Question 1

Orson is looking to hedge his portfolio perfectly.He is deciding between entering the futures markets and creating a forward contract.His broker says that he thinks he could get him in a forward contract that would not only hedge his portfolio,but also make him a lot of money.The forward contract does not perform and Orson loses everything.What should Orson do?

Accepted Answer

A)  Sue his broker for negligence
B)  Sue his broker for misrepresentation
C)  Sue his broker for deceit
D)  Orson has no remedy;his broker was stating an opinion
E)  Orson has no remedy;his broker was making a statement of future conductF) A) and B)
G) A) and C)

Question 2

Asha sells bottled spring water.Unlike other water vendors who purify their water,Asha is marketing her product to those who want to drink spring water in its natural state.Although her water source is pure and clean,she is concerned that some consumers might have allergic reactions to trace elements in the unpurified water,so she designs a clause to exclude her company from liability.The clause indicates that,by opening and drinking the water,consumers are indicating that they have read and understood the warning that the water has not been purified and,as such,waive all liability claims against the company for any allergic reactions resulting from drinking the water.Which of the following is most likely TRUE of Asha's strategy?

Accepted Answer

A)  It will fail because it is never possible to exclude tort liability by way of contract.
B)  It will only succeed if the distributor personally points out to the consumer that by drinking the water they are waiving their right to sue.
C)  It will succeed as long as the label on the bottle constitutes reasonable notice of the exclusion clause.
D)  The exclusion clause must be written in reasonably clear language that makes it relevant to the liability to be excluded in order for the exclusion clause to be effective.
E)  Exclusion clauses are not enforceable in a court of law.F) A) and D)
G) C) and E)

Question 3

Why are boilerplate provisions of potential value to businesses generating standard form agreements?

Accepted Answer

Boilerplate provisions often allocate th...

Question 4

Reeba is signing an employment contract that states she will perform the actions as required of the job daily for 2 years or until she is terminated by management.Reeba asks if this means she does not get weekends off and her manager verbally assures her that she will not be asked to work weekends.Which of the following statements is most likely false?

Accepted Answer

A)  As interpreted by the golden rule,Reeba may be asked to work weekends.
B)  As per the parol evidence rule,the verbal assurance is not part of the contract.
C)  The contra proferentem rule may apply if the judge thinks the term is unreasonable.
D)  If not working weekends is a term that induces Reeba to sign the contract,it may create a collateral contract.
E)  Having all weekends off is a term implied by statute.F) B) and D)
G) B) and C)

Question 5

The possible consequences of actionable misrepresentation include

Accepted Answer

A)  a damage award for breach of contract.
B)  the remedy of rescission.
C)  the remedy of an injunction.
D)  the remedy of an incision.
E)  a fine for breach of contract.F) A) and D)
G) A) and E)

Question 6

Samuel and Ben are negotiating the sale of a sailboat.Samuel expresses an interest in the boat but emails Ben a list of five questions that he wants answered before agreeing to purchase it.Ben responds with full answers to four of the questions.Samuel emails back and says he will buy the boat on Saturday as long as his remaining question (about the state of its hull) checks out okay.Ben promises to check with his boat mechanic and respond before they are scheduled to meet on Saturday.Both men get busy.Ben checks with his mechanic but innocently forgets to report back to Samuel that there is a crack in the hull.Samuel forgets that there was one question outstanding.Saturday comes and the transaction takes place.If it turns out that there is a significant problem with the hull of the boat,which of the following is TRUE?

Accepted Answer

A)  If he sues,Samuel will likely obtain a damage award.
B)  If he sues,Samuel will likely succeed in a tort action.
C)  Samuel is stuck with the boat.
D)  Ben may have to take the boat back and return Samuel's money.
E)  Ben may seek to get his boat back even if Samuel wants to keep it.F) C) and D)
G) A) and D)

Question 7

Personal opinions are not usually treated as misrepresentations.Very briefly explain why they are not and describe a situation where it is risky to offer a personal opinion.

Accepted Answer

In order for a statement to be considere...

Question 8

Which of the following best describes an implied term?

Accepted Answer

A)  It is a statement expressed by one of the parties.
B)  It is sometimes inserted into a contract by a court.
C)  It cannot create an enforceable legal obligation.
D)  It can be used to rectify a mistake in a contractual document.
E)  It is always based on the standard in the industry that the parties are engaged in.F) B) and D)
G) All of the above

Question 9

A person who investigates a condition or state of facts for themselves,rather than relying on a pre-contractual statement of the other side,will usually succeed in an action for misrepresentation whenever the investigation that they made turns out to be untrue.

Accepted Answer

A) True 
 B)False

Question 10

Nate wanted to rent a car.The attendant gives him a standard form agreement to sign.She tells him to sign three places,telling him these areas indicated exclusion clauses,but not saying what the clauses were.He signs the agreement anyway.If Nate breeches one of these exclusion clauses,which of the following is true?

Accepted Answer

A)  Nate is bound by the clause's terms simply because they were included.
B)  Nate can argue he was not given reasonable notice.
C)  Nate is bound only if the clause used unambiguous language.
D)  Nate is bound by the terms because the attendant pointed out the clauses.
E)  Nate is only free of the clause if it was written unreasonably small.F) B) and E)
G) C) and D)

Question 11

A standard form contract contains a term that reads,"Henceforth,all dealings between the Purchaser and the Seller shall be conducted on the grounds of a working relationship and,as such,shall be conducted with professionalism.Any conduct contrary to the Agreement (as construed by one of either the management of the parties involved or the lawyers of these parties) shall be met with termination of the contract and all sums previously paid as liquidated damages and not as penalty shall be retained." In plain English,this means

Accepted Answer

A)  If one of the parties acts fraudulently they must pay damages to the other party.
B)  If one of the parties commits a tort against the other,the contract will be terminated.
C)  If one of the parties acts without a duty of care to the working relationship,the other can terminate the contract and keep all money already paid.
D)  If one of the parties acts without a duty of care to its employees,the contract is rescinded.
E)  If both parties no longer want to work together,the contract is rescinded.F) All of the above
G) None of the above

Question 12

Which of the following statements is TRUE with respect to misrepresentations?

Accepted Answer

A)  An innocent misrepresentation may trigger an award of damages.
B)  A fraudulent misrepresentation may trigger rescission but not damages.
C)  A negligent misrepresentation may trigger damages but not rescission.
D)  An innocent misrepresentation may be rescinded.
E)  A pre-contractual misrepresentation may trigger relief in contract but not relief in tort.F) B) and D)
G) C) and E)

Question 13

An ambiguous contractual term

Accepted Answer

A)  always results in litigation.
B)  never results in litigation.
C)  will have more than one plausible meaning.
D)  will always have only one plausible meaning.
E)  will always have six possible meanings.F) All of the above
G) None of the above

Question 14

Which of the following statements is FALSE? The use of plain language instead of legalese

Accepted Answer

A)  can reduce the amount of time a company spends answering questions from customers about confusing terminology.
B)  is required by the official Communications Policy of the Government of Canada.
C)  can be mandated by law.
D)  makes it more difficult for businesses to enforce contracts.
E)  was strategically avoided in the past.F) A) and B)
G) B) and D)

Question 15

A misstatement of the law is identical to a misstatement about the existing factual consequences of the application of that law.

Accepted Answer

A) True 
 B)False

Question 16

A contractual term

Accepted Answer

A)  is made with the intention to induce a contract.
B)  is a promissory statement.
C)  does not impose a contractual obligation.
D)  is a form of misrepresentation.E) None of the above
F) A) and D)

Question 17

A pre-contractual representation

Accepted Answer

A)  creates a legally enforceable obligation.
B)  is a promissory statement.
C)  will always induce a contract.
D)  is a voluntary agreement to do something in the future.
E)  can be made by words or conduct.F) B) and E)
G) A) and C)

Question 18

A misrepresentation is

Accepted Answer

A)  a kind of mistake.
B)  an opinion that turns out to be untrue.
C)  actionable whenever it turns out to be false.
D)  actionable if it induces a contract by falsely characterizing the factual consequences of a past legal action.
E)  actionable if it induces a contract by misdescribing another's future action.F) None of the above
G) A) and D)

Question 19

A ticket contract is

Accepted Answer

A)  never enforceable.
B)  enforceable only if the terms on the back of the ticket have actually been read by the customer.
C)  enforceable only if the customer knew about the terms on the back of the ticket.
D)  enforceable only if the terms on the back of the ticket are initialed by the customer.
E)  enforceable only if reasonable notice of the terms was given when the contract was made.F) B) and E)
G) A) and E)

Question 20

Business people often sign written agreements on the oral assurance that some of the terms of the written agreement will not be enforced.To sign under written agreements in these circumstances is imprudent because of

Accepted Answer

A)  the golden rule.
B)  the parol evidence rule.
C)  the contra proferentum rule.
D)  the absurdity rule.
E)  the fact that oral terms of contracts are never enforceable.F) D) and E)
G) B) and D)

Exam 9: Representations and Terms

Which of the following best describes an implied term?

Correct Answer
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Correct Answer
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An ambiguous contractual term

Correct Answer
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A person who investigates a condition or state of facts for themselves,rather than relying on a pre-contractual statement of the other side,will usually succeed in an action for misrepresentation whenever the investigation that they made turns out to be untrue.

Correct Answer
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Personal opinions are not usually treated as misrepresentations.Very briefly explain why they are not and describe a situation where it is risky to offer a personal opinion.

Correct Answer
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In order for a statement to be considere...
View Answer

A ticket contract is

Correct Answer
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Which of the following statements is FALSE? The use of plain language instead of legalese

Correct Answer
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Which of the following statements is TRUE with respect to misrepresentations?

Correct Answer
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Correct Answer
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Correct Answer
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The possible consequences of actionable misrepresentation include

Correct Answer
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Why are boilerplate provisions of potential value to businesses generating standard form agreements?

Correct Answer
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Boilerplate provisions often allocate th...
View Answer

Correct Answer
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A pre-contractual representation

Correct Answer
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A misrepresentation is

Correct Answer
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Business people often sign written agreements on the oral assurance that some of the terms of the written agreement will not be enforced.To sign under written agreements in these circumstances is imprudent because of

Correct Answer
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Correct Answer
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Correct Answer
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A contractual term

Correct Answer
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A misstatement of the law is identical to a misstatement about the existing factual consequences of the application of that law.

Correct Answer
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Exam 9: Representations and Terms

Which of the following best describes an implied term?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An ambiguous contractual term

Correct AnswerverifiedShow Answer

A person who investigates a condition or state of facts for themselves,rather than relying on a pre-contractual statement of the other side,will usually succeed in an action for misrepresentation whenever the investigation that they made turns out to be untrue.

Correct AnswerverifiedShow Answer

Personal opinions are not usually treated as misrepresentations.Very briefly explain why they are not and describe a situation where it is risky to offer a personal opinion.

Correct AnswerverifiedIn order for a statement to be considere...View AnswerShow Answer

A ticket contract is

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE? The use of plain language instead of legalese

Correct AnswerverifiedShow Answer

Which of the following statements is TRUE with respect to misrepresentations?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The possible consequences of actionable misrepresentation include

Correct AnswerverifiedShow Answer

Why are boilerplate provisions of potential value to businesses generating standard form agreements?

Correct AnswerverifiedBoilerplate provisions often allocate th...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A pre-contractual representation

Correct AnswerverifiedShow Answer

A misrepresentation is

Correct AnswerverifiedShow Answer

Business people often sign written agreements on the oral assurance that some of the terms of the written agreement will not be enforced.To sign under written agreements in these circumstances is imprudent because of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A contractual term

Correct AnswerverifiedShow Answer

A misstatement of the law is identical to a misstatement about the existing factual consequences of the application of that law.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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In order for a statement to be considere...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Boilerplate provisions often allocate th...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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