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Unformatted text preview: ADMN 390: Assignment 2 Your Name: 1 of 7 Assignment 2
Complete Assignment 2 after Unit 6. Follow the general directions provided under “Course Assessment” in the Study Guide. MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question. ONE MARK EACH (8 marks for section) 1. Which of the following statements is correct with respect to the law of consideration? A) Consideration must have some value but need not be specific. B) Without consideration or a seal, there can be no contract. C) Consideration need not be specific, just so both parties got something out of the deal. D) For a contract to be binding something valuable must have changed hands. This consideration may have been paid before the agreement (past consideration) or at the time of the agreement (present consideration), but future consideration is no consideration. E) The amount of consideration to be paid in a contract must be reasonable (that is, fair) from the point of view of each party. TRU Open Learning ADMN 390: Assignment 2 Your Name: 2 of 7 2. Jed, who lived on Cape Breton Island, needed money for a trip to France. He decided to sell his electric guitar. On Monday, October 29, he called the owner of a music store in Halifax and offered to sell his Fender Stratocaster guitar for $400, the offer to be open until Friday noon, November 2. Jed told the store owner to send a letter of acceptance since he (Jed) would be away for a few days. The store owner examined his inventory and mailed a letter of acceptance on Thursday, November 1. When Jed returned home on Saturday, November 3, the letter had not yet arrived, so that afternoon he sold the guitar to a music teacher in his town. The store owner in Halifax sued for breach of contract. Which of the following is true? A) The letter of acceptance was effective when it was received, and by then Jed had sold it, so there was no contract. B) The offer was revoked before the store owner accepted. C) The offer lapsed before the store owner accepted. D) Sending a letter by mail was not a reasonable method of acceptance. E) The acceptance was effective before the offer lapsed, so there was a contract between Jed and the store owner. 3. Joe was in a bar and saw his friend Sam. Sam had a considerable amount to drink. Sam offered to sell Joe his Porsche automobile for only $15,000. Joe made sure to have Sam sign a written agreement to that effect. The next day, Joe went to pick up the car, but Sam didnʹt remember anything about it. Even when Joe showed him the written agreement signed by him, Sam refused to deliver the car. Joe sued. Which of the following correctly states the legal position of the parties? A) As long as Joe can produce the agreement in writing, there is nothing Sam can do to get out of the deal. Once Sam has signed the document, he is responsible for its contents. B) If Joe can show that there was no indication that Sam was drunk, even though Sam was completely incapacitated, he will be required to go through with the deal. C) Being drunk is no excuse; the contract is binding. D) Sam will not have to go through with the deal because no money has yet changed hands. E) Sam just has to show he was legally intoxicated, and he will not be bound. TRU Open Learning ADMN 390: Assignment 2 Your Name: 3 of 7 4. When John bought a car from his fatherʹs old classmate, Joe, he was only seventeen years old. The price of the car was $5000. He paid $1000 down and was to pay the remaining $4000 over time. With these facts in mind, which of the following statements is true? (Read each statement separately.) A) If John has an accident and refuses to pay the balance, Joe could successfully sue John for breach of contract. B) Even if the car is defective, John could not sue Joe. C) If the car is defective, John could sue Joe for breach even though Joe could not sue him. D) If John has an accident because of his negligent driving and he refuses to pay, Joe could successfully sue him in negligence to get around any difficulty in suing him in contract. E) If Joe didnʹt realize John was only 17 years old, he can enforce the contract against him no matter what his age. 5. Smith ran a software‐design business. He needed someone to handle some of the product demonstrations, so he hired Janet to do this work. In the employment contract, he insisted that Janet promise that if she left the firm, she would not work for Smithʹs competitors within a stated period of time and within a stated geographical region. If Janet now wishes to leave the job, indicate the statement that accurately describes the likely effect of her promise. A) If the court holds such a promise to be invalid, then the whole employment contract is necessarily void as well. B) Such promises are invariably held to be valid when they are part of the terms of employment and thus are given in consideration for getting the job. C) Such promises are in restraint of trade and thus the courts invariably hold them to be invalid. D) Such promises are valid only if given under seal. E) If the court thinks that such a promise is reasonable between the employer and employee and that the public interest will not be damaged, then it will enforce it. TRU Open Learning ADMN 390: Assignment 2 Your Name: 4 of 7 6. The equitable remedy of rectification is granted by the courts in which of the following situations? A) The parties to a contract disagree as to the meaning of a term in their contract. B) Because of a mistake, a written document does not include a corrected term to which the parties had orally agreed. C) A person buys something that he later learns he already owned. D) The seller made a fraudulent misrepresentation that induced the buyer to buy. E) The seller of goods has made an innocent misrepresentation that persuaded the buyer to buy. 7. Dubocovich had contracted to supply a health‐food store with jars of Melatonin, a hormone reported in the media as a miracle potion. After they contracted, but before delivery, the government banned the sale of Melatonin so that it could be properly tested under government auspices. Dubocovich told the owner of the store, Mr. Wei, that he wouldnʹt be delivering the Melatonin because of the government ban. The demand for the Melatonin was high. Mr. Wei was very upset with Dubocovich for failing to honour his contractual obligations. Furthermore, he had given Dubocovich $5,000 in advance, which Dubocovich needed and used to pay the freight costs in bringing the drug to his warehouse. Wei sued Dubocovich for breach of contract. Which of the following is correct with respect to the legal position of the parties? A) This is an example of a frustrated contract and Wei will lose, since the loss will remain where it has fallen. B) Wei will be able to get back his $5,000 minus aportion of any costs Dubocovich incurred in preparing to perform the contract. C) When a contract is frustrated in this way, the frustrating party is responsible for any losses incurred by the other party. D) Wei will be successful in his breach of contract action. E) The contract is illegal and void. TRU Open Learning ADMN 390: Assignment 2 Your Name: 5 of 7 8. Which of the following statements is correct with respect to breach of contract? A) When a contract for the purchase of goods is breached, the warranty will require that the goods be repaired by the seller. B) When a condition is breached, the victim can treat the contract as ended. C) When a contract is repudiated before performance is due, the victim must wait until the time of performance before taking any action. D) When a condition is breached, a person can only sue for damages but must perform their part of the contract. E) When a warranty is breached, the victim can treat the contract as ended. SHORT ANSWER In no more than three sentences, write the answers to the following four questions. THREE MARKS EACH (12 marks for section) 1. Distinguish between a bilateral and a unilateral contract. 2. Joe had a classic Buick automobile, and he agreed to trade it to Sam for a specified amount of cocaine. Sam took the car and, three days later, before he could deliver the cocaine to Joe, his cocaine was seized by the police and he was arrested. Joe is now bringing this action claiming that heʹs entitled to the car back. Indicate what arguments are available to Joe and the likelihood of him obtaining his car back. 3. 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 nor 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? If so, why; if not, why not? 4. Indicate what must be present in order for an assignment to qualify as a statutory assignment. TRU Open Learning ADMN 390: Assignment 2 Your Name: 6 of 7 ESSAY QUESTIONS 1. ʺThe purpose of contract law is to give effect to the reasonable expectations of the parties to a contract.ʺ Discuss this observation in terms of the five elements that are required for the creation of a legally binding contract. (20 marks) 2. Using practical examples from your own experience or from the text, discuss the various types of misrepresentation that may induce A to contract with B. Describe the various remedies that may be available to A if he is a victim of misrepresentation. When might one of these remedies be unavailable? (15 marks) CASE STUDIES 1. Cathy owned and operated “Leave it Here” — a successful inner city pawn shop. When she was no longer able to handle the finances herself, she hired Max, a Certified General Accountant, to take care of the books and financial records. She also employed Frank to do shipping and receiving. She made both of them sign confidentiality and non‐competition agreements that stated, among other things, that (a) they would not disclose any information about the business to anyone at any time unless they had Cathy’s permission; and (b) if they left, they would not open or work in another pawn shop within 20 km for five years. Frank had drug addict friends who regularly paid Frank to sell stolen goods through “Leave it Here.“ Although Cathy had her suspicions about the origin of some of the goods that were arriving at her shop, she turned a blind eye as she appreciated the profits they brought in. When Max found out, instead of going to Cathy, he threatened to go to the police unless Frank gave him half of his proceeds. Frank thought he had no choice but to agree. Eventually, Max decided to open his own pawn shop business with the money he had saved from Frank. He gave Cathy reasonable notice but during that time he contacted everyone on Cathy’s customer list to tell them that, in six months, he would be open for business in the same neighbourhood. When he opened his own shop, Frank stopped paying Max. Max sued Frank for missed payments. An owner of a stolen ring that was sold by the shop also sued Frank and Cathy for the tort of conversion. Cathy sued Max for breach of contract and applied for an injunction to shut down his new premises. Identify the legal principles and opposing interests involved in each of these lawsuits and discuss their likelihood of success. (20 marks) TRU Open Learning ADMN 390: Assignment 2 Your Name: 7 of 7 2. Elise agreed to buy property from Mario to build a store of a certain design. Mario, the vendor, and Jane, the real estate agent, were aware of the design and knew that an easement across the back of the property would prevent such a building being erected, but said nothing. Elise purchased the property, later discovered the easement, and learned that Mario and Jane knew about it. She sued both of them for misrepresentation. Discuss the likely outcome. (10 marks) 3. Joe agreed to buy a car from Sam at Samʹs Used Car Lot for $10,000 with a $1,000 down payment. The next day, before he took delivery, he changed his mind and refused to go through with the deal. Sam kept the down payment, describing it as a deposit, and sued Joe – arguing that Joe should be forced to go through with the sale. A) Indicate what kind of remedies he might be entitled to. Before the case came to court, Joe discovered that Sam had never received title to the car – although Sam, in good faith, thought that he was the owner. Joe then countersued, arguing that the whole contract was void and that he should get his money back regardless of Sam’s arguments. B) Explain the legal principle that Joe would likely rely upon. (15 marks) TRU Open Learning ...
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- Winter '07