Jacques and Madeline made a reservation for a romantic weekend at the Sunny Harbour Inn to celebrate their 25th wedding anniversary. Unfortunately, a week before the romantic weekend, a tornado caused severe damage to the inn. The damage was so great that the inn could not be repaired in time for their stay, so it cancelled their reservation.

Jacques and Madeline will succeed in their claim of breach of contract against the owners of the Sunny Harbour Inn.

True / False [1 mark] Briefly explain your answer. [2 marks]

Question 1 options:

Question 2 (3 points)

Homer went to Moe's Bar and drank a lot of beer with his friends. By the time the bar closed, Homer was very drunk - he was incoherent and could barely walk on his own. One of Homer's sober friends drove him home. The next day, Homer woke up with a bad hangover. After a coffee and donut, he checked his emails. One email was from an online bookstore he sometimes purchased books from. It stated that Homer had ordered $500 worth of cookbooks. Apparently, last night after he got home from the bar, he went online and ordered these cookbooks. Homer has no memory whatsoever of ordering the books. He does not want the books nor can he afford them. The bookstore has a policy of no refunds and no cancellation of book orders; all sales are final.

Homer can legally cancel the contract to purchase the books.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 2 options:

Question 3 (3 points)

If you are the only shareholder of a corporation, you are personally liable for all of the debts, obligations and other liabilities of the corporation.

True / False [1 mark] Briefly explain your answer. [2 marks]

Question 3 options:

Question 4 (3 points)

Rafael is a famous pop singer who was in Toronto in the winter of 2020 to spend the Christmas break. During this time, Toronto Show Limited got in touch with Rafael and contractually engaged him to perform at the Scotia Bank Arena in the summer of 2021. Within one week of promoting the show, the tickets were sold out. All was set for Rafael's performance. Unfortunately, five days before the show, Rafael informed Toronto Show Limited that he would not be able to perform as earlier arranged.

Assuming that Rafael is in breach of contract, Toronto Show Limited is entitled to specific performance as a remedy.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 4 options:

Question 5 (3 points)

Bob operates a successful coffee shop as a sole proprietor. With business doing well, he wants to expand and invites his friend Doug to invest in the business. Doug, who earns a good salary and owns a nice house and fancy cars, suggests that they take precautions to protect themselves from personal liability. Bob does some preliminary research and suggests to Doug that they would be best to register their business as a limited liability partnership.

Doug wants to make sure that Bob's idea is a good one, so he shares Bob's idea with you because he knows you're taking a business law course.

You should tell Doug that Bob's plan is a good one.

True / False [1 mark] Briefly explain your answer. [2 marks]

Question 5 options:

Question 6 (3 points)

Maria was the sole shareholder and operator of the Muskoka Deli in Huntsville. She decided to retire and advertised the Muskoka Deli for sale. Theo has worked in the hospitality sector for many years and replied to the advertisement, indicating his interest in buying the deli. During negotiations, he asked Maria what income the deli received each year over the past five years. Maria said: "I would have to check my records, but I believe it was approximately $500,000 per year." This statement induced Theo to purchase the Muskoka Deli for $500,000. For the first 12 months after its purchase the income from the Muskoka Deli was only $350,000.

Theo will be successful in suing Maria for misrepresentation.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 6 options:

Question 7 (4 points)

Walter was walking home one day and noticed that all the trees, shrubs, and grass on his property had been trimmed and maintained to perfection. He was confused, as he usually does this work himself, but he had been lazy recently and had not done anything around the house for several months. He saw a van parked on his street with the words "JESSE'S LAWN CARE" on the side of the van. He walked over to the van and noticed the owner of the business, Jesse, sitting in the van enjoying a cold bottle of water, as he appeared tired from a day of work. Walter complimented the work that Jesse did and said to him, "How much can I pay you for this?" Jesse said $500. Walter accepted that price and said he would send Jesse an e-transfer later that evening to his bank account. However, after speaking with his wife, Walter decided that they can use the money elsewhere and decided not to pay Jesse for the work that was done. Jesse has spoken to a lawyer, who told him that he is entitled to the $500 for the work he completed.

Walter is legally obligated to pay Jesse the $500.

True / False [1 mark]

Briefly explain your answer. [3 marks]

Question 7 options:

Question 8 (3 points)

Adam has experienced psychological problems from early childhood. This ultimately resulted in him being legally declared as lacking mental capacity. He applied for a loan from the bank. He met with Rebecca, the loan officer, to complete the loan application. Rebecca later said that Adam appeared "normal" to her and understood what he was doing. The loan application was accepted, and Adam received the funds. Now he is in default of the repayment terms under the loan. Adam will be legally liable to the bank for failure to meet the repayment obligations under the loan.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 8 options:

Question 9 (3 points)

Kareem contracted with Jasmine to clean out her garage, in return for which Jasmine agreed to paint Kareem's kitchen. Although Kareem cleaned out Jasmine's garage, as agreed, she asked that she not be required to paint his kitchen. Although Kareem initially agreed, he changed his mind and now insists that Jasmine paint his kitchen.

Jasmine is contractually required to paint Kareem's kitchen.

True / False [1 mark] Briefly explain your answer. [2 marks]

Question 9 options:

Question 10 (3 points)

Aziz was an avid stamp collector. At a stamp auction last year, he purchased a 1941 King George VI stamp for $2,500. Before doing so, he asked the auctioneer if he thought this was one of the rare 1941-42 George VI stamps. The auctioneer said she could not be certain but, in her opinion, it could be.

Aziz recently had his stamp collection appraised and was shocked when the appraiser valued his George VI stamp at only $100. He told Aziz that only those 1941-42 George VI stamps with imperforate (small hole) errors were rare and valuable, and that his stamp did not have any imperforate errors.

Aziz has a sustainable legal claim against the auctioneer for misrepresentation.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 10 options:

Question 11 (3 points)

Trent is a wheat farmer. The market for wheat is very volatile, with prices fluctuating daily. Trent approaches Matt, a commodities trader who buys and sells wheat. He offers to sell his wheat crop to Matt for $12 per bushel, which is the market price for a bushel of wheat on that day. Matt says that he will think about it and get back to Trent. Three weeks later, Matt calls Trent and says he accepts the offer. Trent knows that at this time the market price for wheat is $15 per bushel.

Trent is contractually bound to sell Matt his wheat crop for $12 per bushel.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 11 options:

Question 12 (3 points)

New Age Toy Corporation entered into a distribution agreement with the Canadian Kids' Company for distribution of its toys in Canada. Their agreement stipulated that retail stores could not sell any New Age toy to customers at less than New Age Toy's recommended customer price. The Canadian Kids' Company sold a large quantity of New Age Toys to the Play With Me Toy Corporation for its retail store chain in Ontario. Play With Me Toy Corporation, in turn, sold the toys to customers at prices less than New Age Toy's recommended customer price. The New Age Toy Corporation commenced legal action against Play With Me Toy Corporation for breach of contract.

New Age Toy Corporation will be successful in its legal action against Play With Me Toy Corporation for breach of contract.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 12 options:

Question 13 (3 points)

On Facebook Marketplace, you post your used Apple watch (3 series GPS, 38 mm), including pink aluminium case with pink sport band. You are asking $240. You receive two responses stating they will buy the watch for $240.

You have two acceptances of your offer to sell the watch for $240.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 13 options:

Question 14 (3 points)

Susanna and Jamal went for a hike to the Crawford Lake Conservation Area in Milton. There is a sign, in all caps, at the entrance to the conservation area, as well as on the front of each entrance ticket, stating: "THE CRAWFORD LAKE CONSERVATION AREA IS NOT RESPONSIBLE FOR ANY INJURIES TO GUESTS NO MATTER THE CAUSE." Susanna did not pay attention to the sign at the entrance, nor did she read the notice on her entrance ticket. She tripped over a tree branch carelessly left on the hiking path by an employee of the conservation area and was injured.

Susanna will succeed in her claim against the Crawford Lake Conservation Area for her injury.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 14 options:

Question 15 (3 points)

Adrian, Gita and Kate operate a child care centre as a General Partnership. Their General Partnership Agreement states that "no partner can purchase any materials or services for the child care centre above $100 without the prior approval of the other partners." Last week, Kate purchased some toys and other supplies for the centre for $150 without the knowledge and prior approval of Adrian and Gita.

The contract for purchase of the toys and other supplies for the child care centre is legally enforceable.

True / False [1 mark] Briefly explain your answer. [2 marks]

Question 15 options:

Question 16 (3 points)

Athena agreed to sell her 2015 Maserati GranTurismo to Andrew for $40,000. Andrew made an initial payment of $10,000, with the remainder to be paid when he received the car. Before delivery of the car, the Maserati dealership Athena purchased the car from said its market value was $50,000. She has now refused to deliver the car to Andrew unless he pays her an extra $10,000. He refuses to pay the extra amount and sues her for breach of contract.

Assuming Andrew will be successful in his claim for breach of contract, the damages for breach of contract are $20,000.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 16 options:

Question 17 (3 points)

Graham contracted with the Muskoka Construction Company to build a cottage on vacant lakeside property on Lake Joseph. The contract required him to make monthly payments in prescribed amounts to the construction company during its construction. Payments were to be made no later than the 15th day of each month, and the contract stated that "time was of the essence." Graham paid on time for the first nine months, but payment for the tenth month was a week late.

The Muskoka Construction Company can discharge the contract for failure by Graham to meet the tenth-month payment date.

True / False [1 mark]

Briefly explain your answer. [2 marks]

Question 17 options:

Question 18 (3 points)

Daniel is a proud alumnus of Kawartha Lakes College. In response to a fundraising campaign by the college for the construction of a new building, Daniel pledges $50,000. Unfortunately, he later encounters financial problems and informs the college that he will have to retract his promised donation.

Daniel is contractually bound to the promised donation of $50,000.

True / False [1 mark]

Briefly explain your answer. [2 marks]