LAW 221 - Case Studies
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School
Toronto Metropolitan University *
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Course
122
Subject
Law
Date
Jan 9, 2024
Type
docx
Pages
2
Uploaded by DeaconKookabura1540
QUESTION ONE
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.
FALSE
Timothy’s post was an invitation to treat, not an offer, since it did not contain any specific actions that would
constitute acceptance of the 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.
QUESTION TWO
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.
True or False: Ismail can rescind the contract with Bill’s Used Cars.
TRUE
Bill made a pre-contractual misrepresention with respect to the state of the car’s maintenance history. The car has
missed many oil changes (among other things), so his statement is untrue. It’s unclear whether this is an
intentional or negligent misrepresentation, but either way, it is a material one as it is an important part of a car’s
history and would be a factor in a decision to purchase it. Therefore, Ismail can rescind the contract.
QUESTION THREE
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.
FALSE
The agreement is between Dio and Ning, not between Edward and Ning. There is no privity of contract between
Edward and Ning as Edward is just a third party beneficiary. A third party beneficiary generally cannot sue for
breach of contract unless suing under a trust, which does not appear to exist here. Only Dio can sue Ning.
QUESTION FOUR
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.
True or False: Vicki can successfully sue Oscar for the $120,000 owed to her.
FALSE
Panther Inc is a corporation is a separate legal entity from Oscar. Only Panther owes Vicki the money. While
Oscar is the sole shareholder of Panther, there is no reason to pierce the corporate veil and allow Vicki to sue
Oscar in this case.
QUESTION FIVE
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.
TRUE
Failure to deliver the car is a clear breach of condition that denies 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)
QUESTION SIX
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, sheregrets her agreement and seeks to escape the contract.
True or False: The contract is voidable and Sophie will be able to rescind the contract.
TRUE
This is a case of undue influence. Sophie’s doctor in is 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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