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

One afternoon while Mr.Reston was going home on the bus,his neighbour,Mr.Outovit,offered to sell Reston his car for $4000,a bit below the market value.Reston said,"You might change your mind on that.Better not be too hasty with your offers." Outovit answered,"I want to sell it quickly," and wrote on the back of an envelope,"I hereby offer my neighbour,Reston,my 2011 Chevrolet for $4000 cash." He signed his name.Reston wrote,"I accept." The next day,Reston went to his neighbour's house to pay the money and get the car.He learned that Outovit was in hospital,unconscious from a reaction to medicines given to him the day before.If Outovit (or his legal representative)refuses to honour the contract on the basis of mental incapacity,which of the following is true?

Because of the Charter of Rights and Freedoms,status Indians no longer have their capacity to contract limited.

In jurisdictions other than British Columbia,which of the following is correct with respect to the law of infants?

The court may hold that a contract is void,voidable,unenforceable,or illegal.Which of the following is true with regard to these terms and the court's use of them?

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.

Neither party is bound by a contract with an infant.

Which of the following attempts to form a contract would the court declare to be void?

Which of the following best describes an illegal contract?

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?

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

Which of the following are in no way incapacitated when entering into contracts?

Which of the following is false with regard to the intention of the parties to an agreement to enter into a legal relationship? Where appropriate,assume that all the other elements necessary to form a contract are present.

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

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?

What is the term used when a person cannot understand the nature or consequences of his or her actions?

Describe an "executed contract" and provide an example.

All provincial and territorial governments have passed legislation to facilitate e-commerce by clarifying the status of electronic documents,contracts and signatures.

Contracts involving domestic relationships are presumed to be binding.

Even in commercial relationships,if the parties make it absolutely clear that they don't intend the arrangement to be legally binding on them,the agreement will not be enforceable in court.

Sam agreed to sell his house to Joe for $400,000,and although the agreement was not in writing,Joe gave Sam $25,000 as a deposit.Sam gave Joe a receipt for the $25,000,indicating that it had been received but not stating for what purpose.In the absence of any other writing,is this contract enforceable? Explain.