Question 1

In examining contracts that include a restrictive covenant,the court will not presume that the term is in restraint of trade unless the evidence establishes that it is.

Accepted Answer

A) True 
 B)False

Question 2

A minor is

Accepted Answer

A) a person who is small in stature. 
B) a person who enters into an agreement to work in a coal mine. 
C) a person who performs minor tasks pursuant to a contract. 
D) a person who is small in stature but is able to enter into certain contract. 
E) a person who has not attained the age of majority.

Question 3

In order for a person under mental incapacity to avoid a contract made while that person was incapacitated,the incapacitated person must show

Accepted Answer

A) that neither party knew what was happening. 
B) that there was no intention to enter into a contract. 
C) that the contract was unfair. 
D) that the other party should have recognized the incapacity. 
E) all of the above

Question 4

In order to collect compensation for a loss under a fire insurance policy,the insured must show an insurable interest.

Accepted Answer

A) True 
 B)False

Question 5

A minor's freedom from liability is limited to contract.Explain.

Accepted Answer

The answer of A minor's freedom from liability is limited...

Question 6

For the purpose of a contract,who is a minor?

Accepted Answer

The answer of For the purpose of a contract,who is...

Question 7

Which of the following is NOT true?

Accepted Answer

A) A corporation has no physical existence. 
B) A corporation is a legal fiction. 
C) A corporation is a creature of law. 
D) A corporation does not have the attributes of a natural person. 
E) A corporation has the same attributes as a natural person.

Question 8

Which of the following is TRUE?

Accepted Answer

A) Where a portion of a contract is void,the whole contract is affected and a court will set aside the whole contract as being void. 
B) A contract that contemplates the commission of a tort is not legal unless the tort is committed and someone is injured. 
C) Where a portion of a contract is void,the remainder of the contract is not affected provided a court can sever the void parts without doing injustice to the parties. 
D) The common law supersedes statute law when determining the legality of contracts. 
E) A statute can only make a contract illegal; it cannot make a contract void.

Question 9

Where a contract is illegal,the contract exists,but will not be enforced by the court.

Accepted Answer

A) True 
 B)False

Question 10

When Mary was 17 years old,she was asked to become a partner in an clothing design shop because she created brilliant clothing designs.Mary liked the idea at the time and signed a partnership agreement/contract.However,after working for a month,she decided that it was not something she wanted to do.After Mary turned 18,she decided to stop being a partner in the clothing shop.In this situation

Accepted Answer

A) Mary can repudiate the partnership contract because it is not a beneficial contract of service. 
B) so long as Mary does not affirm or ratify the partnership contract,she can repudiate it. 
C) there is nothing that Mary can do because she is now 18 years of age. 
D) there is nothing that Mary can do because she is bound by a beneficial contract of service. 
E) there is nothing Mary can do because she signed the partnership agreement/contract.

Question 11

A void contract is one that is deemed in law to have never been created.

Accepted Answer

A) True 
 B)False

Question 12

When a court strikes down an unreasonable agreement between an employer and employee that restricts the future economic freedom of the employee,the court serves two public interests,namely,protecting employees and

Accepted Answer

A) maintaining peaceful workplaces. 
B) applying the law. 
C) protecting businesses. 
D) protecting the mobility of labour. 
E) protecting the management of businesses.

Question 13

Happy Carrier Company (HCC)is in the business of shipping goods.Yesterday HCC agreed with John Smith to ship Mr.Smith's furniture from Toronto to Ottawa.Mr.Smith's furniture is worth $100 000.00.Just before loading the furniture onto its truck,HCC's driver had Mr.Smith sign a contract that contained a term that limited HCC's liability for destruction or damage to the furniture to $50.00 if it resulted from the negligence of HCC or its employees.On the way to Ottawa,HCC's driver lost control of the truck and Mr.Smith's furniture was destroyed by fire after the truck crashed into a brick wall.In this situation

Accepted Answer

A) the limitation of liability in the contract is effective only against HCC,but not its employee,so Mr.Smith can sue the employee for the value of his furniture. 
B) the limitation of liability in the contract is permitted by law and Mr.Smith will receive only $50.00. 
C) Mr.Smith's contract with HCC is illegal by common law,so Mr.Smith will recover the full value of his furniture from HCC. 
D) although the contract with HCC is legal,the limitation on liability contained in it is not,so Mr.Smith will recover the full value of his furniture from HCC. 
E) the limitation of liability in the contract is not effective,because Mr.Smith did not see it before he signed the contract,so Mr.Smith will recover the full value of his furniture from HCC.

Question 14

Jack and Jill agree to tell Michael that they will beat him up if he does not give them his valuable coin collection.According to the common law,this agreement between Jack and Jill is

Accepted Answer

A) unenforceable. 
B) illegal. 
C) voidable. 
D) ineffective. 
E) void.

Question 15

During bankruptcy proceedings,a debtor is often under certain contractual disabilities which include necessaries until he is discharged.

Accepted Answer

A) True 
 B)False

Question 16

A year ago,James sold a motor bike to Jim,his best friend.At the time that the bike was sold,Jim was a minor.Jim is still making payments to James.Jim will be attaining the age of majority in a few months' time.How should James protect himself?

Accepted Answer

A) Have Jim transfer the bike to a third party. 
B) Get a witness to witness the next payment that Jim makes. 
C) Enter into another agreement with Jim. 
D) Get Jim to ratify the agreement. 
E) Provide Jim with a statement of account.

Question 17

Whenever a contract involves or requires the commission of a tort,the contract is usually illegal.The torts that typically arise in an agreement include all of the following EXCEPT

Accepted Answer

A) libel and slander. 
B) trespass. 
C) deceit (fraud). 
D) negligence. 
E) inducing breach of contract.

Question 18

Once a contract has been made,legal capacity will be presumed unless the defendant proves otherwise.

Accepted Answer

A) True 
 B)False

Question 19

When a minor reaches the age of majority,a contract that was entered into earlier and was unenforceable remains unenforceable unless

Accepted Answer

A) the parties execute an affidavit. 
B) it was ratified after the person attains the age of majority. 
C) it is repudiated after the person attains the age of majority. 
D) the subject matter is a non-necessary item. 
E) the subject matter is stolen before the person attains the age of majority.

Question 20

If a court finds that one term of a contract is void and the remaining parts are valid,it can do the following to the void term

Accepted Answer

A) disregard it. 
B) give it little weight. 
C) sever it. 
D) enforce it. 
E) treat it as necessary.

Exam 8: Formation of a Contract: Capacity to Contract and Legality of Object

In examining contracts that include a restrictive covenant,the court will not presume that the term is in restraint of trade unless the evidence establishes that it is.

A minor is

In order for a person under mental incapacity to avoid a contract made while that person was incapacitated,the incapacitated person must show

In order to collect compensation for a loss under a fire insurance policy,the insured must show an insurable interest.

A minor's freedom from liability is limited to contract.Explain.

For the purpose of a contract,who is a minor?

Which of the following is NOT true?

Which of the following is TRUE?

Where a contract is illegal,the contract exists,but will not be enforced by the court.

A void contract is one that is deemed in law to have never been created.

When a court strikes down an unreasonable agreement between an employer and employee that restricts the future economic freedom of the employee,the court serves two public interests,namely,protecting employees and

Jack and Jill agree to tell Michael that they will beat him up if he does not give them his valuable coin collection.According to the common law,this agreement between Jack and Jill is

During bankruptcy proceedings,a debtor is often under certain contractual disabilities which include necessaries until he is discharged.

A year ago,James sold a motor bike to Jim,his best friend.At the time that the bike was sold,Jim was a minor.Jim is still making payments to James.Jim will be attaining the age of majority in a few months' time.How should James protect himself?

Whenever a contract involves or requires the commission of a tort,the contract is usually illegal.The torts that typically arise in an agreement include all of the following EXCEPT

Once a contract has been made,legal capacity will be presumed unless the defendant proves otherwise.

When a minor reaches the age of majority,a contract that was entered into earlier and was unenforceable remains unenforceable unless

If a court finds that one term of a contract is void and the remaining parts are valid,it can do the following to the void term