Answers To Ch 5 Textbook Exercises

Topics: Law, Consumer protection, Contract Pages: 6 (1253 words) Published: February 21, 2015
Chapter 5: The Sale of Goods and Consumer Protection Law
Exercises
True or False?
1.

Leases are governed by the Sale of Goods Act. (F)

2.

Fitness for intended purpose is an implied condition under the Sale of Goods Act.

(T)
3.

Specific performance is a remedy available in special circumstances only. (T)

4.

Unpaid sellers have no statutory remedies. (F)

5.

The Consumer Protection Act, 2002 requires that ambiguous contract terms be

construed in favour of the consumer. (T)
6.

The Consumer Protection Act, 2002 creates a ten-day cooling-off period for all

consumer transactions. (F)
7.

The Consumer Protection Act, 2002 requires that the final bill for service for which

an estimate was given is equal to or less than the estimate. (F) 8.

A supplier has the right to tell a retailer how much to charge for its products. (F)

9.

The Competition Act applies to both goods and services. (T)

10. It is an offence under the Competition Act for a company to merge with another and become dominant in the marketplace. (F)
11. The Personal Information Protection and Electronic Documents Act applies to a company's collection and maintenance of personal information for its own marketing purposes. (T)

Canadian Business Law, 2nd Edition, Instructor's Guide
© 2012 Emond Montgomery Publications

1

Multiple Choice
1.

2.

3.

In which of the following areas does the Sale of Goods Act not imply terms? a.

merchantable quality

b.

right to sell goods

c.

fair price for goods

d.

fitness for purpose

To which of the following does the Sale of Goods Act apply?
a.

the sale of a car

b.

the rental of an apartment

c.

the sale of a house

d.

the rental of a motel room

Ashley purchased a used farm tractor for $9,500. She later discovered that the previous owner's bank had a lien on the tractor. Under the Sale of Goods Act, this is most likely a breach of _____________, which would allow her the remedy of _____________.

4.

5.

a.

warranty/rescission

b.

condition/rescission

c.

warranty/damages

d.

condition/damages

The Consumer Protection Act, 2002 would not cover
a.

a professional manicure

b.

the two-month rental of a summer cottage

c.

the purchase of a car

d.

the delivery of high-speed cable Internet service to a home business

An unconscionable representation

Canadian Business Law, 2nd Edition, Instructor's Guide
© 2012 Emond Montgomery Publications

2

a.

is a criminal act

b.

gives a buyer the automatic right to exemplary damages

c.

can be evidence that a transaction is unfair and supports a buyer's right to

a remedy
d.
6.

is irrelevant because of the caveat emptor rule

The main objective of the Competition Act and other laws regulating marketing practices include

7.

a.

ensuring a supply that is adequate to meet the demands of consumers

b.

ensuring that inventories held by retailers do not become excessive

c.

protecting consumers from unfair selling practices

d.

encouraging development of innovative new products

Jake sells towels at the local beach every summer. The label on his towels reads "100% Egyptian Cotton." In fact, Jake's towels were manufactured in China from 100 percent Chinese materials. Under the Consumer Protection Act, Jake may be subject to a maximum penalty of a:

a.

$250,000 fine

b.

$250,000 fine and a three-year prison term

c.

$10,000 fine and a two-year prison term

d.

$25,000 fine and no prison term permitted for this crime

Canadian Business Law, 2nd Edition, Instructor's Guide
© 2012 Emond Montgomery Publications

3

8.

Jane recently opened a general store that sells toothpaste, among other things. Jane decides that she wants to compete with other stores by selling her toothpaste products in one-litre tubes. Jane is in violation of:

9.

a.

The Competition Act

b....
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