BROCK UNIVERSITY Mid-Term Examination, Winter 2013 ‘Number of Pages: 17 Course: ACTG 1P71 Number of Students: 300 Date of Examination: March 2, 2013 Number of Hours: 2.0 Instructors: G.W. McCann, B. Troup Questions 1, 2, 3, 4 and 5 are to be answered directly on the examination paper. Do NOT exceed the space provided. DO NOT continue answers on the back of a page. The space provided is sufficient. Concise, precise answers are better. Questions 6, 7 and 8 are to be answered in ONE. workbook. Write your name, student number and seminar leader’s name on the front page of the workbook. DO NOT exceed one workbook in your answers and DO NOT write on the back of pages in the workbook The space provided is sufficient. Concise, precise answers are better. No examination aids other than those specified are permitted. Use or possession of unauthorized materials will automatically result in the award of a zero grade for this examination, Suggested Question Marks Minutes Awarded 1 a 25 2 43 53 3 6 7 4 4 4 5 6 7 6 6 a 7 6 7 8 a0 la 100. 120 NAME: STUDENT #:, SEMINAR LEADER: (Circle One) Chris Bittle Patrick Maloney Stacey Wells David Willer Mark Armitage Gyllian Fahy Lana Sgambelluri Andrew MaloneyQUESTION 1 (22 Marks) For each of the following, select the ONE best answer and circle the appropriate letter. CIRCLE ONLY ONE and make your choice clear, There is no deduction for an incorrect answer. 1 Which of the following statements is/are correct in relation to tort law? mUODP An act must be negligent to be classified as a tort; ‘The main purpose of tort law is to impose punishment on a wrongdoer; Intentional torts are never criminal acts; Tort law compensates victims of wrongful conduct; Cand D above. Which of the following does not constitute an assault? pop ps ‘bumping into another in a crowded hallway; an offensive gesture from another motorist; abystander struck by a ball during a baseball game; pointing an unloaded gun at another who does not know whether or not it’s loaded all of the above; A, Band C, above. In which case has a battery taken place? pOp> m an uninvited kiss; a doctor, with the patients consent, amputating a badly infected leg; youth smashes window of an empty parked car; the attempt to stop a thief from stealing your purse by striking her with your umbrella; punching your opponent in an Olympic boxing match. Doctors are able fo protect themselves from claims of battery by: ROODD being properly licenced medical practitioners; being properly insured; obtaining a patient's consent to a given procedure or treatment; relying on the principle of strict liability; raising the defence of voluntary assumption of risk.3 ‘Which of the following is not true about the tort of defamation: room truth is an absolute defence; a mistaken belief in the truth of a statement is a defence; a plaintiff on a defamation case needs to prove that a defamatory statement is false; any statement made on the floor of Parliament is subject to absolute privilege; both (b) and (6). Which of the following is the test used by the court in a negligence action for personal injury to determine if the defendant owed the plaintiff a "duty of care"? A B. c. D. ‘Would a reasonable person have foreseen that type or kind of injury? ‘Would a reasonable person have acted like that in the circumstances? Would a reasonable person have foreseen that the plaintiff would have been affected by the action of the defendant? Would a careful person have acted like that in the circumstances? ‘The "standard of care" in a negligence case is defined as: moODD> what the average person would do under the circumstances; what a particularly prudent person would do under the circumstances; what a reasonably prudent person would do under the circumstances; all of the above; both (a) and (c). Which of the following is not a defense to a negligence action? PmoOD> no duty was owed; no damage was suffered; the defendant was being reasonably careful; the plaintiff was more likely to be injured than most people; voluntary assumption of risk; none of the above. ‘Which of the following statements is true: A B. Cc D. E, itis not possible to make a counter-offer without rejecting the original offer; is not possible to reject an offer without making a counter-offer; is not possible to make a counter-offer until there is an offer; both (a) and (b); both (a) and (c).10. WL 12. 13. Which one of the following situations will not cause an offer to lapse? insanity of the offeree; the offeror has not stipulated a time limit and the offeree does not accept within a reasonable time; the offeror sells the subject matter of the intended contract to someone else before the offeree accepts; death of the offeror, the offeree has not accepted within a stipulated time. a> FO OO person commits an intentional tort when he causes injury by: acting carelessly; acting recklessly; acting against his will; intending to cause harm; none of the above. FUORP > Which of the following promises are unenforceable? 4 promise to donate $500 to a favourite charity; a promise to pay your postman $500 for delivering your mail; a promise to pay $500 to a person who stopped you from choking in a restaurant; ‘a promise to sell your car to someone for $100; all of the above; all of a), (b) and (c). BEDOD> Assume that all the other requirements for a valid contract are present and indicate which of the following would not be a binding agreement because of a problem with consideration. A. Although an antique dealer told May her statute was worth $500, she later agreed to sell it for $100; B. Mr. Ng promises to give $50 to a local theatre association and makes that promise under seal; Laura promises to pay a carpenter an additional $100 if he will build an extra second cabinet for her files; John, back from a month in Ottawa, promises to give Sam, a neighbour, $50 for hhaving kindly shovelled his walks while he was away; Tones agrees to accept $800 as full payment of a $1,000 debt when Kahn, the debtor, pays the $800 a week before the due date. mo14, 15. 16. 7. 18. 5 Which of the following is true of a misrepresentation? A. an opinion of an expert cannot be a misrepresentation; B. _apurely innocent misrepresentation will not affect the enforceability of a contract; C. inorder to be actionable, a misrepresentation must have induced the innocent party to enter into the contract; D. _allof the above; E. none of the above. Which of the following statements are true? A. all breaches of contract result in an award of damages; B. only damages witich could be reasonably anticipated by the parties are compensable ina breach of contract case; C. victims of breach must take reasonable steps to mitigate their damages; D. all of the above; E, both (b) and (c). Specific performance is an appropriate remedy where: there is a liquidated damages clause in the agreement; damages are considered not to be an adequate remedy; the claim for damages is particularly large; the contract calls for personal services by a specific individual; all of the above. moOOmP> ‘A bank may require that someone who guarantees the debts of another to obtain independent legal advice for which the following reasons? the guarantor uses a different bank; to avoid a defence of undue influence; to avoid a defence of duress; to avoid a defence of quantum meruit; all of the above; both (b) and (6). AROOBD Which of the following is not an example of discharged contractual obligations? contract which is frustrated; a situation in which a party cannot complete a contract that has been substantially performed; a contract which is void for illegality; all of the above; none of the above, moo >19, 20. 2. The goal of damages for breach of contract is: A. moO to put the parties into the positions they occupied before the contract was entered into; to give the victim of the breach the value of his reasonable expectations from the bargain; to punish the party who is in breach; all of the above; none of the above. Which of the following statements is true? map OD> past consideration is no consideration; the court will not generally examine the sufficiency of consideration in a contract; professional may be held to a higher standard of conduct than an ordinary person; a contract with an infant is never enforceable; all of the above; all of 2), (b) and (¢). A professional person can be liable for negligent words: vOe> mm ‘where he has a contract with the victim; where the vietim relies on the words; only if the professional knows the victim is relying on the words; where the victim is a member of a class of persons who can be expected to rely on the words; (@), (b) and (4); (a) and (@).QUESTION 2 (42 Marks) Complete each of the following questions with the most appropriate word or phrase, In all ‘cases very few words are required, so be as precise as you can, A The tort of involves confusing the public into thinking your product is a product produced by someone else. A contract is no contract at all. = A contract, on the other hand, does exist and has legal effect, but one of the parties has the option to terminate it. A contract is one in which performance follows the agreement between the parties. ‘The concept which provides that an employer can be held responsible for the torts of her employees during the course of their work is called : involves the communication or publication of defamatory material in oral (not written) form. The tort of, consists of restricting a person’s freedom of movement without lawful excuse, ‘The purpose of tendering performance is to show that the person tendering is ‘An agreement in which the contract is formed simultaneously with performance is called a contract.(2 Marks) In a case where "A" sells something to "B", who is a rogue and does not pay "A", and "B" subsequently sells to "C", what does the court want to know about "C" before ruling in her favour? A person driving a bus is held to a higher standard of care than a person driving a car. ‘True: False: ‘The fact that it was an accident excuses a person from the injury caused to another. ‘True: False: Courts will award compensation to anyone who suffers financial loss because of negligent statements, Tre: __ False: __ Reasonable conduct falls somewhere between careless and average. True: False: It is not necessary for a plaintiff to show injury to self or loss of property as a result of defendant's negligence. True: False: __(3 Marks) A disclaimer of liability in a standard form contract is not generally enforceable. ‘True: False: Sometimes, in obvious cases, a plaintiff will be excused from proving that the defendant failed to meet the standard of care because of the principle known as ‘ ". (Note: either the Latin or the English expression is acceptable. A very simple definition of a contract is, ‘What are the elements necessary for an agreement to be a contract? a Q) 8) @ 6 (6) sometimes A valid contract must be based on a fair bargain. ‘True: False: Avoidable contract is one that can be ended by either party. True: False: __(10 Marks) U. 10 In each of 1 - 10, below, select the item from the Key that is most appropriate (Note: it is possible for an item in the Key to be used more than once but only where it is the most appropriate answer.) Key: (@) invitation to treat (b) offer (©) gratuitous promise (@ bilateral contract (©) unilateral contract @ mistake (g)___ illegality of object (h) rescission @ —— nonest factum (rectification promissory estoppel @) none of the above 1. Mrs, Wright pledged to give Planned Parenthood Association a $200 donation during its annual fund raising campaign. 2, Am announcement in the newspaper read as follows: "$200 reward for the return of two lost Brittany Spaniels.” 3, After having read the announcement given in (b) above, Mr. Hong found and returned the two lost dogs. 4, Anad in the morning paper read "Brand New 1998 Ford Escort $9,499. No payment until January, 1999, We make your first payment." 5. "Til give you $70 for your tennis racquet.” 6. Mr. Frank, a foreman supervising some 43 employees, was asked by his secretary to sign a form requesting additional supplies needed on the factory floor. He was not careless when he examined the form but his secretary had cleverly arranged the signature line so that instead of signing a request for supplies he signed a cheque payable to his secretary. What plea, if any, would be used to defend against her action on the cheque? 7. Aand B entered into a contract for the purchase and sale of three grams of cocaine. B delivered the goods but A didn't pay. If B sued for payment, the court would not enforce the contract because of which of the above?pal 8. If Mr. Jay took out a life insurance policy on a stranger, Mr. Wilde (known for his rough and dangerous habits), on which of the above grounds would the insurance company refuse to pay Jay if Wilde did die in one of his wild escapades? 9, What remedy would the courts award if a buyer was induced to enter into a contract because of an innocent mistepresentation by the seller? 10, A Landlord agrees to reduce its rent to its tenant for one year while the tenant undertakes a major change in its business. After the year is up the landlord sues the tenant for the amount by which the rent had been reduced, What must the purchaser of an insurance policy demonstrate about the insured person or thing to avoid the contract being declared void as a wager? ‘What is meant by the phrase “privity of contract”? Identify two exceptions to the rule that contracts with infants are unenforceable. oO @Q) An offeror puts his offer in the following terms, "If I don't hear from you in two weeks, I will consider this offer as accepted." What is the effect of the offeree's failure to reply?12 marks) Z. Whats a counter-offer and what is its effect on an offer? @ marks) ZZ. "promise to leave my offer open for acceptance until Friday at 5:00 p.m.". What would be necessary for this promise to be an "option" and why would an offeree want an option?13 QUESTION 3 (6 Marks) - Write your answer on the FRONT ONLY of THIS PAGE. Tdentify the elements that a plaintiff must establish to make a successful claim for negligence and what a defendant may try to establish as a defence.14 QUESTION 4 (4 Marks) - Write your answer on this FRONT ONLY of THIS PAGE. What are elements of a valid statutory assignment?15 QUESTION 5 (6 Marks) — Write your answer on this FRONT ONLY of THIS PAGE. Describe the differences between special damages, general damages and punitive damages.16 Question 6, 7 and 8 ONLY must be answered in the workbook provided. QUESTION 6 (6 Marks) Frank writes a letter to Joe saying "I offer to sell you my detective agency for $40,000.00. This offer is open for acceptance until 5:00 p.m. on Friday, March 13th". Joe receives the offer on Monday, March 9th and he considers it. By Wednesday, March 11th, Joe still can't decide and he calls Frank on the phone and says "T haven't made up my mind yet, will you extend the offer until next Friday, March 20th?". Frank agrees. On Saturday, March 14th, Frank receives an unsolicited offer to buy his business for $50,000.00. Frank wants to accept this offer and tries several times to call Joe to revoke his offer, but without success since Joe has gone out of town for the weekend. Frank leaves a message at Joe's office telling Joe to call him immediately. Frank then accepts the $50,000.00 offer. When Joe arrives at his office Monday moming he sees Frank's message. Before returning the call Joe writes out an acceptance of Frank's offer and drops it in the mail box. He then calls Frank and when Frank advises him that he is revoking the offer, Joe tells him he's too late. Advise Frank and Joe with respect to their rights on these facts. Discuss all issues raised in the facts. QUESTION 7 (6 Marks) Chester and Arthur are both toy manufacturers and both have remarkably similar problems. Chester had a customer place an order for $100,000.00 worth of his new “Tickle Me Bamey” doll and the customer then refused to take delivery. Chester's profit margin on the sale ‘would have been $40,000.00. Arthur had a customer place an order for $100,000.00 worth of his “Cabbage Breath Kid” doll and that customer refused delivery. Arthur's profit on the sale would also have been $40,000.00. ‘The only difference is this: Tickle Me Bamey is a big hit and stores can't get enough of them. On the other hand the Cabbage Breath Kid is somewhat less successful and Arthur fears he may have a bunch left in his warehouse after the Christmas season. ‘Advise Chester and Arthur of their rights and obligations and their chances for success in lawsuits against their respective customers,QUESTION 8 17 (8 Marks) @ @ (4 Marks) Peter grows pumpkins which he sells to vegetable markets. On September Ist, Sherry, a market owner, entered into a contract with Peter who agreed to supply her with 100 pumpkins for Halloween season, The contract called for delivery on October 20th at a price of $1.00 each. Sherry planned to sell them for $2.00 each. On October 15th, Peter phoned Sherry and informed her that he did not intend to perform because another customer had since offered to buy all his pumpkins at $1.50 each. Sherry is angry because the pumpkin supply is dwindling as a result of unseasonably cold October weather. Advise Sherry of her rights and obligations as a victim of anticipatory breach, (4 Marks) Assume further that Sherry hears no further word from Peter and on October 30th purchases 100 pumpkins elsewhere for $1.75 each. She is able to sell only 80 at $2.00 each. She could have sold 100 if she'd had them on October 20th, Advise Sherry as to the amount of damages she can recover.