Deck 4: Enforcing Contractual Obligations

Question 1

Misunderstanding occurs when each party has a different understanding of the terms of the agreement,in which case the courts apply a reasonable interpretation of the contract.

Answer 1

True

Question 2

Which of the following will have the likely consequence of the court's finding the contract void on the grounds of mistake?

A)Ms.Hunt bought some property erroneously thinking that the province was planning to put a highway nearby,even though the seller had never made any such suggestion.She wants out of the contract.
B)The parties signed a document that stated the consideration as $1100 instead of the $900 that the buyer and seller had contracted for,but the buyer cannot prove the terms of the original contract.
C)Annette bought a suit thinking she would be invited back for a second interview.She wasn't and now wants to return the suit on the basis of mistake.
D)Mary contracted to buy "the Acura car" from a collector of cars.He was selling his 1994 model but she thought she was buying the 1990 model.The court,looking at all evidence,found that the collector's interpretation was the more reasonable.
E)Mr.Armstrong accepted the offer by Sidhu,who was selling a "computer program," but learned that they had a different understanding of what program was meant.The court cannot say that one interpretation is better than the other.

Answer 2

E

Question 3

Which of the following situations gives rise to the application of the equitable remedy of rectification?

A)The defendant has a justifiable defence of non est factum.
B)A written instrument,because of an obvious mistake,does not embody the unchanged terms of an original oral agreement.
C)The two parties to a contract have made a mutual mistake and one of these parties is asking the court to choose the more reasonable meaning of the terms in question.
D)The contract is one requiring "utmost good faith."
E)Both parties to a contract agree that they want to change some of its terms and thus apply jointly to the court to have the relevant terms altered.

Answer 3

B

Question 4

The equitable remedy of rectification is granted by the courts in which of the following situations?

A)The seller made a fraudulent misrepresentation that induced the buyer to buy.
B)The parties to a contract disagree as to the meaning of a term in their contract.
C)The seller of goods has made an innocent misrepresentation that persuaded the buyer to buy.
D)A person buys something that he later learns he already owned.
E)Because of a mistake,a written document does not include a corrected term to which the parties had orally agreed.

Question 5

The court will not allow the careless party to escape responsibility when a shared mistake is the result of the negligence of one of the parties.

Question 6

Jones offers to sell Smith his car.Smith thinks Jones is selling his 2009 Toyota,and Jones thinks he is selling his 2012 Pontiac.This is an example of which of the following?

A)a mistake
B)fraudulent misrepresentation
C)shared mistake
D)misunderstanding
E)one-sided mistake

Question 7

In which of the following would the court find that the contract is void (i.e.,not a binding agreement)?

A)Two parties contracted for a tanker of oil,but unknown to either of them at the time of the contract,the tanker had caught on fire and all the oil had burnt.
B)Kramer,thinking that the city was going to build a new school in the area,offered to buy a house.She had not talked with the seller or his agent about the possibility of a school.After the offer was accepted,she learned that there would be no such new school.
C)Ry and Ali,two parties to a contract,each had a different understanding about the term royalties in the contract.The court found Ali's interpretation the more reasonable.
D)After some negotiation,Paul accepted Monafo's offer to sell him the painting for $5000.When the contract was put in writing,the price was incorrectly stated as $500.Monafo could prove the terms of the oral contract.
E)Joe bought pizzas,but after eating one he realized that purchasing them was a big mistake.

Question 8

The longer Adolph stayed on this job,the more he hated it.He thought the boss was too demanding.He especially disliked being reprimanded for being late.One afternoon,he was asked by a secretary to take a letter to the boss for his signature.The boss had had an eye operation and was recuperating at home.Adolph got two signatures,one on the letter and one on a note promising to pay Adolph $1000 in consideration for services rendered.The boss was not careless,but couldn't read the papers.What plea or argument,if any,could the boss use to avoid paying on the promissory note?

A)unconscionability
B)duress
C)shared mistake
D)rectification
E)non est factum

Question 9

To avoid a contract on the basis of non est factum,the mistake must have gone to the entire nature of the agreement,not just to some aspect of it.

Question 10

Rules of interpretation are guidelines used by the court to correct simple misunderstandings in relation to the contract.

Question 11

Often,costs can be considerably reduced by including provisions in a contract for all disputes to be handled through mediation and arbitration.

Question 12

Len was behind in his work at the office.He decided to go in for a few hours on Sunday to catch up.He asked a secretary to come in for four hours.He turned on his office TV.Just then,his secretary came in and asked him to sign four letters that she said concerned general office matters.He carelessly signed them without taking his eyes off the TV screen.One of the "letters" was,in fact,a cheque for $500 payable to the secretary.The secretary cashed the cheque at her bank,and when her bank presented the cheque for payment,Len instructed his bank not to honour it.He said that he had been tricked and that his signing it was a big mistake.On these facts,which of the following is true?

A)Undue influence would be Len's best defence on these facts.
B)Because Len did not know what he was signing,he cannot be held liable.
C)Len could avoid his obligation on the cheque on the basis of duress.
D)Len could avoid his obligation on the cheque on the basis of unconscionability.
E)Len's carelessness in failing to read what he was signing will likely defeat any claim of non est factum.

Question 13

Mr.Frank,a foreman supervising 43 employees,was asked by his secretary to sign a form requesting additional supplies needed on the factory floor.He was not careless when he examined the form,but his secretary had cleverly arranged the signature line so that instead of signing a request for supplies,he signed a cheque payable to his secretary.What plea,if any,would be used to defend against her action on the cheque?

A)non est factum
B)mistake
C)illegality of object
D)rescission
E)rectification

Question 14

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

Question 15

In which of the following instances would the court most likely hold the contract to be void on the basis of a mistake?

A)Carson and Leno had a serious misunderstanding about a term in the contract; the court found that the more reasonable interpretation was that of Leno.
B)Barry and Mary contracted for the sale and purchase of a boat for the price of $1200.When the contract was written up,the price was incorrectly stated as $1700.
C)Although the seller said nothing to the buyer about the characteristics of the answering machine,the buyer bought it,thinking it would tell him the date and time of the call.Later,he learned that it did not perform that function.
D)Sarah bought three rolls of wallpaper,but found she had made a mistake; two would have been sufficient.
E)Two parties contracted for a shipload of fish,but unknown to both parties,at the time of the contract the ship had sunk and the fish had been lost.

Question 16

When two parties are involved in a misunderstanding as to the meaning of a term of the contract,which of the following is usually applied by the court to settle the matter?

A)The court will find that there is no contract because there is no meeting of the minds.
B)non est factum
C)the most reasonable interpretation of the terms
D)the equitable remedy of rectification
E)caveat emptor

Question 17

Clive and Bill were not friends but worked in the same firm.Both worked with computers and had computers at home.They entered a contract in which Clive agreed to sell Bill his "Apple,printer,and a compatible word processing program for $3000." When Bill went to take delivery of the goods,he realized that there had been a great mistake.He thought Clive was selling his Apple Macintosh.By "Apple" Clive meant his Apple IIe.Furthermore,unknown to both of them at the time of the contract,the program disk had been destroyed by some coffee accidentally spilled on it by a friend of Clive's wife.Bill refused to go through with the deal.On these facts,which of the following is true if Clive sues Bill?

A)This is an example of caveat emptor and the purchaser has no remedy.
B)With regard to which computer is the subject matter of the contract,the court will determine which computer was meant to be sold by the seller and declare that one to be the subject matter of the sale.
C)With regard to the program disk,since all elements of a contract exist (i.e.,offer,acceptance,consideration,etc.),Bill must pay for it.
D)With regard to which computer is the subject matter of the sale,the court will examine which interpretation is the more reasonable; if they are equally reasonable,that part of the contract,at least,will be void.
E)Since the parties to the contract have a different understanding as to the subject matter of the sale,they can ask the court for rectification,that is,for the court to rewrite the contract.

Question 18

When there is clear evidence that both parties agreed to something different than what was in the written document,the courts will rectify the document.

Question 19

Which one of the following mistakes voids a contract?

A)Two parties contracted for a shipload of coal,but unknown to both parties,at the time of the contract the ship had sunk and the coal had been lost.
B)Two parties contracted for the sale and purchase of a painting for the price of $800.When the contract was written up,the price was incorrectly stated as $900.
C)Sally and Mary had a serious misunderstanding about a term in the contract; the court found that the more reasonable interpretation was that of Sally.
D)When Mr.and Mrs.Houston put their property up for sale,Sam,without speaking to the Houstons or to their agent about the land,offered close to the asking price because he thought it was suitable for growing wheat.After his offer was accepted,he learned it was not suitable for wheat.
E)Sam bought three gallons of paint,but found he had made a mistake; two would have been sufficient.

Question 20

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?

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 21

When there is disagreement over the meaning of a term in a contract,the normal approach taken by the courts is to apply the most reasonable interpretation,although the courts will refuse to imply terms into the agreement that the parties have left out.

Question 22

A misrepresentation must be a false statement of fact unless it is a statement by an expert.

Question 23

With regard to the law concerning misrepresentation,which of the following is true?

A)A statement of opinion can be a one-sided mistake.
B)The case law provides a remedy for a wildly exaggerated claim,such as "This is the best car ever built."
C)A buyer could not be awarded the equitable remedy of rescission if the seller honestly believed that the misrepresentation was true.
D)For fraudulent misrepresentation,the buyer could ask only for the equitable remedy of rescission.
E)A misrepresentation can be a false assertion of fact that induces (persuades)the party to contract,and need not be an assertion about a term of the contract.

Question 24

Which of the following will have the likely consequence of the court finding the contract void on the grounds of mistake?

A)Mr.Ideer bought some property,erroneously thinking that the province was planning to put a highway nearby,even though the seller had never made any such suggestion.
B)Mr.Twigg carelessly signed a mortgage for $24 000,which he was told was a mortgage for only $14 000.This was assigned to Mr.Jones.
C)The parties signed a document that stated the consideration as $1200 instead of the $1100 that the buyer and seller had contracted for,but the buyer cannot prove the terms of the original contract.
D)Mr.Ille (a blind man),although using due care,signed a cheque for $100 in favour of his caretaker,who had told him it was a receipt for money received.
E)Mr.Jones,without reliance on a salesperson,purchased an Android table from a store,thinking it ran the Apple iOS.

Question 25

Mr.and Mrs.H were induced to sign a mortgage in favour of M Co.Ltd.by Johnston,a man living with their daughter.Johnston led them to believe that the document was an unimportant amendment to an existing mortgage,when in reality it was a second substantial mortgage of their home.Neither read the document nor questioned it.When the payments were in arrears,the mortgagee took an action for foreclosure (to take Mr.and Mrs.H's home).Which of the following is correct with respect to the legal position of the parties?

A)Mr.and Mrs.H will likely have to honour the mortgage contract even though they didn't read it.
B)If the court finds that Johnston has committed a fraudulent misrepresentation,Mr.and Mrs.H will not have to honour the mortgage.
C)If the court finds that this is an example of undue influence by Johnston,Mr.and Mrs.H will not have to honour the mortgage.
D)If the court finds that this is an example of duress by Johnston,Mr.and Mrs.H will not have to honour the mortgage.
E)If Mr.and Mrs.H can show they didn't read the document,they will not have to honour the mortgage contract.

Question 26

Often a party to a contract wants to avoid his or her obligations by arguing that the contract was entered into because of a mistake,misrepresentation,undue influence,or duress.Which of the following is true with regard to these areas of the law?

A)A buyer could not be awarded the equitable remedy of rescission if the seller honestly believed that his or her misrepresentation,which persuaded the buyer to buy,was true.
B)Independent legal advice given to a person is good evidence of undue influence.
C)If a seller persuades a person to buy something by an innocent misrepresentation,the buyer could ask for rescission and damages for the tort of deceit.
D)Where a written document embodies the original oral agreement,a party to the contract could ask the court for the equitable remedy of rectification.
E)An illiterate or blind person might successfully argue non est factum and avoid his or her obligations under a contract only if he or she was misled about the very nature of the document and was not careless.

Question 27

In order to succeed in suing for a misrepresentation,that misrepresentation must have been in writing.

Question 28

For a misrepresentation to be actionable,it must become a term of the contract.

Question 29

Len's new secretary asked him to sign four letters that she said concerned general office matters.One of the "letters" was,in fact,a cheque for $500,payable to the secretary.The secretary cashed the cheque at her bank,and when her bank presented the cheque for payment,Len refused to pay it.He said he had been tricked and it was all a mistake.On these facts,which of the following is true?

A)Len would be obligated to honour the cheque no matter how careful he had been.
B)Even if Len had been careless,he will not have to honour the cheque.
C)Len may be able to avoid his obligation on the cheque on the basis of duress.
D)Len may be able to avoid his obligation on the cheque on the basis of unconscionability.
E)Len may be able to avoid his obligation on the cheque on the basis of non est factum.

Question 30

Which of the following is an example of an exemption or limitation of liability clause?

A)This contract will automatically terminate in the event that the purchaser orders less than the quota for four consecutive weeks.
B)The parties agree that the law of Ontario applies to any dispute under this agreement.
C)With respect to all information provided by this website,you agree that we shall not be liable for any loss arising out of your use of this information,including without limitation,any indirect or consequential damages.
D)This is the entire agreement between the parties covering everything agreed or understood in connection with the subject matter of this transaction.No oral promises,conditions,warranties,representations,understandings,or interpretations were relied on by either party to execute this contract.
E)The parties agree that any notices required under this agreement be provided by facsimile or other electronic transmission.

Question 31

Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.

Question 32

With regard to exemption clauses,which of the following is true?

A)When exemption clauses appear unfair,courts generally will not allow them.
B)Courts are generally reluctant to interfere with exemption clauses,even when they may appear unfair.
C)When an exemption clause leads to an "unconscionable,unfair,or unreasonable result," the doctrine of fundamental breach would apply.
D)To overrule an exemption clause,the courts first consider whether there exists some "overriding policy" on the part of the defendant.
E)Courts are more likely to interfere with a contract in a commercial relationship than with a contract in a consumer relationship.

Question 33

Jenny went to the store and asked to see an AM-FM clock radio with a tape deck.The salesman brought out a clock radio that he said had all of the features that she wanted.After looking at the price tag and little else,Jenny said she would think about it.The salesman said that this was the most popular model sold,that they sold 1000 of them during the World Series alone,that it had the highest rating in Consumer Reports,and that he only had that one left.Jenny bought it.Later,she found out that all of the statements made to her by the salesman were false,including the one that the clock had all of the features she wanted,because it did not have an AM band.Which of the following is true?

A)The equitable remedy of rescission is available only if Jenny is able to restore the clock radio to the seller.
B)Jenny would only have a remedy for breach of contract (namely,the clock radio did not have an AM band)because none of the other statements was about the clock radio itself.
C)The statements of the salesman are negligent only if the salesman knew they were false.
D)Jenny could obtain the remedy of rescission only if the statements made to induce her to contract were fraudulent.
E)Jenny could return this clock radio to the seller only if she could prove undue influence.

Question 34

Mr.Rice purchased software online from a major software company based in Ontario,accepting the terms of the standard-form contract when he clicked on "Agree." When the software failed to perform as advertised,Rice complained but his complaints were ignored.When he threatened the software company with legal action,it was then pointed out to him that the contract contained a number of exemption clauses that would preclude Rice from winning in any legal action.Rice filed a lawsuit in Ontario.What is the court's likely approach to this situation?

A)The court would likely refuse to interfere with the terms of the contract based on the "principle of freedom to contract."
B)The courts would consider this a fundamental breach if it found the clauses to be "unconscionable,unfair,and unreasonable."
C)The court would determine that Rice had equal bargaining power and therefore the court could not support his position.
D)The court would support the software company's policy due to "an overriding policy reason."
E)The court is likely to interpret the exemption clauses very narrowly due to the nature of standard-form contracts.

Question 35

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

Question 36

Sam agreed to buy property from Joe to build a store of a certain design.Joe,the vendor,was aware of the design and knew that an easement across the back of the property would prevent such a building being erected,but said nothing.Sam purchased the property,later discovered the easement,and learned that Joe knew about it.He sued for misrepresentation.Discuss the likely outcome.

Question 37

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

Question 38

John and Sam entered into a contract whereby John would sell auto parts from his junkyard to Sam's Auto Repair.However,they ended up in a dispute over the condition of the parts to be sold and could not agree on the meaning of terms used in the sales contract.John was invoicing Sam's Auto Repair for considerably more money than Sam thought appropriate for the used and often seriously damaged parts.When Sam paid less than the invoice amount,they ended up in a legal dispute and asked the court to interpret their contract.Which of the following is false regarding approaches the court might use to interpret the contract terms in dispute?

A)If the terms are clear and there is no ambiguity,the court might look at dictionaries for literal meanings of the terms.
B)If the terms are clear and there is no ambiguity,the court might look at the common usage of the industry for meanings of the terms.
C)Where there is ambiguity,the court might look at the rest of the contract to try to discern the intention of the parties.
D)The court will supply missing terms and prices that are necessary for the contract to exist.
E)Where there is ambiguity,the court might look to other dealings between the parties.

Question 39

The facts of a case heard by the Supreme Court of Canada are as follows: Mr.and Mrs.H were induced to sign a mortgage in favour of M.C.R.Ltd.by Johnston,a man living with their daughter.Johnston led them to believe that the document was an unimportant amendment to an existing mortgage when,in reality,it was a substantial second mortgage on their home.Neither read the document nor questioned it.When the payments were in arrears,the mortgage company took an action for foreclosure (to take the home).Mr.and Mrs.H.pleaded non est factum.Would this defence succeed? If so,why; if not,why not?

Question 40

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?

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

Question 41

With regard to the law concerning misrepresentation,which of the following is true?

A)If the buyer realizes the seller persuaded him to contract by a misrepresentation,he will not be able to get the remedy of rescission if he was tainted with wrongdoing himself (i.e.,not coming with "clean hands").
B)Damages as a remedy are not available where the misrepresentation becomes part of the contract.
C)A misrepresentation can be a true assertion of fact that induces (persuades)the party to contract.
D)Rescission is available as a remedy for misrepresentation only if it is innocent misrepresentation.
E)The case law allows a remedy for an opinion given by a non-expert.

Question 42

What is rescission?

Question 43

A salesman innocently misrepresented a fact about a new printer to a customer.He honestly believed that his statement was true and was not careless.Although this fact was not about a term of the contract,it did induce the customer to buy that printer.The next day,the customer learned the true facts and wanted to return the printer.If the store refused to take it back and the customer sued,which of the following would be the most likely result?

A)the buyer's case would be dismissed
B)an injunction
C)an order of rescission
D)an award of damages
E)an order of specific performance

Question 44

Indicate under which circumstances the remedy of rescission may not be available.

Question 45

Which of the following is false with regard to misrepresentation?

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 46

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?

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 47

The office manager of a real estate agency was at an office supply store to replace a filing cabinet when he saw a demonstration of a new Xerox copier.Undoubtedly,the agency would benefit from the copier,especially since it had the capability of enlarging the original-a good feature when dealing with the small print of contracts.The next day,he called the manager of the store to discuss the machine further.The seller said that it was "10 years ahead of the competition," that it "was rated as maintenance-free by an independent consumer research group," and that he had "sold five to other real estate agencies in this area" and "had only one left." The agency,relying on these statements,asked to have it delivered.When it arrived,the office manager had learned that every statement made by the seller had been false; furthermore,the seller did not send out the machine discussed,but the older model.Which of the following is true?

A)The agency would have a remedy for breach of contract,but no remedy for other statements that merely persuaded it to enter the contract.
B)The agency could have returned the machine even if it had been the right model,since the remedy of rescission was available to it for misrepresentations made.
C)Had the office supply store sent the right model,the agency would have had no remedy.
D)The agency would have to keep the machine,but could sue the seller for damages for the tort of deceit.
E)This is a "buyer beware" situation and the buyer has no remedy.

Question 48

"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.

Question 49

A fraudulent misrepresentation that induces another person to enter into a contract can result in which of the following remedies?

A)rectification
B)rescission and/or damages
C)rescission only
D)damages only
E)There is no remedy available for fraudulent misrepresentation.

Question 50

Fraudulent misrepresentation is intentionally misleading another person into a contract.

Question 51

The victim of innocent misrepresentation can sue for damages but cannot ask for rescission.

Question 52

When Gary went into Computer Heaven,Ltd.to get a better manual for the program he was trying to master,he was caught by a demonstration of a computer created by Next,Mr.Job's new firm.He was fascinated by its performance.The salesman,Ross,told Gary that he should have this machine; that "it was the latest computer; no other will ever be better"; that "UBC,Simon Fraser,and BCIT just ordered over 1000 of them"; that he only had "a few left and the demand is so great it will take almost a year for the next shipment to arrive." When Gary said he needed a computer with at least 1000K memory,Ross said this model had 2000K.Gary was persuaded and contracted for the computer.Later,Gary learned that every statement made by Ross was untrue,including the one about the memory capacity; the model had only 800K.On these facts,which of the following is true?

A)Only if Ross knew that all of the statements he made were false could Gary get a remedy.
B)Statements that induced Gary to contract,but that are not the terms of the contract,are not significant enough for the courts to award a remedy by case law or by statute.
C)The exaggerated claim "it was the latest computer; no other will ever be better" is enough,according to the case law,to allow Gary to get out of the contract.
D)Gary could be awarded the equitable remedy of rescission even if Ross honestly believed everything he said was true.
E)Such misrepresentations could result in contractual remedies,legal or equitable,but not in tort remedies.

Question 53

A computer salesman innocently misrepresented a fact about a Macintosh computer to a customer.Although this fact was not about a term of the contract,it did induce the customer to buy the computer.The customer has now learned the true facts and wants to return the computer.If the store refused to take it back,the customer would ask the court for which equitable remedy?

A)rescission
B)restitution
C)injunction
D)damages
E)rectification

Question 54

Which of the following constitutes a misrepresentation that would not allow the courts to award the equitable remedy of rescission?

A)A man who contracted for an insurance policy did not state on the application form that he had been treated for cancer.He died from the cancer two months later.
B)The seller concealed the broken drawer of the desk from the buyer.He would not be able to see it until he got it home.
C)The seller persuaded the buyer to buy the car by misrepresenting it as having just been serviced and passing the air-care test.Neither had been done,but the seller honestly believed that both had been done.
D)The buyer was persuaded by the seller to buy the car by a misrepresentation that it had the fewest repairs of any car of its class.After the buyer learned the truth,he kept the car for three weeks to get some benefit from it before taking it back.
E)none of the above

Question 55

Where the misrepresentation is innocent,explain the remedies available to the victim.

Question 56

Damages as a remedy will not be available in which of the following situations?

A)Jones makes a negligent misstatement,persuading Smith to enter a contract with him.
B)Jones,although being careful,makes an innocent misrepresentation,persuading Smith to enter a contract with him.
C)Jones makes a fraudulent misrepresentation,persuading Smith to enter a contract with him.
D)A false statement made by Jones becomes a term of the contract.
E)none of the above

Question 57

Mrs.Sharp,the owner of a restaurant,induced the Morissons to buy the business by a misrepresentation; the invoices made her costs appear less than they actually were,and thus her profits more than they actually were.On these facts,which of the following is false?

A)The court could award the equitable remedy of rescission if the evidence showed she had fraudulently misrepresented the costs.
B)The court could not award the equitable remedy of rescission if evidence showed that Mrs.Sharp really believed the invoices were accurate.
C)The court could not award the equitable remedy of rectification because the argument is not about rectifying an erroneous written version of a previous oral contract.
D)The court could terminate the contract for breach of contract if the accurate statement of costs and profit were essential terms of the contract.
E)The cause of action could be for the tort of deceit,if there was evidence that Mrs.Sharp intended to deceive the Morissons.

Question 58

Discuss the various remedies that are available where one of the parties to the contract is a victim of misrepresentation.

Question 59

Mr.Copperfield,a collector of movie memorabilia,bid $50 000 on the Batmobile.After taking delivery,he discovered that the car was not the one actually used in the film Batman; it was merely one of five cars used to promote the film.He is suing the seller,Mr.Eisenberg.If Copperfield could prove any of the following,which would entitle him to return the Batmobile and get his money back?

A)innocent misrepresentation by Eisenberg
B)fraudulent misrepresentation by Eisenberg
C)breach of contract by Eisenberg
D)negligent misrepresentation by Eisenberg
E)all of the above

Question 60

With regard to damages,which of the following is false?

A)Where a loss can be calculated,such as where wages already lost are involved or where more money had to be paid to accomplish a contractual purpose,this is referred to as special damages.
B)Where damages have to be estimated,as in compensation for pain and suffering or an estimate of future lost earnings,this is referred to as general damages.
C)In a breach of contract case for punitive damages to be awarded,there must be stand-alone wrongful conduct present.
D)An example of damages would be a case of rescission where a buyer would return a car to the seller and the seller would return the purchase price as well as any incidental repair expenses.
E)Normally,punitive damages designed to punish the breaching party rather than compensate the victim for the loss are not available for breach of contract.

Question 61

You and your parents were both surprised when Grandmother said the doctor told her to come for weekly checkups,because she didn't seem sick.Nevertheless,you dutifully took her to and from her appointments for a period of about six months.She never talked about these sessions,but loved to go.Now she has come to the family and said that she is sorry that she gave the doctor the oil paintings and sold him the farm.On these facts,which of the following is false?

A)A presumption of undue influence doesn't mean the weaker party will automatically get her property back.
B)If a court held that the property was obtained by undue influence,the contract would be voidable at the option of Grandmother,the weaker person.
C)It would be easier for Grandmother to argue duress than undue influence.
D)In a court action,if Grandmother claimed the return of her property on the basis of undue influence,the court would presume undue influence and the doctor would have to prove that the property was freely given.
E)If Grandmother had gone to her own lawyer for independent advice before conveying her property to the doctor,she would have more difficulty arguing undue influence.

Question 62

An 80-year-old woman signed,in the presence of a solicitor,a contract for land by which she sold property to her daughter.She later asked the court to set the contract aside on the grounds of non est factum (mistake)and undue influence.Which of the following is true with regard to these grounds for the contract?

A)She can successfully use the plea of non est factum if she was not misled about the very nature of the document.
B)If the aged mother received independent legal advice,it would be good evidence for the daughter that the mother's transferring the property was done freely,without undue influence being exerted.
C)If the court presumes that undue influence was used by the adult who gained from the contract with an aged parent,the contract is automatically set aside.
D)She can successfully use the plea of non est factum if there is evidence that she was careless when she signed the document.
E)If the lawyer were the daughter's husband,his advice would be seen as independent legal advice.

Question 63

Mr.Ho talked with Mr.Tarr,who ran a business called Roscali Roofing.Ho agreed to pay Tarr $250 for the repair of his roof.In time,Gene Fix,Tarr's employee,came to Mr.Ho's and worked on the roof.Fix used the wrong material in the repairs,which made all his effort worthless; during the next rain,the roof leaked as before.Which of the following is true?

A)Ho could successfully sue Fix and Tarr for breach of contract since they were both connected with the job.
B)Ho could successfully sue only Fix or Tarr for breach of contract,whichever he chooses,but not both.
C)Ho could successfully sue only Tarr for breach of contract.
D)Ho could sue only Tarr because he is the one who did a poor job on the roof.
E)If Tarr doesn't pay Fix,Fix could sue Ho directly for his pay because he worked on Ho's roof.

Question 64

Undue influence takes place when one person uses violence to force another to enter into a contract.

Question 65

Duress takes place when one person takes advantage of another's vulnerability because of a special relationship with that person.

Question 66

Which of the following is an example of duress?

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 67

What is the significance of determining that the misrepresentation was negligent rather than innocent?

Question 68

When it has been clearly established that one of the parties to the contract has been the victim of undue influence,that contract is void.

Question 69

A woman sought to set aside a mortgage on the grounds of misrepresentation,undue influence,and non est factum.She had been persuaded to enter into that mortgage contract with a mortgage company by her doctor.Which of the following is true with regard to these challenges to the mortgage contract?

A)If the court found that there was undue influence by her doctor,who obtained the money from the mortgage,she would not have to repay the mortgage company.
B)If she failed to read the mortgage agreement,the mortgage would be void on the basis of non est factum.
C)If the person who misled her as to the contents of the mortgage agreement honestly thought what he was stating was correct,she could sue for only damages,not rescission.
D)If she were influenced to sign the mortgage by her doctor and the court found undue influence,the mortgage would be void and she wouldn't have to pay the mortgage company.
E)If she were influenced to sign the mortgage by her doctor and the mortgage benefited the doctor,the court would presume undue influence.

Question 70

Mary has a little scam most everywhere she goes; she sells by saying anything.Her buyers just have woes.Which of the following is true with regard to misrepresentation?

A)In some types of misrepresentation there are no remedies available.
B)If Mary induces the buyer to buy by making a misrepresentation that she honestly thought was true,the buyer has no remedy in law or in equity.
C)For fraudulent misrepresentation,the buyer can be granted only the equitable remedy of rescission.
D)There are several remedies available in case law for an exaggerated claim made by Mary.
E)A misrepresentation can be made about a term of a contract and result in an award of rescission and/or damages.

Question 71

When the courts find that undue influence is present,the resulting contract is:

A)binding.
B)void.
C)illegal.
D)voidable.
E)unenforceable.

Question 72

Discuss unconscionability with respect to contract law.

Question 73

Distinguish between duress and undue influence.

Question 74

Randal embezzled $6000 of his employer's money and then disappeared.The employer's accountant called at Randal's residence and discovered that his wife had a $3500 term deposit.When the accountant threatened to have her husband arrested and imprisoned if she did not agree to sign over the deposit,she assigned the term deposit to the employer to help to defray the loss from the embezzlement.If the wife were later to sue for return of the term deposit,what would be her grounds for avoiding the assignment?

A)mistake of law
B)non est factum
C)duress
D)fraudulent misrepresentation
E)undue influence

Question 75

What is the effect of a court determining that undue influence has been present in a contractual relationship?

Question 76

Indicate three situations where the courts will presume a relationship to involve undue influence.

Question 77

A real estate agent,Mr.Jones,was owed a $7000 commission,having sold property for Mr.Quick.Quick couldn't be found,but Jones did find Quick's wife and learned that she had over $20 000 in Treasury bills.Jones told her that if she didn't assign to him $7000 of the $20 000,he would make sure her husband was imprisoned for his debts and "for other crimes" he knew about.If she did make an assignment in writing to Jones of the $7000 but later tried to void the agreement,she would argue which of the following?

A)privity
B)statutory assignment
C)duress
D)mistake
E)non est factum

Question 78

Discuss the development and importance of the principle of unconscionable contracts.In your answer,compare unconscionability to insanity,duress,and undue influence.

Question 79

With respect to having the court set aside a contract on the basis of undue influence,which of the following is false?

A)Where undue influence is established,the resulting contract is voidable,not void.
B)If the court presumes the existence of undue influence,the person asking for the return of the property will automatically get it back.
C)A contract made in favour of a dominant person who exerted undue influence over the weaker party is voidable at the option of the weaker party.
D)If you are a dominant person in relation to an aged relative who wants to sell you his house below market value,you should insist that the aged relative receive independent legal advice.
E)If a client transferred property to his lawyer and later claimed the transfer was due to undue influence,the law would presume the transfer was due to undue influence.

Question 80

The threat of violence makes a contract voidable.