished to place her outerwear and backpack into a storage unit on the train.Because she did not want to be encumbered during her journey,she accepted the offer.She was given a "small baggage claims" ticket before handing over her coat and belongings.When the train arrived in Ottawa,and Preetpal tried to collect her coat,she was told that it could not be found.When she threatened to sue,the person who was representing the train told Preetpal that the back of the "small baggage claims" ticket she received excluded liability for lost or stolen goods.Assuming these are the only exclusions,Preetpal can be bound by the exclusion clause only if

A)she actually read it.
B)it was written in a font that was larger than the font that otherwise appeared on the ticket.
C)the clause was written in a language that she can read.
D)it was explained to her when she first bought her train ticket.
E)she was given reasonable notice of the terms on the back of the ticket before or at the time that she received the ticket.

Question 55

Tyra is looking to buy her first motorcycle.She sees one listed online and contacts Graham,the owner.Graham knows that the transmission is faulty and the bike often doesn't shift properly.Because this doesn't happen all the time,he doesn't make note of it in the listing.Furthermore,he schedules Tyra to come for a test drive when he isn't present,getting his brother to meet her,so that she can't ask him any questions.Tyra buys the bike for full price and doesn't ask any questions.Which of the following statements is most likely true?

A)Silence can never be misrepresentation.
B)Graham's silence is misrepresentation because the contract required utmost good faith.
C)Graham's actions constituted misrepresentation because he wasn't present for the test drive,actively concealing the damage.
D)Graham's silence constituted a half-truth.
E)Graham is not required to disclose the problem in pre-contractual relations.

Question 56

Justice Howe,a member of the Supreme Court of Canada,is deciding a case that deals with a complicated commercial agreement between two sophisticated and experienced companies.The resolution of the case depends upon the interpretation of several clauses in that agreement.Which of the following statements is TRUE?

A)The general rules governing the interpretation of contracts do not apply in the Supreme Court of Canada because that court is expected to arrive at the fairest result regardless of the rules of law.
B)In order to decide the case,the judge may need to know which party drafted the agreement.
C)The contextual approach to interpretation requires a particular clause to be interpreted exclusively by reference to its own terms.
D)The golden rule of interpretation,which says "do unto others as you would have others do unto you," requires the judge to adopt whichever interpretation of the contract that favours both parties equally.
E)Given the nature of the parties and the contract,Justice Howe cannot decide that their agreement contains implied terms.

Question 57

Asha sells bottled spring water.Unlike other water vendors who purify their water,Asha is marketing her product to those who want to drink spring water in its natural state.Although her water source is pure and clean,she is concerned that some consumers might have allergic reactions to trace elements in the unpurified water,so she designs a clause to exclude her company from liability.The clause indicates that,by opening and drinking the water,consumers are indicating that they have read and understood the warning that the water has not been purified and,as such,waive all liability claims against the company for any allergic reactions resulting from drinking the water.Which of the following is most likely TRUE of Asha's strategy?

A)It will fail because it is never possible to exclude tort liability by way of contract.
B)It will only succeed if the distributor personally points out to the consumer that by drinking the water they are waiving their right to sue.
C)It will succeed as long as the label on the bottle constitutes reasonable notice of the exclusion clause.
D)The exclusion clause must be written in reasonably clear language that makes it relevant to the liability to be excluded in order for the exclusion clause to be effective.
E)Exclusion clauses are not enforceable in a court of law.

Question 58

The BEST way for a company to manage the risk associated with standard form agreements is to

A)frequently redesign the standard form agreement to ensure that customers must read through the form each time they sign it.
B)teach employees the meaning of onerous and ambiguous contract terms.
C)require customers to clearly indicate their specific agreement to be bound by any onerous or unusual terms.
D)conceal ambiguous language at the end of the agreement to avoid customer confusion.
E)draft the form in a manner which is ambiguous to your customers but could be literally interpreted in your favour by a clever lawyer.

Question 59

Which of the following statements is TRUE with respect to misrepresentations?

A)An innocent misrepresentation may trigger an award of damages.
B)A fraudulent misrepresentation may trigger rescission but not damages.
C)A negligent misrepresentation may trigger damages but not rescission.
D)An innocent misrepresentation may be rescinded.
E)A pre-contractual misrepresentation may trigger relief in contract but not relief in tort.

Question 60

An exception to the parol evidence rule may arise if

A)both parties want to rescind the contract.
B)the plaintiff will not be able to successfully claim damages otherwise.
C)the judge is convinced that the contract would be more effective if it contained additional terms.
D)Evidence of matter extrinsic to the written document required in order to rectify a mistake made in the written document
E)the wording of the document is unfair to one of the parties.

Question 61

Petros is the sole proprietor of a river rafting company in Banff.He is drafting a standard form contract for his customers and is considering how to protect himself and his company.He is worried about customers being injured while rafting,but doesn't want it to seem like he doesn't care about their safety,so he wants to keep some responsibility.He also wants to ensure the section of river he takes his clients down remains a secret so people will continue to patronize him.Petros should include which of the following clauses?

A)An exclusion clause that has customers accept all risk for injury
B)A confidentiality clause that prohibits customers from telling their friends about the scenery
C)A force majeure clause that exempts him from superior or irresistible forces
D)An arbitration clause to resolve any disputes
E)An entire agreement clause ensuring there can be no agreements outside the contract

Question 62

Name a shortcoming of the literal approach to contractual interpretation.Provide an example to illustrate your point.How might this difficulty be overcome?

Question 63

Zhou listed a commercial lot for sale,describing the land as being zoned for commercial/residential occupation.Dalvi,who was looking to build a funky billiards bar with condos above,inquired about Zhou's lot.Throughout their negotiations Zhou maintained that the law would allow the purchaser to use the lot for both commercial and residential purposes,and understood that the consequences of the zoning law were critical to Dalvi's business plan.Induced by this,Dalvi subsequently decided to buy the property.After buying the property,Dalvi learned that the land was not zoned as residential and that he was not permitted to build condos above the billiards bar.He sued Zhou,arguing that the inducing statement was actionable as misrepresentation.Will Dalvi succeed in his action? Why?

Question 64

A purchaser bought an oil painting from a private collector who promised that it was painted by one of the members of the Group of Seven,a promise that was held to be one of the terms of the contract.The painting quickly became the purchasers favourite.He took it home and built a special room for its viewing,with an expensive lighting system.Five years later,after having grown somewhat tired of the room,the purchaser decided to sell the painting.In so doing,he discovered much to his chagrin that the painting was worth much less than he had thought as it was,in fact,done by a less famous American painter,who worked in a style similar to the Group of Seven.The purchaser decided to try to get his money back.He sued the private collector who sold it to him,asking the court to rescind the contract on the ground that there had been an innocent misrepresentation.What are the most plausible grounds upon which the court might decide not to rescind?

Question 65

What is an exclusion clause? Why would a business want one included in a contract?

Question 66

What is meant by the contra proferentum rule?

Question 67

Nate wanted to rent a car.The attendant gives him a standard form agreement to sign.She tells him to sign three places,telling him these areas indicated exclusion clauses,but not saying what the clauses were.He signs the agreement anyway.If Nate breeches one of these exclusion clauses,which of the following is true?

A)Nate is bound by the clause's terms simply because they were included.
B)Nate can argue he was not given reasonable notice.
C)Nate is bound only if the clause used unambiguous language.
D)Nate is bound by the terms because the attendant pointed out the clauses.
E)Nate is only free of the clause if it was written unreasonably small.

Question 68

A standard form contract contains a term that reads,"Henceforth,all dealings between the Purchaser and the Seller shall be conducted on the grounds of a working relationship and,as such,shall be conducted with professionalism.Any conduct contrary to the Agreement (as construed by one of either the management of the parties involved or the lawyers of these parties)shall be met with termination of the contract and all sums previously paid as liquidated damages and not as penalty shall be retained." In plain English,this means

A)If one of the parties acts fraudulently they must pay damages to the other party.
B)If one of the parties commits a tort against the other,the contract will be terminated.
C)If one of the parties acts without a duty of care to the working relationship,the other can terminate the contract and keep all money already paid.
D)If one of the parties acts without a duty of care to its employees,the contract is rescinded.
E)If both parties no longer want to work together,the contract is rescinded.

Question 69

Can an express term ever be overridden by an implied term? Explain your reasoning and provide an example.

Question 70

Personal opinions are not usually treated as misrepresentations.Very briefly explain why they are not and describe a situation where it is risky to offer a personal opinion.

Question 71

Jane was at the international terminal of the airport when she realized that she had forgotten to purchase travel insurance for her trip.After checking-in early,Jane was browsing at some of the shops and happened upon a vending machine selling travel insurance.On the outside of the machine was a sign that indicated "Full coverage for $2 per day." Jane plugged in three toonies to cover herself for the weekend.Out from the machine dropped a standard form agreement.After boarding the plane,Jane examined the fine print and noticed that the coverage was limited to travel within Canada.Like every other potential customer in the international terminal of the airport,Jane was not travelling within Canada.Concerned that she would not be covered,as soon as the plane landed Jane used her cellphone to dial the 1-800 number on the back of the printed form.All she got was a recorded message.If Jane got injured while traveling in the United States,will the exclusion clause prevent her from making a successful claim?

Question 72

In what sense might a standard form agreement be beneficial to consumers? Briefly explain the downside of standard forms.

Question 73

Why do insurance contracts require a duty of utmost good faith?

Question 74

Why are boilerplate provisions of potential value to businesses generating standard form agreements?

Question 75

What does it mean to say that a pre-contractual representation is NOT promissory in nature?

Question 76

A purchaser explains to his real estate agent that he wants to buy a house containing a suite that would generate rental income.The agent showed and sold to him a house with a basement suite.After taking possession of the house,the purchaser discovered that the previous owner had been renting the basement unlawfully.No permit to build the suite had been obtained,nor could it have been obtained because the ceiling was too low and the lot too small.It turned out that the agent knew about these legal requirements and knew that they had not been met.She said nothing.Is the law of misrepresentation actionable? Explain your reasoning.

Question 77

"It is imperative that all business contracts be in writing." Assess this statement.Is it accurate from a legal perspective? It is accurate from the perspective of risk management? Explain your reasoning.

Question 78

What is the rationale for holding people to their signatures even when they have not read or understood the contract?