Contemporary Canadian Business Law

Business

Quiz 8 :

The Requirement of Consideration

Quiz 8 :

The Requirement of Consideration

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A and B are neighbours. Before A left on a holiday, he asked B to "keep an eye on his house." While A was on holidays, B noticed that A's lawn was in need of cutting and proceeded to cut the lawn. On A's return from his holiday, B demanded $10 for cutting the lawn. B would not be entitled to claim anything for his service because his act was gratuitous.
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A and B are neighbours. Before A left on a holiday, he asked B to "keep an eye on his house." While A was on holidays, B noticed that A's lawn was in need of cutting and proceeded to cut the lawn. On A's return from his holiday, B demanded $10 for cutting the lawn. A's statement was a request for service, and hence B may claim for his service of cutting of the lawn on the basis of quantum meruit.
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A bicycle repair shop replaced a wheel on Zoe's mountain bike after she had run over a nail in the street. The repairman said that, although the new tire was not the same brand that had been on the bike when she bought it, not only was it of better quality and would be dependable, it was less expensive too. As Zoe biked down a busy street the tire tube popped causing her to lose control and fall into traffic. She suffered broken bones and internal injuries resulting in lost pay at work. Zoe's lawyer suggested using estoppel as grounds for her case. Which of the following are elements upon which estoppel can be used to argue her case?
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Cyril owed Robert $12,000 but since he had lost his job, he could only pay $7,000. Reluctantly, Robert agreed, since they were old friends, to accept the lesser amount as full payment of the debt, and Cyril gave him the money. Now Robert has heard that Cyril has just won a huge amount in a lottery, but Cyril will not pay him the rest of the debt. "A deal's a deal," he says.
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Regarding consideration, the following questions can help determine whether there is a contract rather than a gratuitous promise: 1. Is the consideration past consideration? 2) Is the proposed consideration legal? 3) Is there consideration flowing in both directions? 4) Does it have value in each direction? 5) If not, is there an exception?
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A and B are neighbours. Before A left on a holiday, he asked B to "keep an eye on his house." While A was on holidays, B noticed that A's lawn was in need of cutting and proceeded to cut the lawn. On A's return from his holiday, B demanded $10 for cutting the lawn. A and B have a binding contract for the cutting of the lawn, because A's statement constituted an offer to B to cut the lawn, which B accepted.
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The Queen's Wardrobe, a dressmaking boutique, agrees to make Rhonda's wedding dress for $2,000. The dress is to be ready for her wedding on June 1st. On May 14th, Jane, the owner called Rhonda to tell her that the dress would not be ready on time unless Rhonda agreed to pay an extra $500 so that Jane could hire someone to help her finish the lace embroidery. Rhonda is very upset, and feeling that she has no other choice, agrees. When she picks up the dress, she tells Jane that she does not think that it is fair that she should have to pay more than they had agreed upon and refuses to do so.
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Jane looked after Colin's dog in February. In May, Jane went away and asked Colin, in return, to look after her cat. Colin refused. Did Colin breach a contract?
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Chris offered to take Kelly to the movie. Kelly went to the movie theatre but Chris did not arrive. Can Chris sue Kelly for breach of contract?
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A small company, Software Design Limited, was indebted for $150,000 to a sole individual, and it is now due. This individual was an investor who was a former classmate of the firm's president, Angela. Owing to a reversal of fortunes for the company, Software Design could now only repay $100,000. With her investor chalking the affair up to experience, Angela intended the firm to repay what it could now, and then she would wind up the company. A few weeks after paying off her creditor at $100,000, but before she could wind up the company, a new investor with both ideas and money approached her and encouraged Angela to continue on in the business. Once Angela's former classmate heard of the new investor, she demanded the balance due on her loan. Angela briefly considered repaying more, but her new investor demanded a hardline approach. Angela was holding the repaid note in her hands as her later investor said "Neither you nor she could see the future when she agreed to accept $100,000. But accept she did. Business is business."
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Mr. Megabucks promises the Turtle Preservation Society of Victoria that he will give it $500,000, provided it names the new headquarters building it wants to erect after him. The President of the Society tells him that his generous donation will allow them to carry on their turtle preservation work while getting decent working conditions for their staff and, at a ground-breaking ceremony soon after, the announcement is made that the building will be named after Mr. Megabucks. Four months later, Mr. Megabucks suffers severe business reversals and decides to withdraw his promise.
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Jane agreed to look after Colin's dog in February if he would look after her cat in May. In May, Colin refused to look after Jane's cat. Did Colin breach a contract?
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Under the Civil Code of Quebec, a contract ___________________ consideration to be enforceable.
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Dimitri wrote to Pat offering to sell his neo-expressionist painting, "Red Sails in the Sunset," for $25,000. Pat replied that, since it would require that he redecorate, he could not really pay more than $18,000 for the painting. Dimitri replied that he was greatly hurt and deeply insulted by such an offer, especially from someone who was supposed to be a connoisseur of fine art, but that, since he was a little tight for cash, he would be willing to let it go to Pat for $13,000 for old times' sake. Pat immediately replied, saying that he accepted the painting at $13,000 and enquiring whether Dimitri wanted it in cash. Dimitri then realized that he had typed "$13,000" instead of "$23,000" in his second letter to Pat.
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Metro Auto Parts supplies many garages with auto parts. On its invoice it says that the amount is due in 30 days but will be reduced by 10% if paid within 15 days. Is Metro Auto Parts bound in contract to give its customers the discount if they pay early?
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The act of performing a contract or the offer of payment of money due under a contract is known as a(n):
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Chu, a non-swimmer, fell off a ferry boat into the lake. "Help!" he cried. "$100 to the person who saves me!" Frances, a passenger on the ferry, then jumped in and held Chu's head above water until the boat's dinghy could reach them.
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While Marion was on extended holiday, her property became overgrown, principally with noxious weeds. Her municipality wrote to her home address threatening a $500 fine and the attendance of a municipal crew to control the problem with a further fee of $350. Marion's neighbour, George, who was tending her mail, read the notice and telephoned her and told her he would see to the cleanup job. In time, he forgot to do so, and the municipality performed the work, leaving a bill for Marion of $850. Upon Marion's return she was enraged at George's failure, and sued him in Small Claims Court for the $850.
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Which of the following charitable pledges will be sufficient to find consideration on the part of the recipient?
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The Big Book Store just received a shipment of 100 copies of Contemporary Business Law: Principles and Cases at wholesale price. The store contacted the local university to see if it was interested in purchasing the book. The bookstore faxed an offer of $5,000.00 for the 100 books. Due to a poor quality fax transmission the last three zeros were not visible. Upon receiving the offer, it appeared that the 100 books were on sale for $500. The university accepted the offer, received the books and deposited $500.00 in the store's bank account. Upon receiving its bank statement, the store realized the error and decided to take action against the university. Will it succeed?
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