Humber College - BLAW 150

REVIEW QUESTIONS – BLAW 150 - TEST #2

Chapter 4: Contract Law

True or False

1. A contract is an agreement between two or more parties and must be in writing to be enforceable by law. 
2. Breach of contract is a tort. 
3. Much of the law that applies to contracts is common law. 
4. There is a presumption that the parties to a business agreement intended to form a binding contract. 
5. Disputes arise where one party believes that a deal is final, while the other party believes that the deal is still being negotiated. 
6. A counteroffer revokes an offer only when this is a specified term of the counteroffer. 
7. Depending on the terms of the contract, acceptance can be communicated orally, in writing, electronically, or by action. 
8. Acceptance by regular mail occurs when the letter arrives at its destination, regardless of whether it is opened and read. 
9. If offers are made to several parties simultaneously, and all are accepted, only the first acceptance creates a binding contract. 
10. Consideration means that the parties must be thoughtful of each other’s point of view. 
11. A contract made under seal does not require consideration. 

  

12. The parol evidence rule states that if a contract is in writing and the language of the contract is clear, a court will not look beyond the contract itself to interpret, alter, or contradict its terms. 
13. Contracts within particular industries tend to contain similar or identical terms because these terms have proven, over time, to be expedient for businesses. 
14. Standard form contracts are just as enforceable between businesses as contracts that result from extensive negotiations. 
15. Some contracts permit termination of the agreement if one party provides a specified amount of notice to the other. 
16. A contract may require a deposit of a fixed amount or a percentage of the total contract price. 
17. The extent of the limitation of liability provided by a disclaimer clause depends on the wording of the clause. 
18. A choice of law clause determines the venue where litigation will occur. 
19. Terms that are warranties in some contracts may be conditions in others. 
20. Whether a misrepresentation was made innocently, negligently, or fraudulently affects the remedies available. 
21. Parents are held accountable for the contracts entered into by their minor children. 

Multiple Choice

1. 1. Which of the following are essential elements of a contract?
      1. Offer and acceptance;
      2. Consideration;
      3. Legality;
      4. Intention to create a legal relationship; (e) All of the above.
   2. Which of the following events do not terminate an offer?
      1. Lapse;
      2. Revocation;
      3. Counteroffer; (d) Acceptance.

Short Answer

1. Briefly describe the four elements of a contract. .
2. Why is the enforceability of contacts so important in a business context?

3. What negative consequences are likely in the event of a breach of contract?

4. Briefly describe two benefits of well-worded contracts.

 

4. Briefly explain the meaning of “meeting of the minds.”

5. Briefly describe two events that terminate an offer.

6. How can the parties arrange to have an offer held open and irrevocable for a specified period of time?

8. Briefly describe electronic acceptance.

9. Briefly define consideration and explain why it is important.

10. riefly describe two exceptions to the rule requiring consideration.

 

 

10. What is the effect of making an agreement to do something illegal? 

11. What are the advantages of written contracts over oral contacts?

 

 

12. Name one kind of contract that must be in writing to be enforceable.
13. What is the purpose of the rules of construction? Provide two examples.

14. What is a standard form contract? Provide three examples.

15. What is “privity of contract” and why is it important?

17. What should you keep in mind when drafting a description of products or services?

18. If you are a seller, what should you keep in mind when drafting a pricing clause?

19. What is a liquidated damages clause? Provide examples.

20. What is the difference between a liquidated damages clause and a penalty clause? What is the significance of the difference?

21. What right do the parties give up when they include an arbitration clause in their contract?

22. What is a cancellation clause and when might it be useful?

23. What is the difference between a condition precedent and a condition subsequent? Provide an example of each.

24. What does a disclaimer clause do?

25. What is an exclusion clause, and how is it different from a disclaimer clause?

26. What is a force majeure clause, and how does it differ from a condition subsequent?

27. What is the purpose of an indemnity clause? Provide an example.

28. Why is it important not to ignore a lawsuit brought against your business in a foreign place?

 

29. Before a court will imply a term in a contract, the party who seeks to have the term included must satisfy the court of what two things? Briefly describe two types of situations in which courts may imply contractual terms.

 

29. What is the difference between a condition and a warranty?

 

31. Briefly explain the concept of vicarious performance, and provide an example.

 

32. Why is mitigation important?

 

33. List three steps you should take to justify your damages, should the other party to a contract be in breach.
34. Briefly describe two remedies for breach of contract other than damages.
35. Briefly describe misrepresentation of material fact and explain its significance.

36. Briefly describe the doctrine of mistake and how it applies.

37. When is there a presumption of undue influence?

38. When is it advantageous to encourage the other party to a contract to obtain independent legal advice?

 

39. What are four responses to a breach of contract?

Chapter 5: The Sale of Goods and Consumer Protection Law (Part 1 of Chapter 5– up to pp. 179 of Textbook to and including “Collection Agencies”) [NOTE: separate section below on Chapter 5 –Part 2 “Competiton Act” and follwoing].

True or False

1. Consumer protection law is much narrower in scope than sale of goods law. 
2. Consumer protection law is in general a codification of the common law principle of caveat emptor. 
3. In Ontario the Sale of Goods Act is the principal statute that governs commercial sales transactions. 
4. The Consumer Protection Act, 2002, applies to consumer and business-to-business transactions. 
5. All the ordinary rules of contract law apply to the sale of goods, except where they are modified by the Sale of Goods Act. 
6. A seller’s breach of an implied condition in a contract for the sale of goods allows the buyer to reject the goods and ignore all further contractual obligations. 
7. Damages are the only remedy for breach of warranty, regardless of whether the warranty is express or implied by statute. 
8. If a seller fails to deliver goods, the buyer can buy the goods elsewhere and sue the seller for the difference between the contract price and the price that the buyer actually paid. 
9. Clicking an icon may bind you to a legally enforceable contract. 
10. The Consumer Protection Act, 2002 applies to purchases by a business of consumable products, such as paper and other office supplies. 
11. A cooling-off period is a period during which consumers can cancel their contracts without providing businesses with any justification for doing so. 
12. When repairing vehicles and other goods, a business is obliged to provide a written estimate unless the consumer declines the offer, or authorizes a maximum payment that is not exceeded. 
13. Price estimates for repairing vehicles and other goods must be in writing and contain specifics about the repairer, the vehicle to be repaired, and the parts and services required, and it must provide an itemized list of costs. 
14. Before attempting to collect a debt from a consumer, a debt collection agency must send written notice to the consumer of its intent to do so. 

Multiple Choice

1. Which of the following is not a condition implied into a contract for the sale of goods by the Sale of Goods Act?

1. Fitness for purpose;
2. Merchantable quality;
3. Right to sell the goods;
4. Lowest price in Canada or money back guarantee.

Short Answer

1. What is the meaning and significance of “caveat emptor”?

 

2. To which sort of transactions does the Sale of Goods Act apply?

3. Describe three of the major conditions implied into contracts by the Sale of Goods Act.

• 4.  Describe one of the two implied warranties under the Sale of Goods Act.
  • 5. Why is it important to determine when title to goods passes from a seller to a buyer?

 

6. Describe two of the five rules that determine when title to goods passes from seller to buyer.
   • .
7. When might the remedy of specific performance be ordered with respect to a contract for the sale of goods?

8. Describe two contract issues relevant to those engaged in e-commerce.

9. What does the Consumer Protect Act, 2002 require with respect to price estimates for goods or services?

10. What is negative-option marketing and what does the Consumer Protect Act, 2002 say about it?

11. Describe two false, misleading, or deceptive representations prohibited by the Consumer Protection Act, 2002.

12.List two practices that a court may consider in determining whether a representation made to a consumer is unconscionable.

 

13. What is “renegotiation of terms” and why is it significant?

14. What consequences does a business risk incurring if it engages in unfair business practices?

• 15. List two steps a business can take to avoid committing unfair business practices.

16.Identify two types of agreement singled out by the Consumer Protection Act, 2002, and describe the special rules that apply.

Chapter 5: The Sale of Goods and Consumer Protection Law Chapter 5 – Part 2 (from p. 179 forward and including

Competition Act, Consumer Safety, Consumer Information);  

True or False

1. Anti-competitive business tactics by monopolies is an unfair practice under the Consumer Protection Act, 2002. 
2. If a business denies credit to a consumer, the consumer may challenge the denial by making an application to the credit-reporting agency pursuant to the Consumer Reporting Act. 
3. The Competition Tribunal is the principal enforcement body under the Competition Act, and appeals go to the Federal Court of Canada. 
4. In Ontario, municipal public health units are responsible for health and safety concerns in local grocery stores and restaurants, and assess these businesses for compliance with regulations. 
5. Health Canada is responsible for enforcing federal standards by monitoring the humane handling of food animals, and by enforcing laws against fraudulent food labelling and other illegal practices related to food. 
6. The definition of drugs under the Food and Drugs Act is narrow. 
7. The penalties for failure to comply with the Food and Drugs Act are particularly harsh with respect to food, in which case the maximum fine is $250,000 and the maximum jail term is three years. 
8. The Personal Information Protection and Privacy Act applies to businesses that collect, use, or disclose personal information in the course of commercial activities. 
9. The federal Personal Information Protection and Privacy Act does not apply to

Ontario regulated businesses, because Ontario has passed comparable legislation. 

Short Answer

1. Identify the three legal processes by which the Competition Act operates.
2. What is the difference between a reviewable practice and criminal conduct under the Competition Act? Provide an example of each.

3. List the three categories of restrictive trade practices.

 

 

3. Identify and briefly describe one restrictive trade practice related to the nature of a business that is a reviewable practice.

.

4. Identify and briefly describe one restrictive trade practice related to dealings with competitors and that is a criminal offence.

5.  Identify and briefly describe two restrictive trade practices related to dealings with customers that are reviewable practices.

 

6. Identify and briefly describe two prohibited activities with respect to promoting and advertising products.

7. What agency will monitor your business if it is involved in processing or manufacturing food? List three things that will be checked.

 

6. Briefly describe two principal barriers to making diet-related health claims about foods, according to the Food and Drugs Act.

7. List the three pieces of information that must appear on product labels for products sold to consumers, according to the Consumer Packaging and Labelling Act.
8. List four kinds of personal information that are protected under the Personal Information Protection and Privacy Act.
9. Briefly describe five of the ten fair information principles set out in the Personal Information Protection and Privacy Act.