In the Case of Bank of Montreal V

question 55

Multiple Choice

In the case of Bank of Montreal v.Duguid (2000) ,47 O.R.(3d) 737 (C.A.) ,the court was asked to consider whether a wife who had signed a guarantee on a loan for her husband's business was entitled to be released from the guarantee on the basis of undue influence exerted by her husband.Why did the majority of the court find that the guarantee was enforceable against the wife?

• A) because the wife had received independent legal advice
• B) because the wife was a real estate agent and presumably knowledgeable enough to not be unduly influenced by her husband to sign the guarantee
• C) because agreements between spouses are always enforceable
• D) because there was no evidence that the guarantee was unconscionable

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, leading to a decreased cost per unit.

Pin Factory

An example used by Adam Smith to describe the benefits of specialization and division of labor in manufacturing, increasing productivity and efficiency.

Constant Returns to Scale

A situation in production where increasing the amount of inputs results in a proportional increase in the output.

Long-run Total Costs

The aggregate expenses a firm incurs in the production of goods or services when all factors of production are variable.