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Contemporary Canadian Business Law

Business

Quiz 12 :

The Extent of Contractual Rights

Quiz 12 :

The Extent of Contractual Rights

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The Four Guys Garage advertised automobile repairs by "Licensed Mechanics." Terry, a car owner, took his automobile to the Four Guys Garage for repairs. The garage owner, Todd, examined the car, and indicated that extensive repairs were required. Terry left his car with Todd, and the repairs were carried out by another licensed mechanic, Rod, an employee. Terry paid $150 for the repairs, but on his way home discovered that the repairs had been done negligently, and had ruined the engine. Terry may only sue Rod, the mechanic that negligently performed the service.
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Kathy sells her business to Lucy for $40,000 including the stock, the goodwill, and the remainder of the lease. The landlord agrees that Kathy may end her involvement with the leased premises and that Lucy may take over the remainder of the lease on the same terms, and a new lease reflecting this is drawn up and signed by the landlord and Lucy. This new lease is an example of
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C

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Sylvia obtained a full release from the payment of her car loan when she gave the car to her friend, Victoria, who agreed to make all the remaining payments. The arrangement was acceptable to the bank that had made the loan. The bank cancelled the loan and replaced it with one in Victoria's name. This is
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C

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Chris was indebted to Kirk for a loan of $1,000. Kirk assigned Chris' promise to pay to Bryce. The assignment must be of the entire agreement between Chris and Kirk.
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Mr. Black enters into a contract with Build-It Construction Ltd. for the construction of a house. The house is not built in accordance with the contract. Mr. Black sues Build-It Construction Ltd. seeking $200,000 in damages. He is successful, but discovers that Build-It Construction Ltd. has insufficient assets to satisfy the judgment as it regularly transfers its assets to its parent company Build-It Holding Company Inc. Can Mr. Black collect the $200,000 from Build-It Holding Company Inc.
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Chris was indebted to Kirk for a loan of $1,000. Kirk assigned Chris' promise to pay to Bryce. The assignment by Kirk to Bryce must be in writing to be an effective assignment.
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The Block furniture store granted credit to many customers for the purchase of furniture and appliances. It had separate categories for furniture credit and appliance credit. It statutorily assigned its furniture credit to Prestige Financing Inc. and its appliance credit to Gold Stream Financing Ltd. Karim purchased a bed for $700 and a stove for $700 from The Block and received financing for both purchases on the same contract. When The Block's contracts were assigned, Karim's was assigned to both assignees. On Monday he received a notice of assignment from Prestige Financing Inc. and on Tuesday from Gold Stream Financing Ltd. To whom should Karim make his next payment?
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The Four Guys Garage advertised automobile repairs by "Licensed Mechanics." Terry, a car owner, took his automobile to the Four Guys Garage for repairs. The garage owner, Todd, examined the car, and indicated that extensive repairs were required. Terry left his car with Todd, and the repairs were carried out by another licensed mechanic, Rod, an employee. Terry paid $150 for the repairs, but on his way home discovered that the repairs had been done negligently, and had ruined the engine. The Four Guys Garage is liable to Terry under the vicarious performance rule for Rod's negligence.
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On March 6th, the Limestone Student Society entered into a contract with the "Stumbling Stones", a rock group, to give a performance at the Limestone University Students' Union on March 31st. On March 29th, the "Stumbling Stones" fell ill with the flu and were unable to travel to Limestone City. Another rock group was contacted by the Stumbling Stones to appear in their place and arrived at the Students' Union in time to perform. The contract, by its nature, is not subject to vicarious performance.
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Carten Printing receives an unexpectedly large order for shipping envelopes from one of its regular clients, a major Canadian CD-ROM retailer. In order to meet the order delivery date, Carten farms out part of the printing to another firm, Serger Printing. Serger, in an attempt to raise its own profit margin on the deal, uses lower grade adhesive and cuts corners on printing quality. The faulty shipping envelopes show up as returns made to the retailer from dissatisfied customers. The retailer takes action against Carten for damages. What is the most likely outcome?
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The party who holds property for the benefit of another under a trust agreement or arrangement is known as the
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Transfer of rights can be accomplished through which of the following:
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On March 6th, the Limestone Student Society entered into a contract with the "Stumbling Stones", a rock group, to give a performance at the Limestone University Students' Union on March 31st. On March 29th, the "Stumbling Stones" fell ill with the flu and were unable to travel to Limestone City. Another rock group was contacted by the Stumbling Stones to appear in their place and arrived at the Students' Union in time to perform. The contract, by its nature, is not subject to assignment.
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The Four Guys Garage advertised automobile repairs by "Licensed Mechanics." Terry, a car owner, took his automobile to the Four Guys Garage for repairs. The garage owner, Todd, examined the car, and indicated that extensive repairs were required. Terry left his car with Todd, and the repairs were carried out by another licensed mechanic, Rod, an employee. Terry paid $150 for the repairs, but on his way home discovered that the repairs had been done negligently, and had ruined the engine. Money damages awarded by the court for the negligence would be approximately equal to Terry's loss.
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Luxury Homes Ltd. contracts with Eliza to build her house. The electrical work is completed by Firefly Electric Ltd. under a contract it entered into with Luxury Homes Ltd. The electrician was Wilbur, an employee of Firefly. Eliza moves into the house and three months later it burns to the ground as a result of faulty wiring. Who can Eliza sue for breach of contract?
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On March 6th, the Limestone Student Society entered into a contract with the "Stumbling Stones", a rock group, to give a performance at the Limestone University Students' Union on March 31st. On March 29th, the "Stumbling Stones" fell ill with the flu and were unable to travel to Limestone City. Another rock group was contacted by the Stumbling Stones to appear in their place and arrived at the Students' Union in time to perform. The privity of contract rule would entitle the Limestone Students' Society to reject the substitute rock group and prevent them from performing.
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Precision Engineering receives a contract to design and build a sewage treatment plant from the town of WaWa. It designs the project and assigns the construction to Dynamic Construction Ltd. The contract has no provisions regarding assignment. Can Precision make the assignment to Dynamic?
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A business may raise capital by assigning its existing accounts receivable to a collections company or bank in return for an immediate lump-sum percentage payment. What is this method of raising capital called?
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Hammond sells her house to Mendoza for $165,000 subject to a mortgage from Imperial Bank for $90,000. Hammond's mortgage had been arranged at a time when interest rates were low, and prevailing interest rates are now much higher. Mendoza would very much like to assume Hammond's obligation to pay under the existing mortgage, rather than arrange a more costly replacement from his own banker. Imperial Bank is indifferent as to who is repaying the debt as Mendoza is just as acceptable a credit risk as was Hammond. Mendoza pays Hammond the $75,000 difference and takes over both the house and her mortgage. This arrangement is an example of
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On March 6th, the Limestone Student Society entered into a contract with the "Stumbling Stones", a rock group, to give a performance at the Limestone University Students' Union on March 31st. On March 29th, the "Stumbling Stones" fell ill with the flu and were unable to travel to Limestone City. Another rock group was contacted by the Stumbling Stones to appear in their place and arrived at the Students' Union in time to perform. The Limestone Student Society must allow the substitute rock group to perform by virtue of the legal doctrine of vicarious performance.
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