Question 1

Whenever parties of unequal bargaining powers transact, undue influence is always presumed but can be rebutted.

Accepted Answer

A) True 
 B)False  False

Question 2

Ariel pays Newton a $17 000 deposit as part of an oral contract for the sale of land. According to the terms of their agreement, Ariel is to pay the balance on the day of the closing, failing which Newton is allowed to keep the deposit. Suppose that the deal never closes. Which of the following is TRUE?

Accepted Answer

A)  Newton has a contractual defence if Ariel seeks to get her deposit back. 
B)  Ariel has a contractual defence if Newton seeks to enforce the contract of sale. 
C)  Newton can enforce the contract of sale against Ariel. 
D)  Newton does not have a contractual defence if Ariel seeks to get her deposit back. 
E)  Ariel can enforce the contract of sale against Newton. 
A)  Newton has a contractual defence if Ariel seeks to get her deposit back. 
B)  Ariel has a contractual defence if Newton seeks to enforce the contract of sale. 
C)  Newton can enforce the contract of sale against Ariel. 
D)  Newton does not have a contractual defence if Ariel seeks to get her deposit back. 
E)  Ariel can enforce the contract of sale against Newton. A

Question 3

Shelly hires James to steal her neighbour's dog (because it barks a lot and the owners do nothing about it). Shelley paid James according to the terms of the contract, but James did not follow through with his end of the bargain. Can Shelly get her money back?

Accepted Answer

A)  No. The contract is defective because it is a restraint on trade. 
B)  Yes. The lawsuit can be brought in Small Claims Court. 
C)  No. The contract is defective because it was not in writing. 
D)  No. The contract is defective because it is illegal. 
E)  Yes. The parties will be returned to their pre- contractual position. 
A)  No. The contract is defective because it is a restraint on trade. 
B)  Yes. The lawsuit can be brought in Small Claims Court. 
C)  No. The contract is defective because it was not in writing. 
D)  No. The contract is defective because it is illegal. 
E)  Yes. The parties will be returned to their pre- contractual position. D

Question 4

Outline three situations where a court might set aside a contract because of unfairness during bargaining. What are the requirements to prove each, and who has the onus to prove what in court?

Accepted Answer

(i) Economic Duress: Courts will sometim

Question 5

Malkit sold a house to Amanda. The evidence indicates that Amanda owed fiduciary obligations to Malkit both before and after the agreement was signed. Which of the following statements is TRUE?

Accepted Answer

A)  In order to set aside the contract, Malkit must prove that the agreement is unfair to him. 
B)  Amanda has an absolute right to have the contract set aside. 
C)  Malkit is entitled to receive Amanda's performance even though he is not required to perform his obligations under the agreement. 
D)  The contract will be set aside unless Amanda proves that she was unaware of her fiduciary obligations. 
E)  The court will presume that Malkit entered into the contract as a result of Amanda's undue influence. 
A)  In order to set aside the contract, Malkit must prove that the agreement is unfair to him. 
B)  Amanda has an absolute right to have the contract set aside. 
C)  Malkit is entitled to receive Amanda's performance even though he is not required to perform his obligations under the agreement. 
D)  The contract will be set aside unless Amanda proves that she was unaware of her fiduciary obligations. 
E)  The court will presume that Malkit entered into the contract as a result of Amanda's undue influence.

Question 6

The Statute of Frauds eliminates the writing requirements of the common law.

Accepted Answer

A) True 
 B)False

Question 7

Ling is about to enter into a contract that will be carried out over the next year and a half. Is it safe for her to assume that the contract will not be enforced if it is not evidenced in writing in a jurisdiction where the Statute of Frauds applies?

Accepted Answer

This is not a safe assumption for Ling t

Question 8

Joe is an aboriginal person, born and raised on a native reserve. After reaching the age of majority, Joe decides to move to Calgary to continue his work as an artist. After abandoning the reserve and living in Calgary for several years, Joe is asked to participate in a major art opening. Much of his art depicts life on his reserve. Which of the following is TRUE?

Accepted Answer

A)  Joe is unable to sell his art anywhere other than the reserve. 
B)  The profits from Joe's sales will be held by the Crown. 
C)  Joe lacks the capacity to contract. 
D)  Joe has only a limited capacity to contract. 
E)  Joe's art could be used as security for a credit transaction. 
A)  Joe is unable to sell his art anywhere other than the reserve. 
B)  The profits from Joe's sales will be held by the Crown. 
C)  Joe lacks the capacity to contract. 
D)  Joe has only a limited capacity to contract. 
E)  Joe's art could be used as security for a credit transaction.

Question 9

Unconscionable transactions can be characterized as one- sided.

Accepted Answer

A) True 
 B)False

Question 10

How should your business manage risk when contracting with an unincorporated association?

Accepted Answer

First, we should see whether there exist

Question 11

Which of the following is sufficient written evidence to satisfy the Statute of Frauds in most Canadian jurisdictions?

Accepted Answer

A)  a signed standard form agreement 
B)  a signed IOU written on a napkin 
C)  a notation on a signed cheque indicating what was purchased 
D)  a signed letter confirming a severance arrangement 
E)  all of the above 
A)  a signed standard form agreement 
B)  a signed IOU written on a napkin 
C)  a notation on a signed cheque indicating what was purchased 
D)  a signed letter confirming a severance arrangement 
E)  all of the above

Question 12

Which of the following distinguishes a chartered corporation from a statutory corporation?

Accepted Answer

A)  Statutory corporations are treated the same as individuals of a majority age whereas chartered corporations are not. 
B)  Statutory corporations cannot be said to act ultra vires whereas chartered corporations can. 
C)  Statutory corporations are indistinguishable from chartered corporations as both have the same legal effect. 
D)  Chartered corporations have a limited contractual capacity whereas statutory corporations do not. 
E)  none of the above 
A)  Statutory corporations are treated the same as individuals of a majority age whereas chartered corporations are not. 
B)  Statutory corporations cannot be said to act ultra vires whereas chartered corporations can. 
C)  Statutory corporations are indistinguishable from chartered corporations as both have the same legal effect. 
D)  Chartered corporations have a limited contractual capacity whereas statutory corporations do not. 
E)  none of the above

Question 13

List three types of contracts that must be evidenced in writing. Provide one example of each.

Accepted Answer

(i) Guarantees to assume another person'

Question 14

Which of the following have limited capacity to contract for the necessities of life?

Accepted Answer

A)  Aboriginals and the elderly 
B)  public authorities and Indian bands 
C)  minors and people who have been declared mentally incompetent by the courts 
D)  corporations and alcoholics 
E)  none of the above 
A)  Aboriginals and the elderly 
B)  public authorities and Indian bands 
C)  minors and people who have been declared mentally incompetent by the courts 
D)  corporations and alcoholics 
E)  none of the above

Question 15

Tinh agrees to purchase a block of land that Ed plans to sever from his property. Tinh pays a large cash deposit to Ed, the closing date is set for six months away, and they shake hands on the deal. Ed falls on hard times and he realizes he cannot subdivide his land since he cannot afford to lose any equity or the bank will foreclose on his mortgage. On the agreed closing date, he sends Tinh an email to back out of the deal. Worse still, Ed reallocated the cash deposit and cannot afford to pay Tinh back. Ed feels terrible and avoids Tinh's calls. Tinh sues Ed for breach of contract and specific performance. How will the Statute of Frauds be applied in this case? What is the legal effect of Tinh and Ed's deal?

Accepted Answer

Under the Statute of Frauds, any contrac

Question 16

Cy and Kelly negotiate the sale of "Indian Art" over the Internet. Because of an electronic miscommunication, Cy thinks he is buying art from Calcutta. But it turns out upon delivery that Kelly was selling Inuit art all along. Because there was no misrepresentation, the sale is final.

Accepted Answer

A) True 
 B)False

Question 17

Salvatore created a contract with Acme Corp. Although the parties initially performed their obligations without complaint or difficulty, a dispute has now arisen. Acme Corp claims the protection of a force majeure clause. Which of the following statements is most likely to be TRUE?

Accepted Answer

A)  The company has discovered that Salvatore is under the age of majority. 
B)  The company wants to escape from the contract on the grounds of frustration. 
C)  Salvatore claims that he made some mistake when he entered into the agreement. 
D)  Salvatore has argued that the contract is unenforceable because it is not evidenced in writing. 
E)  Salvatore has argued that he entered into the contract as a result of undue influence. 
A)  The company has discovered that Salvatore is under the age of majority. 
B)  The company wants to escape from the contract on the grounds of frustration. 
C)  Salvatore claims that he made some mistake when he entered into the agreement. 
D)  Salvatore has argued that the contract is unenforceable because it is not evidenced in writing. 
E)  Salvatore has argued that he entered into the contract as a result of undue influence.

Question 18

Which of the following agreements must be evidenced in writing in order to be enforceable?

Accepted Answer

A)  guarantees and contracts that may require more than one year to perform 
B)  contracts with the government and contracts for the sale of interests in land 
C)  loans and guarantees 
D)  contracts of employment and contracts for the sale of interests in land 
E)  none of the above 
A)  guarantees and contracts that may require more than one year to perform 
B)  contracts with the government and contracts for the sale of interests in land 
C)  loans and guarantees 
D)  contracts of employment and contracts for the sale of interests in land 
E)  none of the above

Question 19

Which of the following contracts may be set aside for mistake or frustration?

Accepted Answer

A)  Pam sold a computer for cash to a person she mistakenly thought she had known in high school. 
B)  Pam enters into a contract to sell a colt to Dave, but neither party realizes that Pam has already sold the same colt to Donna. 
C)  Pam rented a cottage to Dave for a summer for $5000, and Pam later learns that because of winter storms, it will unexpectedly cost her $30 000 to repair the cottage so that it meets the needs of the rental contract. 
D)  Pam said nothing about the quality and history of a painting that she sold to Dave, despite knowing that he incorrectly believed the painting was worth more than its purchase price. 
E)  none of the above 
A)  Pam sold a computer for cash to a person she mistakenly thought she had known in high school. 
B)  Pam enters into a contract to sell a colt to Dave, but neither party realizes that Pam has already sold the same colt to Donna. 
C)  Pam rented a cottage to Dave for a summer for $5000, and Pam later learns that because of winter storms, it will unexpectedly cost her $30 000 to repair the cottage so that it meets the needs of the rental contract. 
D)  Pam said nothing about the quality and history of a painting that she sold to Dave, despite knowing that he incorrectly believed the painting was worth more than its purchase price. 
E)  none of the above

Question 20

Which of the following examples of a covenant in restraint of trade is most likely to be against public policy?

Accepted Answer

A)  The sellers of a dot.com sign an agreement that they will not compete directly with their former company for a period of two years. 
B)  A high- tech firm has its engineers sign a contract promising not to reveal any information about patents to any other high- tech, communications, or pharmaceutical companies during their employment tenure. 
C)  Partners in an advertising agency sign an agreement that they will engage in advertising sales exclusively for the agency for the duration of their employment. 
D)  An entrepreneur sells his successful home baking business to a supermarket chain. He signs an agreement that bars him from setting up a bakery business in the future. 
E)  all of the above 
A)  The sellers of a dot.com sign an agreement that they will not compete directly with their former company for a period of two years. 
B)  A high- tech firm has its engineers sign a contract promising not to reveal any information about patents to any other high- tech, communications, or pharmaceutical companies during their employment tenure. 
C)  Partners in an advertising agency sign an agreement that they will engage in advertising sales exclusively for the agency for the duration of their employment. 
D)  An entrepreneur sells his successful home baking business to a supermarket chain. He signs an agreement that bars him from setting up a bakery business in the future. 
E)  all of the above

Exam 10: Contractual Defects

Whenever parties of unequal bargaining powers transact, undue influence is always presumed but can be rebutted.

Shelly hires James to steal her neighbour's dog (because it barks a lot and the owners do nothing about it). Shelley paid James according to the terms of the contract, but James did not follow through with his end of the bargain. Can Shelly get her money back?

Outline three situations where a court might set aside a contract because of unfairness during bargaining. What are the requirements to prove each, and who has the onus to prove what in court?

Malkit sold a house to Amanda. The evidence indicates that Amanda owed fiduciary obligations to Malkit both before and after the agreement was signed. Which of the following statements is TRUE?

The Statute of Frauds eliminates the writing requirements of the common law.

Ling is about to enter into a contract that will be carried out over the next year and a half. Is it safe for her to assume that the contract will not be enforced if it is not evidenced in writing in a jurisdiction where the Statute of Frauds applies?

Unconscionable transactions can be characterized as one- sided.

How should your business manage risk when contracting with an unincorporated association?

Which of the following is sufficient written evidence to satisfy the Statute of Frauds in most Canadian jurisdictions?

Which of the following distinguishes a chartered corporation from a statutory corporation?

List three types of contracts that must be evidenced in writing. Provide one example of each.

Which of the following have limited capacity to contract for the necessities of life?

Cy and Kelly negotiate the sale of "Indian Art" over the Internet. Because of an electronic miscommunication, Cy thinks he is buying art from Calcutta. But it turns out upon delivery that Kelly was selling Inuit art all along. Because there was no misrepresentation, the sale is final.

Salvatore created a contract with Acme Corp. Although the parties initially performed their obligations without complaint or difficulty, a dispute has now arisen. Acme Corp claims the protection of a force majeure clause. Which of the following statements is most likely to be TRUE?

Which of the following agreements must be evidenced in writing in order to be enforceable?

Which of the following contracts may be set aside for mistake or frustration?

Which of the following examples of a covenant in restraint of trade is most likely to be against public policy?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

The Nature and Creation of Contracts

Consideration and Privity

Representations and Terms

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Special Contracts: Negotiable Instruments

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Personal Property: Bailment and Insurance

Knowledge-Based Businesses and Intellectual Property

Electronic Commerce

Agency and Other Methods of Carrying on Business

Basic Forms of Business Organizations

Legal Rules for Corporate Governance

Secured Transactions

Dealing With Bankruptcy and Insolvency

Government Regulation of Business

Individual Employment

Organized Labour

Doing Business in a Global Economy

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