Question 1

It was almost time for the Heeleys to renew the mortgage on their home and they were considering their options. The mortgage was currently held by the Big Bank and the Heeleys were not satisfied with the service they had received from the Big Bank's mortgage staff. Recently, the local radio station had been airing commercials for the Little Bank, which suggested that people switch their mortgages to Little Bank to take advantage of better rates and more personal service. As a special incentive, the commercials stated that, for a limited time, for every mortgage over $50,000 which was brought to Little Bank from another financial institution, Little Bank would give the customer an all-expense-paid trip to Mexico. Feeling in need of a vacation, the Heeleys decided to take advantage of this incentive and made an appointment to see the manager of Little Bank. During their meeting the manager explained that the Mexico trip would be given on mortgages brought within the next month. The Heeleys mortgage did not expire at Big Bank for another six weeks, however the manager said it should not be a problem awarding them the trip for having made the commitment within the advertised period to transfer their mortgage. At the end of the six weeks, the Heeleys transferred their mortgage to Little Bank and delivered the paperwork needed by the bank to set up their trip. Several days later the Heeleys received a telephone call from the head office of the Little Bank informing them that they were not eligible to receive the trip as their mortgage had not been transferred within the offer period.
Discuss the legal issues that arise as a result of this case. What legal principles might the Heeleys and the bank apply to support their respective positions, and what would be the likely result should legal action ensue?

Accepted Answer

The answer of It was almost time for the Heeleys...

Question 2

There are requirements predetermined by law to make a contract binding and, therefore, legally enforceable. With your knowledge of the process of arriving at a contract, explain how that process relates to the legal solidification of a contract.

Accepted Answer

The answer of There are requirements predetermined by law to...

Question 3

On July 23^rd, Carson, who lived in Bytown, wrote a letter to Henri, offering to sell his (Carson's) vintage car for $18,000. The letter was delivered to Henri in his home in Mount Royal, an hour's drive away, on July 27. On July 24^th, Carson met his friend Jack on the street. Jack expressed an interest in buying Carson's vintage car. He offered Carson $18,000 for the car, but Carson said only that he would "give the offer some thought," and promised to advise Jack of his decision. Carson did not tell Jack of his offer to sell the car to Henri. On July 25^th, while on vacation in York, Jack sent a fax to Carson, offering to buy the car for $18,250 if Carson would deliver the car, on July 30^th, to his farm, located some 20 km west of Bytown. Carson received the fax the same day and, that evening, wrote and mailed a letter to Henri, revoking his offer to sell the vintage car. On July 28^th, Henri wrote a letter to Carson accepting his offer to sell the vintage car and enclosed a cheque for $18,000 as payment in full. On July 29^th, Henri received Carson's letter revoking the offer. Carson had business west of Bytown on July 29^th, and since his trip would take him past Jack's farm, he decided to deliver the vintage car on his way. Carson left the car on a trailer at Jack's farm, but finding no one at home, left the keys to the car and a note in Jack's mailbox. The note stated that he had left the car behind the garage. On July 30^th, Carson received the letter of acceptance Henri had mailed to him on July 28^th. Carson immediately telephoned Henri to tell him he had sold the car to Jack, but Henri was out of town on a business trip. Carson left a message with Henri's wife and, on July 31^st, returned by mail the cheque that Henri had sent him with the letter of acceptance Later on July 31^st, Carson received a telephone call from Jack who had just returned from Toronto requesting delivery of the car. When Carson explained that the car had been delivered on July 29^t^h, Jack stated that the car was not behind the garage. Carson then requested Jack to call the police to investigate the theft. Later in August, the police located the car in the possession of a minor and an arrest was made. Unfortunately the car had been badly damaged while in the thief's possession. The estimate of damages was $12,000. Discuss the issues raised in this case. Describe the rights of the parties (if any) and the possible outcome of any litigation if legal action should be taken to enforce the rights of the parties.

Accepted Answer

The answer of On July 23^rd, Carson, who lived in...

Question 4

Mookie, a professional baseball player, negotiated with the Soxville Eagles for a one-year contract. He was given one week to consider the offer and was to sign it by the opening day of the season, one week away. Mookie, in the meantime, was offered a better contract with the Baxton Bulldogs, which he accepted. On opening day, Mookie walked onto the field in the uniform of Baxton. Soxville can sue Mookie for a breach of contract.

Accepted Answer

Mookie did not sign a contract with the Soxville Eagles; therefore, there was no formal agreement in place to breach.

Question 5

At a computer fair, Porter saw a demonstration by Maxwell of an excellent new accounting software package published by Slyckbyte Co., but he felt it was overpriced at $900. "At $500," he said, "I would definitely buy it." Maxwell said that she was not authorized to give deals to anyone, not even such a good customer as Porter. Porter bought another package from a different company. Four days later, he received a package from Maxwell that contained the new software and a letter which said that Slyckbyte was happy to give him the discount he had wanted and that she looked forward to receiving his cheque within the next few days.
Discuss whether Porter must pay for the software.

Accepted Answer

The answer of At a computer fair, Porter saw a...

Question 6

George was an independent salesman, working sales territories in which various manufacturers did not maintain sales agents. Prior to a trip to Northern Manitoba, George informed a manufacturer of small electrical generators he expected to secure an order for fifty generators on this trip. From a more remote community, George was able to send a fax to the manufacturer which, when received, read "Send by air immediately the generators. Must be here by next Thursday." The fax should have read, "three generators" and the mistake was made solely by the fax office. The manufacturer sent fifty generators. Aside from the fact that one of the parties may have a remedy against the fax office, discuss the relevant principles of contract raised here, and determine whether there was no contract, a contract for three generators, or a contract for fifty generators.

Accepted Answer

The answer of George was an independent salesman, working sales...

Question 7

Robert has just mailed a letter of acceptance in response to James' letter offering to sell his hardware store to Robert, when he is knocked down by a car and killed. Jane, Robert's wife and sole heir, wants to run the business, since that is what she and Robert had intended, but James does not believe a woman could run a hardware store and tells her that the deal is off. Discuss Jane's legal position.

Accepted Answer

The answer of Robert has just mailed a letter of...

Question 8

Becky is colouring her hair one day and her friend Kamilah asks if Becky will colour hers as well. Becky agrees and does a good job. Two months later, Becky goes to a professional hairdresser to have her hair coloured and pays her $100. Becky should also be entitled to payment for her colouring job.

Accepted Answer

Becky's agreement to color Kamilah's hair was informal and there was no discussion or implication of payment for the service, unlike the professional service she paid for.

Question 9

John notices while mowing his lawn one summer day that while his neighbour had been on vacation, his hedge had become unkempt. Worried that people might think it were his hedge, John decided to clip the hedge himself. On his return John's neighbour thanked John for the work. Several weeks later the neighbour hired a handyman to do the same job and paid him $50. John would be entitled to payment for subsequent hedge clippings if requested by his neighbour.

Accepted Answer

John's neighbor thanked him for clipping the hedge, which implies that he was happy with the work and did not consider it to be trespassing.

Question 10

Discuss the significance of Carlill v. Carbolic Smoke Ball Co. [1893], 1 Q.B. 256 for modern day marketing practice. Give some examples to illustrate your points.

Accepted Answer

The answer of Discuss the significance of Carlill v. Carbolic...

Question 11

The world of commerce requires that the intention to create a legal relationship be proven before any contract can be found to exist between the parties.

Accepted Answer

The answer of The world of commerce requires that the...

Question 12

If an acceptance is not unconditional, but changes the terms of the original offer, then it would have the effect of rejecting the original offer.

Accepted Answer

When an acceptance modifies the terms of the original offer, it is considered a counteroffer, which effectively rejects the original offer and proposes new terms for agreement.

Question 13

If GA Stereos sends a fax to Wholesale HiFi Equipment ordering ten car stereos at a particular catalogue price, requesting delivery by courier (or some other means), the fax would not constitute an offer to purchase.

Accepted Answer

The fax sent by GA Stereos to Wholesale HiFi Equipment detailing the quantity, price, and requested delivery method constitutes an offer to purchase. This is because it clearly indicates the intention to enter into a contract under specified terms.

Question 14

When an offeree dies before accepting an offer, the offer does not lapse because the deceased's personal representative can accept an offer on behalf of a deceased person.

Accepted Answer

An offer lapses upon the death of the offeree before acceptance, as the personal representative cannot accept an offer on behalf of the deceased.

Quiz 7: An Introduction to Contracts