Question 1

Which of the following is LEAST LIKELY to be understood by a court as a contract for the sale of an interest in land?

Accepted Answer

A) the purchase of a home 
B) the lease of a farm 
C) the short-term lease of a residential apartment 
D) the lease of mineral rights in an oilfield 
E) the purchase of lakefront property 
A) the purchase of a home 
B) the lease of a farm 
C) the short-term lease of a residential apartment 
D) the lease of mineral rights in an oilfield 
E) the purchase of lakefront property C

Question 2

Contracts are part of private law.A key concept of private law is that parties are at liberty to create and define the legal obligations they owe to one another.Discuss whether you agree that judges should be able to step in and set aside certain transactions on the basis that they think an agreement is unjust.Does this interfere with the core concept of private law? Explain your answer.

Accepted Answer

Agree: Those who agree will argue that judges should continue to set aside transactions where there has been a material mistake,fraud,or unfairness during bargaining.To hold parties to their contracts one hundred percent of the time is not practical in these situations.Judges should not interfere with "unwise" or "imprudent" bargains,but if the bargaining process is so flawed that it cannot plausibly be said that the parties truly consented to the arrangement,courts should strike down such deals.The purpose of freedom to contract is to ensure that people are making voluntary undertakings.
Disagree: Those who disagree will argue that anyone who enters into a contract does so because they perceive it to their advantage to do so.Because each person can choose whether to enter into the agreement or not,the system of commerce and free enterprise should not be compromised just because things do not go the way of one party as opposed to the other.This view,they will argue,is crucial for commercial stability.Business cannot succeed unless parties are able to rely on their contracts being enforced by the courts without minute inquiries into the fairness of the process by which those contracts are obtained.A free enterprise system is premised on some parties have advantages that other parties do not,and some businesses being wealthier and more powerful than others.The courts cannot interfere with this system by changing freely bargained contracts.

Question 3

Whether actual pressure has been exerted is

Accepted Answer

A) never relevant in a claim of unfairness during bargaining. 
B) never relevant in a claim of undue influence. 
C) relevant in a claim of undue influence only if there is a fiduciary relationship. 
D) relevant in a claim of undue influence only if there is not a fiduciary relationship. 
E) always relevant to determine if any contract exists. 
A) never relevant in a claim of unfairness during bargaining. 
B) never relevant in a claim of undue influence. 
C) relevant in a claim of undue influence only if there is a fiduciary relationship. 
D) relevant in a claim of undue influence only if there is not a fiduciary relationship. 
E) always relevant to determine if any contract exists. D

Question 4

Napolean wanted to borrow money from the Bank of Winnipeg.The bank was not,however,fully convinced that Napolean would be able to repay the debt.It therefore wanted some assurance from Napolean's mother,Josephine,that she would repay the loan if necessary.Which of the following statements is most likely to be TRUE?

Accepted Answer

A) If it was not evidenced in writing,Josephine's promise will certainly be enforceable if it was a guarantee,but it may not be enforceable if it was an indemnity. 
B) If Josephine's promise must be evidenced in writing in order to be enforceable,the bank may be able to satisfy that requirement by combining several documents even if those documents do not refer to each other. 
C) If Josephine's promise is not evidenced in writing,and if such writing is required by statute,then neither Josephine nor Napolean needs to repay the loan. 
D) If Josephine's promise must be evidenced in writing in order to be enforceable,then the contract will be unenforceable unless both Josephine and the bank sign the relevant document. 
E) If Josephine's promise is properly classified as an indemnity,then the bank cannot demand payment from her unless Napolean has first refused to pay. 
A) If it was not evidenced in writing,Josephine's promise will certainly be enforceable if it was a guarantee,but it may not be enforceable if it was an indemnity. 
B) If Josephine's promise must be evidenced in writing in order to be enforceable,the bank may be able to satisfy that requirement by combining several documents even if those documents do not refer to each other. 
C) If Josephine's promise is not evidenced in writing,and if such writing is required by statute,then neither Josephine nor Napolean needs to repay the loan. 
D) If Josephine's promise must be evidenced in writing in order to be enforceable,then the contract will be unenforceable unless both Josephine and the bank sign the relevant document. 
E) If Josephine's promise is properly classified as an indemnity,then the bank cannot demand payment from her unless Napolean has first refused to pay.

Question 5

Outline three situations where a court might set aside a contract because of unfairness during bargaining.What are the requirements to prove each,and who has the onus to prove what in court?

Accepted Answer

(i)Economic Duress: Courts will sometime

Question 6

Lucy wants to sell her furniture store in Edmonton before she moves to Calgary in six months.You offer to buy the establishment under one condition;the contract must include a restrictive covenant in the form of a non-compete clause.Lucy agrees and signs the contract making you the new owner of a furniture store.A year later,a mutual friend informs you that Lucy is operating a furniture store in Calgary and it is performing very well.When you hear this,you decide to take Lucy to court for breaching the restrictive covenant of the contract.Which statement is true?

Accepted Answer

A) Unless there is unfairness in the bargaining process,the restrictive covenant will be upheld as courts want to enforce the concept of freedom to contract between parties. 
B) The restrictive covenant will be struck down as all restrictive covenants are a restraint of trade and are against public policy. 
C) All restrictive covenants are presumed to be against public policy unless they can be shown to be reasonable. 
D) All restrictive covenants are presumed to be against public policy unless they can be shown to be geographically reasonable. 
E) All restrictive covenants are presumed to be fair unless they can be shown to be unreasonable. 
A) Unless there is unfairness in the bargaining process,the restrictive covenant will be upheld as courts want to enforce the concept of freedom to contract between parties. 
B) The restrictive covenant will be struck down as all restrictive covenants are a restraint of trade and are against public policy. 
C) All restrictive covenants are presumed to be against public policy unless they can be shown to be reasonable. 
D) All restrictive covenants are presumed to be against public policy unless they can be shown to be geographically reasonable. 
E) All restrictive covenants are presumed to be fair unless they can be shown to be unreasonable.

Question 7

When may the defence of non est factum be raised?

Accepted Answer

A) when a person signs a document but his attention has not been drawn to a particularly onerous term 
B) when there is a radical difference between what a person signed and what the person thought he was signing,and the signatory was not careless in signing or in not reading the documents 
C) when a person signs a document but fails to read it first 
D) when the defendant forgot to have the plaintiff sign the contract 
E) when there is no written evidence of the contract 
A) when a person signs a document but his attention has not been drawn to a particularly onerous term 
B) when there is a radical difference between what a person signed and what the person thought he was signing,and the signatory was not careless in signing or in not reading the documents 
C) when a person signs a document but fails to read it first 
D) when the defendant forgot to have the plaintiff sign the contract 
E) when there is no written evidence of the contract

Question 8

Svetlana paid an advance under a contract of sale for a unique antique in Ontario,but the performance of the contract was rendered impossible because of a terrible accident that happened during delivery.Because the seller incurred expenses while trying to deliver the antique,the court is permitted to allow the seller to keep some of the advance towards those expenses.

Accepted Answer

A) True 
 B)False

Question 9

Charlie has bipolar disorder (also known as manic-depression).Usually,medication helps to control her disorder.Lately,Charlie stopped taking her medication and started drinking heavily.During a manic (up)phase,she dressed in an elegant suit,went to a BMW dealership and signed a contract for the purchase of a new sports car.She financed the transaction by putting a large deposit on her credit card,and drove the car off the lot that same day.Charlie's family became very concerned.Describe the law as it pertains to Charlie's capacity to contract.What should Charlie do? What should the car dealer do?

Accepted Answer

Mentally disabled adults who are unable

Question 10

Sina employs Joe,who is 16.The terms of the employment contract are to Joe's benefit.Still,Joe wants to walk away from his obligations.Joe can do so whenever he wants because the contract was always void.

Accepted Answer

A) True 
 B)False

Question 11

Sarah bought a stereo system in Vancouver under a payment plan that must be completed within two years.Technically speaking,the contract is enforceable only if it is evidenced in writing.

Accepted Answer

A) True 
 B)False

Question 12

Unincorporated associations

Accepted Answer

A) are always treated the same way as corporations. 
B) can be given the capacity to contract through the enactment of legislation but otherwise do not have legal capacity as they are not legal entities. 
C) generally have the capacity to contract. 
D) are independent legal entities. 
E) no longer exist in Canadian society. 
A) are always treated the same way as corporations. 
B) can be given the capacity to contract through the enactment of legislation but otherwise do not have legal capacity as they are not legal entities. 
C) generally have the capacity to contract. 
D) are independent legal entities. 
E) no longer exist in Canadian society.

Question 13

Ariel pays Newton a $17 000 deposit as part performance of an oral contract for the sale of land and that Ariel takes possession of the land at the time of possession.According to the terms of their agreement,Ariel is to pay the balance 30 days after taking possession,failing which Newton is allowed to keep the deposit and Ariel must vacate.Suppose that the contract of sale does not complete as Newton fails to provide a transfer of title even though Ariel tenders the whole amount on the thirtieth day after possession was taken by Ariel.Which of the following is TRUE in most Canadian jurisdictions?

Accepted Answer

A) Ariel can enforce the contract of sale against Newton. 
B) Newton has a defence to enforcement of the contract based on the Statute of Frauds. 
C) Newton can refund the deposit and take the money back as the actions of the parties was not part performance of a contract. 
D) Ariel can only sue for return of the deposit. 
E) Ariel will lose the deposit and must pay rent to Newton for the month of possession and then must vacate the land. 
A) Ariel can enforce the contract of sale against Newton. 
B) Newton has a defence to enforcement of the contract based on the Statute of Frauds. 
C) Newton can refund the deposit and take the money back as the actions of the parties was not part performance of a contract. 
D) Ariel can only sue for return of the deposit. 
E) Ariel will lose the deposit and must pay rent to Newton for the month of possession and then must vacate the land.

Question 14

Salvatore created a contract with Acme Corp.Although the parties initially performed their obligations without complaint or difficulty,a dispute has now arisen.Acme Corp claims the protection of a force majeure clause.Which of the following statements is most likely to be TRUE?

Accepted Answer

A) The company has discovered that Salvatore is under the age of majority. 
B) Salvatore has argued that the contract is unenforceable because it is not evidenced in writing. 
C) Salvatore claims that he made a mistake when he entered into the agreement when he thought that there was insurance for what he bought,but what he had bought was destroyed in a typhoon while it was in transit to him from the vendor,ACME Corp. 
D) The company wants to escape from the contract on the grounds of frustration. 
E) Salvatore has argued that he entered into the contract as a result of undue influence. 
A) The company has discovered that Salvatore is under the age of majority. 
B) Salvatore has argued that the contract is unenforceable because it is not evidenced in writing. 
C) Salvatore claims that he made a mistake when he entered into the agreement when he thought that there was insurance for what he bought,but what he had bought was destroyed in a typhoon while it was in transit to him from the vendor,ACME Corp. 
D) The company wants to escape from the contract on the grounds of frustration. 
E) Salvatore has argued that he entered into the contract as a result of undue influence.

Question 15

Which of the following is TRUE?

Accepted Answer

A) A transaction can be unconscionable only if there is an inequality of bargaining power between the parties and that inequality results in an improvident bargain for the weaker party. 
B) A transaction can be unconscionable only if the bargain is not improvident. 
C) A transaction can be unconscionable only if the presumption of unconscionability is rebutted. 
D) A transaction can be unconscionable only if the contract is enforceable. 
E) A transaction is always unconscionable when a big company makes a deal with a consumer that is more to the benefit of the big company. 
A) A transaction can be unconscionable only if there is an inequality of bargaining power between the parties and that inequality results in an improvident bargain for the weaker party. 
B) A transaction can be unconscionable only if the bargain is not improvident. 
C) A transaction can be unconscionable only if the presumption of unconscionability is rebutted. 
D) A transaction can be unconscionable only if the contract is enforceable. 
E) A transaction is always unconscionable when a big company makes a deal with a consumer that is more to the benefit of the big company.

Question 16

Adrian and Darah entered into a contract.After the agreement was partially performed,Adrian successfully claimed that the contract is voidable.Which of the following statements may be TRUE?

Accepted Answer

A) Adrian,who is an Aboriginal living on reserve land,had created a contract to sell that land to Darah. 
B) Adrian,who is 17 years old,had entered into a contract to purchase a set of computer games from Darah. 
C) Adrian,who has been declared mentally incompetent by a court,entered into a contract to purchase food and shelter from Darah. 
D) Adrian,who is an Aboriginal living in Toronto,entered into a contract to purchase recreational sporting goods from Darah. 
E) Adrian,who is 17 years old,entered into a contract to obtain life-saving medical services from Darah. 
A) Adrian,who is an Aboriginal living on reserve land,had created a contract to sell that land to Darah. 
B) Adrian,who is 17 years old,had entered into a contract to purchase a set of computer games from Darah. 
C) Adrian,who has been declared mentally incompetent by a court,entered into a contract to purchase food and shelter from Darah. 
D) Adrian,who is an Aboriginal living in Toronto,entered into a contract to purchase recreational sporting goods from Darah. 
E) Adrian,who is 17 years old,entered into a contract to obtain life-saving medical services from Darah.

Question 17

In 1824,Justice Burrough said,"Public policy ...is a very unruly horse and once you get astride it you never know where it will carry you." In 1971,Lord Denning MR said that with a good judge "in the saddle,the unruly horse can be kept in control.It can jump over obstacles.It can leap the fences put up by fictions and come up on the side of justice." Explain what each judge meant in the above quote.State which judge,in your opinion,is correct.Substantiate your answer with a brief discussion of the relevant concepts from the text.

Accepted Answer

Burrough J is providing a warning to jud

Question 18

The doctrine of frustration applies when

Accepted Answer

A) the contracting parties are both mistaken about some future set of circumstances that are beyond the power or control of either party,and those circumstances prevent them from carrying out their obligations pursuant to their contract. 
B) the contracting parties are both mistaken about some previously mutually assumed fact,in a manner that prevents them from carrying out their obligations pursuant to the contract. 
C) the contracting parties are unable to reach an agreement and are forced to abandon negotiations. 
D) the contracting parties agree on a purchase price for a particular good and the purchasing party fails to pay. 
E) both parties agree to not perform the contract. 
A) the contracting parties are both mistaken about some future set of circumstances that are beyond the power or control of either party,and those circumstances prevent them from carrying out their obligations pursuant to their contract. 
B) the contracting parties are both mistaken about some previously mutually assumed fact,in a manner that prevents them from carrying out their obligations pursuant to the contract. 
C) the contracting parties are unable to reach an agreement and are forced to abandon negotiations. 
D) the contracting parties agree on a purchase price for a particular good and the purchasing party fails to pay. 
E) both parties agree to not perform the contract.

Question 19

Cy and Kelly negotiate the sale of "Indian art" over the internet.Because of an electronic miscommunication,Cy thinks he is buying art from Calcutta.But it turns out upon delivery that Kelly was selling Inuit art all along.Because the mistake was material and prevented the creation of a shared contractual intent,Cy will be able to claim the contract was defective and may have a remedy.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is most likely an improvident bargain?

Accepted Answer

A) when Granny assigns all of her assets to a powerful business in exchange for the promise to take care of her in the future 
B) when Granny assigns all of her assets to a convicted fraudster in exchange for the promise of the fraudster to take care of her grandson in the future 
C) when Granny trades her farm for a condo in Florida 
D) when Granny trades her farm for blue chip stocks 
E) when Granny goes to play bingo for the third time in a week 
A) when Granny assigns all of her assets to a powerful business in exchange for the promise to take care of her in the future 
B) when Granny assigns all of her assets to a convicted fraudster in exchange for the promise of the fraudster to take care of her grandson in the future 
C) when Granny trades her farm for a condo in Florida 
D) when Granny trades her farm for blue chip stocks 
E) when Granny goes to play bingo for the third time in a week

Which of the following is LEAST LIKELY to be understood by a court as a contract for the sale of an interest in land?

Whether actual pressure has been exerted is

Outline three situations where a court might set aside a contract because of unfairness during bargaining.What are the requirements to prove each,and who has the onus to prove what in court?

When may the defence of non est factum be raised?

Sina employs Joe,who is 16.The terms of the employment contract are to Joe's benefit.Still,Joe wants to walk away from his obligations.Joe can do so whenever he wants because the contract was always void.

Sarah bought a stereo system in Vancouver under a payment plan that must be completed within two years.Technically speaking,the contract is enforceable only if it is evidenced in writing.

Unincorporated associations

Salvatore created a contract with Acme Corp.Although the parties initially performed their obligations without complaint or difficulty,a dispute has now arisen.Acme Corp claims the protection of a force majeure clause.Which of the following statements is most likely to be TRUE?

Which of the following is TRUE?

Adrian and Darah entered into a contract.After the agreement was partially performed,Adrian successfully claimed that the contract is voidable.Which of the following statements may be TRUE?

The doctrine of frustration applies when

Which of the following is most likely an improvident bargain?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

The Nature and Creation of Contracts

Consideration and Privity

Representations and Terms

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Special Contracts: Negotiable Instruments

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

Filters

Exam 10: Contractual Defects

Which of the following is LEAST LIKELY to be understood by a court as a contract for the sale of an interest in land?

Whether actual pressure has been exerted is

Outline three situations where a court might set aside a contract because of unfairness during bargaining.What are the requirements to prove each,and who has the onus to prove what in court?

When may the defence of non est factum be raised?

Sina employs Joe,who is 16.The terms of the employment contract are to Joe's benefit.Still,Joe wants to walk away from his obligations.Joe can do so whenever he wants because the contract was always void.

Sarah bought a stereo system in Vancouver under a payment plan that must be completed within two years.Technically speaking,the contract is enforceable only if it is evidenced in writing.

Unincorporated associations

Salvatore created a contract with Acme Corp.Although the parties initially performed their obligations without complaint or difficulty,a dispute has now arisen.Acme Corp claims the protection of a force majeure clause.Which of the following statements is most likely to be TRUE?

Which of the following is TRUE?

Adrian and Darah entered into a contract.After the agreement was partially performed,Adrian successfully claimed that the contract is voidable.Which of the following statements may be TRUE?

The doctrine of frustration applies when

Which of the following is most likely an improvident bargain?

Risk Management and Sources of Law

Litigation and Alternative Dispute Resolution

Introduction to Torts

Intentional Torts

Miscellaneous Torts Affecting Business

Negligence

The Nature and Creation of Contracts

Consideration and Privity

Representations and Terms

Discharge and Breach

Contractual Remedies

Special Contracts: Sale of Goods

Special Contracts: Negotiable Instruments

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

Filters