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Exam 8: Factors Affecting the Contractual Relationship

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Question 61

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The principle that contract terms apply only to the actual parties to the contract is known as ________.

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Question 62

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Mr.Zink hired Bruce Dorne to create a payroll program for his business.Bruce was to be paid $4000 for the program.When Bruce was half finished,a creditor to whom he owed $2000 pressed so hard for payment that Bruce assigned him $2000 of the contract price,an amount he felt he had earned already.The creditor,Mr.Pressing,gave written notice that very day to Mr.Zink.On these facts,which of the following is true? (Read each statement separately.)

A) Mr.Zink must pay $2000 to Mr.Pressing on the day that notice was given,because at that time Bruce had done half of the work on the $4000 contract.
B) This assignment is a statutory assignment,not an equitable assignment.
C) This type of assignment is not recognized by the courts because it is an assignment of contractual obligations.
D) Mr.Pressing is entitled to $2000 from Mr.Zink when the contract is completed,if at least that much is owed to Bruce by Zink at that time.
E) If Bruce bungled the assignment and the court determined that nothing was owed to him,Pressing could still get $2000 from Zink.

F) B) and E)
G) A) and B)

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Question 63

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A windfall that one party to a contract stands to make at the expense of the other is known as ________.

Discuss the principle of caveat emptor and how it relates to misrepresentation in contract law.

The thing or benefit (such as a claim or the right to sue)that is transferred in an assignment is known as ________.

A provision in equity whereby one person transfers property to a second person obligated to use it to the benefit of a third is known as ________.

Outline the restrictions on the ability of a person to claim non est factum.

With regard to the law governing privity of contract and assignment,which of the following is true?

The original party cannot enforce a contract that bestows benefits on an outsider.

Explain what is meant by an "involuntary assignment."

Joe,a student at the local college,had a one-year lease on a suite in a house owned by Sam.Sam sold the house to Jones without telling Jones about the lease.When he discovered Joe in the suite,he demanded that Joe leave.Explain the rights of the parties in terms of privity of contract.

Discuss how privity of contract affects the position of people who are not parties to a contract.In your discussion,include an examination of the Supreme Court decision in London Drugs Ltd.v.Kuehne & Nagel International Ltd.

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

Al sells gravel to Bob on credit,and Bob sells it to Chuck,an innocent purchaser.Then Bob runs away with the money,without paying Al.Who will get the gravel if the court holds that the contract between Al and Bob was "void"?

If Mills agreed to sell Boothe a used Nissan automobile,which in the contract was described as a 2012 Nissan Murano with a rebuilt transmission,Boothe could sue for ________ if the vehicle turned out to be a 2010 Murano and the transmission was used,not rebuilt.

If a lawyer persuades a client to guarantee a loan,the relationship of solicitor/client leads to a presumption of

Fraud does not exist if the victim of the misrepresentation could have found out the truth,but relied instead on the statement of the defendant.

The principle that courts will not permit outside evidence to contradict clear wording of a contract is known as ________.

A fraudulent misrepresentation which induces another person to enter into a contract can result in which of the following remedies?

When two parties are involved in a misunderstanding as to the meaning of a term of the contract,which of the following is usually applied by the court to settle the matter?