Deck 9: The Requirements of Form and Writing

Question 1

On leave from the navy, Bart and his buddies ventured into town for a night of partying. After a good many drinks a friend suggested they all get tattoos. When Bart's turn came he, in his inebriated state, chose a large tattoo to cover his entire forearm. When they were done the sailors returned to their ship. When Bart woke the next morning his tattoo was there, large as life, on his arm. Bart, after a discussion with a friend decided to contact his lawyer to see what he could do about this tattoo.

A) Bart, realizing his mistake on his return to sobriety, can sue for damages.
B) Bart does not have a case against the tattoo parlour because alcohol is not a ground for which a person can repudiate a contract.
C) Bart may have a case against the tattoo parlour since it either knew or ought to have known that he was drunk and should not have performed the service.
D) Bart does not have a case because there is no provision for drunkenness in contract law.
E) A and C.

Answer 1

E

Question 2

Ruth opens a craft store one block east of Mary's store six months later and customers start going there instead of to Mary.

A) If the court finds the clause in the contract of sale to be reasonable, Mary will want damages as her remedy.
B) If the court finds the clause in the contract of sale to be reasonable, Mary will want an injunction as her remedy.
C) If the court feels that clause was not reasonable but that Mary should have protection from Ruth, it will imply a more reasonable restriction into the contract.
D) A and B.
E) A, B and C.

Answer 2

D

Question 3

Sashi and Leon were having marital problems and had an argument one morning over whether or not Leon should buy a motorbike. Sashi went to her sister Nancy's home where the two women talked about life and drank vast quantities of wine. Very drunk, Sashi decided everything was her fault. She went to a local motorbike store, selected one she knew Leon wanted, but had rejected as being too expensive, and paid for it with her credit card. The salesman had no idea she was drunk. The next day, she had no memory of the transaction and was horrified to find out what she had done. Sashi discovered the sales slip and the motorbike outside, and called the company at once to tell them she is returning it immediately.

A) Since she was so drunk that she didn't know what she was doing, Sashi lacked the capacity to make the contract, and cannot be held to it under any circumstances.
B) Sashi cannot use her own voluntary behaviour in getting drunk to excuse her from responsibility for this contract.
C) Since Sashi repudiated the contract immediately once she became sober, she cannot be held to it.
D) Even though Sashi repudiated the contract promptly once she became sober, she can be held to the contract since the salesperson had no idea she was so drunk that she did not know what she was doing.
E) Since she made the contract to save her marriage, it is a contract for a necessary and, drunk or not, she is bound to it.

Answer 3

D

Question 4

In May, Joey, a 17-year-old from, Charlottetown, P.E.I., enters into a contract to factory order a car. He gives the dealer a $2,000 deposit. The car will be delivered in September. Joey reached the age of majority in July. In August he called the dealer to see if the car was still scheduled for delivery in September and assured him that he would be ready to take delivery at the Charlottetown, P.E. I. dealership. Is he bound by the contract and required to take delivery of the car in September?

A) Yes, it remains binding unless repudiated within a reasonable time of attaining the age of majority.
B) Yes, it remains binding unless ratified within a reasonable time of attaining the age of majority.
C) No, it is not binding unless repudiated within a reasonable time of attaining the age of majority.
D) No, it is not binding unless ratified within a reasonable time of attaining the age of majority.
E) No, it is not binding unless ratified, in writing, within a reasonable time of attaining the age of majority.

Question 5

The Competition Act is a statute that

A) affects certain kinds of contracts and that, in part, is criminal law.
B) renders illegal any contract or agreement between business firms that represent a constraint of competition.
C) covers a number of business practices that are contrary to the public interest.
D) attempts to provide a balance between freedom of trade and the protection of the consumer.
E) All of these statements are true.

Question 6

Margaret operates a large business based in a Central American country, which sells automobile tires. Margaret moved to Central America from Canada to start her venture, but has retained her Canadian citizenship. After five years of successful sales, her Canadian supplier ceased sending her tires. She contacted the supplier to find out its reason for discontinuing the sales. The company replied that because Canada was party to a U.N. sanctioned trade embargo against this country she had been deemed an enemy alien by the government of Canada. The supplier company had, on that basis, decided to break the supply contract. Margaret was desperate to maintain supplies and threatened legal action for the broken contract. Would she be successful?

A) Yes, because her "enemy alien" status does not provide grounds for the breach of contract that has happened.
B) No, because her "enemy alien" status automatically renders the contract null and void.
C) No, because the "enemy alien" status results from the implementation of the "War Measures Act" which makes all contracts abroad null and void.
D)
D) Yes, because this may not be a valid declaration of an "enemy alien" as Canada is not at war and there are no grounds for a breach.

Question 7

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

Question 8

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

Question 9

Mariah, 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 Mariah would only be required to return a non-necessary coat to avoid the contract.

Question 10

In May, Joey, a 17-year-old, enters into a contract to factory order a car. He gives the dealer a $2,000 deposit. The car will be delivered in September. Joey reached the age of majority in July. He took no action. Is he bound by the contract and required to take delivery of the car in September?

A) Yes, it remains binding unless repudiated within a reasonable time of attaining the age of majority.
B) Yes, it remains binding unless ratified within a reasonable time of attaining the age of majority.
C) No, it is not binding unless repudiated within a reasonable time of attaining the age of majority.
D) No, it is not binding unless ratified within a reasonable time of attaining the age of majority.
E) No, it is not binding. It is automatically repudiated upon a minor attaining the age of majority

Question 11

Bernie Nohave is operating a scheme whereby investors' money is utilized to buy AIDS drugs in Africa. The money is then deductible as a charitable donation for tax purposes. Tom invests in this scheme to generate tax losses knowing that medicine is not being purchased. Is the contract valid?

A) No, everyone knows that Bernie is bankrupt.
B) No, this transaction is ultra vires Bernie Nohave's corporation.
C) No, there is no consideration.
D) No, there is no capacity.
E) No, the subject matter of the contract is illegal.

Question 12

War has just been declared between Canada and the U.S.A. Ellen Lewis, a Canadian resident with American citizenship, has been carrying on her cosmetics manufacturing and direct sales business only in Canada for about 10 years. She has a contract with Basic Chemicals, a Canadian company, for the supplies she needs to make her cosmetics.
I) Ms. Lewis is classified as an enemy alien because of her citizenship.
Ii) The contract made between Ms. Lewis and Basic is void and illegal from the moment war is declared.
Iii) Ms. Lewis is not an enemy alien.
Iv) The Crown may grant Ms. Lewis the right to continue her business if it is in the public interest.
V) The contract between Ms. Lewis and Basic is not affected by the outbreak of war.

A) i and ii.
B) i, ii and iv.
C) iii and v.
D) iii, iv and v.
E) ii, iii and iv.

Question 13

Eric, a 14-year-old, was an excellent painter. His teacher, Mr. Ryan, commissioned him to paint a picture of the city skyline and gave him a $50 deposit. Eric did not complete the painting. What is the position of Eric and Mr. Ryan?

A) The contract is void under the law of equity.
B) The contract is void in Newfoundland as it is not in writing.
C) The contract is voidable at the minor's option under the Sale of Goods Act.
D) The contract is valid under the Sale of Goods Act.
E) The contract is valid under the Capacity Act in Ontario.

Question 14

While in the manic-depressive stage of mental illness, Alec ordered 20,000 paper bags, believing that he could sell them to small supermarkets as an ecologically sound marketing device. His doctor then placed him back on his medication, and he was upset to realize what he had done. Trying to make the best of a bad job, he contacted a number of small supermarkets, but they were not interested. Recalling his business school law course, he called the paper bag supplier and cancelled the contract on the grounds that he lacked capacity when he made it.

A) Alec is bound to the contract because he affirmed it by trying to sell the bags when he became unimpaired, instead of promptly repudiating the contract.
B) Since this is a contract for necessaries, he is bound to it even though he was mentally impaired when he entered into it.
C) Since this is not a contract for necessaries, Alec is not bound to it, provided he repudiated it promptly.
D) Alec's reasonable attempts to resolve the problems caused by his making the contract when he was impaired should not affect him negatively now.
E) C and D.

Question 15

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

Question 16

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

Question 17

Ross's family lives in Ontario. His parents gave him a credit card in his own name for his 14^th birthday. For the past 20 months they have always paid the bills for charges made on the card. Last night, Ross's father told him that they were tired of his extravagance and that from now on, he will have to pay any charges himself, including the one which triggered Ross's father's statement. This bill is for $1,200 for a Florida spring break holiday from which Ross has just returned.

A) Since the credit card is in Ross's name, he is responsible for making the payments, including the one for $1,200.
B) Since a holiday is a necessary, the credit card company can hold Ross's parents to paying the bill since they are obliged to support a child under age 16.
C) Ross's parents are liable for any charges on the credit card until they inform the credit card company that they will no longer pay such bills.
D) Since Ross may, as his parents' "agent of necessity," pledge their credit to provide for himself, the parents are liable for his bills until he is 18 years old.
E) A minor cannot be sued for non-necessaries, so Ross's parents must continue to pay for his purchases until either he turns 18 or the credit card company takes back the card, whichever comes first.

Question 18

When Peter is 16, he enters into an agency agreement whereby he rents commercial property in exchange for a commission valued at 2% of the lease. When he turned 18 (the age of majority) he took no action. Does the contract continue?

A) Yes, it remains binding unless repudiated within a reasonable time of attaining the age of majority.
B) Yes, it remains binding unless ratified within a reasonable time of attaining the age of majority.
C) No, it is not binding unless repudiated within a reasonable time of attaining the age of majority.
D) No, it is not binding unless ratified within a reasonable time of attaining the age of majority.
E) No, it is not binding. It is automatically repudiated upon a minor attaining the age of majority

Question 19

Wade, an Ontario resident, ordered a customized motorbike on February 1^st with delivery on June 1^st. On his 18^th birthday, on May 1^st, Wade decided that he wanted a windsurfer instead, so he called the motorbike company the next morning and cancelled the contract. The payments would have been made on a 24-month basis.

A) Wade cannot be held to this contract since he would have had to ratify it when he turned 18, and he did not.
B) Wade cannot be held to the contract since he repudiated it within a reasonable time after turning 18.
C) Wade can be held to the contract since he failed to repudiate it in writing within a reasonable time after he became 18.
D) Wade cannot be held to this contract since he would have had to ratify it in writing when he turned 18 and he did not.
E) Since Wade has caused the motorbike company to incur the extra expense of removing the customization from the bike, he can be required to pay for that, but not to accept delivery and pay for the bike since he repudiated the contract within a reasonable time after he turned 18.

Question 20

Ruth sold her craft shop to Mary. The contract of sale had a clause which said that Ruth could not open a similar store for two years within a five-kilometre radius.
This kind of clause is called

A) a restrictive covenant.
B) an employment contract.
C) a protection of the freedom to compete clause.
D) public policy clause.
E) None of the above.

Question 21

Sue, aged 15, bought an expensive calculator from Biggs & 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 22

Mr. Martin, who has been declared bankrupt, decided to rent an apartment for $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 23

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 them 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 24

Mariah, 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 Mariah is not bound by such a contract.

Question 25

Rita, who is 15, makes a contract with Ahmed, who is 30, to babysit Ahmed's two children over March break. If Rita instead goes to Miami Beach with her parents, Ahmed can sue her.

Question 26

A public utility corporation 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 27

Moshir ordered a custom-made winter coat from a mail-order catalogue. He is 17. Before the coat arrived, he contacted the seller and told them he did not want it. He has no winter coat. The coat is a necessary.

Question 28

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 29

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

Question 30

Dale, while in a drunken state, purchased a large sailboat from Sonja. If, on his return to a sober state and when made aware of the contract, Dale 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 31

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

Question 32

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

Question 33

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

Question 34

Samuel, who has been declared bankrupt, decided to rent an apartment for $800 per month, since his house is to be sold to satisfy his creditors. Assuming this is a contract for necessaries, Samuel must tell the landlord that he is a bankrupt or he cannot make the contract.

Question 35

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 36

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

Question 37

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

Question 38

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

Question 39

X sold his retail clothing business to Y. The business was located in a small town, and most of the customers lived within a radius of eight kilometres of the clothing shop. As a part of the sale agreement, X agreed not to set up a similar business in competition with Y for a period of five years or within a radius of eight kilometres 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 40

Mariah, 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 Mariah repudiated the agreement to purchase the watch and silver bracelet.

Question 41

Any business firm or merchant that decides to enter into a contract with a minor assumes the risk (in the case of a contract for a non-necessary) that the minor might repudiate the agreement.

Question 42

Jolene, aged 16, is hired by the Sparkle Company, a costume jewellery manufacturer, to learn the design and manufacture of costume jewellery for the upscale market. Under the contract she signs, she will receive quite a low salary for the first three years, and then will be put on the regular pay scale once her apprenticeship is completed. After a year, her designs are being sought by stores in Europe and the U.S.A. The world's largest and most prestigious costume jewellery firm, located in Paris, wishes to hire her and pay her a fabulous salary as well as give her the free use of a large apartment in the most chic part of Paris. Sparkle's management refuses to release her from her contract because her designs are building their reputation. "We taught her everything she knows," says the president of Sparkle.

Question 43

Jasmine wagered $10,000 on the tables at Las Vegas, where gambling is legal. She paid her gambling debt by a cheque drawn on her Ontario bank account, but immediately put a stop payment on the cheque when she got home. Our courts will not enforce the Nevada court's judgment for the casino owners.

Question 44

The legality of the subject matter of a contract determines its validity and enforceability. Legality is generally determined on the basis of public policy or public interest; any agreement contrary to these considerations may be illegal or void.

Question 45

The Indian Act recognizes First Nations bands as legal entities.

Question 46

Don rented a small store from a landlord to carry on a business. Don stated that he was of legal age, 18, to carry out the deal when, in fact, he was only 17 years old. After a short period of time Don realized that his business plans were not working out and it would be in his best interest to return to school. By this time, the landlord was wondering why he had not received a cheque for Don's rent. When he confronted Don about this, Don informed him of his plans. The landlord told Don he would have to pay for the time he occupied the premises. Don said that he would not pay, and the landlord could not force him to pay because he was not of legal age and was insolvent. Discuss this situation using your knowledge of the law governing age of majority.

Question 47

Nancy was the administrator of her deceased father's estate. Several years before he died, Wilbur, the father, had entered into a lease agreement with an oil exploration company. The company had leased the rights to explore and drill for oil on Wilbur's farm for a period of 20 years. About two years after entering into the lease, the oil company began drilling. According to the terms of the lease, the company was requested to pay Wilbur a basic monthly fee regardless of whether any drilling was underway, and regardless of the outcome of the drilling. In addition, Wilbur was to receive a substantial additional payment if any drilling proved to be profitable. For about six years before his death, Wilbur suffered from a mental illness that had impaired his ability to remember things. While he seemed generally lucid and aware of his actions in present time, he would be unable to remember events which had occurred only an hour before.
The oil company was not aware of Wilbur's illness at the time it entered into the lease. It became apparent, however, once drilling was underway as Wilbur did not seem to remember that the company had paid him extra amounts as the result of successful drilling. Nancy, who believes that the oil company can afford to pay more for the lease rights wishes to void the lease on the basis of her father's mental incapacity, and renegotiate it herself. Discuss the legal principles she will rely upon and the response of the oil company. What would be the likely outcome of Nancy's challenge?

Question 48

James, a 16-year-old boy, got a job for a catalogue company selling household items that he ordered from the business and sold to his customers. James' 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 49

Two weeks before Susan's 18^th birthday, her father gave her $3,000 to purchase a car. She chose a used car from the local dealer for $2,700, and having paid cash, drove the car home. After 300 kilometres the brakes needed considerable work. She felt that it might be more prudent to use her father's money as a start to savings for a new car. Accordingly, she returned the car and the keys to the dealer along with a letter that she was repudiating the contract. She had written the letter almost a week prior to her 18^th birthday, but was unable to deliver the car and letter until three days after her 18^th birthday. The dealer refused to refund her money, and Susan was forced to bring an action to recover her funds. Discuss the issue of capacity and repudiation that arise in this fact situation.

Question 50

At age 16, Smith was a promising young hockey player. He was drafted by the Fredericton Firebirds to play for their club, a junior team one step below the professional league. One year into the contract, the Firebirds terminated the contract and required all of their players to sign new four-year contracts. Smith was to receive $250 weekly, along with room and board and the flexibility to complete his high school studies. In return, Smith agreed to play only for Fredericton and gave them the right to trade him to any other team or terminate the contract at any time. On his 18^th birthday, Smith visited the general manager of the Firebirds, and repudiated his contract. Smith had received offers from the professional league, which promised him far greater instruction with superior coaching, as well as $200,000 per season. Smith felt that an early jump on a professional career was vital to him, considering the early retirement age of most hockey players. The general manager was upset with Smith, and vowed to bring a suit against him if he signed with the professional league to set an example for the other players. Smith signed the contract with the professional team, and the general manager brought suit against him.
Discuss the contractual issues raised in this case, and discuss in particular the issues of capacity, enforceability, and repudiation that bear in this instance. What aspects would a judge take into account in rendering a decision and why?

Question 51

Doug, the 17-year-old brother of a friend of yours, bought your old car from you three months ago to get him to and from his new job. He needed a car because there was no public transportation in that area. You agreed to let him pay in 36 monthly installments of $200, but he has paid you only once so far. Yesterday, you asked him to pay up and he told you he had spent all he had earned. When you told him you would have to take him to court, he said that an adult cannot sue a minor on a contract. Today, a tow truck left the remains of the car in your driveway; it had been so badly damaged in an accident that was Doug's fault that it was a write-off. A note on the windshield said "Your car doesn't run too well, but I won't sue. Let's call it quits. Best wishes, Doug." Under your contract he was to have insured the car, but he did not.
a. Discuss whether you have any recourse against Doug.
b. If Doug had bought the car, simply for normal driving, would your answer be any different, and why or why not?

Question 52

An agreement with a public official, whereby the official would use his or her position to obtain a benefit for the other party in return for payment, is both legal and enforceable.

Question 53

Drew, a five-year-old boy, saved his allowance to buy his mother a present for her birthday. After a talk with his father, Drew discovered that the present was on sale and he would not have to use all of his allowance. When Drew returned home, his father learned that he had been charged the full price for the gift. When his father confronted the store owner, he refused to refund the sale. At the father's request pursuant to the contractual Right of Repudiation, the store owner must refund the sale, thus voiding the contract.

Question 54

Winston was an engineer of great repute in the field of fluid mechanics. Some years ago, he took out a patent on a general theory of how fluid moves through a particular shape of valve, and a patent on a unique valve specifically adapted for use in a nuclear reactor. He had formed a company that had produced this latter valve in the Canadian market and other countries which used Canada's CANDU reactor. After a number of years of successful business operations, Winston was approached by a group of investors interested in purchasing his company, and a deal was concluded. As part of the contract of purchase and sale, Winston sold the patent to the valve and agreed that he would not work in or carry on any other business manufacturing valves, nor would he engage in any other business that might compete in any way with the purchasers business for a period of ten years. The restrictions applied on a worldwide basis. Winston retired to Florida and after five restless years again became involved in the field of fluid mechanics, making designs for certain parts for nuclear reactors for submarines of the United States Navy. One particular part that he designed and built was based on the patented principles of his general theory, which he had never sold, and while it was similar to his former valve in many ways, a slight change had rendered it patentable in its own right. On learning of the multimillion dollar sales that Winston had effected to the U.S. Navy, the purchasers of his former business brought suit for his breach of the contract. With his new valve, Winston had generated profits of $5 million before the "ten-year waiting period" had expired and $10 million after the period had expired. Discuss the relevant issues of contract bearing on this case, the relevant aspects of business which would assist the court in determining damages, if any, and render your own decision.A.C. 535.

Question 55

The protection extended to a minor under the rules of contract may be used by a minor to perpetrate a fraud on an unsuspecting merchant.

Question 56

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

Question 57

In general, the courts are reluctant to place any impediment in the way of a person seeking employment. As a consequence, a restrictive covenant in a contract of employment will not be enforced unless serious injury to the employer can be clearly demonstrated.

Question 58

Janine, a dental student, does some dental work for a friend even though she is not yet licensed. Since the work, though not negligent, did not achieve the promised results, Janine's friend can sue her for breach of their contract.