CHAPTER 7

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1. In contracts, an exemption clause is

a separate agreement, made at the same time as a more substantial contract
an agreement that provides a type of insurance to a seller that the buyer will actually pay the full purchase price
a term of a contract that specifies how much one party must pay to the other in the event of a breach
a term of a contract that limits liability for breach to something less than would otherwise be recoverable
a term of a contract that identifies events causing loss for which there is no liability

2. In contracts, a liquidated damages clause is

a separate agreement, made at the same time as a more substantial contract
an agreement that provides a type of insurance to a seller that the buyer will actually pay the full purchase price
a term of a contract that specifies how much one party must pay to the other in the event of a breach
a term of a contract that limits liability for breach to something less than would otherwise be recoverable
a term of a contract that identifies events causing loss for which there is no liability

3. In contracts, a limitation of liability clause is

A) a separate agreement, made at the same time as a more substantial contract
B) an agreement that provides a type of insurance to a seller that the buyer will actually pay the full purchase price
C) a term of a contract that specifies how much one party must pay to the other in the event of a breach
D) a term of a contract that limits liability for breach to something less than would otherwise be recoverable
E) a term of a contract that identifies events causing loss for which there is no liability

4. A collateral agreement is

a separate agreement, made at the same time as a more substantial contract
an agreement that provides a type of insurance to a seller that the buyer will actually pay the full purchase price
a term of a contract that specifies how much one party must pay to the other in the event of a breach
a term of a contract that limits liability for breach to something less than would otherwise be recoverable
a term of a contract that identifies events causing loss for which there is no liability

5. Reasons for which a court may imply terms into a contract include

prior dealings between the parties
statutory requirements
customs of the trade
business efficacy
all of the above

6. Under the parol evidence rule,

oral evidence regarding problems at the time of contract formation is not admissable in court
oral evidence regarding the terms of the contract is not admissable in court
oral evidence regarding the existence of collateral agreements is not admissable in court
oral evidence regarding intention that the contract be partly oral and partly written is not admissable in court
none of the above

7. The difference between express terms and implied terms in a contract is

express terms are enforceable and implied terms are not
implied terms are enforceable and express terms are not
express terms are included in the agreement actually made between the parties
implied terms are included in the agreement actually made between the parties
none of the above

8. When interpreting ambiguous terms in a contract, the courts will

enforce the meaning of the words used by the parties, and ignore their actual intention
enforce the parties' actual intention, and ignore the meaning of the words that were used
reject the contract
send the parties to mediation to establish the actual terms of the contract
consider both the words used and the actual intention of the parties

9. As of 2000 A.D., the only province having legislation providing for legal recognition of electronic information and documents for purposes of contract law was

British Columbia
Alberta
Manitoba
Ontario
New Brunswick

10. In general, when a customer signs a standard form contract without reading and understanding its terms,

the court will reject the contract
the court will delete ambiguous terms and then enforce the contract
the court will delete unfair terms and then enforce the contract
the court will enforce the contract
the court will impose a penalty on the other party