Question 1

Which one of the following correctly indicates the position of the parties in respect to contracts involving minors?

Accepted Answer

A)  All contracts with minors are void. 
B)  Contracts with minors are unenforceable by the infant against the adult and by the adult against the infant. 
C)  Contracts with minors are void, except beneficial contracts of service. 
D)  An adult cannot sue the infant on the contract even if the infant affirms the contract after reaching the age of majority. 
E)  An infant can enforce a contract made by an adult with him despite that fact that he is a minor. 
A)  All contracts with minors are void. 
B)  Contracts with minors are unenforceable by the infant against the adult and by the adult against the infant. 
C)  Contracts with minors are void, except beneficial contracts of service. 
D)  An adult cannot sue the infant on the contract even if the infant affirms the contract after reaching the age of majority. 
E)  An infant can enforce a contract made by an adult with him despite that fact that he is a minor. E

Question 2

A guarantor promises that if the ________ fails to pay the debt, he will assume responsibility and pay it.

Accepted Answer

A)  debtee 
B)  court 
C)  debtor 
D)  offeror 
E)  offeree 
A)  debtee 
B)  court 
C)  debtor 
D)  offeror 
E)  offeree C

Question 3

Explain how an insurance contract avoids being void as a wager.

Accepted Answer

The insured must have an insurable interest in the thing insured and not obtain a windfall when the insured-against event takes place.

Question 4

If the relationship between the contracting parties is primarily commercial in nature, what do the courts presume?

Accepted Answer

That the parties int

Question 5

A husband started a small business and agreed to pay his wife $1700 a month for her bookkeeping services. This was primarily a method of income-splitting for tax purposes. Unfortunately, the business was not as successful as they had imagined, and the husband couldn't afford to pay his wife that much money from the business. The marriage went sour, and after separation, the wife brought an action against the husband demanding back pay for the last 11 months, as well as compensation for loss of future earnings. Explain what defence the husband could best raise in these circumstances.

Accepted Answer

Probably the best defence here is that t

Question 6

In the classic case of Carlill v. Carbolic Smoke Ball Company, the defendants manufactured a product they claimed would protect against influenza. The company advertised that it would pay a specific sum of money to anyone who contracted influenza while using their product and put money on deposit to demonstrate their sincerity. When Mrs. Carlill claimed the money, the company argued that these statements were not intended to be taken seriously. What did the Court decide?

Accepted Answer

A)  There was intention because a reasonable person would have thought that the advertisement was serious. 
B)  There was intention because Mrs. Carlill took the advertisement seriously. 
C)  There was no intention because the claims made by the company were not put into a standard form agreement. 
D)  There was no intention because the company did not intend for the statements to be taken seriously. 
E)  Intention is irrelevant to whether or not a contract is valid. 
A)  There was intention because a reasonable person would have thought that the advertisement was serious. 
B)  There was intention because Mrs. Carlill took the advertisement seriously. 
C)  There was no intention because the claims made by the company were not put into a standard form agreement. 
D)  There was no intention because the company did not intend for the statements to be taken seriously. 
E)  Intention is irrelevant to whether or not a contract is valid.

Question 7

In Transport North American Express Inc. v. New Solutions Financial Corp., various payments were found to be "interest" within the meaning of s. 347 of the Criminal Code. The interest rate applied was illegal. The Supreme Court applied "notional severance," resulting in a reduction of the interest rate. The Supreme Court of Canada outlined four factors to consider when deciding whether to declare an illegal contract void, or to partially enforce it. Which of the following is not one of those factors?

Accepted Answer

A)  Whether the contract was a standard form agreement 
B)  Whether the purpose or policy of s. 347 would be subverted by severance 
C)  Whether the parties entered into the agreement for an illegal purpose or with an illegal intention 
D)  The relative bargaining positions of the parties and their conduct in reaching the agreement 
E)  Whether the debtor would be given an unjustified windfall 
A)  Whether the contract was a standard form agreement 
B)  Whether the purpose or policy of s. 347 would be subverted by severance 
C)  Whether the parties entered into the agreement for an illegal purpose or with an illegal intention 
D)  The relative bargaining positions of the parties and their conduct in reaching the agreement 
E)  Whether the debtor would be given an unjustified windfall

Question 8

The case of Canadian Imperial Bank of Commerce v. Milhomens examined the effect of one party's insanity on a contract. What did the Court find?

Accepted Answer

A)  For a contract to be voidable because of insanity, one party must be insane and the other party must have known (or ought to have known) of the insanity. 
B)  If a person has the mental faculties to sign a contract, that person cannot be insane. 
C)  If an insane person enters into a contract, that contract is automatically void. 
D)  Contracts are not enforceable by either party if one party can establish a mental defect. 
E)  The relevant test for insanity is simply whether one party believed the other to be insane at the moment the offer was made. 
A)  For a contract to be voidable because of insanity, one party must be insane and the other party must have known (or ought to have known) of the insanity. 
B)  If a person has the mental faculties to sign a contract, that person cannot be insane. 
C)  If an insane person enters into a contract, that contract is automatically void. 
D)  Contracts are not enforceable by either party if one party can establish a mental defect. 
E)  The relevant test for insanity is simply whether one party believed the other to be insane at the moment the offer was made.

Question 9

Married women are no longer considered incapacitated in contract law.

Accepted Answer

A) True 
 B)False

Question 10

Mr. Buyer, the plaintiff in the action, is attempting to enforce a contract in which the defendant, Mr. Seller agreed to sell to Buyer his property, Blackacre, for $100,000. Which of the following, by itself, would be sufficient to allow Mr. Seller to get out of the contract?

Accepted Answer

A)  The $100,000 was not enough, so was not fair. 
B)  At the time of the contract, unknown to Mr. Buyer, Mr. Seller did not understand the quality and nature of this act because of mental incapacity. 
C)  Mr. Buyer referred to essential terms in a letter sent to Mr. Seller. 
D)  Although both parties agreed to this, there had not actually been any money paid on the contract, not even a deposit or a down payment. 
E)  There was only a verbal agreement between Mr. Seller and Mr. Buyer. 
A)  The $100,000 was not enough, so was not fair. 
B)  At the time of the contract, unknown to Mr. Buyer, Mr. Seller did not understand the quality and nature of this act because of mental incapacity. 
C)  Mr. Buyer referred to essential terms in a letter sent to Mr. Seller. 
D)  Although both parties agreed to this, there had not actually been any money paid on the contract, not even a deposit or a down payment. 
E)  There was only a verbal agreement between Mr. Seller and Mr. Buyer.

Question 11

What is a guarantee?

Accepted Answer

A written commitment

Question 12

Describe an "executed contract" and provide an example.

Accepted Answer

A fully performed contract, or

Question 13

All of the following contracts would be illegal, and not binding on the parties, except

Accepted Answer

A)  a contract whereby one person agrees to spread false and damaging information about another. 
B)  a contract whereby one person agrees to sell a banned substance (e.g., cocaine) to another. 
C)  the act of paying for sexual favours (prostitution). 
D)  a contract between camera dealers whereby they agree not to sell a specific model of camera below a specified price. 
E)  a contract in which a lawyer agrees to represent an accused where the accused did commit the crime. 
A)  a contract whereby one person agrees to spread false and damaging information about another. 
B)  a contract whereby one person agrees to sell a banned substance (e.g., cocaine) to another. 
C)  the act of paying for sexual favours (prostitution). 
D)  a contract between camera dealers whereby they agree not to sell a specific model of camera below a specified price. 
E)  a contract in which a lawyer agrees to represent an accused where the accused did commit the crime.

Question 14

Which one of the following is an example of a contract that is binding on an infant in jurisdictions other than British Columbia?

Accepted Answer

A)  A contract to purchase a new stereo 
B)  A contract for a camera 
C)  A contract for baseball tickets 
D)  A contract for rent 
E)  A contract for professional hairstyling 
A)  A contract to purchase a new stereo 
B)  A contract for a camera 
C)  A contract for baseball tickets 
D)  A contract for rent 
E)  A contract for professional hairstyling

Question 15

Today, there is no general rule that a contract must take a certain form, although most jurisdictions have statutory requirements regarding the transfer of land.

Accepted Answer

A) True 
 B)False

Question 16

From the perspective of contract law, why might the distinction between a guarantee and an indemnity be important?

Accepted Answer

Because in most provinces, the

Question 17

Parents are responsible for their children's actions in which of the following situations?

Accepted Answer

A)  Where the child enters into a contract for a new stereo 
B)  Where the child carelessly breaks a window in a neighbour's house 
C)  Where a child purchases a needed new jacket 
D)  Where an infant borrows money for college tuition 
E)  Where an infant was acting as agent for the parents 
A)  Where the child enters into a contract for a new stereo 
B)  Where the child carelessly breaks a window in a neighbour's house 
C)  Where a child purchases a needed new jacket 
D)  Where an infant borrows money for college tuition 
E)  Where an infant was acting as agent for the parents

Question 18

In the legal sense, to what does "insanity" refer?

Accepted Answer

When a person cannot

Question 19

When parents have led a merchant to believe that their infant child is acting as their agent, the parents are liable.

Accepted Answer

A) True 
 B)False

Question 20

When a restriction is excessive and deemed to be an unreasonable restraint of trade, what is the usual result?

Accepted Answer

Normally, only that provision

Which one of the following correctly indicates the position of the parties in respect to contracts involving minors?

A guarantor promises that if the ________ fails to pay the debt, he will assume responsibility and pay it.

Explain how an insurance contract avoids being void as a wager.

If the relationship between the contracting parties is primarily commercial in nature, what do the courts presume?

The case of Canadian Imperial Bank of Commerce v. Milhomens examined the effect of one party's insanity on a contract. What did the Court find?

Married women are no longer considered incapacitated in contract law.

Mr. Buyer, the plaintiff in the action, is attempting to enforce a contract in which the defendant, Mr. Seller agreed to sell to Buyer his property, Blackacre, for $100,000. Which of the following, by itself, would be sufficient to allow Mr. Seller to get out of the contract?

What is a guarantee?

Describe an "executed contract" and provide an example.

All of the following contracts would be illegal, and not binding on the parties, except

Which one of the following is an example of a contract that is binding on an infant in jurisdictions other than British Columbia?

Today, there is no general rule that a contract must take a certain form, although most jurisdictions have statutory requirements regarding the transfer of land.

From the perspective of contract law, why might the distinction between a guarantee and an indemnity be important?

Parents are responsible for their children's actions in which of the following situations?

In the legal sense, to what does "insanity" refer?

When parents have led a merchant to believe that their infant child is acting as their agent, the parents are liable.

When a restriction is excessive and deemed to be an unreasonable restraint of trade, what is the usual result?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Agency and Partnership

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters

Exam 7: The Elements of a Contract: Capacity, Legality, and Intention

Which one of the following correctly indicates the position of the parties in respect to contracts involving minors?

A guarantor promises that if the ________ fails to pay the debt, he will assume responsibility and pay it.

Explain how an insurance contract avoids being void as a wager.

If the relationship between the contracting parties is primarily commercial in nature, what do the courts presume?

The case of Canadian Imperial Bank of Commerce v. Milhomens examined the effect of one party's insanity on a contract. What did the Court find?

Married women are no longer considered incapacitated in contract law.

Mr. Buyer, the plaintiff in the action, is attempting to enforce a contract in which the defendant, Mr. Seller agreed to sell to Buyer his property, Blackacre, for $100,000. Which of the following, by itself, would be sufficient to allow Mr. Seller to get out of the contract?

What is a guarantee?

Describe an "executed contract" and provide an example.

All of the following contracts would be illegal, and not binding on the parties, except

Which one of the following is an example of a contract that is binding on an infant in jurisdictions other than British Columbia?

Today, there is no general rule that a contract must take a certain form, although most jurisdictions have statutory requirements regarding the transfer of land.

From the perspective of contract law, why might the distinction between a guarantee and an indemnity be important?

Parents are responsible for their children's actions in which of the following situations?

In the legal sense, to what does "insanity" refer?

When parents have led a merchant to believe that their infant child is acting as their agent, the parents are liable.

When a restriction is excessive and deemed to be an unreasonable restraint of trade, what is the usual result?

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Agency and Partnership

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Priority of Creditors

Sales and Consumer Protection

Filters