Question 1 Allana's car was showing signs of age. On September 23rd, while looking through the...

Transcribed Image Text:

Question 1 Allana's car was showing signs of age. On September 23rd, while looking through the automotive section of the newspaper, she came across the following ad from Harry G's Ford dealership: "Model Year Clearance. Only 3 left! 2022 V6 Mustang Convertibles. No need to - haggle Harry's one price/low price policy - only $24,995.00. Harry G's Ford Sales, 406 Lake Street, St. Catharines, Phone: 688-1111; Email: harry@gmail.com" Allana went to the dealership on September 23rd and was met by Jodi, who worked at the lot. "I'll take one!" Allana exclaimed. "One what?" asked Jodi. "One of these" said Allana waving the advertisement and presenting a certified cheque for $24,995.00. Jodi read the advertisement and took Allana to see the cars. On the window of each there was a feature sheet listing the options included. The price indicated on the sheet on each of the 3 cars was $26,995.00 plus an additional $1,100.00 for freight and preparation. "I'll take the black one" said Allana. Jodi explained that the price in the advertisement was only for the basic model. The 3 Mustangs which Harry G's was selling had a number of additional options. It would be unreasonable to think that he would sell the cars for less since the price was clearly marked on each car. In any event, Jodi said, the policy was that any deviation from the price on the feature sheet required the approval of Harry. Harry would not be in until 9:00 a.m. on Friday, September 26th. Jodi told Allana that her offer of $24,995.00 would be presented at that time. Allana, although unhappy, left her business card and asked for a reply as soon as Harry arrived. She still thought that Harry should honour the advertised price and that she was entitled to the car at that price. On September 25th, Harry returned, received the note from Jodi and at 5:30 p.m. emailed Allana at her work email as follows: "Will accept $25,500.00 for the car.' " Allana did not receive the email at that time since she had left work for the day. That evening (September 25th) at 9:30 p.m. she delivered a letter to the dealership which read: "Will pay $25,995.00 plus freight and preparation." Harry received this letter on September 26th at 9:00 a.m. He called Allana's office. She was not yet in and he left a message with her secretary that they had a deal for $25,995.00 plus freight and preparation and emailed a confirming letter at 9:05 a.m. At 10:30 a.m. Allana arrived at the office. She read, in order: (i) (ii) the email sent by Harry on September 25th; the email sent by Harry on September 26th; (111) the message left by Harry with her secretary. She then called Harry and told him she was accepting the offer for $25,500.00, although she still thought there was a binding contract for $24,995.00. Harry told her that they have a binding contract for $25,995.00 plus $1,100.00 for freight and preparation. Required: Explain whether there is a contract for the purchase and sale of the car and, if so, at what price. Be certain to include and explain the applicable principles as part of your answer. Question 2 Assume Allana and Harry agree on a price for the car. When she picked up the car, Harry gave Allana a preprinted form titled "Terms and Conditions of Purchase" and the owner's manual. Allana signed to acknowledge that she had received the form and manual. Paragraph 5 of the form, which Allana did not read, read as follows: "Dealer's warranty is limited to the cost of repair of any defect in materials or workmanship. No other warranty applies." On November 15th Allana was driving in the country near Wainfleet. Allana loved her convertible. On the first trip out she was cruising with the top down, the heater on and "Born to be Wild" on the radio. Even though it was cold (45 degrees Fahrenheit) she wanted to try the top down. Suddenly it began to rain. Allana tried to put the top up but the mechanism failed. The rain fell harder. She put the wipers on high but they did not speed up and were unable to clear the windshield. Allana could barely see the road. Suddenly a transport truck coming from the other direction passed her spraying rainwater over the windshield and into the car. She was temporarily blinded by the water. As her vision cleared, she saw a cow directly in her path. She swerved to miss it, going off the road, striking a hydro pole and totalling the car. As a result of striking the hydro pole, power in the area was disrupted for 8 hours. The interruption extinguished the oxygen supply to Farmer Johnson's barn and several thousand chickens died. Johnson brought an action for damages of $30,000.00 against Allana. Allana denied responsibility and, in turn, sued Farmer Hendricks (the owner of the cow), Harry G's 2 and Ford Motor Company for damages of $1,000,000.00 representing any liability she might have to Farmer Johnson, lost income (she was unable to work for 6 months), damage to property (the value of her car) and pain and suffering. At trial, the following was established: (i) (ii) (iii) ) (iv) The cow had escaped through a hole in Farmer Hendricks' fence. Farmer Hendricks was unaware of the hole but had inspected his entire property three months before the accident and had not noticed any defect. The cow that escaped had been separated from her calf the week before. The windshield wiper motor on the Mustang was defective and, as a result, only operated on the slowest speed. Engineers at Ford Motor Company were aware of the problem with the roof assembly. Page 47 of the owner's manual (printed in the U.S.) provided the following warning under the heading - Operation of Roof Assembly: "Roof closure apparatus may fail if vehicle is in motion at temperatures below 50F." The cost of re-engineering and replacing the sensors which operated the roof assembly was in excess of $10,000,000.00. The Engineers felt that the warning would be sufficient since it was very improbable that anyone would need to work the roof assembly in conditions where the vehicle was in motion and the temperature was below 50F. Farmer Johnson had installed a battery-operated power generator in the barn to be available as an emergency backup. The batteries were not charged and therefore the generator did not start when the power went out. Required: Explain the issues which will be raised in the lawsuits, the applicable principles and the likely result of the action. Be certain to make reference to the elements which must be established for a successful tort action and the effect of paragraph 5 of the Terms and Conditions of Purchase. There are multiple law suits. Question 3 McMaster, a wealthy doctor undertook to contribute $2,500,000.00 to Brock University's capital campaign, payable in 5 annual instalments of $500,000.00. On the occasion when McMaster made the pledge the President of the University stated that the University would now be able to undertake the construction of an additional building and continue with its application to establish an accredited medical school. A picture of McMaster and the University President was published in the local paper and on the University's website together with a news item about McMaster's generous contribution to the campaign. 3 One month later McMaster asked if the University would name the new medical school building after him. The President agreed and said the University would be honoured to call the new building "McMaster Hall" in recognition of his pledge. One year later, following payment of the first instalment of the pledge and as construction was about to begin, the President contacted McMaster and advised him that in accordance with the University's naming policy, the University had recently entered into an agreement with Siri, to name the new building, once completed, Siri Hall. Siri had agreed to pay $4,000,000.00 for the naming rights for a period of 20 years from the completion of the building. The President advised McMaster that a lecture hall in the building would now be named McMaster Hall. McMaster advised the University that it had breached their agreement and he would not be making any further payment. McMaster demanded the immediate return of the $500,000.00 he had paid. The University responded that it had hired architects and engineers, had closed off a parking lot, entered into a construction contract and commenced construction based on McMaster's promise and would be commencing legal action against McMaster for the balance of $2,000,000.00. Required: Discuss the application of the principles of consideration to the facts of this case. Will the university be successful in its action? Question 1 Allana's car was showing signs of age. On September 23rd, while looking through the automotive section of the newspaper, she came across the following ad from Harry G's Ford dealership: "Model Year Clearance. Only 3 left! 2022 V6 Mustang Convertibles. No need to - haggle Harry's one price/low price policy - only $24,995.00. Harry G's Ford Sales, 406 Lake Street, St. Catharines, Phone: 688-1111; Email: harry@gmail.com" Allana went to the dealership on September 23rd and was met by Jodi, who worked at the lot. "I'll take one!" Allana exclaimed. "One what?" asked Jodi. "One of these" said Allana waving the advertisement and presenting a certified cheque for $24,995.00. Jodi read the advertisement and took Allana to see the cars. On the window of each there was a feature sheet listing the options included. The price indicated on the sheet on each of the 3 cars was $26,995.00 plus an additional $1,100.00 for freight and preparation. "I'll take the black one" said Allana. Jodi explained that the price in the advertisement was only for the basic model. The 3 Mustangs which Harry G's was selling had a number of additional options. It would be unreasonable to think that he would sell the cars for less since the price was clearly marked on each car. In any event, Jodi said, the policy was that any deviation from the price on the feature sheet required the approval of Harry. Harry would not be in until 9:00 a.m. on Friday, September 26th. Jodi told Allana that her offer of $24,995.00 would be presented at that time. Allana, although unhappy, left her business card and asked for a reply as soon as Harry arrived. She still thought that Harry should honour the advertised price and that she was entitled to the car at that price. On September 25th, Harry returned, received the note from Jodi and at 5:30 p.m. emailed Allana at her work email as follows: "Will accept $25,500.00 for the car.' " Allana did not receive the email at that time since she had left work for the day. That evening (September 25th) at 9:30 p.m. she delivered a letter to the dealership which read: "Will pay $25,995.00 plus freight and preparation." Harry received this letter on September 26th at 9:00 a.m. He called Allana's office. She was not yet in and he left a message with her secretary that they had a deal for $25,995.00 plus freight and preparation and emailed a confirming letter at 9:05 a.m. At 10:30 a.m. Allana arrived at the office. She read, in order: (i) (ii) the email sent by Harry on September 25th; the email sent by Harry on September 26th; (111) the message left by Harry with her secretary. She then called Harry and told him she was accepting the offer for $25,500.00, although she still thought there was a binding contract for $24,995.00. Harry told her that they have a binding contract for $25,995.00 plus $1,100.00 for freight and preparation. Required: Explain whether there is a contract for the purchase and sale of the car and, if so, at what price. Be certain to include and explain the applicable principles as part of your answer. Question 2 Assume Allana and Harry agree on a price for the car. When she picked up the car, Harry gave Allana a preprinted form titled "Terms and Conditions of Purchase" and the owner's manual. Allana signed to acknowledge that she had received the form and manual. Paragraph 5 of the form, which Allana did not read, read as follows: "Dealer's warranty is limited to the cost of repair of any defect in materials or workmanship. No other warranty applies." On November 15th Allana was driving in the country near Wainfleet. Allana loved her convertible. On the first trip out she was cruising with the top down, the heater on and "Born to be Wild" on the radio. Even though it was cold (45 degrees Fahrenheit) she wanted to try the top down. Suddenly it began to rain. Allana tried to put the top up but the mechanism failed. The rain fell harder. She put the wipers on high but they did not speed up and were unable to clear the windshield. Allana could barely see the road. Suddenly a transport truck coming from the other direction passed her spraying rainwater over the windshield and into the car. She was temporarily blinded by the water. As her vision cleared, she saw a cow directly in her path. She swerved to miss it, going off the road, striking a hydro pole and totalling the car. As a result of striking the hydro pole, power in the area was disrupted for 8 hours. The interruption extinguished the oxygen supply to Farmer Johnson's barn and several thousand chickens died. Johnson brought an action for damages of $30,000.00 against Allana. Allana denied responsibility and, in turn, sued Farmer Hendricks (the owner of the cow), Harry G's 2 and Ford Motor Company for damages of $1,000,000.00 representing any liability she might have to Farmer Johnson, lost income (she was unable to work for 6 months), damage to property (the value of her car) and pain and suffering. At trial, the following was established: (i) (ii) (iii) ) (iv) The cow had escaped through a hole in Farmer Hendricks' fence. Farmer Hendricks was unaware of the hole but had inspected his entire property three months before the accident and had not noticed any defect. The cow that escaped had been separated from her calf the week before. The windshield wiper motor on the Mustang was defective and, as a result, only operated on the slowest speed. Engineers at Ford Motor Company were aware of the problem with the roof assembly. Page 47 of the owner's manual (printed in the U.S.) provided the following warning under the heading - Operation of Roof Assembly: "Roof closure apparatus may fail if vehicle is in motion at temperatures below 50F." The cost of re-engineering and replacing the sensors which operated the roof assembly was in excess of $10,000,000.00. The Engineers felt that the warning would be sufficient since it was very improbable that anyone would need to work the roof assembly in conditions where the vehicle was in motion and the temperature was below 50F. Farmer Johnson had installed a battery-operated power generator in the barn to be available as an emergency backup. The batteries were not charged and therefore the generator did not start when the power went out. Required: Explain the issues which will be raised in the lawsuits, the applicable principles and the likely result of the action. Be certain to make reference to the elements which must be established for a successful tort action and the effect of paragraph 5 of the Terms and Conditions of Purchase. There are multiple law suits. Question 3 McMaster, a wealthy doctor undertook to contribute $2,500,000.00 to Brock University's capital campaign, payable in 5 annual instalments of $500,000.00. On the occasion when McMaster made the pledge the President of the University stated that the University would now be able to undertake the construction of an additional building and continue with its application to establish an accredited medical school. A picture of McMaster and the University President was published in the local paper and on the University's website together with a news item about McMaster's generous contribution to the campaign. 3 One month later McMaster asked if the University would name the new medical school building after him. The President agreed and said the University would be honoured to call the new building "McMaster Hall" in recognition of his pledge. One year later, following payment of the first instalment of the pledge and as construction was about to begin, the President contacted McMaster and advised him that in accordance with the University's naming policy, the University had recently entered into an agreement with Siri, to name the new building, once completed, Siri Hall. Siri had agreed to pay $4,000,000.00 for the naming rights for a period of 20 years from the completion of the building. The President advised McMaster that a lecture hall in the building would now be named McMaster Hall. McMaster advised the University that it had breached their agreement and he would not be making any further payment. McMaster demanded the immediate return of the $500,000.00 he had paid. The University responded that it had hired architects and engineers, had closed off a parking lot, entered into a construction contract and commenced construction based on McMaster's promise and would be commencing legal action against McMaster for the balance of $2,000,000.00. Required: Discuss the application of the principles of consideration to the facts of this case. Will the university be successful in its action?

Answer rating: 100% (QA)

Question 1 The scenario involving Allana and Harry delves into the intricacies of contract formation for the purchase and sale of a car A contract necessitates an offer acceptance consideration intent... View the full answer