Question 1

The principle of caveat emptor applies only to situations where

Accepted Answer

A) the seller has made no misrepresentation about the goods. 
B) the goods can be inspected by the buyer. 
C) the goods are specific items. 
D) the goods are in existence. 
E) all of the above 
A) the seller has made no misrepresentation about the goods. 
B) the goods can be inspected by the buyer. 
C) the goods are specific items. 
D) the goods are in existence. 
E) all of the above

Question 2

International Shippers Corp.wants your advice on the legal implications of international trade.Business has been developing in parts of the Middle East where it's sometimes hard to collect from customers.You advise International Shippers that they should

Accepted Answer

A) ensure all of their shipments are covered by an order bill of lading. 
B) first clear each contract through the relevant government department. 
C) ensure all of their shipments are COD. 
D) retain a lien on the goods. 
E) ensure all of their shipments are covered by a straight bill of lading. 
A) ensure all of their shipments are covered by an order bill of lading. 
B) first clear each contract through the relevant government department. 
C) ensure all of their shipments are COD. 
D) retain a lien on the goods. 
E) ensure all of their shipments are covered by a straight bill of lading.

Question 3

Nasty Travel is a company that sells vacation time share packages.To do this,first it contacts potential customers,telling them that if they come to one of its meetings,they will receive a prize.Once a person comes to the meeting,Nasty's representatives use very high pressure tactics to virtually force this person to buy a time share package and sign the documents.They then give this person a very inexpensive gift.In fact,this happened to John just two days ago.Under present-day consumer legislation,

Accepted Answer

A) if John decides to go ahead with the purchase,he is bound to do so. 
B) if Nasty does not give John back his money,John can sue Nasty for its return. 
C) John has a cooling-off period to decide if he wants to go ahead with the purchase. 
D) if during the cooling-off period,John decides to terminate the contract,Nasty must give his money back to him. 
E) all of the above 
A) if John decides to go ahead with the purchase,he is bound to do so. 
B) if Nasty does not give John back his money,John can sue Nasty for its return. 
C) John has a cooling-off period to decide if he wants to go ahead with the purchase. 
D) if during the cooling-off period,John decides to terminate the contract,Nasty must give his money back to him. 
E) all of the above

Question 4

George goes to his neighbourhood hardware store and asks for a four-foot by eight-foot piece of plywood.He also requests that it be "thick and strong." George purchases the plywood and proceeds to use it as a makeshift bridge on his driveway over a small ditch.The first time he attempts to drive his tractor over the makeshift bridge,the plywood collapses,causing damage to the tractor.George's suit against the hardware store will

Accepted Answer

A) succeed for breach of implied term of fitness because George specifically asked for the plywood to be "thick and strong." 
B) succeed because George has likely incurred consequential losses as well. 
C) fail because George did not expressly state the particular purpose for which he intended to use the plywood and therefore the hardware store did not breach any implied term of fitness. 
D) fail because there was no breach of the implied term as to description. 
E) succeed because the hardware store breached the implied term of merchantable quality by selling the plywood to George in these circumstances. 
A) succeed for breach of implied term of fitness because George specifically asked for the plywood to be "thick and strong." 
B) succeed because George has likely incurred consequential losses as well. 
C) fail because George did not expressly state the particular purpose for which he intended to use the plywood and therefore the hardware store did not breach any implied term of fitness. 
D) fail because there was no breach of the implied term as to description. 
E) succeed because the hardware store breached the implied term of merchantable quality by selling the plywood to George in these circumstances.

Question 5

Henry stops at a yard sale to look for old musical equipment.He sees an amplifier that is exactly what he has been looking for.Henry believes it is worth a lot more money than the $50 the owner is requesting.Henry asks the owner whether or not the amplifier is in good working condition.The owner tells him that he knows nothing about the amplifier and is not prepared to comment further.Henry purchases the amplifier for $50.Later he finds out that it is stolen from a nearby music store and did not belong to the seller at the time he purchased it.Henry's action for recovery of his money against the seller will

Accepted Answer

A) succeed because the owner breached an implied term as to title. 
B) succeed because the music store will likely pay him a reward. 
C) fail because of the principle of caveat emptor. 
D) fail because the owner made no representations about the amplifier. 
E) none of the above 
A) succeed because the owner breached an implied term as to title. 
B) succeed because the music store will likely pay him a reward. 
C) fail because of the principle of caveat emptor. 
D) fail because the owner made no representations about the amplifier. 
E) none of the above

Question 6

One of the remedies of a seller is to maintain a lien on the goods.When does the right to a lien end?

Accepted Answer

A seller only has a right to maintain a

Question 7

John returned home from work and checked his mailbox to see if anything had been delivered that day.To his surprise,he received a package of magazines from a magazine distributor.John proceeded to open the package and over the course of the next several days,read through the magazines.He then gave them to his dentist for use by patients at the dental office.Approximately thirty days later John received a demand letter from the magazine distributor requesting payment of the magazines which John had not requested.In a subsequent Small Claims action brought by the magazine distributor for payment,the following would likely be the outcome

Accepted Answer

A) the magazine distributor would succeed because John used the magazines. 
B) as a recipient of unsolicited goods John can use them without becoming liable for their price. 
C) John only became liable when he removed the magazines from his residence and took them to the dentist's office. 
D) John would not be liable because he did not sign a contract. 
E) John would be liable because he did not immediately package up the magazines and return them to the magazine distributor before reading them. 
A) the magazine distributor would succeed because John used the magazines. 
B) as a recipient of unsolicited goods John can use them without becoming liable for their price. 
C) John only became liable when he removed the magazines from his residence and took them to the dentist's office. 
D) John would not be liable because he did not sign a contract. 
E) John would be liable because he did not immediately package up the magazines and return them to the magazine distributor before reading them.

Question 8

The implied conditions in the Sale of Goods Act apply to any and all sales of goods.

Accepted Answer

A) True 
 B)False

Question 9

Jack buys a second-hand car from Charles,who is not a retail seller.The province in which the sale takes place does not require that the car be certified.After two months,Jack finds that the car requires substantial repairs.In this case,

Accepted Answer

A) there is a breach of the implied condition of fitness for purpose. 
B) there is a breach of the implied condition of merchantable quality. 
C) there is a fundamental breach of contract. 
D) there is a breach of the implied warranties under the Sale of Goods Act. 
E) the maxim caveat emptor applies. 
A) there is a breach of the implied condition of fitness for purpose. 
B) there is a breach of the implied condition of merchantable quality. 
C) there is a fundamental breach of contract. 
D) there is a breach of the implied warranties under the Sale of Goods Act. 
E) the maxim caveat emptor applies.

Question 10

Title in goods purchased by an innocent purchaser outside the ordinary course of business from a third party who did not own those goods does not pass to the innocent purchaser.

Accepted Answer

A) True 
 B)False

Question 11

The Sale of Goods Act deals with the sale of goods by sample and/or description.Which of the following statements is correct?

Accepted Answer

A) If goods are sold by sample,there is an implied term of suitability. 
B) It is an implied condition that goods by description alone be of merchantable quality. 
C) If goods are sold by sample and description,it is a breach of implied warranty if the goods do not correspond with both the sample and the description. 
D) If goods are sold by sample only,there is an implied condition that the buyer must have a reasonable opportunity of comparing the bulk to the sample. 
E) It is an implied warranty that the goods sold by sample alone be of merchantable quality. 
A) If goods are sold by sample,there is an implied term of suitability. 
B) It is an implied condition that goods by description alone be of merchantable quality. 
C) If goods are sold by sample and description,it is a breach of implied warranty if the goods do not correspond with both the sample and the description. 
D) If goods are sold by sample only,there is an implied condition that the buyer must have a reasonable opportunity of comparing the bulk to the sample. 
E) It is an implied warranty that the goods sold by sample alone be of merchantable quality.

Question 12

Is there any difference between unascertained goods and future goods? Explain.

Accepted Answer

Unascertained goods are goods that have

Question 13

In the sale of goods,

Accepted Answer

A) passing of title and passing of ownership are separate concepts. 
B) ownership and possession are separate concepts. 
C) the change in possession and a transfer of title are the same thing. 
D) the buyer has title when goods are paid for. 
E) the seller has title until delivery. 
A) passing of title and passing of ownership are separate concepts. 
B) ownership and possession are separate concepts. 
C) the change in possession and a transfer of title are the same thing. 
D) the buyer has title when goods are paid for. 
E) the seller has title until delivery.

Question 14

John and Jane entered into an agreement for the sale and purchase of an ornate oak table.The purchase price was $450.The contract was silent as to the time for payment.John,the vendor,insisted that the $450 be paid to him before he would deliver the table.Jane insisted that the table be delivered to her before she paid the $450.Who has taken the correct position? Give the legal basis for your answer.

Accepted Answer

In the absence of an agreement as to pay

Question 15

Donald visited the premises owned by Mary's Hay Farm Ltd.and viewed a stack of more than 4000 bales of hay.He agreed to purchase 800 bales for $2.00 per bale.He paid the $1600 and advised that he was going to get his truck and would return in about three hours.When Donald returned three hours later he noticed that there was a smoldering pile of debris where the stack of bales had previously been.The entire stack had been destroyed.Who is entitled to the $1600? Give the legal basis for your answer.What additional fact do you need to know in order to confirm your answer?

Accepted Answer

Title to unascertained goods does not pa

Question 16

The War Veterans League sent Martha five sheets of labels with her name and address on them.The enclosure also had a request for a $5.00 payment.If Martha is going to use the self-addressed stickers,is she legally required to send in the payment?

Accepted Answer

A) No,she is not,since legislation prohibits the sending of unsolicited goods. 
B) No,she is not,since this would be a gratuitous donation anyway. 
C) Yes,she is,since use gives the consideration for a binding agreement. 
D) Yes,she is,because there is a moral obligation when benefits are obtained. 
E) No,she is not,since consumer protection statutes expressly state that use of goods does not amount to an acceptance of a seller's offer. 
A) No,she is not,since legislation prohibits the sending of unsolicited goods. 
B) No,she is not,since this would be a gratuitous donation anyway. 
C) Yes,she is,since use gives the consideration for a binding agreement. 
D) Yes,she is,because there is a moral obligation when benefits are obtained. 
E) No,she is not,since consumer protection statutes expressly state that use of goods does not amount to an acceptance of a seller's offer.

Question 17

George Shifty is not a very nice guy.In fact,George has just incorporated a telemarketing company solely to make money off of the unsuspecting people his company contacts.For the next six months,the company's telemarketers will be selling funeral caskets and marketing to people over the age of 70.Once a person is contacted,the telemarketer tells him or her that before a casket can be sold,the person must send in an administrative deposit equal to one-fifth of the value of a casket.If they do this,they will receive a casket within eight months.At the end of six months of telemarketing the caskets,the company has received $1 500 000.00 in administrative charges,which George immediately pockets,leaving the company insolvent.Then George gets on a plane for an extended vacation in a South American country that has no extradition treaty with Canada and loses himself in that country.In this case,

Accepted Answer

A) the company has committed the offence of deceptive telemarketing. 
B) since the company is insolvent and George cannot be found,there is no practical recourse. 
C) had George stayed in Canada,he could have been convicted as a director of the company. 
D) the company can be fined in the millions of dollars. 
E) all of the above 
A) the company has committed the offence of deceptive telemarketing. 
B) since the company is insolvent and George cannot be found,there is no practical recourse. 
C) had George stayed in Canada,he could have been convicted as a director of the company. 
D) the company can be fined in the millions of dollars. 
E) all of the above

Exam 14: Sale of Goods and Consumer Contracts

The principle of caveat emptor applies only to situations where

International Shippers Corp.wants your advice on the legal implications of international trade.Business has been developing in parts of the Middle East where it's sometimes hard to collect from customers.You advise International Shippers that they should

One of the remedies of a seller is to maintain a lien on the goods.When does the right to a lien end?

The implied conditions in the Sale of Goods Act apply to any and all sales of goods.

Jack buys a second-hand car from Charles,who is not a retail seller.The province in which the sale takes place does not require that the car be certified.After two months,Jack finds that the car requires substantial repairs.In this case,

Title in goods purchased by an innocent purchaser outside the ordinary course of business from a third party who did not own those goods does not pass to the innocent purchaser.

The Sale of Goods Act deals with the sale of goods by sample and/or description.Which of the following statements is correct?

Is there any difference between unascertained goods and future goods? Explain.

In the sale of goods,

The War Veterans League sent Martha five sheets of labels with her name and address on them.The enclosure also had a request for a $5.00 payment.If Martha is going to use the self-addressed stickers,is she legally required to send in the payment?

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

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