Exam 15: Sales and Consumer Protection

Bob,owner of a pizza business,went with his wife to pick out a new family car.Since they already knew the make and model they wanted,it did not take long before the contract was signed by the wife for a new 2012 Oldsmobile.While the paperwork was being done,Bob had been talking with another salesperson about the used cars on the lot,telling him that he needed a mechanically sound car but not a new car for his business.The salesperson showed him one that he said was in good shape and would give several years of service.Bob made a very low offer that the salesperson accepted,much to Bob's surprise.The contract Bob signed,like his wife's,contained a clause exempting the seller,B & S Motors,from liability for breach of any warranties,including any implied warranties under the Sale of Goods Act.A few weeks after the sale,the wife and daughter were injured in an accident caused by the faulty steering mechanism of the new car.Furthermore,the used car was not in good shape and lasted weeks,not years.Given these facts,which of the following is true?

Which one of the following statements is false with respect to who bears the risk of loss in a sale-of-goods contract?

Colson went to Logan Drugs and bought some light bulbs for the hallways of his new apartment building.A tenant asked for one and Colson gave him one but told him he was responsible for getting his own from now on.The bulb,manufactured by Burnaby Brite,Ltd.and sold to Logan Drugs by Dandy Distributors Ltd.,was defective,improperly made.It exploded and set some curtains on fire.The tenant's apartment suffered $6000 damage and he had to move out.He couldn't live there while repairs were being undertaken and had no choice but to find another place,as it would take three weeks to get the apartment liveable again.Given these facts,which of the following is false?

When the holder of a negotiable instrument signs his name in the form of an endorsement before passing it on to a subsequent holder,what risk does he take?

Sarah,who had just celebrated her twenty-first birthday,was distraught over the fact that her tuition had recently gone up.She did not qualify for any further student funding,so she had no alternative but to borrow money from FastCash Loans.Without getting legal advice,she signed a contract in which she agreed to pay back the money along with interest.Because Sarah was a student,and therefore a high-risk client,the interest clause was to be calculated at the rate of 80 percent per year.Sarah failed to pay back all of the funds,and FastCash Loans sued her.What argument might she successfully raise to limit the amount of her obligation?

Jones walked into Sam's TV shop and said,pointing to a particular television,"I'll take that one." They wrote up the deal,and Jones was to return the next day to pay for it and pick it up.Explain who bears the risk in the meantime.

A bill of exchange is an order by one person to another to pay money to a third.

Which of the following is a statement of facts to which the Sale of Goods Act would apply?

What is a cooling-off period?

Which of the following statements is correct with respect to a contract for the purchase of goods?

The principles of freedom of contract and caveat emptor have been completely done away with by the Sale of Goods Act.

Discuss the consumer protection legislation in place in your province in terms of its effectiveness and purpose.

Uncle Isaac has had some difficulty in a sale-of-goods contract and wants to know if there are any mistakes in the information he has received with regard to the remedies for breach of such a contract.Indicate the true statement.

Explain the importance of the provisions of the Sale of Goods Act relating to fitness and quality of the goods.

Which of the following is not controlled by consumer protection legislation?

In what way does the Interest Act affect contracts under which interest is payable?

Distinguish between a sale and an agreement to sell.

What is referral selling?

If you buy a toaster from a second-hand dealer of small appliances,which of the following is true?

With F.O.B.contracts,title and risk always transfer at the seller's place of business.