LAW122 Final Note (2)
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Toronto Metropolitan University *
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LAW122
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Law
Date
Feb 20, 2024
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1.Timothy makes a post on his social media page that he is selling his stamp collection for
$2000. Within minutes Timothy receives two messages. The first is from Jane. Her message
says: “Yes, I will buy that for $2000.” A second one arrived a minute later from Mark. It says“
Me! I’ll make that deal, and I’ll throw in an extra $100.”
True or False: Timothy has a contract with Jane to sell his stamps for $2000.
Briefly explain your answer.
False. Timothy’s post was an invitation to treat, not an offer. Each of the messages he received
from Jane and Mark are offers, not acceptances. Timothy can choose which one to accept. No
contract exists until he does so.
2.Ismail is looking to buy a relatively cheap used car. He goes to Bill’s Used Cars and sees a car he thinks he might like for the low price of $3000. However, he wants to make sure that the car has received all of its scheduled maintenance. Bill, the car salesman, tells him “yes, the car has never missed so much as an oil change.” Ismail buys the car, but runs into mechanical trouble. He takes it in and finds that it has barely been previously serviced at all. He wants to return the car and get his money back.
Ismail can
rescind the contract with Bill’s Used Cars because Bill’s false statement that the car had never missed so much as an oil change was a Misrepresentation
. (fill in the blank in 1 to 3
words). 3.Ning enters an agreement with Dio under which Ning will transfer 1000 shares of her company
Shirts-R-Us to Dio’s son, Edward, in exchange for Dio’s promise to pay Shirts-R-Us’ rent for two
years. Dio pays the rent, but when it comes time to transfer the shares to Edward, Ning does
not do so.
True or False: Edward could successfully sue Ning for breach of contract for failure to transfer
the shares.
Explain your answer.
False. Ning has a contract with Dio, not with Edward. Edward has no privity of contract with
Ning, and thus no basis to sue her. Only Dio can sue Ning for breach of contract.
4.Oscar is the sole shareholder of Panther Inc., a shoe corporation. Vicki has loaned Panther
Inc. $100,000 to purchase materials to make shoes. With interest on the loan, Panther Inc. now
owes Vicki $120,000. Unfortunately, Panther Inc. is not doing well, and Panther Inc. fails to pay
Vicki back when the debt is due. Vicki thinks Panther lacks the money to pay her, but she knows
that Oscar recently received a large inheritance. She wants to sue Oscar to recover the money
owed to her.
Vicki cannot
successfully sue Oscar for the $120,000 owed to her because Oscar and Panther
Inc. are Separate legal entities
(answer in 2 to 5 words). 5.Natasha entered a contract with Eric on April 18, 2023 to purchase his classic car (a Pontiac
GTO) for $30,000. The car is to be delivered on August 1, 2023. Natasha gave Eric $15,000 at
the signing of the contract, and promised to give him the other $15,000 on delivery of the car.
Before August 1, 2023 however, the value of the car significantly increased due to a sudden
interest in Pontiac GTOs among car enthusiasts. At August 1, 2023, the car was worth $60,000.
Because of this increase in value, Eric refused to give Natasha the car when the delivery was
due.
True or False: Natasha can successfully sue Eric for breach of contract and receive expectation
damages of $45,000. Briefly explain your answer. True. Failure to deliver the car is a clear breach of condition denying Natasha the benefit of the
contract. Expectation damages are available. The calculation of expectation damages is [benefit
of contract] – [price not paid]. In this case, Natasha’s benefit is $60,000. She has not paid
$15,000 under the contract. Therefore, the formula is $60,000 - $15,000 = $45,000.
(Alternatively, one could say that Natasha expects to be up $30,000 from the contract. She has
paid $15,000, so to put her at a net gain of $30,000 Eric must pay her $30,000 + $15,000 =
$45,000)
6.Sophie suffers from a genetic disorder that causes slow degeneration of her nerves, leading to
pain and weakness. She sees her physician, Dr. Moore, for help dealing with the pain. Dr.
Moore’s brother runs a series of very expensive week-long wellness retreats in which
participants are supposedly healed of various ailments. Dr. Moore strongly suggests that
Sophie’s pain could be helped if she signs up for at least four of these retreats at a cost of
$20,000 each. She subsequently signs a contract with Dr. Moore’s brother for four of them for a
total of $80,000. Before going on the first one, she regrets her agreement and seeks to escape
the contract.
True or False: The contract is voidable and Sophie will be able to rescind the contract. Briefly explain your answer. True. This is a case of undue influence. Sophie’s doctor is in a position of trust that creates an
irrebuttable presumption of influence. His influence directly caused Sophie to enter the contract
for the retreats, which is also a suspicious transaction on the basis of its exorbitant cost.
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