Question 1

You innocently have made some misstatements that others are relying on.Legally speaking,you can change your situation from innocent misrepresentation into one of fraudulent or negligent misrepresentation by

Accepted Answer

Doing nothing when you learn about the truth can change an innocent misrepresentation into a fraudulent or negligent one because it implies a decision to allow the deception to continue once you are aware of it.

Question 2

A pleas of non est factum

Accepted Answer

A plea of non est factum means "it is not my deed" and is used when a party claims that they did not sign or execute the contract, or that they did so under a mistaken belief about its nature or terms. It is not necessarily dependent upon a mistake made by both parties, and it can be raised as a defense against third parties in some cases. It is not the same as a claim of misrepresentation, though either or both could potentially be used as a defense in a contract dispute.

Question 3

Use this fact situation to answer the related questions that follow it. John lives with his wife,Mary,and regularly beats her,leaving Mary in a constant state of fear when John is around.John needs to borrow some money for his business,and so he goes to his bank and meets with the manager,who agrees to loan him the money,but only if both John and his wife sign a guarantee of the loan.John signs the guarantee in front of the manager and then takes it home to be signed by Mary.At home,John tells Mary to sign the guarantee "or else you know what will happen to you," so Mary signs the guarantee.
Mary's signing the guarantee under these circumstances is a classic example of

Accepted Answer

Mary signed the guarantee under duress, meaning she was threatened with harm if she did not comply.

Question 4

Use the fact situation in Q30 to answer the related question that follows. Using the fact situation above,assume that shortly after signing the guarantee,Mary leaves John so that he can no longer abuse her and decides that she really should not have to guarantee John's loan.If Mary acts quickly by bringing a lawsuit against the bank,Mary may succeed because

Accepted Answer

The guarantee is not automatically unenforceable or void just because Mary has left John. However, if Mary acts quickly to repudiate the guarantee (i.e. notify the bank that she is no longer willing to be bound by it), the guarantee may be voidable. This is because Mary may be able to argue that her consent to the guarantee was obtained by John's coercion or undue influence, and that once she no longer feared his abuse, she realized the true nature of the transaction and no longer wished to be bound by it. The bank may also have the option to void the guarantee at this point. Therefore, the correct answer is D.

Question 5

The parking enforcement officer gave Jim a parking ticket.But as it turns out,the NO PARKING sign had been placed in error on private property.Can Jim recover damages in a tort action?

Accepted Answer

Jim cannot recover damages in a tort action because the issuance of the parking ticket, although based on an erroneously placed NO PARKING sign, does not constitute fraud or negligence on the part of the parking enforcement officer. The officer acted within their duties, and the mistake regarding the sign's placement does not imply wrongful intent or a breach of duty towards Jim.

Question 6

Use the fact situation in Q33 to answer the related question that follows. Referring to the above fact situation,in a lawsuit by Alice against Marvin,Alice will seek

Accepted Answer

The answer of Use the fact situation in Q33 to...

Question 7

Use this fact situation to answer the related questions that follow it. Marvin is an investment counsellor.Alice is one of Marvin's clients.Alice has no investment experience and relies on Marvin's advice in making her investments.Last night,while he was sleeping,Marvin had a dream that the shares of Very Big Company (VBC)would go up a great amount in value.As a result,without even checking to ensure that VBC was a good company to invest in,this morning Marvin called Alice and told her to put all of her money into VBC,which Alice did.Later that day VBC declared bankruptcy and Alice lost all of her money.
In these circumstances,Marvin's advice to Alice is

Accepted Answer

Marvin's advice to Alice was a negligent misrepresentation as he did not check to ensure that VBC was a good company to invest in and provided false information that caused Alice to make a poor investment decision.

Question 8

Christi was told by the store's produce manager that the oranges were of a variety that had a extremely high level of vitamin C.So she bought a case for her health club's garden party.At the party,the guests enjoyed eating up all the oranges.When Christi was next in the store,the manager corrected his prior statement,saying the oranges were of a different variety than what he had thought.Does Christi have a legal claim for rescission?

Accepted Answer

Rescission is impossible in this case because the oranges have already been consumed. Additionally, if the store made an innocent mistake in their representation, without any intention to mislead, then it may not be grounds for a legal claim of rescission or damages.

Question 9

If,at the time a contract was made,the subject matter did not exist,without the knowledge of the seller,the contract is

Accepted Answer

According to the Sale of Goods Act and under the common law, a contract for the sale of goods that do not exist at the time of the contract is considered void. This is because there is no subject matter to transfer ownership of, and therefore, no valid contract can be formed. It does not matter whether the seller knew or did not know that the subject matter did not exist.

Question 10

Use the fact situation in Q30 to answer the related question that follows. Assume that before Mary signs the guarantee,she sees a lawyer for independent legal advice.Assume also that just before she signs the guarantee,the lawyer asks her if she is signing the guarantee freely and without threat of harm,duress,or undue influence and that Mary replies,"Yes,I am signing it freely and without threat of harm,duress,or undue influence." In these circumstances,if Mary changes her mind and does not want to be bound by the guarantee,

Accepted Answer

The answer of Use the fact situation in Q30 to...

Question 11

James purchases an antique chair at a garage sale for $150.00.Later he sells it to Jacqueline for $300 and makes a nice profit.A few months later the Antiques Road Show comes to town and Jacqueline takes the chair to the show to be valued.She is advised that the chair dates as far back as 1866 and is worth approximately $5000.Which of the following is true?

Accepted Answer

James did not make a mistake about the value of the chair because the significantly different price is one of the risks expected in a contract of this type. The principle of caveat emptor (buyer beware) applies, and Jacqueline could have done her own research to determine the value of the chair before buying it from James. Therefore, James is not legally obligated to refund or compensate Jacqueline for the difference in value.

Question 12

If an incident of misrepresentation is neither fraudulent nor negligent,yet it resulted in harm,then

Accepted Answer

The answer of If an incident of misrepresentation is neither...

Question 13

McKenzie purchases goods from Dormond.Later McKenzie goes to court and the court declares that the contract between McKenzie and Dormand is void.This means that

Accepted Answer

The answer of McKenzie purchases goods from Dormond.Later McKenzie goes...

Question 14

The domination of one party over the mind of another to such a degree as to deprive the latter of the will to make an independent decision is

Accepted Answer

This best describes undue influence, which involves the exertion of extreme pressure or control over another person in order to manipulate their decisions or actions. Domination, supervision, and control can all involve some degree of influence or power, but undue influence specifically emphasizes the coercion or manipulation that undermines the other person's agency. Being pushy is a more colloquial or informal term that may imply a less intense level of influence.

Question 15

Use this fact situation to answer the related questions that follow it. John Jones is an 80-year-old man who lives in Ontario.Two years ago,John made a will in which he left one-third of his entire estate (all of his assets)to each of his three children,Mary,George,and Edward.Harry told the children what he was leaving them just after he made his will.Since that time,Edward has been unhappy about getting only one-third of his father's estate,and for the past two years he has been telling his father that Mary and George really hate their father and cannot wait until he dies.Lately John has become ill,and because Edward is the only son in Ontario,he has been taking care of his father.Each time that Edward sees his father,which is two to three times a week,he reminds him about Mary's and George's feelings towards him and tells John that he is the only child who really loves his father.John,seeing how much care Edward is giving him,begins to believe Edward and decides to make a new will in which he leaves his entire estate to Edward and nothing to Mary and George.
George's changing his will under these circumstances is a classic example of

Accepted Answer

John is vulnerable due to his illness and dependence on Edward for care. Edward is using his position of power and influence over John to manipulate him into changing his will to benefit himself. This is an example of undue influence, where a person takes advantage of a vulnerable individual to gain a benefit for themselves.

Question 16

If a party to an existing contract discovers he or she had made an incorrect statement during the contract negotiations,then he or she should

Accepted Answer

The best course of action is to inform the other party of the true situation as soon as possible. This allows both parties to discuss and possibly renegotiate the terms of the contract based on the new information. Being honest and transparent about any mistakes or misunderstandings can help maintain a good business relationship and prevent potential legal issues down the road.

Question 17

Jonathan sells crates of tomatoes on board the SS Apapa to Margaret.At the time of the sale,both parties are unaware that the crates were washed overboard.What is the status of the contract between Jonathan and Margaret?

Accepted Answer

In this scenario, the contract between Jonathan and Margaret is void as the subject matter of the contract, which is the crates of tomatoes, has been destroyed. Since both parties were unaware of the loss at the time of the sale, Jonathan bears the loss and will have to refund Margaret's money. Therefore, option A is the best choice. Option B is not applicable as insurance would only cover unforeseen events, and not losses resulting in a void contract. Option C is not applicable as ownership cannot pass if the subject matter does not exist. Option D is not applicable as Margaret cannot bear the loss of something that does not exist. Option E is also not applicable as there was no intention to deceive on Jonathan's part.

Question 18

Use the fact situation in Q28 to answer the related question that follows. Change the fact situation by assuming that Edward's conduct towards his father is designed to make his father enter into a contract with a third party.Also assume that Mary and George convince John that what Edward has been telling him about how they feel about him was a lie.In this situation,the contract is

Accepted Answer

The answer of Use the fact situation in Q28 to...

Question 19

Both rescission and damages are available remedies for misrepresentation only when the misrepresentation is

Accepted Answer

Rescission and damages are available remedies for misrepresentation only when the misrepresentation is fraudulent or negligent. Innocent misrepresentation does not provide a basis for rescission or damages.

Question 20

When a court grants rectification of a contract,it

Accepted Answer

Rectification means correcting a mistake in a legal document. When a court grants rectification of a contract, it changes the part of the document that was incorrect in the written document. The court does not declare the contract to be unenforceable or voidable, nor does it interpret the contract for the parties. It simply corrects the mistake in the written document.

Quiz 8: Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation