When Gary Went into Computer Heaven,Ltd

question 82

Multiple Choice

When Gary went into Computer Heaven,Ltd.to get a better manual for the program he was trying to master,he was caught by a demonstration of a computer created by Next Inc.He was fascinated by its performance.The salesperson,Ross,told Gary that he should have this machine; that "it was the last computer,no other will ever be better"; that "UBC,Simon Fraser University,and BCIT just ordered over 1000 of them"; that he only had "a few left and the demand is so great it will take almost a year for the next shipment to arrive." When Gary said he needed a computer with at least 1000 Gigabytes,Ross said this model had 2500 Gigabytes.Gary was persuaded and contracted for it.Later Gary learned that every statement made by Ross was untrue,including the statement about the memory capacity; the model only had 400 Gigabytes.On these facts,which of the following is true?

• A) Gary could be awarded the equitable remedy of rescission even if Ross honestly believed everything he said was true.
• B) Only if Ross knew that all the statements he made were false could Gary get a remedy.
• C) Merely the exaggerated claim "it was the last computer, no other will ever be better" is enough, according to the case law, to allow Gary to get out of the contract.
• D) Statements that induced Gary to contract, but that are not the terms of the contract, are not significant enough for the courts to award a remedy by case law or by statute.
• E) Such misrepresentations could only result in contractual remedies, legal or equitable, but not in tort remedies.

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Definitions:

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources or goods between two parties and to illustrate potential gains from trade.

Pareto Efficient

A Pareto efficient outcome is one in which it is impossible to make any one individual better off without making at least one individual worse off, indicating an optimal allocation of resources.

Utility Function

A mathematical representation of how a consumer's preferences between different goods or services translate into levels of satisfaction or utility.

Initial Endowment

Refers to the initial allocation of goods, resources, or wealth that an individual or entity possesses before any transactions.