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25 Cards in this Set

  • Front
  • Back

If neighbours have a contract agreeing not to erect a building that blocks the other's view, which remedy might the court impose if that agreement is breached?


Mandatory injunction.

In which of the following situations would the contract not be discharged by agreement?


A condition subsequent that calls for termination of the contract has not been met.

Which of the following is true with regard to ending a contract by performance, agreement, frustration, or breach?


An exemption clause that a seller claims absolves him from liability may be of no effect if the seller has committed a "fundamental breach" of the contract.

Which of the following is false with regard to ending a contract by agreement?


A contract can be ended by one party if he finds a better deal, e.g., by cancelling an order that has been accepted, as long as this is done before performance.

Ibolya entered into an employment contract with a Toronto advertising firm, VertaNet Ltd. The agreement included a non-competition clause that prevented her from participating in the advertising field in Toronto for five years after termination of her employment. In the event of abreach, the contract provided that Ibolya would have to pay VertaNet the sum of $500,000 as liquidated damages. Ibolya worked for VertaNet for a period of time, then took another job in Vancouver where she worked for four and half years. Six months before the expiry of the five-year period in her VertaNet contract, Ibolya returned to Toronto to take a part-time position as a small advertising firm. Although VertaNet did not suffer any damage, VertaNet sued Ibolya claiming $500,000. What is the likely outcome?


The non-competition clause is likely a penalty and therefore unenforceable.

In all but one of the following situations, the contract is frustrated. Identify the exception.


Ed, a trucker with whom you contracted last month to transport stoves tomorrow, phones to tell you that his truck has broken down.

Sam entered into a contract for the purchase of a used dump truck from "Joe's Heavy Duty Trucks." The written contract clearly specified, among other things, that "it shall be a warranty for this contract that the truck has the capacity of carrying and properly dumping loads of up to 4,000 kg of gravel." In fact, when Sam loaded the truck with 4,000 kg of gravel, he discovered that the hoist on the truck was not capable of dumping it. Only if the load was reduced to 3,000 kg could the gravel be dumped. Sam obtained an estimate stating that it would cost $8,000 to reinforce the hoist mechanism of the truck so that it could handle the dumping of 4,000 kg of gravel. When Sam approached Joe demanding satisfaction, Sam pointed out another term of the agreement that stated that in the event of a breach of contract the "maximum damages payable to the purchaser are limited to $5,000." Sam sued. Which of the following statements is correct with respect to the legal position of the parties?


Sam must keep the truck and sue for damages, but those damages are limited to $5,000.

The principle of substantial performance can best be described as:


All or most of contractual obligations are fulfilled.

Tufts and McDougal were having an argument about the law regarding performance of a contract. Which one of the following statements of theirs is correct?


If Roscoe tries to deliver lumber to Jed in accordance with their contract and Jed doesn't take delivery of it, Roscoe can sue Jed for breach of contract without ever trying to deliver it again.

In which of the following is the contract not ended by agreement?


Randy visited Terry two weeks after the contract but one month before performance date to say he wouldn't do it. Terry had already paid Randy for the work. After hearing Randy's story, Terry said, "Just forget it, good bye and good luck."

The case of Sail Labrador Ltd. v. Challenger One (The) involved an option to purchase and a breach of a contract that was inconsequential and immediately corrected. What did the Supreme Court of Canada hold?


The contract had been substantially performed and the option was still available.

Rick was a talented computer programmer and had agreed to work for Bill in his successful computer software business, signing a one-year contract to that effect. On the day he was to start work, and after a week of training where he learned a considerable amount of confidential information about Bill's operation, he phoned Bill and announced that he was going to work for Bill's competitor instead. Which of the following is the appropriate remedy in these circumstances?


Injunction.

Dagney was an author of a popular series of children's books. She signed an agreement with her publisher, in which she agreed to have a new book in the series written by October 15th. As noted in the contract, the timing was critical to ensuring the books would be on the shelves before Christmas and in order to coincide with a massive promotion the publisher had been planning. Faran had a terrible case of writer's block. By October 3rd, she realized that there was no way that she would have the book finished by the deadline. She e-mailed her publisher, admitting that she would not have the book finished in time. What are the publisher's options?


The publisher has the right to demand performance or sue.

In which one of the following instances would the seller most likely succeed in an attempt to escape liability by the use of an exemption clause when the buyer suffers a loss?


Ralph bought a used lawnmower under a written and signed contract that contained an "as is" clause.

Carson arranged with his brother-in-law, Waxman, that he would try to buy a famous old B.C. coastal airplane, the Spruce Ghost, which Waxman would then buy from him to display in his flight museum. Waxman promised to pay Carson a 10% commission over the price that Carson had to pay to buy the plane, so that their price would be 110% of Carson's purchase price. Carson and the owner, Wonka, agreed on a price of $80,000. After reconditioning the plane but before delivering it to Carson, Wonka decided to take it up for one last nostalgic flight and, because of his carelessness, he crashed it on take-off. Although Wonka escaped uninjured, the plane caught fire and was totally destroyed. Carson was able to locate a similar plane for only $60,000 but Waxman wasn't interested. Carson sued his brother-in-law and Wonka. What is the likely outcome of this suit?


Wonka will have to pay Carson damages (probably $8,000) for breach of contract.

If a contract states that the contract is "subject to the purchaser obtaining financing for $10,000 at 8% by 5:00 p.m. Friday, March 11," it means that:


If the purchaser does obtain the financing and properly notifies the seller, the contract is then in full force and effect.

A student bought an I-Pod Nano for the stated purpose of listening to his taped notes while he took his daily run. The contract he signed with the seller, Tape Talk Ltd., included a clause excusing the seller from liability for the breach of "any term of the contract, whether a breach of condition or warranty whether express, implied, statutory or otherwise." After only 30 days, the I-Pod failed to function at all. It was totally useless for the student's purpose, so he took it back to the seller. The seller refused to take it back and pointed out the exemption clause in the signed contract. On these facts, which of the following could be true?


The student could be awarded damages if the exemption clause were found invalid by the court on the grounds that the clause could not be interpreted to mean it would forgive such a fundamental breach.

The claim of frustration is not available in which of the following circumstances?


A change in circumstances makes it difficult or more costly for one of the parties to perform.

In which one of the following instances would the seller most likely succeed in an attempt to escape liability by the use of an exemption clause?


The exemption clause that covers the situation was posted in plain view and was brought to their attention at the place and time of contract.

Which of the following is false with regard to ending a contract by performance, agreement, or breach?


If one party to the contract has paid for a service, but now the other doesn't want to perform, the contract is ended by agreement as long as they both agree to call it off.

A deposit must be returned if no damage has taken place.


False.

When an outside, unforeseen event interferes with the performance of a contract, and there is some other way to fulfill the contract, performance is required.


True.

Damages are an example of an equitable remedy.


False.

Lack of financial ability, if proven, will establish frustration.


False.

The victim of a breach cannot recover damages that he could have avoided if he had made a reasonable effort.


True.