NPPE Contract Law Fundamentals 3

Question 1

Which legal principle prevents a party from resiling from a promise when the other party has reasonably relied on that promise to their detriment, even without a formal contract?

Accepted Answer

Promissory estoppel

Answer

Promissory estoppel prevents a party from going back on a clear, unambiguous promise when the other party has changed their position in reliance on that promise. It is an equitable doctrine used as a shield, not a sword, in Canadian law.

Question 2

A subcontractor completes work under an oral contract and the general contractor refuses to pay. The subcontractor may recover under which equitable claim if no contract price was agreed?

Accepted Answer

Quantum meruit

Answer

Quantum meruit ('as much as is deserved') allows a party who has provided services under a contract where no price was agreed, or where the contract is unenforceable, to recover the reasonable value of the services rendered.

Question 3

In Canadian construction law, what is the significance of a 'substantial performance' certificate under the CCDC 2 contract?

Accepted Answer

It establishes the date from which the lien holdback release period begins to run

Answer

In CCDC 2, the certificate of substantial performance establishes the date from which the statutory lien holdback release period begins to run under applicable provincial construction lien legislation.

Question 4

Which contractual remedy is most appropriate when monetary damages are inadequate to compensate for a breach of contract involving unique property or services?

Accepted Answer

Specific performance

Answer

Specific performance is an equitable remedy that orders the breaching party to perform their contractual obligations. It is granted where damages are an inadequate remedy — typically involving unique property or specialised services.

Question 5

When is a contract voidable rather than void in Canadian contract law?

Accepted Answer

When one party lacked capacity, or when it was induced by misrepresentation, undue influence, or duress

Answer

A voidable contract is valid unless the affected party chooses to void it. It arises when a party lacked full contractual capacity or where consent was obtained by misrepresentation, undue influence, or duress.

NPPE - National Professional Practice Examination Practice Test

NPPE - National Professional Practice Examination Practice Test

NPPE Contract Law Fundamentals 3