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Blaw3205 test bank Sergey Tarasenko(2021) chapter 7...

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Legal Fundamentals for Canadian Business, 4e (Yates) Legislation in the Marketplace Chapter 5 1) Which of the following contracts would be covered by the Sale of Goods Act? A) a contract for the sale of a famous painting B) the trade of a car for a boat involving no money C) the purchase of a house D) a contract for medical services with a doctor E) the sale of corporate shares Answer: A Diff: 1 Type: MC Page Ref: 130 Skill: Recall 2) To which of the following transactions would the Sale of Goods Act apply? A) a contract for a boat B) a contract with a warehouse owner to store a Chevrolet car C) a contract for a house D) a contract for a haircut E) a contract to have a dress mended and cleaned Answer: A Diff: 1 Type: MC Page Ref: 130 Skill: Recall 3) Which of the following complaints would lead to a successful action under the Sale of Goods Act? A) "What do you mean you are not going through with the contract to sell me that lot? I have workers ready to start construction one week after the closing date!" B) "I paid a lot of money for this car and this is the third time I've had it back in the first week. Something is seriously wrong with it." C) "I hired you to tutor me for my chemistry exam, not to tell me your personal problems week after week!" D) "I left the car here with orders to adjust the front lights; I did not order a wheel alignment and I don't want to pay for it!" E) "I paid $1000 for government bonds, but you have sent me shares in a private company that I've never heard of!" Answer: B Diff: 2 Type: MC Page Ref: 130 Skill: Applied

4) In the sale of goods: A) title and ownership are separate concepts. B) ownership and possession are separate concepts. C) a change in possession and a transfer of title are the same thing. D) the buyer always has title when goods are paid for. E) the seller always has title when goods are paid for. Answer: B Diff: 2 Type: MC Page Ref: 130 Skill: Applied 5) Which of the following is a statement of facts to which the Sale of Goods Act would apply? A) "Waiter, there is a dead fly in my spaghetti." B) "Today is the closing date and I am willing to tender the full price in cash, namely $70 000, for the farm, and you are now telling me that you have no intention of closing." C) "I agreed to give you a dozen old campaign buttons for that original signature of the prime minister, but received the signature of the governor general." D) "I brought in five shirts to be laundered and you are returning only four to me!" E) "I asked for a trim! You've cut off 5 inches!!!" Answer: A Diff: 2 Type: MC Page Ref: 130 Skill: Applied 6) Which of the following complaints would lead to a successful action under the Sale of Goods Act? A) "Waiter, there's a spider in my sandwich." B) "I paid $10 for government bonds, but you have sent me shares in a private company that I've never heard of!" C) "You are not going to honour our contract for the land?! I planned to build on that lot in the spring!" D) "I left the car here with orders to adjust the front lights; I did not order a tune-up!" E) "I hired you to wait tables, not to stand around doing stand-up comedy routines." Answer: A Diff: 2 Type: MC Page Ref: 130 Skill: Applied 7) Which of the following is a statement of facts to which the Sale of Goods Act would apply? A) "I asked for a trim! You've cut off 2 inches!!!" B) "Excuse me; there is a mouse in this beer bottle." C) "Today is the closing date and I am willing to tender the full price in cash, namely $50 000, for the house and you are now telling me that you have no intention of closing."

D) "I brought in five shirts to be laundered and you are returning only four to me!" E) "I agreed to give you a dozen old campaign buttons for that original signature of the prime minister, but received the signature of the governor general." Answer: B Diff: 2 Type: MC Page Ref: 130 Skill: Applied 8) Which of the following is a statement of facts to which the Sale of Goods Act would apply? A) "The deal was this: Fred was to assign to Paul Fred's accounts receivable, and Paul would pay

him $5000 cash, but Fred did not honour his promise." B) "We hired you as a bartender, not to join the guests and teach them Texas line dancing!"

C) "I paid you to tune the car, but it obviously wasn't done!" D) "Pursuant to the contract, the buyer of the house tendered $50 000 on the closing date, but the seller had changed his mind." E) "There's a small, dead insect in my soup!" Answer: E Diff: 2 Type: MC Page Ref: 130 Skill: Applied 9) In which of the following will the title to the goods pass to the buyer at the time of contract? A) ABC Co. buys all chemicals contained in a drum marked "A" but the price has to be ascertained by measuring the number of litres in the drum. B) Williams contracts for the desk he selected at Antiques Unlimited, and he arranges to have it delivered to his office tomorrow and to be paid for in one month. C) Mrs. Jones calls the Bay and asks it to send her the blanket advertised on page 3 of its flyer. The Bay agrees and takes her credit card number. D) Mary picks out a leather briefcase and leaves it with the seller so that initials can be engraved on it. She pays by cheque. E) While at the Bay, Preston decides to buy the style of sofa he sees on display. He pays by cash and the store arranges to have a sofa sent from its warehouse directly to Preston's home. Answer: B Diff: 2 Type: MC Page Ref: 131 Skill: Applied 10) The following events occurred before the goods or parts of the goods were destroyed by fire. In which case would the buyer suffer the loss? A) Justin contracted for a piano that had to be tuned before it was in a deliverable state. It was tuned, but Justin had not been notified that it was ready. B) Jaspers contracted for four standard-sized cupboards for the kitchen. The boards had been cut, but they had not been assembled. C) Manchesco chose which of the chairs he wanted and contracted for them, but he had agreed to pay and pick them up the next day. D) McGrady ordered a chainsaw advertised in the Sears catalogue. E) Heinz contracted for all the corn in silo A. The seller still had to weigh the corn to determine the price. Answer: C Diff: 3 Type: MC Page Ref: 131 Skill: Applied

11) The following events occurred before the goods or parts of the goods were lost or destroyed. In which case would the buyer suffer the loss? A) Heinz contracted for all of the corn in Silo A. The seller still had to weigh the corn to determine the price. B) Al picked out and contracted for a particular computer, and an additional component had to be installed before it was in deliverable state. The component was installed, but Al had not been notified that it was ready. C) Jaspers contracted for four standard-sized cupboards for the kitchen. The boards had been cut, but they had not been assembled. D) George ordered a Pentium computer system with 4 megabytes of RAM and a 105megabyte hard drive advertised by Kicks Computers. E) Yates chose which of the desks he wanted and contracted for it, but he had agreed to pay and pick it up the next day. Answer: E Diff: 2 Type: MC Page Ref: 131 Skill: Applied 12) If the contract doesn't say who bears the loss if an item is lost or stolen, the Sale of Goods Act says risk goes with title. If the contract doesn't say when the title will pass, the Sale of Goods Act implies when it will pass. In which of the following will the statute imply that title will pass to the buyer at the time of the contract? A) George calls a store and asks it to deliver the table advertised in its catalogue. The store agrees, takes his credit card number, and promises to deliver the table on Friday.

B) Azar goes into a store specializing in old woodworking tools. He chooses a $10 tooling machine. The contract provides that it would be delivered to his workshop the next morning and he would pay for it in one month. C) Maureen contracts for Ms. Roberts' next year's pumpkin crop. D) Agro Ltd. buys all chemicals contained in the container marked "A" but the price has to be ascertained by measuring the number of litres in the container. E) While at Sears, Preston decides to buy the style of sofa he sees on display. He pays cash and the store arranges to have one like it, covered in the material he selects, delivered directly to him from the factory. Answer: B Diff: 2 Type: MC Page Ref: 131 Skill: Applied

13) Which of the following statements is correct with respect to a contract for the purchase of goods? A) Where a breach of a condition is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement. B) The purpose of the inclusion of a warranty in a sale of goods contract is to force the seller of those goods to repair the goods if they are defective. C) The purchaser has a claim against the manufacturer only if the goods purchased are defective. D) Where a breach of a condition is involved, the contract is still in force and the victim of the breach must still perform her side of the agreement. E) Where a breach of a warranty is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement. Answer: A Diff: 1 Type: MC Page Ref: 132 Skill: Recall 14) Carol went to the mall to purchase a cellphone. After discussing the features of several models with the vendor, she purchased one that suited her requirements. However, when she tried to use it, she found it would not work on any of the available networks. Which of the following implied term with respect to title under the Sale of Goods Act has been breached by the vendor of the cellphone? A) the implied warranty that requires the vendor to deliver good title B) the implied warranty that the goods would be free of any charge or encumbrance C) the implied warranty that the goods will match the sample D) the implied warranty that requires the seller to provide quiet possession E) the implied warranty that goods must be of merchantable quality Answer: D Diff: 2 Type: MC Page Ref: 132 Skill: Applied 15) The Sale of Goods Act adds a number of implied terms to a sale-of-goods transaction. Which one of the following statements is not an implied term under the Sale of Goods Act?

A) Where goods are sold by sample, the bulk must match the sample. B) The seller promises the buyer good title. C) The buyer is promised satisfaction or the right to get his or her money back. D) Goods sold by description must be of merchantable quality. E) Where the buyer tells the dealer what he wants them for and relies on the seller to provide them, the goods must be reasonably fit for that purpose. Answer: C Diff: 2 Type: MC Page Ref: 132-134 Skill: Recall

16) If you buy a toaster from a second-hand dealer of small appliances, which of the following is true? A) The Sale of Goods Act prohibits the seller from exempting himself from liability in the event that the toaster is not fit for purpose. B) The risk of loss depends on who has possession of the toaster. C) The Sale of Goods Act does not apply. D) Title to the toaster would pass at the time the buyer picked it up the next day. E) There is an implied term of the contract that the seller has good title (i.e., the right to sell it). Answer: E Diff: 2 Type: MC Page Ref: 132 Skill: Recall 17) John has been working and saving his money; he wants to buy a car on his 25th birthday. Which of the following is false? A) There will be an implied term in the contract that John will get good title to the car. B) There will be an implied term that payment is to be made by certified cheque. C) There will be an implied term in the contract that John will enjoy "quiet possession." D) An exemption clause may modify certain implied terms.

E) There will be an implied term in the contract that the car will be free and clear of encumbrances. Answer: B Diff: 2 Type: MC Page Ref: 132-134 Skill: Applied 18) Alf bought a car from Mr. Wojchu for $10 000. Shortly afterward, a bailiff, acting for an unpaid conditional seller, seized the car. The conditional seller had properly registered his claim in time. Alf wants to sue Mr. Wojchu. Which of the following correctly sets out his legal position? A) Alf wins. Mr. Wojchu has failed to deliver good title. B) Wojchu loses. Risk follows title. C) Alf wins. Goods are not of merchantable quality. D) Alf loses. Caveat emptor applies. E) Alf loses. It was his obligation to search the title and he failed to do so. Answer: A Diff: 2 Type: MC Page Ref: 132 Skill: Applied

19) Which of the following is true with regard to the implied terms of the Sale of Goods Act? A) If you ordered a lamp from a catalogue but it did not match the description when you received it, the seller is in breach of a warranty of the contract. B) The Act does not provide that the goods must be fit for purpose. C) If a buyer places an order for silk after seeing a sample of it, the order must be delivered within 10 days. D) The Act provides that the goods must be of "merchantable quality," and that means that the goods must be without flaw. E) When you buy a car, and the contract speaks only of the car and the price, you are entitled to receive good title, to acquire quiet possession and a car free from any encumbrances (i.e., a claim

by a bank). Answer: E Diff: 2 Type: MC Skill: Applied

Page Ref: 132

20) Delbert stops at a yard sale to look for old musical equipment. He sees an amplifier that is exactly what he has been looking for. Delbert believes it is worth a lot more money than the $50 the owner is requesting. Delbert asks the owner whether or not the amplifier is in good working condition. The owner tells him that he knows nothing about the amplifier and is not prepared to comment further. Delbert purchases the amplifier for $50. Later he finds out that it had been stolen from a nearby music store and did not belong to the owner at the time he purchased it. Delbert's action for recovery of his money against the owner will:

A) fail because of the principle of caveat emptor. B) fail because the owner made no representations about the amplifier. C) succeed because the music store will likely pay him a reward. D) succeed because the owner breached an implied term as to title. E) fail because the goods are bought by description. Answer: D Diff: 2 Type: MC Page Ref: 132 Skill: Applied 21) John bought a used car for $5000. Shortly afterward, a bailiff acting for an unpaid chattel mortgagee who had properly registered his claim in time seized the car. In which of the following circumstances can John sue the seller? A) if the seller told John that the car was free and clear of any encumbrances after John asked B) if the seller told John that the car was free and clear of any encumbrances even though John didn't ask C) if John forgot to check the registry for liens or encumbrances D) if neither John nor the seller said anything about whether the car was free and clear of encumbrances E) all of the above Answer: E Diff: 2 Type: MC Page Ref: 132 Skill: Applied

22) Edward goes to his neighbourhood hardware store and asks for a six-foot by twofoot piece of plywood. He also requests that it be "sturdy." Edward purchases the plywood and proceeds to use it as a makeshift bridge for his dog, a one-hundredpound black lab, to cross over a small ditch in the back yard. The first time his lab attempts to cross the bridge, it breaks and the dog falls, fracturing a bone in his leg. Edward's suit against the hardware store for the veterinarian bills will: A) succeed for breach of implied term of fitness because Edward specifically asked for the plywood to be "sturdy." B) fail because Edward did not expressly state the particular purpose for which he intended to use the plywood and therefore the hardware store did not breach any implied term of fitness. C) fail because there was no breach of the implied term as to description. D) succeed because the hardware store breached the implied term of merchantable quality by selling the plywood to Edward in these circumstances.

E) succeed because of consumer protection legislation. Answer: B Page Ref: 133

Diff: 2 Type: MC Skill: Applied 23) Mrs. Quale bought a new sewing machine from Androcles' Sewing Centre because she thought that, as well as using it herself, her daughter, Susan, would also be able to use it for her high school home economics projects. Unfortunately, because of a manufacturing defect, the machine ran wild when Susan was using it and it destroyed her project, sewed the end of her finger, and sprayed oil all over the carpet. Androcles' Sewing Centre had bought the machine from Midmen Distributors Ltd., which had bought it originally from the manufacturer, General Stitchers Inc. Which one of the following statements is false with respect to the available remedies in this situation? A) Midmen Distributors Ltd. has an action against General Stitchers Inc. for breach of an implied condition of merchantable quality. B) Midmen Distributors Ltd. bears no liability here because it was just an intermediary in the distribution chain. C) Androcles' has an action for breach of contract against Midmen Distributors. D) Susan has an action in tort law against General Stitchers Inc. E) Mrs. Quale has an action against Androcles' for breach of an implied condition of reasonable fitness for a particular purpose. Answer: B Diff: 2 Type: MC Page Ref: 133 Skill: Applied

24) Gregory went to Collegiate Sports Ltd. with his dad, who asked for some shoes for Gregory suitable for playing squash. Gregory was given a pair of running shoes suitable only for jogging. His dad paid by cash. That evening, wearing the new shoes while playing squash, Gregory broke his ankle. In the ensuing lawsuit, the statement of claim cited the provisions of the Sale of Goods Act. Which of the following is true if it were proven that the shoes were inappropriate and the cause of the injury? A) This is not a sale of goods situation because Gregory's father paid by cash. B) This is a "buyer beware" situation and there would be no remedy for anyone. C) Only Gregory can sue since he was the only one hurt. D) Gregory's father would be the proper plaintiff in this action and could win on the claim that the goods were not fit for purpose. E) Gregory's father could win for breach of contract because he made known the purpose for which he wanted the shoes to a shoe dealer. Answer: E Diff: 2 Type: MC Page Ref: 134 Skill: Applied 25) Which of the following statements is correct with respect to the Sale of Goods Act? A) The parties are restricted to contract out of any of the terms of the Sale of Goods Act. B) The Sale of Goods Act does apply to the sale of land. C) The terms included in the Sale of Goods Act override the terms agreed upon by the parties to such a sale of goods. D) Some of the terms of the Sale of Goods Act are implied in the contract of sale. E) The Sale of Goods Act does apply to the assignment of a contractual claim. Answer: D Diff: 1 Type: MC Page Ref: 129 Skill: Recall

26) O'Neil bought a new car from a Chevrolet dealer for family use. The contract he signed contained the following clause: "The parties hereto expressly agree that the dealer is not liable for any breach of condition or warranty, express or implied." He also bought a used car radio from the dealer for his old car, which he was keeping. The contract for the radio was not in writing. The car did not run properly; O'Neil had it back in the shop seven times in three weeks. It was finally determined that the problem was due to a faulty transmission. Unfortunately, the car radio didn't work either. On these facts, which of the following is true?

A) The contract for the radio is not covered by the Sale of Goods Act because the radio was not new. B) The exemption clause in the contract for the car would succeed in defeating an action by O'Neil against the dealer for breach of contract. C) The exemption clause does not apply to either because both involve fundamental breaches of contract. D) The contract for the radio is not covered by the Sale of Goods Act because the contract was not in writing. E) O'Neil has an action for breach of contract against the dea...