Exam 8: Factors Affecting the Contractual Relationship

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

Discuss the development and importance of the principle of unconscionable contracts. In your answer compare unconscionability to insanity, duress, and undue influence.

The facts of a case heard by the Supreme Court of Canada are as follows: Mr. and Mrs. H were induced to sign a mortgage in favour of M.C.R. Ltd. by Johnston, a man living with their daughter. Johnston led them to believe that the document was an unimportant amendment to an existing mortgage when, in reality, it was a second substantial mortgage on their home. Neither read the document or questioned it. When the payments were in arrears, the mortgagee took an action for foreclosure (to take their home). Mr. and Mrs. H. pleaded non est factum. Would this defence succeed? Why or why not?

The office manager of a real estate agency was at an office supply store to replace a filing cabinet when he saw a demonstration of a new Xerox copier. Undoubtedly, the agency would benefit from the copier, especially since it had the capability of enlarging the original-a good feature when dealing with the small print of contracts. The next day, he called the manager of the store to discuss the machine further. The seller said that it was "ten years ahead of the competition," that it "was rated as maintenance-free by an independent consumer research group," and that he had "sold five to other real estate agencies in this area" and "had only one left." The agency, relying on these statements, asked to have it delivered. When it arrived, the office manager had learned that every statement made by the seller had been false. Furthermore, the seller did not send out the machine discussed, but the old model. Which of the following is true?

With regard to the law governing privity of contract and assignment, which of the following is true?

The thing or benefit (such as a claim or the right to sue) that is transferred in an assignment is known as ________.

A and B entered into a contract for the purchase and sale of three grams of cocaine. B delivered the goods, but A didn't pay. If B sued for payment, the court would not enforce the contract because of which of the following?

Privity of contract is a principle that holds that a contract can only affect the immediate parties to it.

In Works v. Works, what was the result where one party was mistaken about something significant in the contract?

Jones offers to sell Smith his car. Smith thinks Jones is selling his 2015 Toyota, and Jones thinks he is selling his 2014 Buick. This is an example of which of the following?

Explain what is meant by a "chose in action."

An assignee can be in no better position than was the assignor.

In which of the following instances would the court most likely hold the contract to be void on the basis of a mistake?

Undue influence takes place when one person uses violence to force another to enter into a contract.

Explain what is meant by "vicarious performance."

An assignee is in no better position than the original contractor.

Often a party to a contract wants to avoid his obligations by arguing that the contract was entered into because of a mistake, misrepresentation, undue influence, or duress. Which of the following is false with regard to these areas of the law?

Privity of contract applies in which of the following situations?

Mr. Zink hired Bruce Dorne to create a payroll program for his business. Bruce was to be paid $4000 for the program. When Bruce was half finished, a creditor to whom he owed $2000 pressed so hard for payment that Bruce assigned him $2000 of the contract price, an amount he felt he had earned already. The creditor, Mr. Pressing, gave written notice that very day to Mr. Zink. On these facts, which of the following is true? (Read each statement separately.)

Where a heavy-duty equipment supplier sells a truck claiming it can haul ten tonnes of gravel but its actual capacity is only five tonnes, this is misrepresentation even where the seller believes what he said was true.