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

Given the provisions of the Statute of Frauds, which of the following contracts should be evidenced in writing?

When John bought a car from his father's old classmate, Joe, he was only seventeen years old. The price of the car was $5000. He paid $1000 down and was to pay the remaining $4000 over time. With these facts in mind, which of the following statements is true? (Read each statement separately.)

Give three examples of contracts that would be considered void because of illegality.

Kashif agreed to sell his acreage to his coworker, Melinda, for $400,000. Because the two worked together, they did not see the need to put the agreement in writing. Nonetheless, Kashif sent Melinda a note that referred to the essential terms of their agreement, to which Melinda replied acknowledging their deal. Without any other writing, can this contract be enforced? Explain.

How do the courts determine whether a customer should have taken an exaggerated claim seriously?

When at war, what happens to contracts with residents of an enemy country if they are not detrimental to Canada?

One afternoon while Mr. Reston was going home on the bus, his neighbour, Mr. Outovit, offered to sell Reston his car for $4000, a bit below the market value. Reston said, "You might change your mind on that. Better not be too hasty with your offers." Outovit answered, "I want to sell it quickly," and wrote on the back of an envelope, "I hereby offer my neighbour, Reston, my 2011 Chevrolet for $4000 cash." He signed his name. Reston wrote, "I accept." The next day, Reston went to his neighbour's house to pay the money and get the car. He learned that Outovit was in hospital, unconscious from a reaction to medicines given to him the day before. If Outovit (or his legal representative) refuses to honour the contract on the basis of mental incapacity, which of the following is true?

Joe was unable to find work in the city where he lived and had to go to the mining camps up north to find work. When he left, he agreed to send his wife $2500 a month from his pay to support her and their children. In fact, he had some unexpected expenses and failed to send the promised funds for two months. Which of the following correctly states the legal position of the parties?

"Contracts must be in writing to be enforceable." Discuss the accuracy of this statement.

"The purpose of contract law is to give effect to the reasonable expectations of the parties to a contract." Discuss this observation in terms of the five elements that are required for the creation of a legally binding contract.

A void contract means that

When a third party says, "I'll see that you get paid," there is an assumption of a primary obligation, and the promise is a(n)

The distinction between a guarantee and a(n) ________ is important, because in most provinces the Statute of Frauds requires that only a guarantee be in writing.

Contracts involving domestic relationships are presumed to be binding.

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

All provincial and territorial governments have passed legislation to facilitate e-commerce by clarifying the status of electronic documents, contracts and signatures.

Which of the following types of contracts would not be considered illegal?

An insane person can escape a contract on the basis of incapacity only if the other person knew or ought to have known of the insanity.

Legislation is now in place in several jurisdictions to give digital records and electronic signatures the status of written documents.

Discuss the Statute of Frauds as it relates to contract law. In your answer, consider the justification of requiring some contracts to be evidenced in writing, and also how and why the Statute of Frauds has been modified or repealed in several jurisdictions.