Question 3 (1 point)

Having just won some money at an American casino, Falstaff (a Calgary resident) promised to pay $10,000 to his room-mate, Hal (who was sick that week-end and couldn't go on the gambling trip).

Falstaff put the promise in a letter and signed the document.

By the time the letter was received by Hal, Falstaff had changed his mind. Falstaff now refuses to pay any money to Hal.

Which of the following is correct?

Question 3 options:

A)	Falstaff's promise is legally enforceable because it was made in writing and put inside an envelope which had to be sealed (moistened at the top) to be sent in the mail.

B)	Because the promise made by Falstaff was not made in Canada, the courts will not be able to hear the case in any event - that is the reason the promise will be unenforceable.

C)	If Hal had immediately accepted Falstaff's promise to pay, then Falstaff's promise could be enforced by Canadian courts.

D)	Falstaff made a gratuitous promise.

Question 5 (1 point)

Turynic wants to sell his graphic design company. He enters into negotiations with Smedlap to have Smedlap buy his business.

After inspecting the books, Smedlap notes that the business only brings in $120,000 per year.

Turynic assures Smedlap that the business actually brings in $210,000 per year and that he can show Smedlap the paperwork to prove it.

Smedlap never does get around to looking at the paperwork, and buys Turynic's business.

The contract sets out the price for the business and the terms of payment but does make any statement about how much the business earned in the past or will earn in the future.

It turns out that the business does not make $210,000 per year. Turynic only said that it made that much because he wanted Smedlap to buy the business.

Which of the following is TRUE?

Question 5 options:

1)	This is a case of unilateral mistake. Smedlap was mistaken about the business making $210,000 per year and Turynic had no obligation to correct Smedlap's mistaken belief.

2)	This is a case of misrepresentation. The false statement of fact (the business makes $210,000 per year) means that the contract itself was breached.

3)	This is a case of misrepresentation. Because the false statement of fact (that the business makes $210,000 per year) was made knowing it was false Smedlap will get rescission, tort damages and perhaps even punitive damages.