Exam 9: The Requirements of Form and Writing

Acme Life Insurance refused to pay out on a life insurance policy on the late Mr. Smith. Since such policies are essentially contracts betting on the length of life of the insured, this contract is enforceable in law by Mr. Smith's family only because the need to protect its business reputation makes an insurer pay.

Jasmine wagered $10,000 on the tables at Las Vegas, where gambling is legal. She paid her gambling debt by a cheque drawn on her Ontario bank account, but immediately put a stop payment on the cheque when she got home. Our courts will not enforce the Nevada court's judgment for the casino owners.

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. As a minor, Mariah would not be liable to pay any of the debts.

Sashi and Leon were having marital problems and had an argument one morning over whether or not Leon should buy a motorbike. Sashi went to her sister Nancy's home where the two women talked about life and drank vast quantities of wine. Very drunk, Sashi decided everything was her fault. She went to a local motorbike store, selected one she knew Leon wanted, but had rejected as being too expensive, and paid for it with her credit card. The salesman had no idea she was drunk. The next day, she had no memory of the transaction and was horrified to find out what she had done. Sashi discovered the sales slip and the motorbike outside, and called the company at once to tell them she is returning it immediately.

Doug, the 17-year-old brother of a friend of yours, bought your old car from you three months ago to get him to and from his new job. He needed a car because there was no public transportation in that area. You agreed to let him pay in 36 monthly installments of $200, but he has paid you only once so far. Yesterday, you asked him to pay up and he told you he had spent all he had earned. When you told him you would have to take him to court, he said that an adult cannot sue a minor on a contract. Today, a tow truck left the remains of the car in your driveway; it had been so badly damaged in an accident that was Doug's fault that it was a write-off. A note on the windshield said "Your car doesn't run too well, but I won't sue. Let's call it quits. Best wishes, Doug." Under your contract he was to have insured the car, but he did not. a. Discuss whether you have any recourse against Doug. b. If Doug had bought the car, simply for normal driving, would your answer be any different, and why or why not?

Jack, who is 16, makes a contract with Thomas, who is 24, to cut Thomas' lawn all summer. If Jack breaches the contract, Thomas cannot sue him.

Bernie Nohave is operating a scheme whereby investors' money is utilized to buy AIDS drugs in Africa. The money is then deductible as a charitable donation for tax purposes. Tom invests in this scheme to generate tax losses knowing that medicine is not being purchased. Is the contract valid?

Sue, aged 15, bought an expensive calculator from Biggs & Little Office Supplies to use in school, paying for it in full. She paid the normal price and the calculator works as expected. Sue would now like one with some extra functions. Therefore, she can take back the one she bought and get her money back from Biggs & Little, even though she no longer has the instruction manual that went with it.

Alex is asked by Greta why minors cannot generally be sued for breach of contract. "It's because they don't have much money, usually, and it would be unfair to let a big corporation take it away from them," he says.

Nancy was the administrator of her deceased father's estate. Several years before he died, Wilbur, the father, had entered into a lease agreement with an oil exploration company. The company had leased the rights to explore and drill for oil on Wilbur's farm for a period of 20 years. About two years after entering into the lease, the oil company began drilling. According to the terms of the lease, the company was requested to pay Wilbur a basic monthly fee regardless of whether any drilling was underway, and regardless of the outcome of the drilling. In addition, Wilbur was to receive a substantial additional payment if any drilling proved to be profitable. For about six years before his death, Wilbur suffered from a mental illness that had impaired his ability to remember things. While he seemed generally lucid and aware of his actions in present time, he would be unable to remember events which had occurred only an hour before. The oil company was not aware of Wilbur's illness at the time it entered into the lease. It became apparent, however, once drilling was underway as Wilbur did not seem to remember that the company had paid him extra amounts as the result of successful drilling. Nancy, who believes that the oil company can afford to pay more for the lease rights wishes to void the lease on the basis of her father's mental incapacity, and renegotiate it herself. Discuss the legal principles she will rely upon and the response of the oil company. What would be the likely outcome of Nancy's challenge?

The Indian Act recognizes First Nations bands as legal entities.

Gavin ordered a custom-made winter coat from a mail-order catalogue. He is 17. Before the coat arrived, he contacted the seller and told them he did not want it. He has no winter coat. It is likely that he cannot be forced by the seller to take the coat and pay for it.

Ruth opens a craft store one block east of Mary's store six months later and customers start going there instead of to Mary.

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mabel refused to pay. If Mariah already has an adequate supply of coats, the coat which she purchased would be a non-necessary item.

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mabel refused to pay. Mariah would be liable for the payment for the coat, if the coat was a "necessary."

Sarah is 18 years old. No matter where she lives in Canada she is fully responsible as an adult for any contracts that she makes.

The legality of the subject matter of a contract determines its validity and enforceability. Legality is generally determined on the basis of public policy or public interest; any agreement contrary to these considerations may be illegal or void.

A public utility corporation was created under legislation that gave it the right to build and maintain power stations, and to raise money within the province to do so. If the PUC enters into a contract to supply power to a group of companies in another province, with the intent to use the money thus raised to build more power stations in the province, that contract is enforceable by the corporations if the PUC decides not to honour it.

Dale, while in a drunken state, purchased a large sailboat from Sonja. If, on his return to a sober state and when made aware of the contract, Dale affirmed it, he could not later avoid the contract on the basis that he was in a drunken state at the time the agreement was made.

Moshir ordered a custom-made winter coat from a mail-order catalogue. He is 17. Before the coat arrived, he contacted the seller and told them he did not want it. He has no winter coat. The coat is a necessary.