Question 1

Mrs.Johnson is thinking of selling some property to her son.Which of the following is correct with respect to intention when entering into such a contract?

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) When intention is the issue,there is never any presumption for or against intention; the courts will always apply the reasonable person test. 
E) Commercial contacts are always binding,no matter what the stated intention.

Question 2

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 3

Which one of the following correctly indicates the position of the parties in respect to contracts involving minors?

Accepted Answer

A) All contracts with minors are void. 
B) Contracts with minors are unenforceable by the infant against the adult and by the adult against the infant. 
C) Contracts with minors are void,except beneficial contracts of service. 
D) An adult cannot sue the infant on the contract even if the infant affirms the contract after reaching the age of majority. 
E) An infant can enforce a contract made by an adult with him despite that fact that he is a minor.

Question 4

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 5

Provide an example of something that would constitute acceptable part performance when land has been sold.

Accepted Answer

The answer of Provide an example of something that would...

Question 6

Which one of the following is required to be evidenced in writing under the Statute of Frauds or its equivalent?

Accepted Answer

A) A contract of employment 
B) A contract to incur debt 
C) A guarantee 
D) Any contract involving money over $1000 
E) Any contract involving goods

Question 7

Which of the following is incorrect with respect to the law of infants and their parents?

Accepted Answer

A) As a general rule,parents are not responsible for the contracts of their children. 
B) As a general rule,parents are not responsible for the torts of their children. 
C) A parent is responsible for the debt of his child if that parent has guaranteed the loan. 
D) A parent can be liable for a tort committed by her child if it can be shown that the parent was negligent as well. 
E) A parent is responsible for the obligations of her children in both tort and contract law.

Question 8

A husband started a small business and agreed to pay his wife $1700 a month for her bookkeeping services.This was primarily a method of income-splitting for tax purposes.Unfortunately,the business was not as successful as they had imagined,and the husband couldn't afford to pay his wife that much money from the business.The marriage went sour,and after separation,the wife brought an action against the husband demanding back pay for the last 11 months,as well as compensation for loss of future earnings.Explain what defence the husband could best raise in these circumstances.

Accepted Answer

The answer of A husband started a small business and...

Question 9

A necessary element of a contract is that the parties must have the intention to be legally bound.Which of the following is true with regard to this element of a contract?

Accepted Answer

A) In contract cases,the court hears evidence as to what the parties actually had in their minds at the time of contract. 
B) If the parties fail to state expressly in their contract their intention to be legally bound,there is no contract. 
C) The court always presumes an intention to be legally bound,so this is never an issue in a contract case. 
D) The court can presume the intention to be legally bound,but a party to the contract can bring forward contrary evidence to rebut the presumption. 
E) Family members can never have the intent to be legally bound in their agreements because family matters are private matters.

Question 10

Indicate 4 categories of persons that have their capacity to enter into contracts limited to some extent.

Accepted Answer

The answer of Indicate 4 categories of persons that have...

Question 11

If a contract is not evidenced in writing this does not make it void,only unenforceable.

Accepted Answer

A) True 
 B)False

Question 12

Corporate bodies created by special legislation invariably lack capacity to enter into binding agreements.

Accepted Answer

A) True 
 B)False

Question 13

When the terms of an agreement make it impossible to perform the contract within one full year from the time the contract is entered into,there must be evidence in writing for it to be enforceable.

Accepted Answer

A) True 
 B)False

Question 14

How do the courts determine whether it is reasonable for the parties trying to enforce the agreement to think that a legally binding contract has been created?

Accepted Answer

The answer of How do the courts determine whether it...

Question 15

A contract that has been partially performed will be enforceable even though it is not in writing as required under the Statute of Frauds.

Accepted Answer

A) True 
 B)False

Question 16

Assuming that all other elements of a contract are present,which of the following would most likely be held to be a binding contract,considering only the requirement that the object of a contract must be legal and not contrary to the public interest?

Accepted Answer

A) An insurance policy paid by a shareholder to insure the business premises of a company he holds shares in 
B) A life insurance policy bought by Harvey insuring the life of his neighbour Kneival without Kneival's consent 
C) An agreement to pay $500 to Mildred if Mildred spreads the false rumour that Helen,a nurse,has AIDS 
D) A provision in a contract of employment where the employee agrees that,upon leaving,he will not work in a similar business anywhere for 5 years 
E) An agreement in which Fred agrees not to bother his father anymore

Question 17

A person who has voluntarily become intoxicated by drugs or alcohol cannot escape a contract on the basis of his incapacity.

Accepted Answer

A) True 
 B)False

Question 18

Give three examples of contracts that would be considered void because of illegality.

Accepted Answer

The answer of Give three examples of contracts that would...

Question 19

Randy,as his two older brothers before him,moved out of the house when he was quite young.When he was 17,he and his older brother,Ted,wanted to buy a condominium in Nelson.They both had jobs and the bank was willing to lend them money and take a mortgage on the condo.Which of the following is a correct statement about the law governing this situation?

Accepted Answer

A) These contracts would be binding on Randy only if he disclosed the fact that he was a minor to the other parties. 
B) All contracts with infants are void. 
C) The mortgage agreement would be binding on Randy as an adult if he continued to make payments after reaching the age of majority. 
D) A mortgage granted by Randy to the bank is effective until a court orders otherwise. 
E) All infants' contracts are enforceable as soon as they become adults.

Question 20

An unwritten contract that the Statute of Frauds requires to be evidenced in writing is still valid and it is merely unenforceable by the courts.

Accepted Answer

A) True 
 B)False

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

Mrs.Johnson is thinking of selling some property to her son.Which of the following is correct with respect to intention when entering into such a contract?

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

Which one of the following correctly indicates the position of the parties in respect to contracts involving minors?

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

Provide an example of something that would constitute acceptable part performance when land has been sold.

Which one of the following is required to be evidenced in writing under the Statute of Frauds or its equivalent?

Which of the following is incorrect with respect to the law of infants and their parents?

A necessary element of a contract is that the parties must have the intention to be legally bound.Which of the following is true with regard to this element of a contract?

Indicate 4 categories of persons that have their capacity to enter into contracts limited to some extent.

If a contract is not evidenced in writing this does not make it void,only unenforceable.

Corporate bodies created by special legislation invariably lack capacity to enter into binding agreements.

When the terms of an agreement make it impossible to perform the contract within one full year from the time the contract is entered into,there must be evidence in writing for it to be enforceable.

How do the courts determine whether it is reasonable for the parties trying to enforce the agreement to think that a legally binding contract has been created?

A contract that has been partially performed will be enforceable even though it is not in writing as required under the Statute of Frauds.

Assuming that all other elements of a contract are present,which of the following would most likely be held to be a binding contract,considering only the requirement that the object of a contract must be legal and not contrary to the public interest?

A person who has voluntarily become intoxicated by drugs or alcohol cannot escape a contract on the basis of his incapacity.

Give three examples of contracts that would be considered void because of illegality.

An unwritten contract that the Statute of Frauds requires to be evidenced in writing is still valid and it is merely unenforceable by the courts.