Deck 5: Legislation in the Marketplace
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Deck 5: Legislation in the Marketplace
1
The principles of freedom of contract and caveat emptor have been completely done away with by the Sale of Goods Act.
False
2
"The Sale of Goods Act is another example of consumer protection legislation." Discuss the accuracy of this statement.
It's incorrect.The Sale of Goods Act is designed to cover all situations where goods are sold, whether at the wholesale level or at the retail level.Commercial transactions are covered as well.
3
Often the title of the goods will be transferred to a creditor as security for a loan.Sometimes this involves the use of a bill of sale, but the nature of the transaction is for the loan to be repaid.In this case, the creditor retains possession of the item used as security.
False
4
When goods are sold, who normally bears the risk?
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5
The Sale of Goods Act applies to all goods and services.
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6
The transfer of the title and possession of the goods in exchange for money must be intended or anticipated for the Sale of Goods Act to apply.
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7
Under the Sale of Goods Act, the general rule is that risk follows title.
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8
What types of transactions do the Sale of Goods Act apply to?
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9
Which of the following is a statement of facts to which the Sale of Goods Act would apply?
A)"The deal was this: Fred was to assign to Paul Fred's accounts receivable, and Paul would pay him $5000 cash, but Fred did not honour his promise."
B)"We hired you as a bartender, not to join the guests and teach them Texas line dancing!"
C)"I paid you to tune the car, but it obviously wasn't done!"
D)"Pursuant to the contract, the buyer of the house tendered $50 000 on the closing date, but the seller had changed his mind."
E)"There's a small, dead insect in my soup!"
A)"The deal was this: Fred was to assign to Paul Fred's accounts receivable, and Paul would pay him $5000 cash, but Fred did not honour his promise."
B)"We hired you as a bartender, not to join the guests and teach them Texas line dancing!"
C)"I paid you to tune the car, but it obviously wasn't done!"
D)"Pursuant to the contract, the buyer of the house tendered $50 000 on the closing date, but the seller had changed his mind."
E)"There's a small, dead insect in my soup!"
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10
Which of the following is a statement of facts to which the Sale of Goods Act would apply?
A)"Waiter, there is a dead fly in my spaghetti."
B)"Today is the closing date and I am willing to tender the full price in cash, namely $70 000, for the farm, and you are now telling me that you have no intention of closing."
C)"I agreed to give you a dozen old campaign buttons for that original signature of the prime minister, but received the signature of the governor general."
D)"I brought in five shirts to be laundered and you are returning only four to me!"
E)"I asked for a trim! You've cut off 5 inches!!!"
A)"Waiter, there is a dead fly in my spaghetti."
B)"Today is the closing date and I am willing to tender the full price in cash, namely $70 000, for the farm, and you are now telling me that you have no intention of closing."
C)"I agreed to give you a dozen old campaign buttons for that original signature of the prime minister, but received the signature of the governor general."
D)"I brought in five shirts to be laundered and you are returning only four to me!"
E)"I asked for a trim! You've cut off 5 inches!!!"
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11
Which of the following complaints would lead to a successful action under the Sale of Goods Act?
A)"Waiter, there's a spider in my sandwich."
B)"I paid $10 for government bonds, but you have sent me shares in a private company that I've never heard of!"
C)"You are not going to honour our contract for the land?! I planned to build on that lot in the spring!"
D)"I left the car here with orders to adjust the front lights; I did not order a tune-up!"
E)"I hired you to wait tables, not to stand around doing stand-up comedy routines."
A)"Waiter, there's a spider in my sandwich."
B)"I paid $10 for government bonds, but you have sent me shares in a private company that I've never heard of!"
C)"You are not going to honour our contract for the land?! I planned to build on that lot in the spring!"
D)"I left the car here with orders to adjust the front lights; I did not order a tune-up!"
E)"I hired you to wait tables, not to stand around doing stand-up comedy routines."
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12
What is the main purpose of the Sale of Goods Act?
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13
The Sale of Goods Act applies to all goods and services.
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14
Risk refers to potential loss due to damage of the goods.
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15
"The Sale of Goods Act imposes terms into the contract that are even and fair, that don't benefit one side over the other." Discuss the accuracy of this statement.
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16
Explain the relationship between risk and title and how they are dealt with in the Sale of Goods Act.
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17
Which of the following complaints would lead to a successful action under the Sale of Goods Act?
A)"What do you mean you are not going through with the contract to sell me that lot? I have workers ready to start construction one week after the closing date!"
B)"I paid a lot of money for this car and this is the third time I've had it back in the first week.Something is seriously wrong with it."
C)"I hired you to tutor me for my chemistry exam, not to tell me your personal problems week after week!"
D)"I left the car here with orders to adjust the front lights; I did not order a wheel alignment and I don't want to pay for it!"
E)"I paid $1000 for government bonds, but you have sent me shares in a private company that I've never heard of!"
A)"What do you mean you are not going through with the contract to sell me that lot? I have workers ready to start construction one week after the closing date!"
B)"I paid a lot of money for this car and this is the third time I've had it back in the first week.Something is seriously wrong with it."
C)"I hired you to tutor me for my chemistry exam, not to tell me your personal problems week after week!"
D)"I left the car here with orders to adjust the front lights; I did not order a wheel alignment and I don't want to pay for it!"
E)"I paid $1000 for government bonds, but you have sent me shares in a private company that I've never heard of!"
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18
Which of the following is a statement of facts to which the Sale of Goods Act would apply?
A)"I asked for a trim! You've cut off 2 inches!!!"
B)"Excuse me; there is a mouse in this beer bottle."
C)"Today is the closing date and I am willing to tender the full price in cash, namely $50 000, for the house and you are now telling me that you have no intention of closing."
D)"I brought in five shirts to be laundered and you are returning only four to me!"
E)"I agreed to give you a dozen old campaign buttons for that original signature of the prime minister, but received the signature of the governor general."
A)"I asked for a trim! You've cut off 2 inches!!!"
B)"Excuse me; there is a mouse in this beer bottle."
C)"Today is the closing date and I am willing to tender the full price in cash, namely $50 000, for the house and you are now telling me that you have no intention of closing."
D)"I brought in five shirts to be laundered and you are returning only four to me!"
E)"I agreed to give you a dozen old campaign buttons for that original signature of the prime minister, but received the signature of the governor general."
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19
To which of the following transactions would the Sale of Goods Act apply?
A)A contract for a boat
B)A contract with a warehouse owner to store a Chevrolet car
C)A contract for a house
D)A contract for a haircut
E)A contract to have a dress mended and cleaned
A)A contract for a boat
B)A contract with a warehouse owner to store a Chevrolet car
C)A contract for a house
D)A contract for a haircut
E)A contract to have a dress mended and cleaned
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20
Which of the following contracts would be covered by the Sale of Goods Act?
A)A contract for the sale of a famous painting
B)The trade of a car for a boat involving no money
C)The purchase of a house
D)A contract for medical services with a doctor
E)The sale of corporate shares
A)A contract for the sale of a famous painting
B)The trade of a car for a boat involving no money
C)The purchase of a house
D)A contract for medical services with a doctor
E)The sale of corporate shares
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21
When a contract of purchase is entered into with regard to specific goods that are to be delivered some time in the future, title always transfers at the point of delivery.
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22
Sam went to Joe's garden shop and agreed to purchase a particular bin of bark mulch.The seller, Joe, agreed and said that he would weigh it, figure out the price, and deliver it tomorrow.In the meantime, who has title to the bark mulch?
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23
Which of the following statements is correct with respect to a contract for the purchase of goods?
A)Where a breach of a condition is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement.
B)The purpose of the inclusion of a warranty in a sale of goods contract is to force the seller of those goods to repair the goods if they are defective.
C)The purchaser has a claim against the manufacturer only if the goods purchased are defective.
D)Where a breach of a condition is involved, the contract is still in force and the victim of the breach must still perform her side of the agreement.
E)Where a breach of a warranty is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement.
A)Where a breach of a condition is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement.
B)The purpose of the inclusion of a warranty in a sale of goods contract is to force the seller of those goods to repair the goods if they are defective.
C)The purchaser has a claim against the manufacturer only if the goods purchased are defective.
D)Where a breach of a condition is involved, the contract is still in force and the victim of the breach must still perform her side of the agreement.
E)Where a breach of a warranty is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement.
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24
Carol went to the mall to purchase a cellphone.After discussing the features of several models with the vendor, she purchased one that suited her requirements.However, when she tried to use it, she found it would not work on any of the available networks.Which of the following implied term with respect to title under the Sale of Goods Act has been breached by the vendor of the cellphone?
A)The implied warranty that requires the vendor to deliver good title
B)The implied warranty that the goods would be free of any charge or encumbrance
C)The implied warranty that the goods will match the sample
D)The implied warranty that requires the seller to provide quiet possession
E)The implied warranty that goods must be of merchantable quality
A)The implied warranty that requires the vendor to deliver good title
B)The implied warranty that the goods would be free of any charge or encumbrance
C)The implied warranty that the goods will match the sample
D)The implied warranty that requires the seller to provide quiet possession
E)The implied warranty that goods must be of merchantable quality
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25
The following events occurred before the goods or parts of the goods were destroyed by fire.In which case would the buyer suffer the loss?
A)Justin contracted for a piano that had to be tuned before it was in a deliverable state.It was tuned, but Justin had not been notified that it was ready.
B)Jaspers contracted for four standard-sized cupboards for the kitchen.The boards had been cut, but they had not been assembled.
C)Manchesco chose which of the chairs he wanted and contracted for them, but he had agreed to pay and pick them up the next day.
D)McGrady ordered a chainsaw advertised in the Sears catalogue.
E)Heinz contracted for all the corn in silo A.The seller still had to weigh the corn to determine the price.
A)Justin contracted for a piano that had to be tuned before it was in a deliverable state.It was tuned, but Justin had not been notified that it was ready.
B)Jaspers contracted for four standard-sized cupboards for the kitchen.The boards had been cut, but they had not been assembled.
C)Manchesco chose which of the chairs he wanted and contracted for them, but he had agreed to pay and pick them up the next day.
D)McGrady ordered a chainsaw advertised in the Sears catalogue.
E)Heinz contracted for all the corn in silo A.The seller still had to weigh the corn to determine the price.
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26
With FOB contracts, title and risk always transfer at the seller's place of business.
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27
Joe left his car at Harry's tire store, asking Harry to put a particular model of tire from his stock onto the vehicle while Joe went to his office in town.During the day, the tires were installed on the car, and Joe returned that evening to pick up the car.At what point did title on those tires transfer?
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28
The Sale of Goods Act adds a number of implied terms to a sale-of-goods transaction.Which one of the following statements is not an implied term under the Sale of Goods Act?
A)Where goods are sold by sample, the bulk must match the sample.
B)The seller promises the buyer good title.
C)The buyer is promised satisfaction or the right to get his money back.
D)Goods sold by description must be of merchantable quality.
E)Where the buyer tells the dealer what he wants them for and relies on the seller to provide them, the goods must be reasonably fit for that purpose.
A)Where goods are sold by sample, the bulk must match the sample.
B)The seller promises the buyer good title.
C)The buyer is promised satisfaction or the right to get his money back.
D)Goods sold by description must be of merchantable quality.
E)Where the buyer tells the dealer what he wants them for and relies on the seller to provide them, the goods must be reasonably fit for that purpose.
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29
If the contract doesn't say who bears the loss if an item is lost or stolen, the Sale of Goods Act says risk goes with title.If the contract doesn't say when the title will pass, the Sale of Goods Act implies when it will pass.In which of the following will the statute imply that title will pass to the buyer at the time of the contract?
A)George calls a store and asks it to deliver the table advertised in its catalogue.The store agrees, takes his credit card number, and promises to deliver the table on Friday.
B)Azar goes into a store specializing in old woodworking tools.He chooses a $10 tooling machine.The contract provides that it would be delivered to his workshop the next morning and he would pay for it in one month.
C)Maureen contracts for Ms.Roberts' next year's pumpkin crop.
D)Agro Ltd.buys all chemicals contained in the container marked "A" but the price has to be ascertained by measuring the number of litres in the container.
E)While at Sears, Preston decides to buy the style of sofa he sees on display.He pays cash and the store arranges to have one like it, covered in the material he selects, delivered directly to him from the factory.
A)George calls a store and asks it to deliver the table advertised in its catalogue.The store agrees, takes his credit card number, and promises to deliver the table on Friday.
B)Azar goes into a store specializing in old woodworking tools.He chooses a $10 tooling machine.The contract provides that it would be delivered to his workshop the next morning and he would pay for it in one month.
C)Maureen contracts for Ms.Roberts' next year's pumpkin crop.
D)Agro Ltd.buys all chemicals contained in the container marked "A" but the price has to be ascertained by measuring the number of litres in the container.
E)While at Sears, Preston decides to buy the style of sofa he sees on display.He pays cash and the store arranges to have one like it, covered in the material he selects, delivered directly to him from the factory.
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30
Under the Sale of Goods Act, when no time has been set for the return of goods taken on approval, title passes at the expiration of 48 hours.
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31
John has been working and saving his money; he wants to buy a car on his 25th birthday.Which of the following is false?
A)There will be an implied term in the contract that John will get good title to the car.
B)There will be an implied term that payment is to be made by certified cheque.
C)There will be an implied term in the contract that John will enjoy "quiet possession."
D)An exemption clause may modify certain implied terms.
E)There will be an implied term in the contract that the car will be free and clear of encumbrances.
A)There will be an implied term in the contract that John will get good title to the car.
B)There will be an implied term that payment is to be made by certified cheque.
C)There will be an implied term in the contract that John will enjoy "quiet possession."
D)An exemption clause may modify certain implied terms.
E)There will be an implied term in the contract that the car will be free and clear of encumbrances.
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32
Jones walked into a new car lot, pointed to a specific car, and said, "I'll take that one." Sam, the operator of the car lot, explained that there was a certain amount of pre-delivery preparation that had to take place before the car could be delivered, and that it would be ready for the purchaser two days later.It was agreed that the purchase price would be paid at that time.Explain who bears the risk in the meantime.
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33
John walked into Sam's TV store and said, pointing to a particular television, "I'll take that one." They wrote up the deal, and John was to return the next day to pay for it and pick it up.Explain who bears the risk in the meantime.
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34
The following events occurred before the goods or parts of the goods were lost or destroyed.In which case would the buyer suffer the loss?
A)Heinz contracted for all of the corn in Silo A.The seller still had to weigh the corn to determine the price.
B)Al picked out and contracted for a particular computer, and an additional component had to be installed before it was in deliverable state.The component was installed, but Al had not been notified that it was ready.
C)Jaspers contracted for four standard-sized cupboards for the kitchen.The boards had been cut, but they had not been assembled.
D)George ordered a Pentium computer system with 4 megabytes of RAM and a 105-megabyte hard drive advertised by Kicks Computers.
E)Yates chose which of the desks he wanted and contracted for it, but he had agreed to pay and pick it up the next day.
A)Heinz contracted for all of the corn in Silo A.The seller still had to weigh the corn to determine the price.
B)Al picked out and contracted for a particular computer, and an additional component had to be installed before it was in deliverable state.The component was installed, but Al had not been notified that it was ready.
C)Jaspers contracted for four standard-sized cupboards for the kitchen.The boards had been cut, but they had not been assembled.
D)George ordered a Pentium computer system with 4 megabytes of RAM and a 105-megabyte hard drive advertised by Kicks Computers.
E)Yates chose which of the desks he wanted and contracted for it, but he had agreed to pay and pick it up the next day.
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35
Joe bought a TV "on approval," took it home, and installed it as part of a built-in stereo wall in his renovated recreation room.He discovered, however, that the TV was too small, extracted it from the wall, and took it back to the seller, saying he was not happy with it.The seller asked about the minor scratches on the finish and Joe explained that it had been built into the wall, and the trouble he had experienced to get the TV out again.Has title transferred? Explain.
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36
If you buy a toaster from a second-hand dealer of small appliances, which of the following is true?
A)The Sale of Goods Act prohibits the seller from exempting himself from liability in the event that the toaster is not fit for purpose.
B)The risk of loss depends on who has possession of the toaster.
C)The Sale of Goods Act does not apply.
D)Title to the toaster would pass at the time the buyer picked it up the next day.
E)There is an implied term of the contract that the seller has good title (i.e., the right to sell it). Correct: 0
A)The Sale of Goods Act prohibits the seller from exempting himself from liability in the event that the toaster is not fit for purpose.
B)The risk of loss depends on who has possession of the toaster.
C)The Sale of Goods Act does not apply.
D)Title to the toaster would pass at the time the buyer picked it up the next day.
E)There is an implied term of the contract that the seller has good title (i.e., the right to sell it). Correct: 0
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37
In which of the following will the title to the goods pass to the buyer at the time of contract?
A)ABC Co.buys all chemicals contained in a drum marked "A" but the price has to be ascertained by measuring the number of litres in the drum.
B)Williams contracts for the desk he selected at Antiques Unlimited, and he arranges to have it delivered to his office tomorrow and to be paid for in one month.
C)Mrs.Jones calls the Bay and asks it to send her the blanket advertised on p.3 of its flyer.The Bay agrees and takes her credit card number.
D)Mary picks out a leather briefcase and leaves it with the seller so that initials can be engraved on it.She pays by cheque.
E)While at the Bay, Preston decides to buy the style of sofa he sees on display.He pays by cash and the store arranges to have a sofa sent from its warehouse directly to Preston's home.
A)ABC Co.buys all chemicals contained in a drum marked "A" but the price has to be ascertained by measuring the number of litres in the drum.
B)Williams contracts for the desk he selected at Antiques Unlimited, and he arranges to have it delivered to his office tomorrow and to be paid for in one month.
C)Mrs.Jones calls the Bay and asks it to send her the blanket advertised on p.3 of its flyer.The Bay agrees and takes her credit card number.
D)Mary picks out a leather briefcase and leaves it with the seller so that initials can be engraved on it.She pays by cheque.
E)While at the Bay, Preston decides to buy the style of sofa he sees on display.He pays by cash and the store arranges to have a sofa sent from its warehouse directly to Preston's home.
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38
A warranty under the Sale of Goods Act is a contract term the breach of which will allow the victim of the breach to refuse to go through with his or her side of the agreement.
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39
Alf bought a car from Mr.Wojchu for $10 000.Shortly afterwards, a bailiff, acting for an unpaid conditional seller, seized the car.The conditional seller had properly registered his claim in time.Alf wants to sue Mr.Wojchu.Which of the following correctly sets out his legal position?
A)Alf wins.Mr.Wojchu has failed to deliver good title.
B)Wojchu loses.Risk follows title.
C)Alf wins.Goods are not of merchantable quality.
D)Alf loses.Caveat emptor applies.
E)Alf loses.It was his obligation to search the title and he failed to do so.
A)Alf wins.Mr.Wojchu has failed to deliver good title.
B)Wojchu loses.Risk follows title.
C)Alf wins.Goods are not of merchantable quality.
D)Alf loses.Caveat emptor applies.
E)Alf loses.It was his obligation to search the title and he failed to do so.
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40
Distinguish between conditions and warranties in a sale of goods contract.
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41
Quiet possession of the goods means that the goods must be of merchantable quality and free from any inherent defect.
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42
O'Neil bought a new car from a Chevrolet dealer for family use.The contract he signed contained the following clause: "The parties hereto expressly agree that the dealer is not liable for any breach of condition or warranty, express or implied." He also bought a used car radio from the dealer for his old car, which he was keeping.The contract for the radio was not in writing.The car did not run properly; O'Neil had it back in the shop seven times in three weeks.It was finally determined that the problem was due to a faulty transmission.Unfortunately, the car radio didn't work either.On these facts, which of the following is true?
A)The contract for the radio is not covered by the Sale of Goods Act because the radio was not new.
B)The exemption clause in the contract for the car would succeed in defeating an action by O'Neil against the dealer for breach of contract.
C)The exemption clause does not apply to either because both involve fundamental breaches of contract.
D)The contract for the radio is not covered by the Sale of Goods Act because the contract was not in writing.
E)O'Neil has an action for breach of contract against the dealer, because the exemption clause does not defeat the dealer's obligation to deliver a properly performing car (fit for use) in a consumer transaction.
A)The contract for the radio is not covered by the Sale of Goods Act because the radio was not new.
B)The exemption clause in the contract for the car would succeed in defeating an action by O'Neil against the dealer for breach of contract.
C)The exemption clause does not apply to either because both involve fundamental breaches of contract.
D)The contract for the radio is not covered by the Sale of Goods Act because the contract was not in writing.
E)O'Neil has an action for breach of contract against the dealer, because the exemption clause does not defeat the dealer's obligation to deliver a properly performing car (fit for use) in a consumer transaction.
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43
Which of the following statements is correct with respect to the Sale of Goods Act?
A)The parties are restricted to contract out of any of the terms of the Sale of Goods Act.
B)The Sale of Goods Act does apply to the sale of land.
C)The terms included in the Sale of Goods Act override the terms agreed upon by the parties to such a sale of goods.
D)Some of the terms of the Sale of Goods Act are implied in the contract of sale.
E)The Sale of Goods Act does apply to the assignment of a contractual claim.
A)The parties are restricted to contract out of any of the terms of the Sale of Goods Act.
B)The Sale of Goods Act does apply to the sale of land.
C)The terms included in the Sale of Goods Act override the terms agreed upon by the parties to such a sale of goods.
D)Some of the terms of the Sale of Goods Act are implied in the contract of sale.
E)The Sale of Goods Act does apply to the assignment of a contractual claim.
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44
With respect to a sale of goods, which one of the following statements is true?
A)If the parties do not agree otherwise, the risk of loss stays with the seller until delivery.
B)A seller who has been given a cheque that "bounces" (dishonoured for insufficient funds), in payment for goods that he still possesses, has rights against the goods themselves as well as an action for breach of contract against the buyer.
C)The Sale of Goods Act also applies to the purchase of real estate and of bonds.
D)Legislation allows a seller to override the requirement that goods supplied be fit and of merchantable quality in consumer transactions.
E)If the parties do not agree otherwise, the time of payment is 30 days after the time of delivery.
A)If the parties do not agree otherwise, the risk of loss stays with the seller until delivery.
B)A seller who has been given a cheque that "bounces" (dishonoured for insufficient funds), in payment for goods that he still possesses, has rights against the goods themselves as well as an action for breach of contract against the buyer.
C)The Sale of Goods Act also applies to the purchase of real estate and of bonds.
D)Legislation allows a seller to override the requirement that goods supplied be fit and of merchantable quality in consumer transactions.
E)If the parties do not agree otherwise, the time of payment is 30 days after the time of delivery.
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45
John bought a new car for $5000.Shortly afterwards, a bailiff acting for an unpaid chattel mortgagee who had properly registered his claim in time seized the car.In which of the following circumstances can John sue the seller?
A)If the seller told John that the car was free and clear of any encumbrances after John asked
B)If the seller told John that the car was free and clear of any encumbrances even though John didn't ask
C)If John forgot to check the registry for liens or encumbrances
D)If neither John nor the seller said anything about whether the car was free and clear of encumbrances
E)All of the above
A)If the seller told John that the car was free and clear of any encumbrances after John asked
B)If the seller told John that the car was free and clear of any encumbrances even though John didn't ask
C)If John forgot to check the registry for liens or encumbrances
D)If neither John nor the seller said anything about whether the car was free and clear of encumbrances
E)All of the above
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46
Gregory went to Collegiate Sports Ltd.with his dad, who asked for some shoes for Gregory suitable for playing squash.Gregory was given a pair of running shoes suitable only for jogging.His dad paid by cash.That evening, wearing the new shoes while playing squash, Gregory broke his ankle.In the ensuing lawsuit, the statement of claim cited the provisions of the Sale of Goods Act.Which of the following is true if it were proven that the shoes were inappropriate and the cause of the injury?
A)This is not a sale of goods situation because Gregory's father paid by cash.
B)This is a "buyer beware" situation and there would be no remedy for anyone.
C)Only Gregory can sue since he was the only one hurt.
D)Gregory's father would be the proper plaintiff in this action and could win on the claim that the goods were not fit for purpose.
E)Gregory's father could win for breach of contract because he made known the purpose for which he wanted the shoes to a shoe dealer.
A)This is not a sale of goods situation because Gregory's father paid by cash.
B)This is a "buyer beware" situation and there would be no remedy for anyone.
C)Only Gregory can sue since he was the only one hurt.
D)Gregory's father would be the proper plaintiff in this action and could win on the claim that the goods were not fit for purpose.
E)Gregory's father could win for breach of contract because he made known the purpose for which he wanted the shoes to a shoe dealer.
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47
Under the Sale of Goods Act, the seller has a lien against the goods and can recover those goods from the purchaser in the event of default.
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48
Which of the following is true with regard to the implied terms of the Sale of Goods Act?
A)If you ordered a lamp from a catalogue but it did not match the description when you received it, the seller is in breach of a warranty of the contract.
B)The Act does not provide that the goods must be fit for purpose.
C)If a buyer places an order for silk after seeing a sample of it, the order must be delivered within 10 days.
D)The Act provides that the goods must be of "merchantable quality," and that means that the goods must be without flaw.
E)When you buy a car, and the contract speaks only of the car and the price, you are entitled to receive good title, to acquire quiet possession and a car free from any encumbrances (i.e., a claim by a bank).
A)If you ordered a lamp from a catalogue but it did not match the description when you received it, the seller is in breach of a warranty of the contract.
B)The Act does not provide that the goods must be fit for purpose.
C)If a buyer places an order for silk after seeing a sample of it, the order must be delivered within 10 days.
D)The Act provides that the goods must be of "merchantable quality," and that means that the goods must be without flaw.
E)When you buy a car, and the contract speaks only of the car and the price, you are entitled to receive good title, to acquire quiet possession and a car free from any encumbrances (i.e., a claim by a bank).
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49
Explain what obligation the Sale of Goods Act puts on the seller with respect to fitness and quality.
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50
The Sale of Goods Act places certain obligations on the seller with respect to conveying the title.What are those requirements?
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51
Explain what is meant by merchantable quality.
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52
Where the parties fail to state a price in a sale of goods transaction, what effect will the Sale of Goods Act have on that agreement?
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53
In commercial transactions, courts view exemption clauses as having been negotiated terms of the contract with consideration calculated on the basis of the liability associated with the clause and, therefore, are reluctant to overturn these clauses when they are clear and contain no ambiguity.
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54
If goods are purchased by description or by sample and what is actually delivered does not match the description or sample, caveat emptor applies.
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55
What are the rights of the purchasers when the goods do not match the description?
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56
When the sale of goods is involved and a specific price has not been agreed upon, a reasonable price must be paid.
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57
Mrs.Quale bought a new sewing machine from Androcles' Sewing Centre because she thought that, as well as using it herself, her daughter, Susan, would also be able to use it for her high school home economics projects.Unfortunately, because of a manufacturing defect, the machine ran wild when Susan was using it and it destroyed her project, sewed the end of her finger, and sprayed oil all over the carpet.Androcles' Sewing Centre had bought the machine from Midmen Distributors Ltd., which had bought it originally from the manufacturer, General Stitchers Inc.Which one of the following statements is false with respect to the available remedies in this situation?
A)Midmen Distributors Ltd.has an action against General Stitchers Inc.for breach of an implied condition of merchantable quality.
B)Midmen Distributors Ltd.bears no liability here because it was just an intermediary in the distribution chain.
C)Androcles' has an action for breach of contract against Midmen Distributors.
D)Susan has an action in tort law against General Stitchers Inc.
E)Mrs.Quale has an action against Androcles' for breach of an implied condition of reasonable fitness for a particular purpose.
A)Midmen Distributors Ltd.has an action against General Stitchers Inc.for breach of an implied condition of merchantable quality.
B)Midmen Distributors Ltd.bears no liability here because it was just an intermediary in the distribution chain.
C)Androcles' has an action for breach of contract against Midmen Distributors.
D)Susan has an action in tort law against General Stitchers Inc.
E)Mrs.Quale has an action against Androcles' for breach of an implied condition of reasonable fitness for a particular purpose.
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58
Each province has passed an international sale of goods act covering international sales transactions, based on the World Trade Organization trade agreement.
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59
Explain the importance of the provisions of the Sale of Goods Act relating to fitness and quality of the goods.
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60
Quiet possession means that goods have to be usable as intended without interference.
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61
Distinguish between attachment and perfection under the Personal Property Security Act.
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62
Regarding the Federal Competition Act, which of the following is true with respect to types of prohibited conduct?
A)An offence is committed where a merchant sets the price of a product below that of the competition.
B)Telemarketers commit an offence when there is failure to disclose the identity of the seller, the nature of the product, and the price.
C)Product performance claims based on sound scientific testing are an offence.
D)Any advertising or representation to promote a product is prohibited.
E)Prohibited conduct includes competitors bidding on a particular project.
A)An offence is committed where a merchant sets the price of a product below that of the competition.
B)Telemarketers commit an offence when there is failure to disclose the identity of the seller, the nature of the product, and the price.
C)Product performance claims based on sound scientific testing are an offence.
D)Any advertising or representation to promote a product is prohibited.
E)Prohibited conduct includes competitors bidding on a particular project.
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63
The protection of consumers is solely a provincial responsibility.
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64
Discuss the function of the federal Competition Act and the role it plays in consumer protection.
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65
Multilevel marketing organizations, where funds distributed are obtained from the sale of products, are otherwise known as pyramid schemes.
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66
As the fishing season slowed down in the fall, Bob decided that this might be a good time to find a real bargain in used equipment for his boat.He found a navigation instrument for sale for $15 000, a great price.However, he only had $10 000, so he borrowed the other $5000 from the bank.He also signed a chattel mortgage on the equipment as collateral in favour of the bank, which promptly registered its interest in the Personal Property Registry.Bob made his payments for a while, but things started to go badly for him.He was unable to make any further payments, although he still owed more than $3000.Desperate and not thinking too clearly, Bob sold his boat to his friend Claude for $50 000 and left for Central America with the funds.When the bank realized what Bob had done, it located the boat and demanded that Claude pay off the $3000+ or lose the navigational equipment.Claude was outraged because he had paid Bob in good faith and argued that he had never borrowed anything from the bank and therefore owed it nothing.Which one of the following statements accurately describes the legal situation here?
A)Because Bob transferred the boat and equipment to Claude, that was an assignment of his obligations and he no longer owed the debt.
B)If the bank does seize the equipment and sells it for $2000, the bank can still sue Claude for the $5000.
C)Claude is right, and the bank's only remedy is to sue Bob.
D)If Claude is unwilling to pay off the $3000+, the bank has the right to remove the equipment from the boat.
E)If the bank had failed to register the chattel mortgage, it would still have a better right to the equipment than Claude, because the mortgage was signed before Bob sold the boat to him.
A)Because Bob transferred the boat and equipment to Claude, that was an assignment of his obligations and he no longer owed the debt.
B)If the bank does seize the equipment and sells it for $2000, the bank can still sue Claude for the $5000.
C)Claude is right, and the bank's only remedy is to sue Bob.
D)If Claude is unwilling to pay off the $3000+, the bank has the right to remove the equipment from the boat.
E)If the bank had failed to register the chattel mortgage, it would still have a better right to the equipment than Claude, because the mortgage was signed before Bob sold the boat to him.
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67
In the case of Bernard Madoff, a scheme was created as an investment program in which the early investors were paid out returns on their investments, not from earnings but from funds supplied by later investors, although they thought the earnings were the results of successful investments. Which of the following describes this scheme?
A)Ponzi scheme
B)Pyramid scheme
C)Price fixing scheme
D)Conspiracy scheme
E)Bait-and-switch scheme
A)Ponzi scheme
B)Pyramid scheme
C)Price fixing scheme
D)Conspiracy scheme
E)Bait-and-switch scheme
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68
The Federal Competition Act refers to predatory pricing as "abuse of dominant position."
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69
There is a cooling-off period in all consumer sales transactions where the purchaser of goods has a period of time in which to change his mind.
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70
Identify which of the following statements is true about secured transactions in provinces having a personal property security act.
A)Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., are regulated by their own distinct statutes.
B)All kinds of security arrangements involving personal property as collateral now come under one statute.
C)An assignment of an account receivable does not qualify as a security arrangement because no tangible property is involved.
D)This kind of transaction, which formerly was legal, is now prohibited by law in all provinces.
E)Only tangible personal property can be used as security.
A)Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., are regulated by their own distinct statutes.
B)All kinds of security arrangements involving personal property as collateral now come under one statute.
C)An assignment of an account receivable does not qualify as a security arrangement because no tangible property is involved.
D)This kind of transaction, which formerly was legal, is now prohibited by law in all provinces.
E)Only tangible personal property can be used as security.
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71
What purpose is served by requiring the creditor to register his or her secured transaction?
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72
The Canada Consumer Product Safety Act (2011) gives regulators the power to force the immediate recalls of dangerous products and requires manufacturers to report incidents of products causing injury and to keep detailed records so that sold products can be traced.The passage of this Act also involved major changes to the Hazardous Products Act.
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73
Unconscionable transactions statutes apply to any transaction where the price paid is not fair or reasonable.
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74
Which of the following is not a term implied by the Sale of Goods Act?
A)The goods are of merchantable quality.
B)Where the goods are bought by sample, the bulk will match the sample.
C)The statements of the salesperson are part of the contract of sale.
D)There are no liens on the goods.
E)The goods must match the description given of them.
A)The goods are of merchantable quality.
B)Where the goods are bought by sample, the bulk will match the sample.
C)The statements of the salesperson are part of the contract of sale.
D)There are no liens on the goods.
E)The goods must match the description given of them.
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75
Tina's Gourmet Catering Ltd.(hereinafter referred to as "Tina's") makes several types of fresh salads, which it packages in sealed containers and sells to various retail outlets.Grandma Wright, shopping with her daughter Jane, bought one of Tina's salads at the delicatessen at Superdeal Grocers Ltd.(Superdeal).Jane and her grandmother drove to Jane's home, and Jane served the salad to her family for lunch.The salad was contaminated through Tina's carelessness and caused Jane's family to be very sick: the father missed work and the kids missed school for a week.Neither Jane nor her grandmother was sick because neither sat down with the others for lunch.On these facts, which of the following actions would most likely be successful?
A)Grandma v.Superdeal for negligence
B)Kids v.Tina's for negligence
C)Jane v.Tina's for negligence
D)Father v.Superdeal for negligence
E)Father v.Superdeal for breach of contract
A)Grandma v.Superdeal for negligence
B)Kids v.Tina's for negligence
C)Jane v.Tina's for negligence
D)Father v.Superdeal for negligence
E)Father v.Superdeal for breach of contract
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76
Attachment takes place:
A)When perfection is completed
B)Upon registration of the claim
C)When a contract is executed
D)When the creditor takes possession of the property
E)When a debtor receives some value under the contract
A)When perfection is completed
B)Upon registration of the claim
C)When a contract is executed
D)When the creditor takes possession of the property
E)When a debtor receives some value under the contract
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77
Real and personal property can be used to secure a loan.
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78
Which of the following statements accurately states the law with respect to consumer transactions?
A)Where the court decides that a transaction was unconscionable, that transaction is unenforceable by the buyer.
B)Where a supplier engages in a deceptive or unconscionable act, he is neither subject to fines nor jail.
C)In most provinces, legislation makes false or misleading statements in advertising or made by a salesperson an unfair business practice, but this is not actionable as a breach.
D)In all consumer transactions, there is a cooling-off period of seven days in which the consumer can call off the deal.
E)In most provinces, legislation makes false or misleading statements in advertising or made by a salesperson a term of the contract and, therefore, actionable as a breach.
A)Where the court decides that a transaction was unconscionable, that transaction is unenforceable by the buyer.
B)Where a supplier engages in a deceptive or unconscionable act, he is neither subject to fines nor jail.
C)In most provinces, legislation makes false or misleading statements in advertising or made by a salesperson an unfair business practice, but this is not actionable as a breach.
D)In all consumer transactions, there is a cooling-off period of seven days in which the consumer can call off the deal.
E)In most provinces, legislation makes false or misleading statements in advertising or made by a salesperson a term of the contract and, therefore, actionable as a breach.
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79
Identify which of the following statements is true about secured transactions in provinces having a personal property security act.
A)All kinds of security arrangements involving personal property as collateral now come under one statute.
B)Only tangible personal property can be used as security.
C)An assignment of an account receivable does not qualify as a security arrangement because no tangible property is involved.
D)Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., are regulated by their own distinct statutes.
E)This kind of transaction, which formerly was legal, is now prohibited by law in all provinces.
A)All kinds of security arrangements involving personal property as collateral now come under one statute.
B)Only tangible personal property can be used as security.
C)An assignment of an account receivable does not qualify as a security arrangement because no tangible property is involved.
D)Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., are regulated by their own distinct statutes.
E)This kind of transaction, which formerly was legal, is now prohibited by law in all provinces.
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80
Parties to a contract can override the Sale of Goods Act's implied conditions and warranties related to title, fitness, quality, and nature by including exemption clauses in the form of limited warranties.
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