Singapore American School

ECON 102

Quiz for Lecture 5

1)A contract was signed for a car rental. At the time the contract was signed, the clerk told the renter to ignore paragraph 14 of the contract. This paragraph was printed clearly, and was not removed, nor crossed out, and the contract was signed. The rental Company is now trying to enforce the terms of paragraph 14, which the renter says are no longer applicable. Which is the best answer?

1. 1. The parole evidence rule will allow the renter to prove that paragraph 14 should be excluded.
   2. The renter is bound by what he signed 
   3. This is an example of a unilateral mistake so the renter is not bound

1. 4. The car dealership will be bound as it was unconscionable t enforce the contract

2.Which best describes a situation which invokes the doctrine of frustration?

1. 5. A contractor cannot get plans to build a project approved on time to start building as he waited too long before submitting the plans
   6. City Hall is on strike when the contract is entered into, so plans cannot be approved until the strike is over
   7. While City Hall is on strike the contractor may have the plans approved by city management if an increased fee is paid
   8. On reviewing the plans, City Hall has determined that the land the project is to be built on is not suitable for building the intended project so will not approve the plans

3. The Parol Evidence rule does not apply
   1. Where one party can show there was a condition precedent
   2. Where one party does not agree with a document signed after the contract was formed
   3. When the courts can strike out the offending term
   4. When the parties are in different jurisdictions

4. Which best applies?
   1. Substantial performance is when the parties agree to quit the contractual terms before completion
   2. When there is a trivial breach of a condition of a contract the court will allow the contract to be discharged
   3. A court will treat a substantial performance as if it were a breach of a warranty
   4. A condition precedent is a term which brings obligations to an end upon some event or condition taking place

5. Which best describes frustration of a contract?
   1. Neither party knew that goods were no longer available when they entered into a contract
   2. Performing the terms of the contract will cost the supplier more money than he will make from performing the contract