Question 1

When there is disagreement over the meaning of a term in a contract,the normal approach taken by the courts is to apply the most reasonable interpretation,although the courts will refuse to imply terms into the agreement that the parties have left out.

Accepted Answer

The answer of When there is disagreement over the meaning...

Question 2

A misrepresentation must be a false statement of fact unless it is a statement by an expert.

Accepted Answer

A misrepresentation must be a false statement of fact, unless it is a statement made by an expert whose opinion is given in their professional capacity. In that case, the misrepresentation may be a false statement of opinion.

Question 3

With regard to the law concerning misrepresentation,which of the following is true?
A)A statement of opinion can be a one-sided mistake.
B)The case law provides a remedy for a wildly exaggerated claim,such as "This is the best car ever built."
C)A buyer could not be awarded the equitable remedy of rescission if the seller honestly believed that the misrepresentation was true.
D)For fraudulent misrepresentation,the buyer could ask only for the equitable remedy of rescission.
E)A misrepresentation can be a false assertion of fact that induces (persuades)the party to contract,and need not be an assertion about a term of the contract.

Accepted Answer

A misrepresentation can be a false assertion of fact that induces (persuades) the party to contract and need not be an assertion about a term of the contract. Option A is incorrect because a statement of opinion cannot be a one-sided mistake. Option B is incorrect because case law does not provide a remedy for a wildly exaggerated claim. Option C is incorrect because a buyer could be awarded the equitable remedy of rescission even if the seller honestly believed that the misrepresentation was true. Option D is incorrect because for fraudulent misrepresentation, the buyer could ask for both the equitable remedy of rescission and the legal remedy of damages.

Question 4

Which of the following will have the likely consequence of the court finding the contract void on the grounds of mistake?
A)Mr.Ideer bought some property,erroneously thinking that the province was planning to put a highway nearby,even though the seller had never made any such suggestion.
B)Mr.Twigg carelessly signed a mortgage for $24 000,which he was told was a mortgage for only $14 000.This was assigned to Mr.Jones.
C)The parties signed a document that stated the consideration as $1200 instead of the $1100 that the buyer and seller had contracted for,but the buyer cannot prove the terms of the original contract.
D)Mr.Ille (a blind man),although using due care,signed a cheque for $100 in favour of his caretaker,who had told him it was a receipt for money received.
E)Mr.Jones,without reliance on a salesperson,purchased an Android table from a store,thinking it ran the Apple iOS.

Accepted Answer

The answer of Which of the following will have the...

Question 5

Mr.and Mrs.H were induced to sign a mortgage in favour of M Co.Ltd.by Johnston,a man living with their daughter.Johnston led them to believe that the document was an unimportant amendment to an existing mortgage,when in reality it was a second substantial mortgage of their home.Neither read the document nor questioned it.When the payments were in arrears,the mortgagee took an action for foreclosure (to take Mr.and Mrs.H's home).Which of the following is correct with respect to the legal position of the parties?
A)Mr.and Mrs.H will likely have to honour the mortgage contract even though they didn't read it.
B)If the court finds that Johnston has committed a fraudulent misrepresentation,Mr.and Mrs.H will not have to honour the mortgage.
C)If the court finds that this is an example of undue influence by Johnston,Mr.and Mrs.H will not have to honour the mortgage.
D)If the court finds that this is an example of duress by Johnston,Mr.and Mrs.H will not have to honour the mortgage.
E)If Mr.and Mrs.H can show they didn't read the document,they will not have to honour the mortgage contract.

Accepted Answer

The answer of Mr.and Mrs.H were induced to sign a...

Question 6

Often a party to a contract wants to avoid his or her obligations by arguing that the contract was entered into because of a mistake,misrepresentation,undue influence,or duress.Which of the following is true with regard to these areas of the law?
A)A buyer could not be awarded the equitable remedy of rescission if the seller honestly believed that his or her misrepresentation,which persuaded the buyer to buy,was true.
B)Independent legal advice given to a person is good evidence of undue influence.
C)If a seller persuades a person to buy something by an innocent misrepresentation,the buyer could ask for rescission and damages for the tort of deceit.
D)Where a written document embodies the original oral agreement,a party to the contract could ask the court for the equitable remedy of rectification.
E)An illiterate or blind person might successfully argue non est factum and avoid his or her obligations under a contract only if he or she was misled about the very nature of the document and was not careless.

Accepted Answer

An illiterate or blind person can argue non est factum to avoid contract obligations if misled about the document's nature and not careless.

Question 7

In order to succeed in suing for a misrepresentation,that misrepresentation must have been in writing.

Accepted Answer

A misrepresentation can be oral or in writing, and a successful lawsuit can be pursued in either case. However, if the misrepresentation was in writing, it may be easier to prove and provide evidence in court.

Question 8

For a misrepresentation to be actionable,it must become a term of the contract.

Accepted Answer

Misrepresentation does not need to become a term of the contract to be actionable; it simply needs to be a false statement of fact that induced the other party to enter into the contract.

Question 9

Len's new secretary asked him to sign four letters that she said concerned general office matters.One of the "letters" was,in fact,a cheque for $500,payable to the secretary.The secretary cashed the cheque at her bank,and when her bank presented the cheque for payment,Len refused to pay it.He said he had been tricked and it was all a mistake.On these facts,which of the following is true?
A)Len would be obligated to honour the cheque no matter how careful he had been.
B)Even if Len had been careless,he will not have to honour the cheque.
C)Len may be able to avoid his obligation on the cheque on the basis of duress.
D)Len may be able to avoid his obligation on the cheque on the basis of unconscionability.
E)Len may be able to avoid his obligation on the cheque on the basis of non est factum.

Accepted Answer

Len may be able to avoid his obligation on the cheque on the basis of non est factum, which applies when a person signs a document not understanding its nature due to a significant mistake, as in this case where Len thought he was signing a letter, not a cheque.

Question 10

Which of the following is an example of an exemption or limitation of liability clause?
A)This contract will automatically terminate in the event that the purchaser orders less than the quota for four consecutive weeks.
B)The parties agree that the law of Ontario applies to any dispute under this agreement.
C)With respect to all information provided by this website,you agree that we shall not be liable for any loss arising out of your use of this information,including without limitation,any indirect or consequential damages.
D)This is the entire agreement between the parties covering everything agreed or understood in connection with the subject matter of this transaction.No oral promises,conditions,warranties,representations,understandings,or interpretations were relied on by either party to execute this contract.
E)The parties agree that any notices required under this agreement be provided by facsimile or other electronic transmission.

Accepted Answer

The clause states that the website will not be liable for any loss arising out of the use of the information provided, including indirect or consequential damages. This is an example of an exemption or limitation of liability clause.

Question 11

Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.

Accepted Answer

The answer of Explain what remedies are available to the...

Question 12

With regard to exemption clauses,which of the following is true?
A)When exemption clauses appear unfair,courts generally will not allow them.
B)Courts are generally reluctant to interfere with exemption clauses,even when they may appear unfair.
C)When an exemption clause leads to an "unconscionable,unfair,or unreasonable result," the doctrine of fundamental breach would apply.
D)To overrule an exemption clause,the courts first consider whether there exists some "overriding policy" on the part of the defendant.
E)Courts are more likely to interfere with a contract in a commercial relationship than with a contract in a consumer relationship.

Accepted Answer

Courts are generally reluctant to interfere with exemption clauses, even when they may appear unfair, as long as they are clear and have been agreed upon by both parties.

Question 13

Jenny went to the store and asked to see an AM-FM clock radio with a tape deck.The salesman brought out a clock radio that he said had all of the features that she wanted.After looking at the price tag and little else,Jenny said she would think about it.The salesman said that this was the most popular model sold,that they sold 1000 of them during the World Series alone,that it had the highest rating in Consumer Reports,and that he only had that one left.Jenny bought it.Later,she found out that all of the statements made to her by the salesman were false,including the one that the clock had all of the features she wanted,because it did not have an AM band.Which of the following is true?
A)The equitable remedy of rescission is available only if Jenny is able to restore the clock radio to the seller.
B)Jenny would only have a remedy for breach of contract (namely,the clock radio did not have an AM band)because none of the other statements was about the clock radio itself.
C)The statements of the salesman are negligent only if the salesman knew they were false.
D)Jenny could obtain the remedy of rescission only if the statements made to induce her to contract were fraudulent.
E)Jenny could return this clock radio to the seller only if she could prove undue influence.

Accepted Answer

Rescission is a remedy that allows the injured party to cancel the contract and return any goods received. However, it requires that the injured party be able to return the goods in their original condition. Therefore, if Jenny cannot restore the clock radio to the seller, she would not be able to use the equitable remedy of rescission.

Question 14

Mr.Rice purchased software online from a major software company based in Ontario,accepting the terms of the standard-form contract when he clicked on "Agree." When the software failed to perform as advertised,Rice complained but his complaints were ignored.When he threatened the software company with legal action,it was then pointed out to him that the contract contained a number of exemption clauses that would preclude Rice from winning in any legal action.Rice filed a lawsuit in Ontario.What is the court's likely approach to this situation?
A)The court would likely refuse to interfere with the terms of the contract based on the "principle of freedom to contract."
B)The courts would consider this a fundamental breach if it found the clauses to be "unconscionable,unfair,and unreasonable."
C)The court would determine that Rice had equal bargaining power and therefore the court could not support his position.
D)The court would support the software company's policy due to "an overriding policy reason."
E)The court is likely to interpret the exemption clauses very narrowly due to the nature of standard-form contracts.

Accepted Answer

The court is likely to interpret the exemption clauses very narrowly due to the nature of standard-form contracts.

Question 15

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

Accepted Answer

Non est factum is a defense used when a person signs a document without understanding its nature due to a fundamental mistake. However, this defense is generally not available if the person acted negligently, such as not reading the document or ignoring its contents.

Question 16

Sam agreed to buy property from Joe to build a store of a certain design.Joe,the vendor,was aware of the design and knew that an easement across the back of the property would prevent such a building being erected,but said nothing.Sam purchased the property,later discovered the easement,and learned that Joe knew about it.He sued for misrepresentation.Discuss the likely outcome.

Accepted Answer

The answer of Sam agreed to buy property from Joe...

Question 17

Distinguish between innocent and fraudulent misrepresentation,indicating why the distinction is important.

Accepted Answer

The answer of Distinguish between innocent and fraudulent misrepresentation,indicating why...

Question 18

John and Sam entered into a contract whereby John would sell auto parts from his junkyard to Sam's Auto Repair.However,they ended up in a dispute over the condition of the parts to be sold and could not agree on the meaning of terms used in the sales contract.John was invoicing Sam's Auto Repair for considerably more money than Sam thought appropriate for the used and often seriously damaged parts.When Sam paid less than the invoice amount,they ended up in a legal dispute and asked the court to interpret their contract.Which of the following is false regarding approaches the court might use to interpret the contract terms in dispute?
A)If the terms are clear and there is no ambiguity,the court might look at dictionaries for literal meanings of the terms.
B)If the terms are clear and there is no ambiguity,the court might look at the common usage of the industry for meanings of the terms.
C)Where there is ambiguity,the court might look at the rest of the contract to try to discern the intention of the parties.
D)The court will supply missing terms and prices that are necessary for the contract to exist.
E)Where there is ambiguity,the court might look to other dealings between the parties.

Accepted Answer

The court cannot supply missing terms and prices as this goes beyond the court's power to interpret the contract. The court can only interpret the terms that are present in the contract and cannot create new terms.

Question 19

The facts of a case heard by the Supreme Court of Canada are as follows: Mr.and Mrs.H were induced to sign a mortgage in favour of M.C.R.Ltd.by Johnston,a man living with their daughter.Johnston led them to believe that the document was an unimportant amendment to an existing mortgage when,in reality,it was a substantial second mortgage on their home.Neither read the document nor questioned it.When the payments were in arrears,the mortgage company took an action for foreclosure (to take the home).Mr.and Mrs.H.pleaded non est factum.Would this defence succeed? If so,why; if not,why not?

Accepted Answer

The answer of The facts of a case heard by...

Question 20

It came to your attention that your great-grandmother had signed a contract pursuant to which she would be paying $5000 for an electronic organ that retails in reputable stores for $3000.Furthermore,the interest being charged is 18%,even though today's rate fell to a 20-year low.This debt is totally out of line with her pension income.It is apparent that she was misled by the door-to-door salesperson who came to her home.On these facts,which of the following laws is the most likely to help her?
A)non est factum
B)misrepresentation only
C)unconscionability only
D)both unconscionability and misrepresentation
E)undue influence only

Accepted Answer

Both unconscionability and misrepresentation are applicable in this situation. Unconscionability refers to situations where there is a grossly unequal bargaining position resulting in overly harsh or one-sided terms in a contract. In this case, the great-grandmother was misled into signing a contract where she would be paying a significantly higher amount than what the electronic organ is worth, and the interest rate charged is also very high.

Misrepresentation refers to a false statement made by one party to another, inducing them to enter into a contract. In this case, the salesperson who visited the great-grandmother's home misled her by misrepresenting the value of the electronic organ and the interest rate being charged.

Therefore, the most likely laws to help her are both unconscionability and misrepresentation.

Quiz 4: Enforcing Contractual Obligations

When there is disagreement over the meaning of a term in a contract,the normal approach taken by the courts is to apply the most reasonable interpretation,although the courts will refuse to imply terms into the agreement that the parties have left out.

A misrepresentation must be a false statement of fact unless it is a statement by an expert.

With regard to the law concerning misrepresentation,which of the following is true?

Which of the following will have the likely consequence of the court finding the contract void on the grounds of mistake?

Often a party to a contract wants to avoid his or her obligations by arguing that the contract was entered into because of a mistake,misrepresentation,undue influence,or duress.Which of the following is true with regard to these areas of the law?

In order to succeed in suing for a misrepresentation,that misrepresentation must have been in writing.

For a misrepresentation to be actionable,it must become a term of the contract.

Which of the following is an example of an exemption or limitation of liability clause?

Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.

With regard to exemption clauses,which of the following is true?

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

Distinguish between innocent and fraudulent misrepresentation,indicating why the distinction is important.