Question 1

A firm offer is

Accepted Answer

A) always supported by consideration. 
B) always placed under seal. 
C) the same thing as an option. 
D) freely revocable. 
E) always found, among other times, in a tender situation. 
A) always supported by consideration. 
B) always placed under seal. 
C) the same thing as an option. 
D) freely revocable. 
E) always found, among other times, in a tender situation.

Question 2

Henrique posts a notice at the racetrack that says he is willing to sell his old horse for $5000.When he returns to the track the next day, two people arrive at the same time to buy the horse.A court would most likely say that Henrique

Accepted Answer

A) can keep the horse and refuse to sell to either person. 
B) must choose between the buyers and sell the horse for $5000 to one of them. 
C) must sell the horse to one buyer and find another horse to sell to the other buyer. 
D) must sell the horse to one buyer and pay $5000 to the other buyer. 
E) can accept the offer of both buyers. 
A) can keep the horse and refuse to sell to either person. 
B) must choose between the buyers and sell the horse for $5000 to one of them. 
C) must sell the horse to one buyer and find another horse to sell to the other buyer. 
D) must sell the horse to one buyer and pay $5000 to the other buyer. 
E) can accept the offer of both buyers.

Question 3

Millie is Jasper's border collie.After she escaped from his yard, he posted the following notice around the neighbourhood: "$500 reward to anyone who finds Millie and returns her to me." Flo, a woman who lived on Jasper's street, saw Millie when she was walking in the nearby river valley.She returned the dog to Jasper and then headed home.After hearing about the episode during dinner, Flo's husband and children insisted that she should demand payment from Jasper.She followed that advice, but Jasper refused to pay a cent.Which of the following is most likely to be TRUE?

Accepted Answer

A) A bilateral contract was created when Flo accepted Jasper's offer by returning Millie to him. 
B) Flo was contractually obligated to return Millie to Jasper as soon as she found the dog. 
C) Although a contract was created between Jasper and Flo, the court will award a reasonable amount to Flo because $500 grossly exceeds the actual value of her services. 
D) As long as Flo knew about the offer when she acted, she is entitled to payment even if she returned Millie to Jasper because she did not want the dog to dig up her garden and not because she wanted the money. 
E) Because advertisements and notices are presumed to be invitations to treat rather than offers, there is no contract between the parties because Jasper did not accept Flo's offer. 
A) A bilateral contract was created when Flo accepted Jasper's offer by returning Millie to him. 
B) Flo was contractually obligated to return Millie to Jasper as soon as she found the dog. 
C) Although a contract was created between Jasper and Flo, the court will award a reasonable amount to Flo because $500 grossly exceeds the actual value of her services. 
D) As long as Flo knew about the offer when she acted, she is entitled to payment even if she returned Millie to Jasper because she did not want the dog to dig up her garden and not because she wanted the money. 
E) Because advertisements and notices are presumed to be invitations to treat rather than offers, there is no contract between the parties because Jasper did not accept Flo's offer.

Question 4

An invitation to treat

Accepted Answer

A) can only occur within the context of a call for tenders. 
B) is a type of offer. 
C) always occurs in response to an offer. 
D) is a part of some tenders. 
E) constitutes a significant risk when it occurs in the context of sale negotiations. 
A) can only occur within the context of a call for tenders. 
B) is a type of offer. 
C) always occurs in response to an offer. 
D) is a part of some tenders. 
E) constitutes a significant risk when it occurs in the context of sale negotiations.

Question 5

Agreements created between family members or friends are never legally enforceable.

Accepted Answer

A) True 
 B)False

Question 6

Ronan was scheduled to move out of his parents' basement and into an apartment near his college last Saturday.When he saw his friends, Siobhan and Jeff, he said, "I'll pay each of you $20 if you help me move on Saturday.What do you say? I need your answers right now so I can properly plan." Siobhan responded, "Maybe." Jeff responded, "Of course! You can always count on me." Which of the following statements is most likely to be TRUE?

Accepted Answer

A) Siobhan transformed Ronan's offer of a unilateral contract into a contract if she actually showed up and helped him move on Saturday. 
B) A contract was created between Jeff and Ronan even if Jeff did not help with the move on Saturday. 
C) A contract was created between Jeff and Ronan only if Jeff actually helped with the move on Saturday. 
D) If a contract was created between Jeff and Ronan, the court will order Ronan to pay a quantum meruit. 
E) In light of the parties' friendship, a court will presume that Siobhan had an intention to create legal relations because she did not clearly reject Ronan's offer. 
A) Siobhan transformed Ronan's offer of a unilateral contract into a contract if she actually showed up and helped him move on Saturday. 
B) A contract was created between Jeff and Ronan even if Jeff did not help with the move on Saturday. 
C) A contract was created between Jeff and Ronan only if Jeff actually helped with the move on Saturday. 
D) If a contract was created between Jeff and Ronan, the court will order Ronan to pay a quantum meruit. 
E) In light of the parties' friendship, a court will presume that Siobhan had an intention to create legal relations because she did not clearly reject Ronan's offer.

Question 7

Professor Angie Shareef hired Hiram Brody to act as her research student for the summer.The professor had received a very large research grant, and she was required to prepare a detailed budget to explain how she intended to spend the money.On Hiram's first day on the job, Prof Shareef asked him to proofread a budget that she had drafted.Although he found the rest of the task exceptionally boring, Hiram became quite excited when he read the following statement in the document: "I will offer Hiram Brody the position of joint-investigator.That position will require him to resign from his present post as my research assistant and take a leave of absence from his current studies.Given the nature of the project and given his outstanding qualifications, Hiram will be paid $8000 per month for a period of eighteen months." After he finished proofreading the document, Hiram tried to contact Prof Shareef, but was told that she had unexpectedly left the country to be with a sick family member.Hiram then informed the Chair of his University Department that he was resigning as Prof Shareef's research assistant and taking a two-year leave of absence from school.He also left a message on Prof Shareef's telephone answering machine: "I accept.I can't wait to begin working as your joint-investigator." When the professor returned from abroad, however, she told Hiram that she had changed her mind and that she had already hired another student to serve as her joint-investigator.Hiram is furious.He has sued Prof Shareef and claims that she had hired him for that job.Which of the following statements is most likely to be TRUE?

Accepted Answer

A) The court will uphold Hiram's claim as long as Prof Shareef listened to his telephone message before telling him that she had hired another student. 
B) The court will reject Hiram's claim because Prof Shareef did not effectively communicate an offer. 
C) The court will reject Hiram's claim as long as Prof Shareef learned that he had resigned as her research assistant before she heard the telephone message in which he accepted the job as her joint-investigator. 
D) The court will uphold Hiram's claim because Prof Shareef created a reasonable expectation that he would be hired as her joint-investigator. 
E) The court will reject Hiram's claim because he communicated his acceptance by telephone even though he had received Prof Shareef's offer in writing. 
A) The court will uphold Hiram's claim as long as Prof Shareef listened to his telephone message before telling him that she had hired another student. 
B) The court will reject Hiram's claim because Prof Shareef did not effectively communicate an offer. 
C) The court will reject Hiram's claim as long as Prof Shareef learned that he had resigned as her research assistant before she heard the telephone message in which he accepted the job as her joint-investigator. 
D) The court will uphold Hiram's claim because Prof Shareef created a reasonable expectation that he would be hired as her joint-investigator. 
E) The court will reject Hiram's claim because he communicated his acceptance by telephone even though he had received Prof Shareef's offer in writing.

Question 8

List five ways in which an offer can be terminated.

Accepted Answer

An offer can be terminated by (i) revoca

Question 9

Garfield owns and operates a wholesale, sporting goods business.He recently delivered a box of cricket balls to his twenty-year-old son, Imran, and a box of cricket outfits to another sporting goods store called Hit-for-Six.Which of the following statements is most likely to be TRUE?

Accepted Answer

A) Neither transaction will be classified as a contract until money is actually paid in exchange for the balls and the outfits. 
B) As a matter of law, Garfield could not have had an intention to create legal relations when he entered into the transaction with Imran because Imran is his son. 
C) As a matter of law, the transaction with Hit-for-Six is not an enforceable contract unless it is sufficiently evidenced in writing. 
D) If Hit-for-Six had previously given its contractual promise that it would pay for any sporting goods that it received from Garfield and retained, a contract will be created if Hit-for-Six keeps the outfits, even if it had not asked Garfield to send them. 
E) Even if Garfield delivered the outfits to Hit-for-Six without any communication between himself and the store, Hit-for-Six will be contractually obligated to pay unless it returns the outfits to Garfield within a reasonable time. 
A) Neither transaction will be classified as a contract until money is actually paid in exchange for the balls and the outfits. 
B) As a matter of law, Garfield could not have had an intention to create legal relations when he entered into the transaction with Imran because Imran is his son. 
C) As a matter of law, the transaction with Hit-for-Six is not an enforceable contract unless it is sufficiently evidenced in writing. 
D) If Hit-for-Six had previously given its contractual promise that it would pay for any sporting goods that it received from Garfield and retained, a contract will be created if Hit-for-Six keeps the outfits, even if it had not asked Garfield to send them. 
E) Even if Garfield delivered the outfits to Hit-for-Six without any communication between himself and the store, Hit-for-Six will be contractually obligated to pay unless it returns the outfits to Garfield within a reasonable time.

Question 10

A statute makes it illegal and a crime for an unlicensed individual to "offer for sale a switchblade knife." Mack, who does not hold a licence, owns a store that deals in a variety of items.The front window display case, which is visible from the street, contains a switchblade knife that has a price tag on it.Under general contractual rules, Mack has undoubtedly committed a crime because he does not hold a licence.

Accepted Answer

A) True 
 B)False

Question 11

On June 1, Maureen sent a letter to Joel that offered to sell 10 000 shares in Tadpole Inc (a computer software company) for $5 each.Her letter did not require Joel to respond by any particular date.On June 3, Tadpole Inc publicly announced that its engineers had perfected a new technology that would revolutionize the electronic commerce industry.By June 4, the price of a single share in the company had increased to $100.On June 6, Joel returned from his cottage and learned of both Maureen's offer and the price of Tadpole Inc shares.He promptly sent a letter to Maureen that said, "I accept your offer.I will pay a total of $50 000 for 10 000 shares in Tadpole Inc." Maureen obviously no longer wants to sell her shares under the price that she quoted in her offer.Discuss the factors that a court would consider in deciding whether or not she and Joel had created a contract.

Accepted Answer

This question does not require students

Question 12

On March 1st, Janet, who lives in Edmonton, sent a letter to Tad, who lives in Toronto.The letter said: "I want to buy your car.I'll pay $10 000 for it.If I don't hear anything more from you, I'll assume that I can drive the car away when I'm in Toronto at the beginning of April." When he received that letter on March 5th, Tad phoned Janet.She was not home, but he left a message on her answering machine that said: "I'm willing to sell my car to you, but only if you promise to pay $15 000.I need your answer to be sent by mail within one week." Janet listened to that message on March 6.That same day, she sent a second letter to Tad that said, "I received your message.I'll pay $15 000, but not one cent more." On March 10, Tad decided that he did not want to sell the car after all.He immediately left a message on Janet's answering machine that said: "The deal is off.I'm keeping my car." An hour later, he received Janet's second letter.Which of the following statements is most likely TRUE?

Accepted Answer

A) The parties do not have a contract because an offer that is received by telephone cannot be accepted by mail. 
B) A contract was created in Edmonton on March 6. 
C) The parties do not have a contract because Janet was not entitled to say that her initial offer would be accepted through silence. 
D) A contract was created in Toronto on March 10. 
E) Tad successfully revoked his offer before he received Janet's acceptance. 
A) The parties do not have a contract because an offer that is received by telephone cannot be accepted by mail. 
B) A contract was created in Edmonton on March 6. 
C) The parties do not have a contract because Janet was not entitled to say that her initial offer would be accepted through silence. 
D) A contract was created in Toronto on March 10. 
E) Tad successfully revoked his offer before he received Janet's acceptance.

Question 13

Anita was required to enter her co-worker's office to get a file.When she was there, she saw the draft of an email message on the screen of her co-worker's computer.The message was addressed to Anita, but it had not yet been sent.In the message, the co-worker offered to sell Anita her leather jacket for $100.Once Anita saw the email, she was entitled to accept the offer.

Accepted Answer

A) True 
 B)False

Question 14

"Contract law represents the pathology of commerce." Which of the following statements best explains that quotation?

Accepted Answer

A) Most contracts eventually develop problems that require a judge's help. 
B) Since most contracts are performed without problems, business people should never waste money on lawyers until problems actually do arise. 
C) Most of the problems that affect commercial contracts are unpredictable and unavoidable. 
D) A business person should go to court every time that a commercial contract develops a problem. 
E) Legal issues usually arise only if a commercial relationship becomes unhealthy. 
A) Most contracts eventually develop problems that require a judge's help. 
B) Since most contracts are performed without problems, business people should never waste money on lawyers until problems actually do arise. 
C) Most of the problems that affect commercial contracts are unpredictable and unavoidable. 
D) A business person should go to court every time that a commercial contract develops a problem. 
E) Legal issues usually arise only if a commercial relationship becomes unhealthy.

Question 15

Which of the following statements is TRUE?

Accepted Answer

A) An offer is automatically terminated as soon as it is accepted by one person. 
B) An invitation to treat indicates that the offeror is willing to receive an acceptance. 
C) A comfort letter is used if at least one party does not have an intention to create legal relations. 
D) The courts use a subjective test to determine whether a statement is an offer or an invitation to treat. 
E) An invitation to treat indicates that the offeree is willing to receive an acceptance. 
A) An offer is automatically terminated as soon as it is accepted by one person. 
B) An invitation to treat indicates that the offeror is willing to receive an acceptance. 
C) A comfort letter is used if at least one party does not have an intention to create legal relations. 
D) The courts use a subjective test to determine whether a statement is an offer or an invitation to treat. 
E) An invitation to treat indicates that the offeree is willing to receive an acceptance.

Question 16

A bilateral contract

Accepted Answer

A) can occur as a result of a tendering process. 
B) always imposes obligations on only one party. 
C) must always be accepted through words rather than through conduct. 
D) does not require a meeting of the minds. 
E) always starts with an invitation to treat. 
A) can occur as a result of a tendering process. 
B) always imposes obligations on only one party. 
C) must always be accepted through words rather than through conduct. 
D) does not require a meeting of the minds. 
E) always starts with an invitation to treat.

Question 17

The "master of the offer"

Accepted Answer

A) can insist that silence will be treated as acceptance. 
B) can change the terms of an offer after it has been accepted. 
C) is a concept that occurs under a bilateral contract but not under a unilateral contract. 
D) is a description of the offeree, who can either accept or reject an offer. 
E) is always the same party that made and communicated the offer. 
A) can insist that silence will be treated as acceptance. 
B) can change the terms of an offer after it has been accepted. 
C) is a concept that occurs under a bilateral contract but not under a unilateral contract. 
D) is a description of the offeree, who can either accept or reject an offer. 
E) is always the same party that made and communicated the offer.

Question 18

Which of the following statements is TRUE?

Accepted Answer

A) An intention to create legal relations always exists in a commercial context. 
B) An intention to create legal relations never exists in a family context. 
C) The courts use a subjective test when determining whether or not there is an intention to create legal relations. 
D) When dealing with the intention to create legal relations, courts apply presumptions that cannot be rebutted. 
E) The existence of an intention to create legal relations is usually readily apparent. 
A) An intention to create legal relations always exists in a commercial context. 
B) An intention to create legal relations never exists in a family context. 
C) The courts use a subjective test when determining whether or not there is an intention to create legal relations. 
D) When dealing with the intention to create legal relations, courts apply presumptions that cannot be rebutted. 
E) The existence of an intention to create legal relations is usually readily apparent.

Question 19

Which of the following statements best explains why the courts use an objective test to determine whether or not there is an intention to create legal relations?

Accepted Answer

A) It would not be fair to recognize a contract unless both parties actually intended to be bound by that contract. 
B) The law of contracts is intended to protect reasonable expectations. 
C) The reasonable person test is only useful for determining subjective intentions. 
D) The courts are confident that people do not lie in court. 
E) An objective test is used if a party is a company, while a subjective test is used if a party is a human being. 
A) It would not be fair to recognize a contract unless both parties actually intended to be bound by that contract. 
B) The law of contracts is intended to protect reasonable expectations. 
C) The reasonable person test is only useful for determining subjective intentions. 
D) The courts are confident that people do not lie in court. 
E) An objective test is used if a party is a company, while a subjective test is used if a party is a human being.

Question 20

Morris posted a notice promising to pay a $50 reward to anyone who found his lost cat.Morris saw Edna, his neighbour, and drew her attention to the notice.She expressed sympathy, but said that she did not have time to help because she was rushing off to work.When she returned home early that afternoon, however, she went to Morris's house to tell him that she would look for the cat.Although he was not at home, she searched the area, found the animal, and returned it to his house.Morris now refuses to pay Edna the $50.A court would most likely say that Edna is entitled to

Accepted Answer

A) nothing because Morris is entitled to revoke his offer at any time. 
B) payment because a contract was created through her act of acceptance in acting on the offer. 
C) nothing because she was required to communicate her acceptance in writing. 
D) payment because the offeree decides whether an offer has been open for a reasonable period. 
E) nothing because she rejected Morris's offer when she said she had to rush to work. 
A) nothing because Morris is entitled to revoke his offer at any time. 
B) payment because a contract was created through her act of acceptance in acting on the offer. 
C) nothing because she was required to communicate her acceptance in writing. 
D) payment because the offeree decides whether an offer has been open for a reasonable period. 
E) nothing because she rejected Morris's offer when she said she had to rush to work.

A firm offer is

Henrique posts a notice at the racetrack that says he is willing to sell his old horse for $5000.When he returns to the track the next day, two people arrive at the same time to buy the horse.A court would most likely say that Henrique

An invitation to treat

Agreements created between family members or friends are never legally enforceable.

List five ways in which an offer can be terminated.

Garfield owns and operates a wholesale, sporting goods business.He recently delivered a box of cricket balls to his twenty-year-old son, Imran, and a box of cricket outfits to another sporting goods store called Hit-for-Six.Which of the following statements is most likely to be TRUE?

"Contract law represents the pathology of commerce." Which of the following statements best explains that quotation?

Which of the following statements is TRUE?

A bilateral contract

The "master of the offer"

Which of the following statements is TRUE?

Which of the following statements best explains why the courts use an objective test to determine whether or not there is an intention to create legal relations?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

Consideration and Privity

Representations and Terms

Contractual Defects

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Personal Property: Bailment and Insurance

Intellectual Property

Electronic Commerce

Agency and Other Methods of Carrying on Business

Basic Forms of Business Organizations

Legal Rules for Corporate Governance

Secured Transactions

Dealing With Bankruptcy and Insolvency

Government Regulation of Business

Individual Employment

Organized Labour

Online: Special Contracts: Negotiable Instruments

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Exam 7: The Nature and Creation of Contracts

A firm offer is

Henrique posts a notice at the racetrack that says he is willing to sell his old horse for $5000.When he returns to the track the next day, two people arrive at the same time to buy the horse.A court would most likely say that Henrique

An invitation to treat

Agreements created between family members or friends are never legally enforceable.

List five ways in which an offer can be terminated.

Garfield owns and operates a wholesale, sporting goods business.He recently delivered a box of cricket balls to his twenty-year-old son, Imran, and a box of cricket outfits to another sporting goods store called Hit-for-Six.Which of the following statements is most likely to be TRUE?

"Contract law represents the pathology of commerce." Which of the following statements best explains that quotation?

Which of the following statements is TRUE?

A bilateral contract

The "master of the offer"

Which of the following statements is TRUE?

Which of the following statements best explains why the courts use an objective test to determine whether or not there is an intention to create legal relations?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

Consideration and Privity

Representations and Terms

Contractual Defects

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Real Property: Interests and Leases

Real Property: Sales and Mortgages

Personal Property: Bailment and Insurance

Intellectual Property

Electronic Commerce

Agency and Other Methods of Carrying on Business

Basic Forms of Business Organizations

Legal Rules for Corporate Governance

Secured Transactions

Dealing With Bankruptcy and Insolvency

Government Regulation of Business

Individual Employment

Organized Labour

Online: Special Contracts: Negotiable Instruments

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