ADMS 2610 Study Guide - Midterm Guide: Fiduciary, Adverse Possession, Easement
Course CodeADMS 2610
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(a) A offers to sell his truck to B, a minor for $5000. B buys the truck, but later decides he does not want
it. Providing your reasons, advise B.
= Contract voidable; minor w/ non-necessary goods; can return if in same condition purchased.
(b) A supplies vegetables to food stores. Today he met with B, a manager of a food store who needs to buy
bushels of grapes. After looking at the grapes, B tells A that he¶ll think about buying the grapes from A and will
let him know later. Grapes are marketable within a two-week period. Two weeks have gone by and A has heard
nothing from B, and now wants to sell the grapes to C. Advise A providing your reasons.
= Lapse; marketable period of 2 weeks; A can sell to third party.
(c) A and B are talking about A¶s surround-sound amplifier which A bought for $8,000. B offers $3,500 for it. A
says wont give it up for less than $5,500 and B says, I¶ll give you $5,000. If A take the $5,000 is there a contract?
= Yes there is offer by B & acceptance by A.
(d) A wants to build a house for his daughter, so he contacts, B to build the house for $300,000. B does a very
poor job and the daughter now wants to sue B. Advise the daughter providing your reasons.
= Privity; contract is between A & B; party not in contract cannot enforce it.
(e) A (developer) enters into a contract with B (land owner) to develop a subdivision on B¶s land. The contract is
oral. A begins to clear the land, and remove the soil. Shortly after A begins, B decides he does not want the land
developed and cancels the contract with B, returning B¶s money. Advise B providing your reasons.
= Statute of Fraud: this is oral contract & must be written contract for land contracts; par performance; B can
enforce contract if shows act of ownership by clearing land & removing soil.
(f) C wants a loan, B will not give C the loan unless someone guarantees it. C¶s brother A now orally agrees with
B to guarantee the loan and B gives C the money. When the loan comes due, C cannot pay it so B brings an action
against A¶s guarantee. Explain whether C will succeed, providing your reasons.
= Contract was oral & needs to be in writing.
(g) On June 1st A, in Toronto, agrees to ship goods by truck to B in Montreal by June 6th at a cost of $50,000 by
the normal truck route, which is least expensive. The truck leaves on June 5th and finds that there has been a major
accident 100 miles from Montreal, which has closed down the highway for 3 days. There is an alternative route
which A¶s truck can use, but it will cost $10,000. So A tells B, he is cancelling the contract, advise B.
= Frustration by closure of highway; no hardship on A as he will have to pay extra money to deliver.
(h) A sells surround sound amplifiers and has contracted with B (retailer) to sell 20 amplifiers for $50,000. The
contract contains an exclusion clause, which states that A will ³not be responsible for repairs to any amplifier that
does no work´. B finds that 15 of the twenty do not work properly and the cost of fixing the problems would be
$40,000. B Company now wants out of the contract. Advise B Company of its rights?
= Exclusion clause fails; fundamental breach 15/20 are not working & repairs are $40,000.
(i) A and B enter contract on January 1st, to be completed September 1st. If on June 1st, one of the parties tells the
other that he will not perform his part of the contract, advise the other party of his rights.
= Breach of contract; express repudiation; anticipatory breach: terminate/sue for damages or keep contract alive.
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