Exam 8: Factors Affecting the Contractual Relationship

Misunderstanding occurs when each party has a different understanding of the terms of the agreement, in which case the courts apply a reasonable interpretation of the contract.

Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.

You and your parents were both surprised when grandmother said the doctor told her to come for weekly checkups, because she didn't seem sick. Nevertheless, you dutifully took her to and from her appointments for a period of about six months. She never talked about these sessions, but loved to go. Now she has come to the family and said that she is sorry that she gave him the oil paintings and sold him the farm. On these facts, which of the following is false?

Mike is given a bottle of wine as a gift. Josh, a neighbour, sees it and recognizes it as a very rare bottle. Knowing that Mike doesn't drink, Josh offers him $300 for it, which he believes to be a fair price. Mike happily agrees. Later, when Josh is looking up the price of the bottle on eBay, he realizes that it is not a valuable bottle of wine at all. He had confused it with another vintage. Josh, who is taking a law class, wonders whether or not he could have the contract set aside. Which of the following statements is true?

Where the misrepresentation is innocent, explain the remedies available to the victim.

Tong hired Hocaloski to design an ad for her business. Hocaloski gave the job to Peppar, her employee. After the ad was run, it was noticed that Peppar had made a serious error. He gave the wrong address and phone number for the business. On these facts, which of the following is true?

A separate contractual obligation that can stand alone, independent of the written contract, is known as ________.

In Moss v. Chin, Chin's insurer, ICBC, made an offer to settle a claim that was accepted by the public trustee representing Mrs. Moss. ICBC was not aware that Mrs. Moss had died in the interim. ICBC made a unilateral mistake and yet the Court ordered that the contract be rescinded. What was the rationale?

Indicate under which circumstances the remedy of rescission might not be available.

A trust inferred by the courts to benefit a third party to a contract is known as ________.

A provision in equity whereby one person transfers property to a second person obligated to use it to the benefit of a third is known as ________.

Which one of the following mistakes voids a contract?

A real-estate agent, Jones, was owed a $17,000 commission, having sold property for Mr. Quick. Mr. Quick couldn't be found, but Jones did find his wife and learned that she had over $20,000 in treasury bills. Mr. Jones told her that if she didn't assign to him $17,000 of the $20,000, he would make sure her husband was imprisoned for his debts and "for other crimes" he knew about. If she did make an assignment in writing to Jones of the $17,000 but later tried to void the agreement, she would argue which of the following?

Which of the following is an example of duress?

Len was behind in his work at the office. He decided to go in for a few hours on Sunday to catch up. He asked an assistant to come in for four hours. He turned on his office TV. Just then his assistant came in and asked him to sign four letters that she said concerned general office matters. He carelessly signed them without taking his eyes off the TV screen. One of the "letters" was, in fact, a cheque for $500 payable to the assistant. The assistant cashed the cheque at her bank, and when her bank presented the cheque for payment, Len instructed his bank not to honour it. He said that he had been tricked and that his signing it was all a big mistake. On these facts, which of the following is true?

While selling the contents of his house in preparation for a move to a condominium, Mr. Lotski sold an antique desk to a Mr. Rogers, who paid by a cheque that was later returned N.S.F. (nonsufficient funds). Lotski later learned that Rogers had sold the desk to Mrs. Lee for cash, which he took and then disappeared. Who is entitled to the desk if the court holds that the first contract between Lotski and Rogers is voidable?

Negotiable instruments can sometimes convey better rights than existed between the original parties.

When a negotiable instrument is used, the drawer of the instrument cannot use the rule of privity to limit the claim of the holder.

Which of the following constitutes a misrepresentation that would not allow the courts to award the equitable remedy of rescission?

Rescission of contract citing innocent misrepresentation on behalf of one of the parties is not available in four situations, list and describe these.