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

Indicate any limitation on the ability of status Indians to contract.

Which of the following attempts to form a contract would the court declare to be void?

A woman forged her husband's signature on dozens of cheques. In an attempt to protect her from prosecution, the husband signed a letter prepared by the Bank agreeing to assume all liability for the forged cheques. What would the Court find in relation to this agreement?

Joe advertised his house for sale and Sam came to have a look at it. While there, they haggled and struck a bargain that Sam would purchase the house for $400,000. They shook hands on the deal and Sam went home. That night, while thinking about it, Sam realized that the house wasn't exactly what he wanted, and so the next day he wrote a letter to Joe stating, "I'm writing this note to let you know that I've changed my mind with respect to the purchase of your home for $400,000, and since the contract isn't valid in any case, I don't expect to hear any more of the matter. Sincerely, Sam." Joe sued Sam for breach of contract. Discuss the legal position of the parties, including any defences available to Sam.

Describe three situations in your jurisdiction where a contract must be evidenced in writing to be enforceable.

Because of the Charter of Rights and Freedoms, status Indians no longer have their capacity to contract limited.

Discuss the importance of putting contracts in writing, both from a legal perspective and from a practical business point of view.

An unwritten contract that the Statute of Frauds requires to be evidenced in writing is still valid and it is merely unenforceable by the courts.

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.

Joe had a classic Buick automobile and he agreed to trade it to Sam for a specified amount of cocaine. Sam took the car and, three days later, before he could deliver the cocaine to Joe, his cocaine was seized by the police and he was arrested. Joe is now bringing this action claiming that he's entitled to the car back. Indicate what arguments are available to Joe and the likelihood of him obtaining his car back.

Provide an example of something that would constitute acceptable part performance when land has been sold.

What is an "executed contract"?

Distinguish between an infant's liability for torts and for contracts.

A provision in a contract for the sale and purchase of a business read as follows: "The vendor (Jones) shall not, directly or indirectly, in any capacity whatsoever, carry on a similar business in any location for one year." Six months later, Kates found that Jones was competing directly by opening up a similar business, contrary to the contract drafted by Kates. Kates sued Jones for breach of contract, namely, breach of the restrictive covenant. Which of the following best describes the legal position of the parties?

Contracts involving activities that, while not illegal, are considered immoral or contrary to public interest, may also be void.

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.)

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?

The creation of a joint tenancy in land must be evidenced in writing.

A necessary element of a contract is that the parties must have the intention to be legally bound. Which of the following is true with regard to this element of a contract?

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?