Question 1

What does the decision in Bayview Credit Union Ltd. v. Daigle illustrate?

Accepted Answer

A)  Businesspeople are at a risk when dealing with minors as if they are adults. 
B)  Parents are responsible for contracts made by their children. 
C)  Contracts made by children are void. 
D)  When a minor enters into a contract, there is no consideration. 
E)  A person under the age of majority cannot intend to enter into a contract.

Question 2

What is the term for a primary obligation of a third party to pay a debt along with a debtor?

Accepted Answer

The answer of What is the term for a primary...

Question 3

Jones entered into a contract for the sale of his barber shop to Harry Cutter. One of the terms of the contract was that Jones would never open up a similar business within 50 kilometres of the location of the barber shop being sold. About two weeks after the sale, Cutter noticed a new barber shop opening across the street with brand-new facilities and equipment. When he learned that the owner of the new shop was the very Jones 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)  If the 50 kilometres is determined to be reasonable, this restriction will be valid and Harry Cutter will succeed. 
B)  Any such attempt to restrict competition is illegal and, no matter how reasonable the terms are, the provision will be void. 
C)  The time period of the restrictive covenant is too broad and would be found to be void or non-enforceable. 
D)  The whole contract for the sale of the business is void because of the illegal term, and therefore Harry will be able to force Jones to take his barber shop back and return the purchase price. 
E)  These terms are enforceable no matter how unreasonable because they are part of the bargain struck.

Question 4

Just what has to be in writing to satisfy the requirements of the Statute of Frauds?

Accepted Answer

The answer of Just what has to be in writing...

Question 5

Contracts that unduly restrict competition are void.

Accepted Answer

A) True 
 B)False

Question 6

Describe how infants are treated in contract law in Canada.

Accepted Answer

The answer of Describe how infants are treated in contract...

Question 7

Given the provisions of the Statute of Frauds, which of the following contracts should be evidenced in writing?

Accepted Answer

A)  A sale of goods involving $4 
B)  A retainer with a lawyer 
C)  An employment contract 
D)  A sale of land 
E)  Domestic agreements

Question 8

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 9

When a third party says, "I'll see that you get paid," there is an assumption of a primary obligation, and the promise is a(n)

Accepted Answer

A)  indemnity. 
B)  guarantee. 
C)  contract. 
D)  obligation. 
E)  interest.

Question 10

Joe entered into a contract to sell his house to Sam for $400,000. Explain under what circumstances this contract would be binding on the parties even where it was not in writing or evidenced by writing.

Accepted Answer

The answer of Joe entered into a contract to sell...

Question 11

What is the age of majority in your province?

Accepted Answer

The answer of What is the age of majority in...

Question 12

When there is a(n) ________ (a right to seize property), or when there is a right to set off a debt against the obligations created by the contract, the parties themselves may be able to enforce the contract without the help of the courts.

Accepted Answer

A)  provision 
B)  indemnity 
C)  lien 
D)  obligation 
E)  court order

Question 13

Which of the following best describes an illegal contract?

Accepted Answer

A)  A contract that is illegal at the time it is formed 
B)  A contract that is illegal in the way in which it is performed 
C)  A contract that has been breached by one of the parties 
D)  A contract that lacks consensus, consideration, capacity, and intention 
E)  A contract that results in civil litigation

Question 14

Which of the following is correct with respect to the law of intention?

Accepted Answer

A)  Since domestic relationships are serious, there is a legal presumption that in such relationships there is an intention for the parties to be legally bound by their agreements. 
B)  In commercial arrangements, there is always an intention to be bound by agreements no matter what the parties state to the contrary. 
C)  In domestic agreements, there is a presumption that there is no intention to be legally bound. 
D)  Where intention is the issue, there is never any presumption for or against intention; the courts will always apply the reasonable person test. 
E)  Since domestic relationships are serious, the parties to such relationships are always bound by their contracts with each other.

Question 15

How is a person of weakened intellect or who is otherwise vulnerable (but not insane or mentally incompetent) protected in terms of contract law?

Accepted Answer

The answer of How is a person of weakened intellect...

Question 16

In most jurisdictions, if the court classifies the nature of a third-party agreement as a guarantee, there is no requirement of writing.

Accepted Answer

A) True 
 B)False

Question 17

In which of the following situations would an infant be bound by the contract he has entered into?

Accepted Answer

A)  A contract for the purchase of a bike with which to race. 
B)  A government student loan. 
C)  A contract for the purchase of a new leather jacket, where the merchant was not aware that he had several other jackets at home. 
D)  A contract for the purchase of theatre tickets. 
E)  A written contract for the purchase of a new stereo.

Question 18

In Ascent Financial Services Ltd. v. Blythman, the Court decided

Accepted Answer

A)  that Anna and Art were in breach of both the sale of goodwill agreement and the non-competition agreement, as well as their fiduciary duty. 
B)  that Carolyn and Don were in breach of both the sale of goodwill agreement and the non-competition agreement, as well as their fiduciary duty. 
C)  that Carolyn and Don were in breach of only their fiduciary duty. 
D)  that Anna and Art were in neither in breach of the sale of goodwill agreement nor the non-competition agreement. 
E)  that Anna only and not Art was in breach of her fiduciary duty.

Question 19

What is a guarantee?

Accepted Answer

The answer of What is a guarantee?...

Question 20

One afternoon while Mr. Reston was going home on the bus, his neighbour, Mr. Outovit, offered to sell Reston his car for $4000, a bit below the market value. Reston said, "You might change your mind on that. Better not be too hasty with your offers." Outovit answered, "I want to sell it quickly," and wrote on the back of an envelope, "I hereby offer my neighbour, Reston, my 2011 Chevrolet for $4000 cash." He signed his name. Reston wrote, "I accept." The next day, Reston went to his neighbour's house to pay the money and get the car. He learned that Outovit was in hospital, unconscious from a reaction to medicines given to him the day before. If Outovit (or his legal representative) refuses to honour the contract on the basis of mental incapacity, which of the following is true?

Accepted Answer

A)  If Reston can show the written contract, Outovit has no argument and will be bound to honour the contract. 
B)  Outovit need only prove that he didn't understand the nature and quality of his act to void the contract. 
C)  Outovit won't be bound by the contract because there hadn't yet been the payment for, or delivery of, the car. 
D)  If it is established that Reston didn't know Outovit was incapacitated at the time of contract and that the deal was fair, Outovit will be bound by the contract even if he didn't understand the nature and quality of his act. 
E)  To get out of a contract on the basis of insanity you have to be institutionalized.

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

What does the decision in Bayview Credit Union Ltd. v. Daigle illustrate?

What is the term for a primary obligation of a third party to pay a debt along with a debtor?

Just what has to be in writing to satisfy the requirements of the Statute of Frauds?

Contracts that unduly restrict competition are void.

Describe how infants are treated in contract law in Canada.

Given the provisions of the Statute of Frauds, which of the following contracts should be evidenced in writing?

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?

When a third party says, "I'll see that you get paid," there is an assumption of a primary obligation, and the promise is a(n)

Joe entered into a contract to sell his house to Sam for $400,000. Explain under what circumstances this contract would be binding on the parties even where it was not in writing or evidenced by writing.

What is the age of majority in your province?

When there is a(n) ________ (a right to seize property) , or when there is a right to set off a debt against the obligations created by the contract, the parties themselves may be able to enforce the contract without the help of the courts.

Which of the following best describes an illegal contract?

Which of the following is correct with respect to the law of intention?

How is a person of weakened intellect or who is otherwise vulnerable (but not insane or mentally incompetent) protected in terms of contract law?

In most jurisdictions, if the court classifies the nature of a third-party agreement as a guarantee, there is no requirement of writing.

In which of the following situations would an infant be bound by the contract he has entered into?

In Ascent Financial Services Ltd. v. Blythman, the Court decided

What is a guarantee?