Law Ch 5

Front 1

When asked to secure a supplier for your company, what is the one goal you should be focused on to ensure the task is completed correctly?

Back 1

to select a reliable supplier, negotiate terms, and secure a written contract

Front 2

Why are contractual relationships usually preferable over casual forms of business arrangements?

Back 2

They readily provide the means for legal enforceability.

Front 3

With respect to what the terms contained in a negotiated formal contract should ultimately be representative of, each parties’ reasonable expectations will most likely be founded on which of the following?

Back 3

the binding commitments that form the essence of the contract

Front 4

What is a valid reason for a court to accept that there is a legally binding contract governing the actions of the parties named to it?

Back 4

The contract clearly contains an offer and acceptance of that offer.

Front 5

Juha agreed to hire Zen Home Builders Ltd. (Zen) to construct his new home. Juha, Zen, and their lawyers met to review and sign a contract that provided for specific types of environmentally safe construction materials to be used. In many instances, Zen failed to use the stipulated “green” construction materials. What would a court, faced with determining a resolution to the ensuing dispute, rely on the existence of to establish the existence of the contract?

Back 5

An intention between the parties to create a legal relationship.

Front 6

With respect to the relationship that exists between contractual parties, what is meant by the phrase “meeting of the minds”?

Back 6

There is agreement upon the intrinsic responsibilities owed to each other.

Front 7

Two accomplished software developers want to combine their talents on a lucrative project offered by a large document storage firm. The developers will have their agreed roles and responsibilities incorporated into a formal contract to be prepared by their respective lawyers. Which of the following is a valid representation of the legal significance of the relationship between the parties that will be evidenced by the contract?

Back 7

There has been a deliberate meeting of the minds.

Front 8

Which of the following is a good reason to use a contract as opposed to having a casual understanding?

Back 8

All contracts are subject to the same set of compulsory legal rules.

Front 9

Matt purchases a car for his son from an auto dealership. A week later, his son discovers a defect that renders the car unsafe. The defect is one that a court would consider to be a breach of contract. What legal recourse is available to remedy this problem?

Back 9

Matt may commence a lawsuit against the dealer for breach of contract.

Front 10

Fatima needs to copy and bind five sets of legal submissions with beige covers, but none are left in the supply cabinet. The office manager offers to reimburse Fatima for the cost of the covers and buy her lunch from petty cash if she will dash to the nearby office supply store to buy them. Fatima agrees. What is the nature of the arrangement negotiated between Fatima and the office manager?

Back 10

an informal business arrangement

Front 11

A Canadian court hearing a disputed matter involving parties to a contract will rely on past decisions to determine a remedy for the dispute. Why is the court’s reliance on past decisions considered to be an effective manner for it to determine an appropriate legal remedy?

Back 11

Precedents contain legal principles determined from similar past litigation.

Front 12

What will likely be the result if one of the parties to a contract fails to perform his or her obligations under that agreement?

Back 12

A court will generally award damages to the innocent party to cover resulting losses.

Front 13

Which of the following has the most influence on the negotiators’ statements made during contractual negotiations?

Back 13

their communications form legal obligations

Front 14

What test will a court apply when asked to determine a matter involving a dispute between parties regarding the formation of a contract?

Back 14

whether a reasonable person could conclude that an offer and acceptance occurred

Front 15

In a strictly legal sense, which of the following is synonymous with the reasonable person test?

Back 15

an objective standard

Front 16

Under which of the following circumstances would a court be likely to set a contract aside?

Back 16

if there is an attempt to take advantage of a handicapped, vulnerable person

Front 17

Which of the following is a defining characteristic of the principle of equality of bargaining power?

Back 17

It generally applies regardless of some distinct advantage favouring one party.

Front 18

Why would a lawsuit be considered the least favourable choice of remedy for non-performance in a contractual business relationship?

Back 18

The court will limit its remedy to focus on the specific disputed transaction.

Front 19

Which of the following is an example of an alternative method of dealing with a breach of contract, rather than starting a lawsuit?

Back 19

Show respect for the other party while seeking a standard of reasonableness in return.

Front 20

Which of the following has the greatest influence on creating the flexible relationship that exists between contract law and economic reality?

Back 20

Contractual obligations must be performed or compensation paid for non-performance.

Front 21

Which of the following would most likely have the greatest influence in orchestrating the occurrence of an economic breach in a contractual business relationship?

Back 21

deciding to secure greater profits through non-performance of an existing contract

Front 22

A large greenhouse grower that wants to source a suitable organic liquid fertilizer contacts Organics. The grower is willing to pay a premium price for Organics’s product. Accepting the order would mean Organics will not be able to completely fill existing orders to its current customers. Organics desires the new business but wants to maintain its existing customer base. Which of the following strategies should Organics use to solve this problem?

Back 22

Offer a price break on existing orders in return for varying quantity and delivery date.

Front 23

What constitutes an economic breach of contract in a contractual business relationship?

Back 23

electing to refuse performance of contractual obligations and paying damages for the breach

Front 24

What is the likely outcome when a court is asked to resolve a dispute involving parties that have reached an incomplete agreement?

Back 24

The court will decline jurisdiction to provide a remedy derived under contract law.

Front 25

How should a manufacturer try to salvage its reputation after it has been discovered to have knowingly produced and sold a defective product to the public?

Back 25

Take ownership for the problem and voluntarily compensate affected customers.

Front 26

What is the most important factor for a retailer to consider when deciding whether to file a lawsuit against a supplier for a breach of a business contract?

Back 26

the significance of the economic harm caused by the defaulting party’s breach

Front 27

Rachel decides to sell her home, so she meets with several real estate agents. One agent offers a reduced commission rate and a guarantee her home will sell within three months without a price reduction. Why should Rachel secure a formal contract if she chooses to use this agent?

Back 27

to allow Rachel to exercise her right to sue if the agent fails to perform as promised

Front 28

What types of employees should a company’s head of risk management choose when putting together a negotiating team?

Back 28

individuals with adequate legal knowledge for the negotiation of an enforceable contract that meets needs and protects interests

Front 29

The purchase of stationery supplies from a retailer for cash, without an invoice or a receipt being provided in return, is an example of which of the following?

Back 29

a formal contract

Front 30

What sequence of procedures will a court follow when asked to determine a matter involving a contractual dispute between two large corporations?

Back 30

evaluate the contract terms and the conduct of the parties, then apply relevant law to arrive at a determination

Front 31

Which of the following is an example of a contract that would be governed by legislation and NOT by common law?

Back 31

a contract involving the sale of goods governed by the Sale of Goods Act