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

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?

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

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

An adult can't sue an infant in tort to get around the infant's contractual incapacity.

Neither party is bound by a contract with an infant.

All contracts that have the effect of restricting competition are void.

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.

Joe saw an ad in a paper for the sale of a house in a residential area of Victoria. He approached Sam, the owner, and after some negotiation Sam orally agreed to sell the house to Joe for $750,000. Joe gave Sam $100,000 cash as a partial payment, the rest to be given upon transfer of the house. Two days later, Sam changed his mind and sent Joe a letter referring to the deal and stating that he would not honour the agreement. Which of the following is correct with respect to the legal position of the parties? Assume all the facts can be proved.

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.

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

Once infants become adults, they are liable for any contract they made while they were infants.

Sue had a beautiful lakeside cottage that had been in her family for years. Times became a little tight, and Sue decided she had no choice but to sell the property. Sue agreed to sell the cottage property to her neighbour Bob for the sum of $250,000. Although Sue was ecstatic about the price early on, she soon changed her mind. There were too many memories for her to give the property up. Which of the following, by itself, would be the biggest barrier to Bob in enforcing the agreement?

Which of the following statements is correct with respect to the legality of contracts?

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.

Randy, as his two older brothers before him, moved out of the house when he was quite young. When he was 17, he and his older brother, Ted, wanted to buy a condominium in Nelson. They both had jobs and the bank was willing to lend them money and take a mortgage on the condo. Which of the following is a correct statement about the law governing this situation?

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?

A person who has voluntarily become intoxicated by drugs or alcohol cannot escape a contract on the basis of his incapacity.