Exam 8: Factors Affecting the Contractual Relationship

A salesman innocently misrepresented a fact to a customer about a new printer. He honestly believed his statement was true and was not careless. Although this fact was not about a term of the contract, it did induce the customer to buy that printer. The next day, the customer learned the true facts and wanted to return the printer. If the store refused to take it back and the customer sued, which of the following would be the most likely result?

A week after signing a contract, you became aware that you and the other party, Sheldon, seemed to have a different understanding of one of the provisions of the contract. Before you said anything to him, you reread it to see if your interpretation was valid. As you reread it, you noticed that not only was that provision vague, but also other terms and provisions were ambiguous or left out. Which of the following is false with regard to the methods used by the courts to interpret contracts?

With regard to the law concerning misrepresentation, which of the following is true?

The remedy of rescission is not available if the parties cannot be returned to their original positions because the subject matter of the contract has been destroyed or damaged.

Explain why agency is not really an exception to the privity rule.

If a lawyer persuades a client to guarantee a loan, the relationship of solicitor/client leads to a presumption of

The major problem with ________ is the need to establish that the person being sued knowingly misled the victim.

Fraudulent misrepresentation is intentionally misleading another person into a contract.

The court will not allow the careless party to escape responsibility when a shared mistake is the result of the negligence of one of the parties.

In order to succeed in suing for a misrepresentation, the misrepresentation must have been in writing.

________ attempts to return both parties to their original positions. The subject matter of the contract must be returned to the original owner, and any monies paid under the contract must also be returned.

Which one of the following will be excluded by the parol evidence rule?

The victim of intentional misrepresentation can sue for damages but cannot ask for rescission.

Randal embezzled $6000 of his employer's money and then disappeared. The employer's accountant called at Randal's residence and found out that his wife had a $3500 term deposit. When the accountant threatened to have her husband arrested and imprisoned if she did not agree, she assigned the term deposit to the employer to help to defray the loss from the embezzlement. If the wife were later to sue for return of the term deposit, what would be her ground for avoiding the assignment?

The threat of violence makes a contract voidable.

Discuss how privity of contract affects the position of people who are not parties to a contract. In your discussion, include an examination of the Supreme Court decision in London Drugs Ltd. v. Kuehne & Nagel International Ltd.

Joe agreed to paint Sam's house for $4000. Joe then assigned the $4000 claim to Harry, who served notice on Sam about the assignment. When it came time for payment, Harry was informed by Sam that he would not pay because the paint was peeling off his house. Harry said that that was nothing to do with him and demanded payment. Explain the legal position of the parties.

Mrs. Sharp, the owner of a restaurant, induced the Morissons to buy the business by a misrepresentation; the invoices made her costs appear less than they actually were, and thus her profits more than they actually were. On these facts, which of the following is false?

Performance by another qualified person of the obligations under a contract is known as ________.

The victim of ________ can seek monetary compensation as well as rescission for any loss incurred.