Question 1

Read the following and indicate which agreement would be a binding contract.Assume that all other requirements for a binding contract have been met.

Accepted Answer

A) Mary promised to give Planned Parenthood a donation of $1. 
B) John,late for work,found that his car battery was dead.He flagged down a passing truck and told the driver "he would be in his debt forever" if he would agree to do him the favour of jump-starting the car.The driver of the truck agreed. 
C) Mr.Kooner sold a farm valued at $190 000 to his nephew for only $50 000. 
D) Peter agreed to pay Ace Computers Ltd.$50 above the contract price if the company would have his new computer ready on the date specified in the original contract. 
E) Len agreed to sell and Karen agreed to buy four of Len's records for "some money." 
A) Mary promised to give Planned Parenthood a donation of $1. 
B) John,late for work,found that his car battery was dead.He flagged down a passing truck and told the driver "he would be in his debt forever" if he would agree to do him the favour of jump-starting the car.The driver of the truck agreed. 
C) Mr.Kooner sold a farm valued at $190 000 to his nephew for only $50 000. 
D) Peter agreed to pay Ace Computers Ltd.$50 above the contract price if the company would have his new computer ready on the date specified in the original contract. 
E) Len agreed to sell and Karen agreed to buy four of Len's records for "some money." C

Question 2

Generally,acceptance must be communicated to the offeror to be effective unless there has been a history of similar relations between the parties.

Accepted Answer

A) True 
 B)False  True

Question 3

Mr.Buyer,the plaintiff in the action,was attempting to enforce a contract in which the defendant,Mr.Seller,agreed to sell to the 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?

Accepted Answer

A) At the time of the contract,unknown to Mr.Buyer,Mr.Seller did not understand the quality and nature of this act because of mental incapacity. 
B) The $10 000 was not enough (i.e.,not fair). 
C) Although both parties agreed to this,no money had actually been paid on the contract,not even a deposit or a down payment. 
D) Mr.Buyer referred to essential terms in a letter sent to Mr.Seller. 
E) There was only a verbal agreement between Mr.Seller and Mr.Buyer. 
A) At the time of the contract,unknown to Mr.Buyer,Mr.Seller did not understand the quality and nature of this act because of mental incapacity. 
B) The $10 000 was not enough (i.e.,not fair). 
C) Although both parties agreed to this,no money had actually been paid on the contract,not even a deposit or a down payment. 
D) Mr.Buyer referred to essential terms in a letter sent to Mr.Seller. 
E) There was only a verbal agreement between Mr.Seller and Mr.Buyer. E

Question 4

When you pay for an option,this prevents a person from revoking an offer before the expiration of the specified time.

Accepted Answer

A) True 
 B)False

Question 5

Joel has an old lawnmower that is constantly breaking down.He decides to purchase a new one.He goes to the local hardware store.He finds a new model that he saw advertised in the newspaper.He pushes the lawnmower up to the cashier.She scans the price tag and tells him what he must pay.Joe hands the money to the cashier.In this fact situation an offer comes into existence when

Accepted Answer

A) the cashier scans the price tag and tells Joel how much the mower costs. 
B) Joel hands the money to the cashier. 
C) Joel sees the price in the newspaper. 
D) Joel sees the price of the mower in the store. 
E) Joel takes the mower from the display area and heads to the front counter. 
A) the cashier scans the price tag and tells Joel how much the mower costs. 
B) Joel hands the money to the cashier. 
C) Joel sees the price in the newspaper. 
D) Joel sees the price of the mower in the store. 
E) Joel takes the mower from the display area and heads to the front counter.

Question 6

In his last year of high school,Larry saw a friend's computer and felt that the word processing function would help him get through high school.He visited Computer Heaven Ltd.and contracted for an Apple Macintosh,printer,paper,and the program.The total cost was $2500.He paid $500 as a down payment and promised to pay another $500 on July 3,when he reached the age of majority,with the remainder to be paid in monthly installments of $250.By July 3,Larry had graduated,thanks to his passing mark in English,and he had no more use for the computer.Furthermore,he wanted to use his $500 birthday/graduation present for a down payment on a compact disc player and speakers.He failed to make his July 3 payment or any other payment to Computer Heaven.The balance outstanding at the time he stopped making payments was $2300,including unpaid interest.On these facts,which of the following is true?

Accepted Answer

A) Although the contract is unenforceable against Larry,if he affirms the contract after he reaches the age of majority,the seller will be able to sue him for breach of contract. 
B) Computer Heaven can sue Larry for breach of contract if it sues Larry after he becomes an adult. 
C) If Larry doesn't pay,Computer Heaven can sue Larry's parents because parents are liable for the debts of their minor children. 
D) Because a contract with a minor is void,Computer Heaven has never passed title and can retrieve the computer,printer,paper,and program even if these goods have been resold to someone else. 
E) none of the above 
A) Although the contract is unenforceable against Larry,if he affirms the contract after he reaches the age of majority,the seller will be able to sue him for breach of contract. 
B) Computer Heaven can sue Larry for breach of contract if it sues Larry after he becomes an adult. 
C) If Larry doesn't pay,Computer Heaven can sue Larry's parents because parents are liable for the debts of their minor children. 
D) Because a contract with a minor is void,Computer Heaven has never passed title and can retrieve the computer,printer,paper,and program even if these goods have been resold to someone else. 
E) none of the above

Question 7

Which of the following is correct with respect to the adequacy of consideration?

Accepted Answer

A) Consideration need not be legal if both parties clearly consent. 
B) Both parties must be present if the agreement is under seal. 
C) Consideration may be only love and affection. 
D) Consideration need not be fair,unless there are extenuating circumstances (i.e.,insanity or fraud). 
E) Consideration might result from existing duty: a change in the contract requires no new consideration. 
A) Consideration need not be legal if both parties clearly consent. 
B) Both parties must be present if the agreement is under seal. 
C) Consideration may be only love and affection. 
D) Consideration need not be fair,unless there are extenuating circumstances (i.e.,insanity or fraud). 
E) Consideration might result from existing duty: a change in the contract requires no new consideration.

Question 8

Explain the nature of the post-box rule.

Accepted Answer

When it is appropriate to resp

Question 9

Explain how an insurance contract avoids being void as a wager.

Accepted Answer

The insured must have an insur

Question 10

Joe offered to sell Harry his car and agreed to hold the offer open for one week,expiring Saturday at noon.The following Sunday,Harry phoned Joe to tell him that he had decided to accept the offer and purchase Joe's car.Joe said at that time that he had decided to keep the car and was just about to phone Harry to revoke the offer.Harry said,"Too bad," and demanded performance of the contract.Explain the legal responsibilities of the parties.

Accepted Answer

There is no contract.The offer

Question 11

Sarah wanted an antique lamp for the bedroom.While in a second-hand shop,she saw a lamp that she really wanted marked $100.She offered the owner $75 for it.He said,"I'll take $95." She answered,"$80!" He said,"Lady,you're pushing me a bit,aren't you? I'll take $90,that's it." She said "Okay,I'll pay $90 if you throw in this old 'Vote-for-Trudeau' button." He said,"Forget it,lady,my shop is closed," and asked her to leave.She said,"Okay,I accept your offer of $95." He made no response.If she sues for breach of contract,which of the following is true?

Accepted Answer

A) There is no contract because the owner's offer to sell the lamp for $95 was rejected by counter-offer,and Sarah's offer to buy it for $95 wasn't accepted. 
B) There is a contract because at one time the owner offered to sell the lamp for $95 and Sarah accepted it. 
C) There is a contract because the owner wanted to sell the lamp for $95 and Sarah was willing to pay that much. 
D) There is no contract because the owner's offer to sell for $95 lapsed after a reasonable time. 
E) There is no contract because the owner's offers to sell the lamp for $95 and $90 were revoked and he didn't accept Sarah's offers. 
A) There is no contract because the owner's offer to sell the lamp for $95 was rejected by counter-offer,and Sarah's offer to buy it for $95 wasn't accepted. 
B) There is a contract because at one time the owner offered to sell the lamp for $95 and Sarah accepted it. 
C) There is a contract because the owner wanted to sell the lamp for $95 and Sarah was willing to pay that much. 
D) There is no contract because the owner's offer to sell for $95 lapsed after a reasonable time. 
E) There is no contract because the owner's offers to sell the lamp for $95 and $90 were revoked and he didn't accept Sarah's offers.

Question 12

The City issued a request for bids for the construction of an events centre with the closing stated as June 15 at 4:00 p.m of the current year.The tender stated that no changes could be allowed to bids after submission.XYZ Construction submitted its bid a week in advance of the closing date.However,on June 12,XYZ Construction advised the City that it needed to increase the price of the events centre project in its bid,as it had discovered a major calculation error in its bid submission.The City refused to allow a change to XYZ's bid.After the specified close date,the City awarded the construction contract to XYZ Construction,as it was the lowest bidder.XYZ Construction refused to perform the work.This caused the City to award the contract to the company with the second-lowest bid,thus increasing the City's cost for the project.The City sued XYZ Construction.What is the legal position of the parties?

Accepted Answer

A) XYZ will win,as it advised the City in advance of the closing date that it needed to revise its bid. 
B) XYZ will win,as it had only bid on the construction job but had not signed a construction contract to build the events centre. 
C) XYZ will win,as bidders are not obligated to accept a contract based solely on the fact that they have bid on it. 
D) The City will win because the lowest bidder is always selected and obligated to perform. 
E) The City will win,as XYZ was bound by a subsidiary agreement when it submitted its bid. 
A) XYZ will win,as it advised the City in advance of the closing date that it needed to revise its bid. 
B) XYZ will win,as it had only bid on the construction job but had not signed a construction contract to build the events centre. 
C) XYZ will win,as bidders are not obligated to accept a contract based solely on the fact that they have bid on it. 
D) The City will win because the lowest bidder is always selected and obligated to perform. 
E) The City will win,as XYZ was bound by a subsidiary agreement when it submitted its bid.

Question 13

Franz bought two front-row tickets to a sold-out concert.Unfortunately,a week before the concert,he found out he had to go on a business trip and would miss the concert.He offered his co-worker,Joe,the tickets for 80% of the full price,offer to remain open until 10:00 p.m.on December 15.Indicate to Joe which of the following is true with regard to the law of offer and acceptance.

Accepted Answer

A) If Franz sells to someone else,it is too late for Joe to accept the original offer. 
B) A letter of acceptance is always effective when it is dropped in the mailbox. 
C) If Joe makes a counter-offer of 50% of the full price,and Franz rejects the counter-offer,Joe can still accept the original offer. 
D) Franz could revoke the offer at any time before acceptance,even before 10:00 p.m.on December 15. 
E) To create a contract,an offer must be in writing. 
A) If Franz sells to someone else,it is too late for Joe to accept the original offer. 
B) A letter of acceptance is always effective when it is dropped in the mailbox. 
C) If Joe makes a counter-offer of 50% of the full price,and Franz rejects the counter-offer,Joe can still accept the original offer. 
D) Franz could revoke the offer at any time before acceptance,even before 10:00 p.m.on December 15. 
E) To create a contract,an offer must be in writing.

Question 14

Contracts involving activities that,while not illegal,are considered immoral or contrary to public interest,may also be void.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an offer as opposed to an "invitation to treat"?

Accepted Answer

A) A notice in the catalogue from the gift shop of the Edmonton Aquarium: "15% off the price of all jewellery until January." 
B) A notice in the Toronto Star: "I will pay $100 to whomever finds and returns my lost female calico cat who answers to the name Marx." 
C) The display of goods on the shelves of Safeway. 
D) A sweater displayed in the window of a shop with the price tag attached and showing. 
E) An ad in a real estate paper: "Best offer in Vancouver! 3-bedroom home in Kitsilano for only $350 000!" 
A) A notice in the catalogue from the gift shop of the Edmonton Aquarium: "15% off the price of all jewellery until January." 
B) A notice in the Toronto Star: "I will pay $100 to whomever finds and returns my lost female calico cat who answers to the name Marx." 
C) The display of goods on the shelves of Safeway. 
D) A sweater displayed in the window of a shop with the price tag attached and showing. 
E) An ad in a real estate paper: "Best offer in Vancouver! 3-bedroom home in Kitsilano for only $350 000!"

Question 16

Susan invites her brother Ralph and sister Sarah,along with their family members,to a surprise birthday party for their mother.Both siblings agree to come and also agree to provide certain beverages,salads,and dessert.At significant expense,Sarah arranges to hire a live band as entertainment as well as a clown to provide face painting and balloon animal making for the kids.Her brother and sister fail to show up for the party.Sarah is extremely upset and commences an action against them for breach of contract seeking damages for the costs she paid to the band as well as to the clown.Her court action will likely:

Accepted Answer

A) fail because the contract was not reduced to writing. 
B) fail because contracts which in any way involve minors are unenforceable. 
C) succeed because all of the essential elements of a valid contract exist. 
D) succeed because her brother and sister did not provide prior notice that they were not going to attend. 
E) fail because where domestic relations are involved,there is a presumption at law that there was no intention to be legally bound and as such there is no legally enforceable agreement. 
A) fail because the contract was not reduced to writing. 
B) fail because contracts which in any way involve minors are unenforceable. 
C) succeed because all of the essential elements of a valid contract exist. 
D) succeed because her brother and sister did not provide prior notice that they were not going to attend. 
E) fail because where domestic relations are involved,there is a presumption at law that there was no intention to be legally bound and as such there is no legally enforceable agreement.

Question 17

Explain typical rules associated with the tendering process.

Accepted Answer

The party requesting the bid must follow

Question 18

Which one of the following is enforceable?

Accepted Answer

A) An ad in the paper promises to pay $5 for the return of a lost ring,but the person who finds and returns the ring never saw the offer in the newspaper. 
B) Mr.Baker was so sick of an old chair that,when Mr.Venson offered him $10 for it,he agreed (i.e.,promised to sell it to him),although the market value of the chair was $80. 
C) Ms.Jones promised to pay an additional $1 to Mr.Wood if he finished the existing contract on time,according to the terms of the contract. 
D) Mr.Ho promised to give his needy friend,Mr.Jahn,$1. 
E) Ms.Goode promised to send $10 to Mr.Paul,who kindly came and warned her when he saw a tow truck approach her car. 
A) An ad in the paper promises to pay $5 for the return of a lost ring,but the person who finds and returns the ring never saw the offer in the newspaper. 
B) Mr.Baker was so sick of an old chair that,when Mr.Venson offered him $10 for it,he agreed (i.e.,promised to sell it to him),although the market value of the chair was $80. 
C) Ms.Jones promised to pay an additional $1 to Mr.Wood if he finished the existing contract on time,according to the terms of the contract. 
D) Mr.Ho promised to give his needy friend,Mr.Jahn,$1. 
E) Ms.Goode promised to send $10 to Mr.Paul,who kindly came and warned her when he saw a tow truck approach her car.

Question 19

"For a contract to be binding,both parties must have a clear understanding of all terms of that agreement." Discuss the accuracy of this statement.

Accepted Answer

It's only necessary that the terms of th

Question 20

Only the essential terms of a contract must be set out in the offer.

Accepted Answer

A) True 
 B)False

Read the following and indicate which agreement would be a binding contract.Assume that all other requirements for a binding contract have been met.

Generally,acceptance must be communicated to the offeror to be effective unless there has been a history of similar relations between the parties.

Mr.Buyer,the plaintiff in the action,was attempting to enforce a contract in which the defendant,Mr.Seller,agreed to sell to the 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?

When you pay for an option,this prevents a person from revoking an offer before the expiration of the specified time.

Which of the following is correct with respect to the adequacy of consideration?

Explain the nature of the post-box rule.

Explain how an insurance contract avoids being void as a wager.

Contracts involving activities that,while not illegal,are considered immoral or contrary to public interest,may also be void.

Which of the following is an offer as opposed to an "invitation to treat"?

Explain typical rules associated with the tendering process.

Which one of the following is enforceable?

"For a contract to be binding,both parties must have a clear understanding of all terms of that agreement." Discuss the accuracy of this statement.

Only the essential terms of a contract must be set out in the offer.

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Exam 3: Formation of Contracts

Read the following and indicate which agreement would be a binding contract.Assume that all other requirements for a binding contract have been met.

Generally,acceptance must be communicated to the offeror to be effective unless there has been a history of similar relations between the parties.

Mr.Buyer,the plaintiff in the action,was attempting to enforce a contract in which the defendant,Mr.Seller,agreed to sell to the 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?

When you pay for an option,this prevents a person from revoking an offer before the expiration of the specified time.

Which of the following is correct with respect to the adequacy of consideration?

Explain the nature of the post-box rule.

Explain how an insurance contract avoids being void as a wager.

Contracts involving activities that,while not illegal,are considered immoral or contrary to public interest,may also be void.

Which of the following is an offer as opposed to an "invitation to treat"?

Explain typical rules associated with the tendering process.

Which one of the following is enforceable?

"For a contract to be binding,both parties must have a clear understanding of all terms of that agreement." Discuss the accuracy of this statement.

Only the essential terms of a contract must be set out in the offer.

The Canadian Legal System

Torts and Professional Liability

Enforcing Contractual Obligations

Legislation in the Marketplace

Agency and Employment

Methods of Carrying on Business

Property

Ideas and Information

Electronic Commerce and International Trade

Filters