More Issues and End of Contract

In each of the following situations, assume that all five elements of the contract are present, and that
if writing is required, the agreement is written and signed.

1. You give your customer a written contract to sign. Your customer says that he does not read
English very well, and cannot understand the contract. You tell your customer that he can take
the contract home and either get legal advice, or have someone read and explain the agreement to
him. He says “no, I don’t have time for that, I’ll just sign.” He signs. Now, he wants to end the
contract. Is this duress, undue influence, unconscionable transaction, misrepresentation or
mistake and is the contract valid, void, or voidable?
All elements for voidable contract not apply this case.
Customer is told to get legal advice but it is the customer choice to refuse to get one, nothing could do
Contract is still valid

2. Your aunt and uncle’s banker has been working with them for 30 years. Your aunt and uncle are
in their 80s and the banker gets them to sign a contract agreeing to pay back your cousin’s loan.
Your aunt and uncle did not read the agreement, because they trust their banker, and he said the
agreement was “just a formality”. Legally, this is an unconscionable transaction and
misrepresentation. Explain how unconscionable transaction and misrepresentation apply here.
Unconscionable transaction applies because the banker took advantage of the aunt and uncle’s
age and trust to make a contract that was not fair to them. Misrepresentation applies because the
banker downplayed the seriousness of the contract by just saying it was a “formality”.

3. You are a financial planner. Your client, who knows nothing about antiques, wants to sell you a
painting. You agree to buy the painting for $100. You pay in full, and your client refuses to
deliver the painting because he discovers it is worth millions. You honestly had no idea the
painting was valuable. Legally, this is undue influence. Explain how undue influence applies here.
Just so you are aware, there was no misrepresentation in this scenario.
Client think professionals know some stuff how much valuation. ??

4. Your banker hands you your loan agreement to sign and says the interest rate in the agreement is
2%, and it’s a standard contract. You sign it without reading it. In fact, the interest rate is 20%,
and you never would have agreed to such a steep rate of interest. The banker tells you that since
this agreement is written, you must pay 20% interest. Is this duress, undue influence,
unconscionable transaction, misrepresentation or mistake?
This is misrepresentation since the banker verbally stated that the interest rate is 2%. You would not
have normally entered into the contract if you had known this information so it is misrepresentation.
(if you do not read your contracts, they are still valid, but since this situation has elements that
invalidate the contract it would be voidable regardless.)
5. A complete stranger meets with you and informs you that if you do not agree to pay back the
money that your mom stole from the bank, the police will be called, so you agree. Is this duress
and why do you say so?
This would be duress because the stranger is threatening to get the police involved. The original
contract was between the stranger and your mother, and the stranger is using the threat of the
police to try an involve you in a contract that you were not originally involved in.

6. Dane wants a court order to stop picketers from harassing his customers. Which remedy would
he request?
Injunction, which is the Court order forcing defendant doing an action, “to stop picketers harassing
customer” is the problem to be solved.

7. Jamison has a contract with Raddison. Jamison agreed to supply steel to Raddison, at the price set
out in the contract. Jamison usually buys steel from Barsteel, but all of Barsteel’s steel is stuck on
a boat at the Suez canal (which is blocked), so it is not able to sell steel. The only other supplier is
Gold Star Steel, and this company charges twice as much. Jamison stops delivering steel. How has
this contract “ended” – performance, agreement, frustration or breach and why do you say so?
Breach. Jamison is still able to supply the steel so it would not count as frustration, and since Jamison
has stopped supplying, that is breach (Lack of funds do not count as frustration).
J – R – separate contract with J-B contract
J – B – frustration, cannot claim because of fructration.

- M

8. Hedaya has a contract with Jones Theatre to play Juliet in their summer theatre production. She
has a heart attack two hours before opening night and lets Jones Theatre know that she will not
be able to perform. How has this contract “ended” – performance, agreement, frustration or
breach and why do you say so?
The contract would be ended by frustration. This would be a termination of the contract because
of an unexpected event (Hedaya having a heart attack). Hedaya being the lead role for the
performance would not be able to go through.

9. Remember Rick and Mandy from the consideration exercise?

“Rick went out for a run one Saturday morning and saw Mandy having a garage sale. One of the
items she is selling is an old drawing for $30. Rick (an antique dealer) pays Mandy the $30 and
says he will be back with his car after his run. Mandy agrees. Meanwhile, doing a quick internet
search, Mandy’s husband discovers that the drawing may be a masterpiece, worth millions. When
Rick returns to pay and pick up the drawing, Mandy tells Rick she’s returning his $30, and refuses
to deliver the drawing. Rick refuses to take his $30 back.”
 What is the difference between rescission, damages and specific performance in the above
situation?

Rescission – is what Mandy want to do, returning the $30 and not selling the drawing. And
money send back to Rick, the whole situation will return to pre-contractual position.
Damages - Rick could sue for money (monetary compensation) and as the drawings worth
millions, with Damages, Mandy need to compensate the value of drawing after identification
from professionals to Rick and then Mandy could keep the drawing.
Specific performance - Court enforce and order the seller Mandy must sell the property
(drawings) and Rick will pay the agreed price $30 to get the property.

10. You have a contract to buy a car. The vendor said the car had 120,000 kilometers on it and it had
never been in an accident.
a. In fact, the car had been in a previous accident, and the frame was bent. Is this a breach of
warranty or condition and what difference does it make?
Breach of condition. Since the seller lied about the condition of the car, something that
is a significant factor when purchasing a vehicle. It means that in addition to sueing for
damages the customer can also void the contract.
-m
b. The vendor agreed to fill the car with gas and the tank is empty. Is this a breach of
warranty or condition and what difference does it make?
This would be a breach of warranty because the gas tank being empty is only a minor term of
the contract that is being breached so the individual would be able to claim damages for the
price of the fuel but would not be able to terminate the contract.

11. Ezra signs a written contract with Jai agreeing to buy a 2002 Honda Civic from him for $5000.
Ezra tells Jai that he has lost his job and he will not be buying Jai’s car. Later that day, Jai sells the
car to someone else for $5000. What is the amount of Jai’s damages?

There is a zero damage, because there is no further loss of money to claim as Jai already mitigates the
damage from someone else.