Question 1

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 2

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

Question 3

In relation to consumer contracts and the protections provided by legislation,a consumer is defined as an individual (not an organization)purchasing a product or service for the following use

Accepted Answer

A) personal. 
B) family. 
C) household. 
D) non-business. 
E) all of the above 
A) personal. 
B) family. 
C) household. 
D) non-business. 
E) all of the above

Question 4

Janice Stone wanted to go rock climbing and needed some rope.She went to Bill's Hardware Store,told the sales associate that she wanted some rope,and described to him what she was going to use it for.The sales associate recommended a polypropylene rope,and on the basis of this recommendation,Janice bought the rope.Janice used the rope for rock climbing and was injured when the rope broke.She subsequently learned that polypropylene rope is unsuitable for rock climbing because it wears wherever it is bent and is hence subject to breakage.
(a)Janice sued Bill's Hardware Store.What must she prove to be successful,and what are her chances of success?
(b)If Janice brought in a sample of polypropylene rope and asked specifically for that type of rope,would the result be different than (a)above?

Accepted Answer

(a)Janice can sue Bill's Hardware Store

Question 5

Every year a convention is held in Ontario by manufacturers and suppliers of after-market automobile accessories.Bill Sampson of Sampson Motors in Toronto attends the convention with the intention of purchasing new and innovative after-market products.On the first day of the convention Sampson sees two custom-made bike racks suitable for his in-stock pickup trucks.He purchases both bike racks from Bob Kerr of Kerr's Bikes & Accessories.Kerr agrees to accept payment by way of cheque.Sampson and Kerr agree that as part of the purchase price Kerr will install the bike racks on two trucks Friday morning.Sampson calls the dealership in Toronto and arranges to have two drivers head to the convention Friday morning.Before the installation,the goods are stolen on Thursday night after the convention closes.Having regard to the Sale of Goods Act rules for passing of title,had title to the goods passed to Sampson at the time of the theft?

Accepted Answer

Unless otherwise agreed to,the Sale of G

Question 6

Under the Sale of Goods Act,the seller of stolen goods can be sued by their recipient (the buyer)for breach of

Accepted Answer

A) an express condition. 
B) a duty. 
C) a warranty. 
D) a guarantee. 
E) an implied condition. 
A) an express condition. 
B) a duty. 
C) a warranty. 
D) a guarantee. 
E) an implied condition.

Question 7

Why is it important that a consumer who has financed a purchase have the same rights against the finance company as against the merchant who sold the goods? What law gives the consumer this assurance?

Accepted Answer

Without these rights,the consumer would

Question 8

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 9

Ted goes to his neighborhood hardware store and asks for a six foot by two foot piece of plywood.He also requests that it be "sturdy".Ted purchases the plywood and proceeds to use it as a makeshift bridge for his dog,a 75 pound black lab,to cross over a small ditch in the backyard.The first time his lab attempts to cross the bridge it breaks and the dog falls into the ditch fracturing a bone.Ted's suit against the hardware store for the vet bills will

Accepted Answer

A) succeed for breach of implied term of fitness because Ted specifically asked for the plywood to be "sturdy". 
B) fail because Ted 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. 
C) succeed because the hardware store meets the implied term of merchantable quality by selling the plywood to Ted in these circumstances. 
D) fail because there was no breach of the implied term as to description. 
E) none of the above 
A) succeed for breach of implied term of fitness because Ted specifically asked for the plywood to be "sturdy". 
B) fail because Ted 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. 
C) succeed because the hardware store meets the implied term of merchantable quality by selling the plywood to Ted in these circumstances. 
D) fail because there was no breach of the implied term as to description. 
E) none of the above

Question 10

Brent Cook owns and operates a farm supply store selling feed and hardware for the farm.
(a)Mary Martin wants to buy a type of mink feed that must be ordered from Regina Brent has a sample,which he shows Mary.What rights does Mary have before she is bound to accept the feed when it arrives at Brent's store,and under what circumstances can she reject the goods?
(b)Donald Jones enters the store and buys 15 metres of marine rope used primarily by water skiers.The rope breaks while being used by Donald to raise bales of hay from a truck to the hay loft of Donald's barn.The bales fell onto the truck,damaging it and injuring Donald who was sitting in the cab.Donald sues Brent on the basis of breach of implied condition of fitness for the rope.What must Donald establish in order to be successful? What defences does Brent have? What is the likely outcome?

Accepted Answer

(a)When goods are sold by sample,Mary is

Question 11

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

Accepted Answer

Unascertained goods are goods that have

Question 12

Plastics Ltd.,which manufactures plastic bottles,has a contract with Carbonation Inc.under which it ships boxes of bottles to Carbonation Inc.at specified times and in specific quantities.The contract goes on to state that Carbonation Inc.can return any boxes of bottles that are not sold.Pursuant to the contract,Plastics Ltd.ships the specified number of boxes of bottles to Carbonation Ltd.'s warehouse.Two weeks later there is a fire in the warehouse and the boxes of bottles are destroyed.In this case

Accepted Answer

A) title to the boxes of bottles passed to Carbonation Inc.at the time of the contract. 
B) title to the boxes of bottles passed to Carbonation Inc.at the time they were delivered to Carbonation Inc.'s warehouse. 
C) title to the boxes of bottles passed to Carbonation Inc.at the time they were destroyed by fire. 
D) title in the boxes of bottles did not pass to Carbonation Inc.because the boxes of bottles had not yet been set aside by Carbonation Inc. 
E) title to the boxes of bottles did not pass to Carbonation Inc.because Carbonation Inc.did not give notice of its acceptance and no fixed time for return was specified. 
A) title to the boxes of bottles passed to Carbonation Inc.at the time of the contract. 
B) title to the boxes of bottles passed to Carbonation Inc.at the time they were delivered to Carbonation Inc.'s warehouse. 
C) title to the boxes of bottles passed to Carbonation Inc.at the time they were destroyed by fire. 
D) title in the boxes of bottles did not pass to Carbonation Inc.because the boxes of bottles had not yet been set aside by Carbonation Inc. 
E) title to the boxes of bottles did not pass to Carbonation Inc.because Carbonation Inc.did not give notice of its acceptance and no fixed time for return was specified.

Question 13

The Sale of Goods Act applies to provision of services.

Accepted Answer

A) True 
 B)False

Question 14

Plastics Ltd.manufactures heavy duty plastic cogs and wheels for elevators and just received an order from Elevators Inc.for 10 cogs and 10 wheels,all heavy duty and tested for specified strength before shipment.Plastics Ltd.has already manufactured the cogs and wheels,but before it has a chance to test them,it receives an order from another company for cogs and wheels and decides to fill that order instead.In this case

Accepted Answer

A) title in the cogs and wheels passed to Elevators Inc.at the time of the contract. 
B) title in the cogs would pass as soon as the cogs and wheels were set aside for Elevators Inc. 
C) title in the cogs and wheels passed to Elevators Inc.at the time they were manufactured by Plastics Ltd. 
D) title in the cogs and wheels would not pass to Elevators Inc.until the cogs and wheels were set aside for Elevators Inc.and tested. 
E) title in the cogs and wheels passed to Elevators Inc.when Plastics Ltd.sold the cogs and wheels to the other company. 
A) title in the cogs and wheels passed to Elevators Inc.at the time of the contract. 
B) title in the cogs would pass as soon as the cogs and wheels were set aside for Elevators Inc. 
C) title in the cogs and wheels passed to Elevators Inc.at the time they were manufactured by Plastics Ltd. 
D) title in the cogs and wheels would not pass to Elevators Inc.until the cogs and wheels were set aside for Elevators Inc.and tested. 
E) title in the cogs and wheels passed to Elevators Inc.when Plastics Ltd.sold the cogs and wheels to the other company.

Question 15

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 16

Caveat emptor,which means "let the buyer beware," functions to limit the liability of sellers.However,it is not a rigid rule.An situation in which a seller would NOT be able to use this defence would be if

Accepted Answer

A) the goods are in existence and are specific items that may be inspected by the buyer. 
B) the buyer had every opportunity to inspect the goods. 
C) the seller appeared to be knowledgeable about the product. 
D) the seller made no misrepresentation concerning the goods. 
E) the seller has made misrepresentations about the goods. 
A) the goods are in existence and are specific items that may be inspected by the buyer. 
B) the buyer had every opportunity to inspect the goods. 
C) the seller appeared to be knowledgeable about the product. 
D) the seller made no misrepresentation concerning the goods. 
E) the seller has made misrepresentations about the goods.

Question 17

What is a bill of lading and what is its purpose?

Accepted Answer

A bill of lading is a shipping document

Question 18

Jack viewed a 1995 Mustang on the lot of Tim's Quality Autos Ltd.(Tim's).Jack approached Tim's and enquired about purchasing a vehicle.On January 5th,Jack signed a purchase agreement with Tim's to purchase the vehicle.
(a)Tim's was required to fix the lock on the driver's door before delivering the vehicle to Jack.They then did fix the lock and notified Jack the car was ready.However,just prior to Jack's picking up the vehicle,it was mysteriously damaged.Who is responsible to fix the damages as between Tim's and Jack?
(b)If the agreed-upon purchase price for the vehicle was $9000 and Jack paid a $5000 deposit when the agreement was signed and thereafter discovered that the vehicle was encumbered with a $6000 chattel mortgage,what courses of action are available to Jack,and what is the best one?

Accepted Answer

(a)Rule 2 applies in this case.Once the

Question 19

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 20

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

Exam 14: Sale of Goods and Consumer Contracts

In the sale of goods

In relation to consumer contracts and the protections provided by legislation,a consumer is defined as an individual (not an organization)purchasing a product or service for the following use

Under the Sale of Goods Act,the seller of stolen goods can be sued by their recipient (the buyer)for breach of

Why is it important that a consumer who has financed a purchase have the same rights against the finance company as against the merchant who sold the goods? What law gives the consumer this assurance?

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

The Sale of Goods Act applies to provision of services.

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

Caveat emptor,which means "let the buyer beware," functions to limit the liability of sellers.However,it is not a rigid rule.An situation in which a seller would NOT be able to use this defence would be if

What is a bill of lading and what is its purpose?

The principle of caveat emptor applies only to situations where

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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