When Gary Went into Computer Heaven, Ltd

question 49

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, Mr. Job's new firm. He was fascinated by its performance. The salesman, 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, 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 100 Gigabytes, Ross said this model had 250 Gigabytes. Gary was persuaded and contracted for it. Later Gary learned that every statement made by the salesman Ross was untrue, including the statement about the memory capacity; the model only had 40 Gigabytes. On these facts, which of the following is true?

• A) 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.
• B) Such misrepresentations could only result in contractual remedies, legal or equitable, but not in tort remedies.
• C) 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.
• D) Gary could be awarded the equitable remedy of rescission even if Ross, the salesman, honestly believed everything he said was true.
• E) Only if Ross, the salesman, knew that all the statements he made were false could Gary get a remedy.

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Definitions:

Chapter 11

A provision of the United States Bankruptcy Code that provides for reorganization, typically involving a corporation or partnership.

Order For Relief

A court’s grant of assistance to a complainant. In bankruptcy proceedings, the order relieves the debtor of the immediate obligation to pay the debts listed in the bankruptcy petition.

Repayment Plan

An agreement between a creditor and a debtor that outlines the manner in which outstanding debts will be paid back.

Chapter 13

A bankruptcy code provision allowing individuals with a regular income to develop a plan to repay all or part of their debts under court supervision.