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Problem 1 (25 marks) Luna wished to purchase an automobile. She saw a 2019 Mustang Convertible advertised for sale in the local newspaper. Luna
Problem 1 (25 marks) Luna wished to purchase an automobile. She saw a 2019 Mustang Convertible advertised for sale in the local newspaper. Luna talked to the owner, Ginny and advised her that she didn't know much about cars but needed a reliable, comfortable car for long distance travel. Ginny confirmed that she found her car comfortable (and fun) and that it was probably what Luna needed. Luna then examined the car and agreed to purchase it from Ginny for $35,000.00. They both signed a short contract which contained a clause stating that the car was sold "as is and with no warranties whatsoever except as expressly set out herein". The agreement did provide that Ginny would be responsible for obtaining a mechanical safety certificate before delivering the vehicle to Luna. Assume The Sale of Goods Act is applicable. (i) (ii) Ginny did obtain the certificate and notified Luna that the car was ready. However, prior to Luna picking up the vehicle, it was mysteriously damaged. Who is responsible to fix the damages as between Ginny and Luna? If Luna found that the car was uncomfortable and not suitable for long distance highway travel, what action, if any could she bring against Ginny and what would be the likely outcome? (iii) If, the day after Luna purchased the car, the transmission failed and the engine seized up, what action could Luna take against Ginny? What remedies could she claim and what defences would Ginny likely raise? Explain. (iv) Two weeks after purchase the car was repossessed by the St. Catharines Savings Bank. The Bank discloses that it had registered a Chattel Mortgage against the car for an outstanding loan of $25,000.00. What remedies would be available to Luna? Give the legal basis for your answer. Be certain to include the applicable principles as part of your answers. Problem 2 (25 marks)
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