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

Joe was in a bar and saw his friend Sam.Sam 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?

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

"Contracts must be in writing to be enforceable." Discuss the accuracy of that statement.

If the court classifies the nature of a third-party agreement as a(n)___________,there is no requirement of writing.

A provision that restricts the seller from competing with the buyer in a contract for the sale of a business is

Today,there is no general rule that a contract must take a certain form,although most jurisdictions have statutory requirements regarding the transfer of land.

When John bought a car from his father's old classmate,Joe,he was only 17 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.)

Advertisers often use exaggerated claims,such as "This is the best little Buick in Canada." What test is used to determine whether such claims become part of the contract or not?

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

Whenever an adult enters into a contract with an infant,the adult is bound.

All contracts must be written to be binding.

Which one of the following is an example of a contract that is binding on an infant in British Columbia?

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

Randy,as 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?

A husband started a small business and agreed to pay his wife $700 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.

Contracts may be in writing,under seal,verbal,or even implied.

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

Which of the following best describes an illegal contract?

What is the effect if an agreement that is required to be in writing under the Statute of Frauds is not?

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?