Question 1

For there to be punitive damages,there must have been fraudulent misrepresentation.

Accepted Answer

Punitive damages are awarded in cases of fraud, which includes fraudulent misrepresentation.

Question 2

If Martin bought a property from Nevin,knowing (because it was noted on the title deeds)that Nevin had agreed to a restrictive covenant in his contract to purchase the property from Olan,Martin must conform to the restrictive covenant even if it is not included in his contract with Nevin.

Accepted Answer

Martin is bound to the restrictive covenant because it was noted on the title deeds and therefore he had notice of it before purchasing the property from Nevin.

Question 3

Able contracts to build a computerized printing press for Baker.Able subcontracts some of the work on the computerized components to another company,Charlie Co. ,which wired a vital component negligently.The repairs are very costly for Baker.He can sue Able for the losses caused by Charlie Co.

Accepted Answer

Able is responsible for the work done by its subcontractor, Charlie Co. Therefore, Baker can sue Able for the losses caused by Charlie Co's negligence.

Question 4

Mr.Richards instructed the contractor building his new house to face it with a special synthetic marble made by Messalot Ltd.Messalot had promised Mr.Richards in writing that the synthetic marble would last longer than the Parthenon and be in better shape.Within three months of its installation,which was properly done,the "marble" was cracking,discolouring,and crumbling at the seams.Mr.Richards can sue Messalot successfully although it was not he but the contractor who made the purchase from Messalot.

Accepted Answer

Mr. Richards can sue Messalot successfully because he was the ultimate consumer of the product and the promise was made directly to him in writing. It is the responsibility of the manufacturer to ensure that their product is of good quality and meets the promises made.

Question 5

Kevin was injured when a bottle of pop,purchased by Katie and given to him,exploded in his hand.Kevin cannot sue the manufacturer in contract and receive damages for his injuries because he lacks privity of contract.

Accepted Answer

Privity of contract refers to the direct relationship between parties who have entered into a contract. If Kevin did not purchase the bottle of pop himself, he does not have a direct contractual relationship with the manufacturer. Therefore, he cannot sue them in contract. However, he may still be able to sue for negligence or another tort.

Question 6

Your car dealer hands you documents for your signature,"the paperwork on the deal" you have just shaken hands on.Among the papers is an undiscussed extended warranty plan.You sign all the documents where the dealer so indicated.You first become aware of the warranty when its cost is automatically debited from your chequing account.Your successful defence to further payments will be non est factum.

Accepted Answer

Non est factum is a defense used when the signing party was mistaken about the nature of the document due to misrepresentation or lack of understanding, not when they failed to read the document. In this case, the signer's failure to read or notice the extended warranty in the documents they signed does not typically qualify for non est factum, as the defense requires a fundamental misunderstanding of the document's nature, not merely an oversight of its contents.

Question 7

Generally,a party is under a duty to disclose material facts to the other contracting party,and failure to do so is a violation of his or her duty of utmost good faith.

Accepted Answer

In general contract law, there is no broad duty to disclose material facts to the other party unless there is a fiduciary relationship, a specific duty is outlined in the contract, or the nondisclosure constitutes fraud or misrepresentation.

Question 8

Dick and Jane agree that Susie must pay each of them $10 per month.They sign a contract and show it to Susie,who makes no objection to it.Neither Dick nor Jane may enforce the contract against Susie if she fails to pay.

Accepted Answer

For a contract to be enforceable, there must be mutual consent and consideration. Susie did not agree to the contract terms, so she is not bound by it.

Question 9

Susan,who is functionally illiterate,asks her friend Jane to read a document aloud to her.She is to sign it in order to purchase chinchillas from Patricia to start a breeding farm.Actually it is a deed transferring ownership of Susan's farm to Patricia and,unknown to Susan,Patricia and Jane have made a secret agreement to sell the farm and share the proceeds.
-Since Susan did what was reasonable to deal with her own inability to read,she could raise the defence of non est factum to an action by Patricia to get possession of the farm.

Accepted Answer

Non est factum is a defence available to a person who signed a document without knowledge of its nature and content due to their inability to read it. In this case, Susan had asked her friend Jane to read the document aloud to her and had no knowledge of the secret agreement between Jane and Patricia to sell the farm. Therefore, Susan could raise the defence of non est factum to an action by Patricia to get possession of the farm.

Question 10

Bob applied to the municipality of Smallville for a permit to build an addition onto his home.He contacted the municipal offices by telephone to inquire about the fee for the permit.The building official was unavailable,but the municipal clerk told Bob she thought the current fee was $100 per 1,000 square feet.Bob's new addition was planned to be 3,500 square feet,so he attached a cheque in the amount of $350 to his application and delivered it to the building office.When the permit was approved and returned,a note was attached to it that read that all building permits now cost a flat fee of $250.No money accompanied the note.Bob contacted the municipal offices requesting a refund of his $100.He was told by the clerk that there was no municipal by-law authorizing the repayment of excess fees paid to the municipality so she had no authority to process his refund.Bob would probably be unable to obtain the money he paid in error.

Accepted Answer

The answer of Bob applied to the municipality of Smallville...

Question 11

Misrepresentation by non-disclosure renders a contract voidable at the option of the party misled.

Accepted Answer

Non-disclosure can be considered a misrepresentation if information is intentionally or negligently withheld, and if the non-disclosure is significant enough to affect the decision-making of the other party. Misrepresentation by non-disclosure can render a contract voidable, meaning the party who was misled has the option to terminate the contract.

Question 12

Given the degree to which courts are willing to enforce contracts subject to mutual mistake,cases of this sort tend to place greater hardship upon defendants than plaintiffs.

Accepted Answer

The statement is incorrect. Cases of mutual mistake can place equal hardships on both plaintiffs and defendants, depending on the specific circumstances of the case. The court will consider factors such as whether the mistake was material, whether it could have been reasonably avoided, and the extent to which each party relied on the mistaken assumption. Ultimately, the court will seek to achieve an outcome that is fair and just for both parties.

Question 13

Fraudulent misrepresentation renders a contract void ab initio.

Accepted Answer

Fraudulent misrepresentation makes a contract voidable at the option of the misled party, not void ab initio.

Question 14

Joe,a university student,commuted to and from classes by public transit.He decided that he had to buy a car because the bus service was terrible.Ryan was discussing this problem with Joe and said that he wanted to sell his car in order to purchase a motorcycle.Knowing the car's good condition,Joe said he would buy it.Ryan told him to come by to pick up the car in two days.Neither of them know that Ryan roommate had borrowed the car that day and had destroyed it in an accident.This is not a cause of mistake of fact because the two were both clear as to the subject matter of the contract.

Accepted Answer

The situation described is a mistake of fact because both parties were unaware of the car's destruction, which is a fundamental aspect of the contract.

Question 15

Innocent misrepresentation renders a contract voidable at the option of either party.

Accepted Answer

Innocent misrepresentation renders a contract voidable at the option of the misled party, not either party.

Question 16

Undue influence is not the same legal concept as duress.Despite this,both constitute grounds for rescission by the affected party.

Accepted Answer

Undue influence and duress are both different legal concepts, but both can lead to a contract being rescinded by the affected party.

Question 17

In the situation where misrepresentation occurs,where there has been rescission,there must have been reliance.

Accepted Answer

Rescission occurs when a contract is canceled because of a material misrepresentation. In order for rescission to occur, the deceived party (the one who was misled by the misrepresentation) must have relied on the misrepresentation in entering into the contract. Without reliance, there can be no rescission.

Question 18

Susan,who is functionally illiterate,asks her friend Jane to read a document aloud to her.She is to sign it in order to purchase chinchillas from Patricia to start a breeding farm.Actually it is a deed transferring ownership of Susan's farm to Patricia and,unknown to Susan,Patricia and Jane have made a secret agreement to sell the farm and share the proceeds.
-Susan could not raise the defence of non est factum if the document she signed was one to purchase chinchillas but for a much higher price than Jane read to her.

Accepted Answer

Susan could not raise the defence of non est factum because she was not illiterate and could have read the document herself.

Question 19

Susan,who is functionally illiterate,asks her friend Jane to read a document aloud to her.She is to sign it in order to purchase chinchillas from Patricia to start a breeding farm.Actually it is a deed transferring ownership of Susan's farm to Patricia and,unknown to Susan,Patricia and Jane have made a secret agreement to sell the farm and share the proceeds.
-If Susan is successful in her defence of non est factum,the courts will grant rectification of the deed transferring the land,and Susan will be able to keep the farm.

Accepted Answer

Non est factum is a defense that can render a contract void, not subject to rectification. If successful, the deed would be void, and Susan would retain ownership of the farm without needing rectification.

Question 20

If Alan is a beneficiary of his father's life insurance with Avuncular Life,he has the statutory right to enforce payment if his father dies and Avuncular refuses to pay on the grounds that Alan lacks privity of contract with it.

Accepted Answer

As a beneficiary, Alan has the right to enforce payment from the insurance company even though he did not enter into a contract with them directly. This is known as the third-party beneficiary rule.

Quiz 4: Enforceability of Contractual Rights