Question 1

Which of the following statements correctly illustrates a legal signature for online commercial transactions?

Accepted Answer

A)  Clicking an "I Reject" dialogue box. 
B)  Signing your name at the bottom of a standard form, and then not mailing it to the business. 
C)  Opening an online shopping basket and adding several items to the basket. 
D)  Attaching an electronic signature to an electronic document. 
E)  Attaching a signature on your computer screen.

Question 2

Smith ran a software design business. He needed someone to handle some of the product demonstrations, so he hired Janet to do this work. In the employment contract, he insisted that Janet promise that if she left the firm, she would not work for Smith's competitors within a stated period of time and within a stated geographical region. If Janet now wishes to leave the job, indicate the statement that accurately describes the likely effect of her promise.

Accepted Answer

A)  Such promises are in restraint of trade and thus the courts invariably hold them to be invalid. 
B)  Such promises are invariably held to be valid when they are part of the terms of employment and thus are given in consideration for getting the job. 
C)  Such promises are valid only if given under seal. 
D)  If the court holds such a promise to be invalid, then the whole employment contract is necessarily void as well. 
E)  If the court thinks that such a promise is reasonable between the employer and employee and that the public interest will not be damaged, then it will enforce it.

Question 3

What must a person establish in order to escape contractual obligations on the basis on insanity?

Accepted Answer

The answer of What must a person establish in order...

Question 4

A(n) ________ describes a relationship in which a third party assumes a primary obligation for the repayment of the debt along with the debtor.

Accepted Answer

A)  debtor 
B)  binding agreement 
C)  promise 
D)  indemnity 
E)  guarantor

Question 5

If a third party incurs a secondary liability for a debt, he has given a(n)

Accepted Answer

A)  indemnity. 
B)  guarantee. 
C)  obligation. 
D)  debt. 
E)  easement.

Question 6

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?

Accepted Answer

A)  If Joe can show that there was no indication that Sam was drunk, even though Sam was completely incapacitated, he will be required to go through with the deal. 
B)  Sam just has to show he was legally intoxicated, and he will not be bound. 
C)  As long as Joe can produce the agreement in writing, there is nothing Sam can do to get out of the deal. Once Sam has signed the document, he is responsible for its contents. 
D)  Sam will not have to go through with the deal because no money has yet changed hands. 
E)  Being drunk is no excuse and the contract is binding.

Question 7

In Royal Bank of Canada v. Holoboff, the Bank sued Holoboff, a minor, who had sold his client card and personal identification number (PIN) to a third party who defrauded the bank. What was the result?

Accepted Answer

A)  Holoboff was found liable for the tort of conspiracy to commit fraud. 
B)  Holoboff was found liable for breach of contract, despite being a minor. 
C)  Holoboff was not liable for anything, as minors can never be liable. 
D)  Holoboff's parents were automatically liable for Holoboff's tort. 
E)  Holoboff's parents were automatically liable for Holoboff's breach of contract.

Question 8

All contracts must be written to be binding.

Accepted Answer

A) True 
 B)False

Question 9

A provision that restricts the seller from competing with the buyer in a contract for the sale of a business is

Accepted Answer

A)  always enforceable because the parties to a contract have the freedom to contract as they see fit. 
B)  always unenforceable because any attempt to restrict competition is an illegal restraint of trade. 
C)  fatal to the whole contract (i.e., it causes the whole contract to fail). 
D)  enforceable if it is reasonable between the parties, which means that it must be limited in time (e.g., one year) but need not be limited in area. 
E)  enforceable if it is reasonable between the parties and not contrary to public policy.

Question 10

"A person's intention to be bound by contracts is presumed." Discuss the accuracy of that statement.

Accepted Answer

The answer of "A person's intention to be bound by...

Question 11

Describe three situations in your jurisdiction where a contract must be evidenced in writing to be enforceable.

Accepted Answer

The answer of Describe three situations in your jurisdiction where...

Question 12

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 13

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

Accepted Answer

The answer of What is the term used when a...

Question 14

Lawer entered into a contract for the sale of his business, a barbershop, to Cutter. The contract provided that Lawer would not open up a similar business within 25 kilometres of the barbershop being sold. About two weeks after the sale, Cutter noticed a new barbershop opening across the street in brand-new facilities. When he learned that the owner of the new shop was the very Lawer who sold the business to him, he sued for breach of contract. Which of the following correctly indicates the legal position of the parties?

Accepted Answer

A)  The court needs to determine only that the distance of 25 kilometres is reasonable; if it does, the restriction is valid and Cutter will succeed. 
B)  Any attempt to restrict competition is illegal, and no matter how reasonable the terms are, the provision will be void. 
C)  The provision will be void as it is broader than necessary to protect the goodwill of the business. 
D)  If the restriction is illegal, the whole contract for the sale and purchase of the business is necessarily void and Cutter can return the barbershop for the return of the purchase price. 
E)  To determine whether or not the restriction is binding, the court asks only one question: does it reduce competition?

Question 15

Distinguish between an infant's liability for torts and for contracts.

Accepted Answer

The answer of Distinguish between an infant's liability for torts...

Question 16

Advertisers often use exaggerated claims, such as "This is the best little Buick in Canada." What test is used to determine whether such claims become part of the contract or not?

Accepted Answer

The answer of Advertisers often use exaggerated claims, such as...

Question 17

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

Accepted Answer

The answer of Explain the legal position of an infant...

Question 18

A requirement for the existence of an enforceable contract is that the parties have the legal capacity to contract. Which of the following is incorrect with respect to the law of incapacity?

Accepted Answer

A)  If someone contracts with an insane person but there was no indication of mental illness, the contract can be binding. 
B)  A contract by an insane person for necessities, such as food, is binding. 
C)  The law governing contracts with persons intoxicated by alcohol or drugs is the same as the law governing contracts with the insane. 
D)  If a mentally impaired person cannot avoid a contract on the basis of insanity, the court could still set the contract aside for being an "unconscionable" transaction. 
E)  If you knew that you were negotiating a new lease, but that you weren't being as effective as you wanted to be because you had been drinking, you can have the resulting contract set aside.

Question 19

"Some contracts are considered illegal even though the conduct involved is not prohibited by any law." Explain the accuracy of that statement.

Accepted Answer

The answer of "Some contracts are considered illegal even though...

Question 20

What is the term for a written commitment whereby a person agrees to pay a debt if the debtor does not?

Accepted Answer

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