Deck 3: Formation of a Valid Contract

Question 1

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
Smith's offer lapsed when Smith agreed to purchase Brown's canoe.

Answer 1

False

Question 2

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
Brown's acceptance of Smith's offer was unconditional.

Answer 2

True

Question 3

Green,a retailer,placed an advertisement in a local newspaper on May 5 that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10 at a sale price of $100 each.Regular Price $199.First come,first served!" Doe was the 10th customer in the store on May 10,but Green refused to sell him a TV set for $100.
Green's advertisement was only an invitation to do business,and not a valid offer to sell.

Answer 3

False

Question 4

Zev and John were neighbours.Before Zev left on a holiday,he asked John to "keep an eye on his house." While Zev was on holidays,John noticed that Zev's lawn was in need of cutting,and proceeded to cut the lawn.On Zev's return from his holiday,John demanded $10 for cutting the lawn.
If John was entitled to claim quantum meruit,and the regular price charged by persons who mow lawns in that area was $10,John would probably be awarded $10 by the court.

Question 5

Green,a retailer,placed an advertisement in a local newspaper on May 5 that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10 at a sale price of $100 each.Regular Price $199.First come,first served!" Doe was the 10th customer in the store on May 10,but Green refused to sell him a TV set for $100.
If Green had placed a notice on his shop door on May 9 that read: "Sale cancelled," his notice would revoke the offer made in the newspaper on May 5.

Question 6

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
The acceptance by Jones was ineffective because Jones did not reply to Smith by way of a written acceptance.

Question 7

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
Smith is not bound in contract with Brown because the prior contract he made with Jones became enforceable when Jones accepted his offer.

Question 8

Zev and John were neighbours.Before Zev left on a holiday,he asked John to "keep an eye on his house." While Zev was on holidays,John noticed that Zev's lawn was in need of cutting,and proceeded to cut the lawn.On Zev's return from his holiday,John demanded $10 for cutting the lawn.
If John should take legal action against Zev to collect the $10,and the court agreed that he was entitled to recover quantum meruit,he would not necessarily be entitled to the $10,but only to a reasonable price for his services.

Question 9

Green,a retailer,placed an advertisement in a local newspaper on May 5 that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10 at a sale price of $100 each.Regular Price $199.First come,first served!" Doe was the 10th customer in the store on May 10,but Green refused to sell him a TV set for $100.
If Doe had seen the notice on the shop door on May 9,he could still accept the offer,because the offer was irrevocable.

Question 10

Zev and John were neighbours.Before Zev left on a holiday,he asked John to "keep an eye on his house." While Zev was on holidays,John noticed that Zev's lawn was in need of cutting,and proceeded to cut the lawn.On Zev's return from his holiday,John demanded $10 for cutting the lawn.
John would not be entitled to claim anything for his service because his act was gratuitous.

Question 11

Zev and John were neighbours.Before Zev left on a holiday,he asked John to "keep an eye on his house." While Zev was on holidays,John noticed that Zev's lawn was in need of cutting,and proceeded to cut the lawn.On Zev's return from his holiday,John demanded $10 for cutting the lawn.
Zev's statement was a request for service,and hence John may claim for his service of cutting of the lawn on the basis of quantum meruit.

Question 12

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
Smith and Brown established a binding contract that both parties are obliged to perform.

Question 13

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
The contract between Smith and Brown automatically rescinded the offer that Smith had made to Jones.

Question 14

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
Smith's offer was merely an invitation to do business.

Question 15

Green,a retailer,placed an advertisement in a local newspaper on May 5 that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10 at a sale price of $100 each.Regular Price $199.First come,first served!" Doe was the 10th customer in the store on May 10,but Green refused to sell him a TV set for $100.
Green's advertisement was a valid offer to sell,which Doe accepted by being one of the first 10 customers at the store on May 10,and verbally accepting the offer.

Question 16

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
Smith's offer to buy the canoe from Jones was a genuine expression of his intention to create a legal relationship.

Question 17

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
Smith and Jones established a binding contract when Jones telephoned Smith and accepted Smith's offer to buy his canoe for $200.

Question 18

Green,a retailer,placed an advertisement in a local newspaper on May 5 that read: "Special Sale! New 16" portable TV set available for sale to the first 10 customers at my store on May 10 at a sale price of $100 each.Regular Price $199.First come,first served!" Doe was the 10th customer in the store on May 10,but Green refused to sell him a TV set for $100.
The advertisement is not an offer because Green did not express the intention to be bound by the statements in the advertisement.

Question 19

Zev and John were neighbours.Before Zev left on a holiday,he asked John to "keep an eye on his house." While Zev was on holidays,John noticed that Zev's lawn was in need of cutting,and proceeded to cut the lawn.On Zev's return from his holiday,John demanded $10 for cutting the lawn.
Zev and John have a binding contract for the cutting of the lawn,because Zev's statement constituted an offer to John to cut the lawn,which John accepted.

Question 20

Smith met Jones at a street corner and made a verbal offer to buy his canoe for $200.Jones replied that he would "think about it." Smith nodded affirmatively.The two then went about their separate business.Later in the day,Smith met Brown,who also had a canoe for sale,and Smith offered to purchase Brown's canoe for $175.Brown agreed to sell Smith his canoe.At 4 p.m.the same afternoon,after Smith and Brown had made their arrangement,Jones telephoned Smith to say he would accept Smith's offer to buy his canoe.
Smith's offer lapsed when Jones did not immediately accept the offer before the two parties departed on their separate business.

Question 21

Mabel,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.
Minors are not liable for non-necessary purchases,and Mabel would be required only to return a non-necessary coat to avoid the contract.

Question 22

Parker owed Andrew a debt in the amount of $1,000.The debt was payable on June 1.
In Ontario,and in Western Canada under the Mercantile Law Amendment legislation,if Andrew accepted the lesser sum as payment in full on the due date,he would not be entitled to collect the remaining $100.

Question 23

Parker owed Andrew a debt in the amount of $1,000.The debt was payable on June 1.
If Brendan,a friend of Parker,paid $900 to Andrew as payment in full of the debt owed by Parker,and Andrew accepted the sum,Andrew could not later demand the remaining $100 from Parker.

Question 24

Kesler,while in a drunken state,purchased a large sailboat from Mullen.
Kesler may avoid the contract with Mullen,if,on his return to a sober state,he promptly repudiates the contract,and can prove that Mullen was aware that he,Kesler,was intoxicated at the time the contract was made.

Question 25

Mabel,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.
All gifts purchased by minors are non-necessary items,and therefore Mabel is not bound by such a contract.

Question 26

Mabel,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.
As a minor,Mabel would not be liable to pay any of the debts.

Question 27

Parker owed Andrew a debt in the amount of $1,000.The debt was payable on June 1.
If Parker offered the $900 on the day before the due date,and Andrew accepted the money as payment in full,at Common Law,he could not later demand the remaining $100.

Question 28

Mabel,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.
Mabel would be liable for the payment for the coat,if the coat was a "necessary."

Question 29

Kesler,while in a drunken state,purchased a large sailboat from Mullen.
If Mullen was unaware that Kesler was intoxicated at the time that the contract was made,Kesler would not be permitted to avoid the contract.

Question 30

Anderson,a city employee,collected garbage along Smith's street on Thursday of each week.One day Rick said to Anderson: "You have done such a good job,I will give you $10 when you come by next week." The next week,when Anderson made his regular garbage pickup for the city,he met Rick and asked for the $10.Rick refused to pay.
Anderson could not enforce Rick's promise to pay,because he cannot show consideration for the promise made to him.

Question 31

Kesler,while in a drunken state,purchased a large sailboat from Mullen.
If on his return to a sober state,and when made aware of the contract,Kesler 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.

Question 32

Mabel,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.
The merchant was entitled to a return of the goods sold when Mabel repudiated the agreement to purchase the watch and silver bracelet.

Question 33

Anderson,a city employee,collected garbage along Smith's street on Thursday of each week.One day Rick said to Anderson: "You have done such a good job,I will give you $10 when you come by next week." The next week,when Anderson made his regular garbage pickup for the city,he met Rick and asked for the $10.Rick refused to pay.
Rick is not obliged to pay Anderson the $10,because his promise was gratuitous.

Question 34

Mabel,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.
Mabel is not bound by the contract to purchase the silver bracelet,because it is a non-necessary item for a minor.

Question 35

Mabel,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 Mabel accidentally damaged the watch while it was in her possession,the merchant cannot hold her liable for the cost of repair.

Question 36

Anderson,a city employee,collected garbage along Smith's street on Thursday of each week.One day Rick said to Anderson: "You have done such a good job,I will give you $10 when you come by next week." The next week,when Anderson made his regular garbage pickup for the city,he met Rick and asked for the $10.Rick refused to pay.
Rick is obliged to pay Anderson the $10,because he promised him the money.

Question 37

Mabel,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 Mabel already has an adequate supply of coats,the coat that she purchased would be a non-necessary item.

Question 38

Anderson,a city employee,collected garbage along Smith's street on Thursday of each week.One day Rick said to Anderson: "You have done such a good job,I will give you $10 when you come by next week." The next week,when Anderson made his regular garbage pickup for the city,he met Rick and asked for the $10.Rick refused to pay.
Anderson would be unable to show consideration because,as a city employee,he was already bound to collect Rick's garbage as a part of his duty to his employer.

Question 39

Parker owed Andrew a debt in the amount of $1,000.The debt was payable on June 1.
If Parker offered Andrew the sum of $900 on the due date as payment in full,at Common Law,Andrew would be entitled to collect the remaining $100 even though he accepted the lesser sum as payment in full on the due date.

Question 40

Parker owed Andrew a debt in the amount of $1,000.The debt was payable on June 1.
If Brendan paid $900 as settlement for the debt owed by Parker to Andrew,Brendan would be entitled to an assignment of the debt owed by Parker,and could collect the debt from him.

Question 41

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
A court will strike down an unreasonable restriction,thereby leaving the purchaser unprotected from competition from the seller.

Question 42

Mr.Groves,a successful lawyer,is asked by his daughter's day care to do their legal work on a voluntary,unpaid basis and,since it is minimal,he agrees.As the result of an error he makes in drawing up the day care's standard employment contract,a mistake that would not have been made by the reasonable lawyer,the day care has to compensate an employee who was let go for failure to meet the job requirements.Since Mr.Groves received no consideration for his work,the day care cannot hold him liable for its loss.

Question 43

In a letter to his nephew,Peter,Mortimer promised to leave Peter all his money when he died,in memory of Peter's father for whom Mortimer had great respect.There is nothing Peter could do to ensure that Mortimer will keep his promise since it is gratuitous and a gratuitous promise can never be made enforceable.

Question 44

Franklin Motors Ltd.makes an agreement to buy 3,000 widgets for $1,000 from Stovely's Engineering Co.The law presumes that,unless one of the companies proves otherwise,they intended this agreement to be a legally binding one.

Question 45

Victor has breakfast at the Kute Kafey.From the menu,he orders buttered muffins "homemade like your mother's," jam "made with loving care and fresh ingredients," and tea "fresh picked from the cool hillsides of an Indian plantation." The waiter has accepted his order.Actually,the muffins are nothing like Victor's mum's muffins and are baked in a factory;the jam is mass-produced from industrial-quality frozen fruit;and the tea is made with generic tea bags.Victor has a good case for breach of contract.

Question 46

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
If the restrictive covenant was considered to be unreasonable by the court,the restriction would be amended to make it reasonable.

Question 47

Jeremy agrees not to sue Angela for having crashed into his car if she agrees to pay for his repairs.Since he promised only not to do something that he could have done,he has not given consideration for her promise to pay.

Question 48

Jill has been negotiating the purchase of a speedboat with Sandi during the last two weeks.Two days ago,she wrote to Sandi,saying "I won't go any higher than $8,000.Take it or leave it,but that's my final offer." By coincidence,Sandi sent a letter the same day that said "I won't take less than $8,000,so if you can't accept that,I'll have to look elsewhere for a buyer." The letters have both arrived today at their destinations.There is a contract between Jill and Sandi.

Question 49

A trader on the floor of the stock exchange makes a deal with another trader by hand signals for the sale of a block of shares.This is a binding contract.

Question 50

Rosa offers Valerie the chance to buy Rosa's cottage for $25,000.Two days later,while Valerie is still considering the offer,Rosa's sister mentions to Valerie that Rosa has sold the cottage to Ben for $30,000.If Valerie now accepts,Rosa will be liable for breach of contract.

Question 51

Paulette Paulson Furs advertises mink coats for sale at 30 percent off.The demand was much greater than anyone could have predicted,and 14 people who came to the store could not be provided with one of the sale coats.Since they had accepted Paulson's offer,she will have to find coats for them or be in breach of their contracts.

Question 52

Andy offers to sell his car to Bob,but Bob needs to arrange financing,so Andy says he will give Bob three days to do so.Andy can revoke the offer before the three days are up.

Question 53

Tom offers to buy Jenny's fishing tackle for $500,but she says she wants $600.Tom then proposes a price of $550,but Jenny says she is not interested.Tom is afraid she will walk away from a deal,so he says "OK.I'll accept your offer to sell for $600." There is now a contract between them.

Question 54

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
The "five-year,five-mile radius" restriction is probably reasonable,as it protects the goodwill purchased by Austin,and does not unnecessarily restrict Corbin's right to set up business elsewhere.

Question 55

Susan offered to pay $500 for a ring that Daria has agreed to sell to her.Each woman has given consideration to the other for her promise.

Question 56

Alliston enters into an agreement with Berkley that,for $2,000,gives him the right to agree to purchase Berkley's screen printing business within the next 30 days for $50,000.If Alliston decides to buy,they agree that the $2,000 will be the down payment on the purchase price.This agreement is an option.

Question 57

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
The agreement that restricts Corbin's right to set up a business in competition with Austin will be enforceable only if it is reasonable and necessary.

Question 58

The world of commerce requires that the intention to create a legal relationship be proven before any contract can be found to exist between the parties.

Question 59

Arnold,a professional baseball player,negotiated with the Soxville Eagles for a one-year contract.He was given one week to consider the offer and was to sign it by the opening day of the season,one week away.Arnold,in the meantime,was offered a better contract with the Baxton Bulldogs,which he accepted.On opening day,Arnold walked onto the field in the uniform of Baxton.Soxville can successfully sue Arnold for a breach of contract.

Question 60

Jack makes an offer to Jill by mail,because she cannot be reached by telephone.She replies by mail,accepting the offer.Canada Post loses her reply for several weeks.Jack,who has given up waiting to hear from her,has entered into the contract with someone else after waiting for a reasonable time.Jill can successfully sue Jack for breach of contract.

Question 61

McSweeney agrees to clear out Broad's basement,but no price is set at the time.Broad argues,once McSweeney has done the work,that since no price was agreed upon,he should pay only a reasonable price and not the excessive amount stated in the bill presented to him by McSweeney.He is right.

Question 62

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 the company he did not want it.He has no winter coat.
The coat is a necessary.

Question 63

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

Question 64

Simple Simon is told by his lawyer that a particular document must be signed under seal.When Simple Simon questions whether that isn't cruelty to animals,his lawyer explains that this is simply a process by which a written document can be made binding even if there is no consideration present.

Question 65

Rita and her mother visit the bank as Rita wants to borrow money for a car.Her mother will be her guarantor.The banker fills out the loan form and the guarantee form,but has only one gummed seal.Considering the most prudent place to put the seal,the banker affixes the seal on the guarantee to be signed by Rita's mother.One seal is enough,this was the correct choice of place to put it,and the bank is fully protected.

Question 66

Zena decided not to honour the pledge form she had filled for a local charity.Since her pledge was in writing and signed by her,it is enforceable by the charity.

Question 67

A small municipality advertised in several newspapers a call for tenders to complete road construction.After the tenders had been submitted the job was not awarded to any of the prospective bidders.The municipality,on the recommendation of a neighbouring township,contacted another firm and awarded it the contract on the basis of price and reputation.After learning of this development the companies that had bid on the advertised tender joined forces and brought a suit against the municipality.They will be successful.

Question 68

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

Question 69

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.

Question 70

June,an underworld enforcer,beats up Jason under an agreement with Monty by which she is to be paid $5,000 for her work.Although each party has given consideration,June cannot use the courts to enforce the contract if Monty will not pay her.

Question 71

Sue,aged 15,bought an expensive calculator from Biggs and 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.

Question 72

A public utility corporation (PUC)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.

Question 73

James,a 16-year-old youth,got a job for a catalogue company selling household items that he ordered from the business and sold to his customers.James's grades at school suffered as a result of his job,and he was forced to give it up.He returned the goods he had purchased on credit,and notified the company that he was discontinuing his employment.The company contacted James,and told him that by having the goods in his possession the company had lost revenue opportunities.It then billed James for the cost of the goods.James is obliged to pay.

Question 74

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

Question 75

Mr.Martin,who has been declared bankrupt,decided to rent an apartment for $1,600 per month,since his house is to be sold to satisfy his creditors.
Assuming this is a contract for necessaries,Mr.Martin must tell the landlord that he is a bankrupt or he cannot make the contract.

Question 76

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.

Question 77

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 the company 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.

Question 78

Mr.Martin,who has been declared bankrupt,decided to rent an apartment for $1,600 per month,since his house is to be sold to satisfy his creditors.
He cannot enter into such a contract,since he lacks the capacity to contract except for necessaries.

Question 79

Jones Construction asks for bids for subcontracts on a building it is to construct.The successful bid will be an acceptance of Jones's offer.

Question 80

A Canadian multinational was interested in developing a market in a developing country that had once been communist,and was moving to a free enterprise system.The multinational negotiated with the government to buy and resurrect the fledging state-owned automobile industry.After signing a contract under seal,the company got cold feet and decided to back out of the deal.The contract will be enforced against the company because the application of a seal together with a signature is considered to represent consideration for the contract.