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

If a contract is not evidenced in writing this does not make it void under the Statute of Frauds; it is merely unenforceable. Explain this distinction.

What is an "executory contract"?

What must a person establish in order to escape contractual obligations on the basis on insanity?

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

A requirement for the existence of an enforceable contract is that the parties have the legal capacity to contract. Which of the following is incorrect with respect to the law of incapacity?

When at war, what happens to contracts with residents of an enemy country if they are detrimental to Canada?

Zlotnik incorporated a company shortly after graduation. The company bought a truck and a computer. The company was short of operating capital so, through its agent Zlotnik, borrowed $10,000 from the bank. In consideration for its loan, the bank took, in addition to the company's promise to pay the bank both principal and interest, a security agreement on its truck and computer. The company made its payment each month without incident. Then the stock market took a tremendous fall, which caused the officer of the bank to call Zlotnik and ask him to guarantee the company's debt. The company was doing very well, so Zlotnik agreed to be guarantor of the debt. On these facts, which of the following is true?

Joe was in a bar and saw his friend Sam. Sam had had a considerable amount to drink. Sam offered to sell Joe his Porsche automobile for only $15,000. Joe made sure to have Sam sign a written agreement to that effect. The next day, Joe went to pick up the car, but Sam didn't remember anything about it. Even when Joe showed him the written agreement signed by him, Sam refused to deliver the car. Joe sued. Which of the following correctly states the legal position of the parties?

Explain the legal position of an infant who enters into a contract with an adult.

When the terms of an agreement make it impossible to perform the contract within one full year from the time the contract is entered into, there must be evidence in writing for it to be enforceable.

The first Statute of Frauds was enacted in the USA in the 20th century.

Lawer entered into a contract for the sale of his business, a barbershop, to Cutter. The contract provided that Lawer would not open up a similar business within 25 kilometres of the barbershop being sold. About two weeks after the sale, Cutter noticed a new barbershop opening across the street in brand-new facilities. When he learned that the owner of the new shop was the very Lawer who sold the business to him, he sued for breach of contract. Which of the following correctly indicates the legal position of the parties?

Ted, a seventeen-year-old high school student, was hired to perform in four episodes of Gossip Gidget. To keep up with his schoolwork and gaming, he contracted with Mr. Tech of Technoland for a $2000 laptop computer. He agreed to pay $500 down and the balance by monthly payments of $250. Read each of the following separately and indicate which is true.

Indicate under what circumstances parents are responsible for the contracts entered into by their children.

A contract that has been partially performed will be enforceable even though it is not in writing as required under the Statute of Frauds.

Clem had wanted a piano for a long time. Although he was a minor, his mom gave him $300 and he took this with some savings and made a $500 down payment on a $3000 piano. The balance was to be paid over a three-year period. His mom signed the contract as a guarantor. Clem made the first three payments, but he damaged the piano trying to move it from the living room to his upstairs bedroom. He didn't have the money to get it fixed. He quit playing, lost interest, and quit making his payments. On these facts, which of the following is False?

Married women are no longer considered incapacitated in contract law.

All contracts must be in writing to be enforceable.

What is an indemnity?

"Where the Statute of Frauds applies and the requirement of writing is not met in an agreement between two parties, the contract is void." Discuss the validity of this statement.