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Merv wanted to buy a used car. The salesman said that the car had 30 000 km on the odometer. The salesman knew this was untrue, but he needed the commission to help pay for his son's university tuition. Merv replied that the mileage did not matter because he liked the car's colour. When Merv found out that the car had 300 000 km on the odometer, can he sue successfully for misrepresentation?

Maybe, but only if a court found the discrepancy in the number of kilometers was not significant

No, because the claim did not encourage Merv to purchase the car

No, because undercaveat emptor, Merv should have looked at the odometer before agreeing

Yes, because the salesman took advantage of Merv's love of the car's colour

Yes, because the salesman made a false claim

Why does independent legal advice usually negate a claim of undue influence?

It removes any possibility there were dire circumstances.

It will prove the weaker party had access to full knowledge and made the decision freely.

It ensures there was no misrepresentation at any stage of negotiations.

It ensures the contract is worded properly to ensure there are no ambiguities.

It will ensure that there are no threats of physical violence or coercion.

Which of the following is not a requirement to establish an error in the recording of a contract?

The absence of further negotiations

The plaintiff did not know the document was incorrect when signed.

The document did not match the intent of the parties.

Demonstration of the existence of fraudulent conduct

The existence of an agreement between the parties

The parol evidence rule

prohibits the parties from testifying about their intended definition of an ambiguous contract term.

prohibits the use of outside evidence to define any contract term.

allows all evidence if a contract term is in dispute.

prohibits the use of outside evidence to define a contract term when the term itself is clear.

requires outside written evidence of the intended meaning of a contract term.

On the morning of June 4, Darlene enters into a written contract with Leonard, pursuant to which Darlene agrees to purchase all of the restaurant tables and chairs he has on the premises of the caf he has just closed. Unknown to both Darlene and Leonard, Leonard's caf premises had been broken into the night before and entirely vandalized. When Leonard learns of this later that day, he calls Darlene to tell her that all of the tables and chairs have been destroyed. She wants to sue Leonard for breach of contract. Which of the following defences to the lawsuit will Leonard use?

He has breached the contract but she has no loss because she hasn't paid any money to him.

The contract was void since the goods had been destroyed before the contract was concluded and therefore was formed on a true mistaken assumption of both parties.

There is no consideration for the contract as he has no goods to deliver on closing.

She cannot sue him for breach of contract because it was not his fault the contract cannot be fulfilled.

He has no defence. He is in breach of contract because he was responsible for delivering tables and chairs to her and he cannot.

Oliver wants to make sure his daughter Penelope is taken care of after he is gone. He sets up a trust to provide for all her needs with Raymond as the trustee. He then places most of his money in the trust with Raymond. After Oliver dies Raymond refuses to give any of the money to Penelope. Can she sue to enforce the trust?

Yes, because the requirement of privity does not apply to trusts

No. Since she is not an original party to the trust creation, Penelope has no right to enforce it.

Maybe, but only if Oliver assigned his contract rights to Penelope before he died

No. Since Oliver is dead, all of his contracts have no effect.

Yes. Because Raymond is still alive, anyone can sue to enforce the trust agreement.

Peter is looking to buy a house from Mary, the current owner. Peter asks for a list of issues with the home. Mary writes a list but does not mention the roof despite knowing it leaks every time it rains. Peter buys the home. Has Mary committed an actionable misrepresentation?

No, because Mary is not a professional and so owes no duty of truthfulness

Maybe, but only if Mary told Peter there was no issue with the roof

Yes, because her failure to report the roof indicates there is no problem with it

No, because non-disclosure is not actionable

Yes, because as a professional she owes the utmost good faith in contracts

Which of the following is not an element of negligent misrepresentation?

There was a duty of care.

The victim suffered damage.

The speaker made a false statement.

The victim unreasonably relied on the statement.

The speaker was negligent.

What remedy or remedies is/are available for the tort of innocent misrepresentation?

Damages

Rescission and specific performance

Damages and rescission

Rescission

Injunction

Which type(s) of misrepresentation allow(s) punitive damages as a remedy?

Fraudulent misrepresentation

Negligent misrepresentation

Innocent misrepresentation

Innocent or negligent misrepresentation

All types of misrepresentation

Duress occurs when

one party is delayed until he signs the contract.

one party agrees to the contract because the other is a trusted advisor.

both parties feel economic pressure to make a deal.

both parties want to void the contract because they changed their minds.

one party enters a contract because the other party improperly threatens her.

Which of the following relationships leads to a rebuttable presumption that a contract is based on undue influence?

Parents contracting with their adult children

Religious advisors contracting with parishioners

Spouses in an equal relationship contracting with each other

Siblings contracting with each other

Lawyers contracting with each other

Which of the following situations does not allow the successful use of unconscionability as an equitable defense?

A loan charged 200 percent interest because the debtor was desperate.

There were no third parties involved in or affected by the contract.

The defendant lied about material facts during the formation of the contract.

Unconscionability is never an equitable defence.

A third party lied about a material fact during the formation of the contract.

When the parties agree to all terms in a contract but the subject matter of the contract does not actually exist, this is a

valid contract.

shared mistake.

misrepresentation.

unilateral mistake.

voidable contract.

A misunderstanding occurs when

the parties have different understandings of a term in the contract and both know about the difference.

one party does not understand a term of the agreement because she did not read the contract.

one party creates a vague term in the contract to make the contract unenforceable.

the parties agree to all terms but the subject matter of the contract does not exist.

the parties have different understandings of a term in the contract but neither knows it.

Two businesses sign a contract. The contract requires all work to stop at noon, local time. The parties disagree on the meaning of "noon." The court will

apply the literal meaning of the word since there is no ambiguity.

tell the parties to settle the matter between themselves.

always apply the literal meaning of a simple word like noon.

apply the most reasonable meaning of the word noon.

look at the intent of the parties to define noon.

If the parties do not include a term in a valid contract, the court can

infer a reasonable term based on what both parties want.

declare the contract void for lack of a meeting of the minds.

declare the contract void for lack of an essential term.

infer a term requested by the non-breaching party.

infer a reasonable term based on the past dealings of the parties.

Ann buys a sandwich from a butcher. Ann immediately gives the sandwich to Carl, who eats the sandwich and gets food poisoning. Can Carl sue the butcher?

Yes. Since Carl was harmed by the sale of the sandwich, the butcher certainly violated a duty of care to him.

Yes. Since Carl was harmed by the sale of the sandwich, he can sue for breach of contract.

No. Carl is not a party to the contract to purchase the sandwich and so has no remedy.

Maybe. Carl may be able to sue under tort law if the butcher was negligent in the preparation of the sandwich.

No. Carl is not a party to the contract for the purchase of the sandwich and the butcher had no duty of care under tort law.

Which of the following situations is not a valid exception to the principle of privity?

Settlor creates a trust to benefit Son. Son thinks Trustee is misusing funds and wants to sue.

Earl has a life insurance policy and dies. Acme Insurance refuses to pay. Bob the beneficiary wants to sue.

Landlord sells the property to Owner but Tenant has a valid lease from Landlord. Tenant wants to sue Owner to stay.

Agent creates a contract for Principal and Customer. Customer believes Agent acted fraudulently and wants to sue both Agent and Principal.

Abe hires Barb to mow Carl's lawn. Barb does not and Carl wants to sue Barb.

Mary buys a car from Fred. She pays with a cheque. Fred endorses the cheque over to Jane. Mary discovers the car Fred sold her needs major repairs even though Fred told her the work had been done. Can Jane cash the cheque?

No. Because Mary has a defense of fraud against Fred, she also can prevent Jane from cashing the cheque.

No. Because Jane is connected to Fred, she is considered a party to the fraud and cannot benefit from Fred's wrongdoing.

No. Negotiable instruments cannot be transferred to a third party.

Yes, because the cheque is endorsed and she is a holder in due course

Yes, because a cheque can always be cashed by anyone if it has been signed by the account holder