Question 1

In order for a contract to satisfy the requirement of being written,all of the requirements must be met in one document called "the contract."

Accepted Answer

A contract can satisfy the requirement of being in writing through multiple documents that, when read together, contain all the terms of the agreement. These documents can be linked by reference, making it unnecessary for all terms to be in a single document named "the contract."

Question 2

Sanjip has elected to build up the earth around the cracked foundation of his home prior to listing the home for sale.Sanjip's action will not amount to misrepresentation if he fails to disclose the cracks to potential purchasers.

Accepted Answer

Failing to disclose known defects, such as cracks in the foundation, to potential purchasers can be considered a form of misrepresentation, as it withholds material information that could affect the buyer's decision.

Question 3

When applying for life and disability insurance protection on her mortgage,Marabou neglected to disclose that she had been diagnosed with type 2 diabetes.As players in the commercial contractual area have a duty to look after their own interests,the insurance policy will be enforced should she become disabled or die as a result of the undisclosed pre-existing condition.

Accepted Answer

Insurance contracts are based on the principle of utmost good faith, requiring parties to disclose all relevant information. Non-disclosure of a significant health condition like type 2 diabetes can lead to the insurance company voiding the policy.

Question 4

Minors have the option of fulfilling their contractual obligations and suing the other party to enforce the contract.

Accepted Answer

Minors can choose to affirm a contract upon reaching the age of majority, thereby fulfilling their obligations and potentially suing the other party if the contract is not honored.

Question 5

To establish undue influence,evidence of actual pressure requires the party seeking relief to show,among other things,that the influence existed.

Accepted Answer

To establish undue influence, the party seeking relief must demonstrate that the influencer had the power to exert undue influence over the victim and that this influence was improperly used to affect the victim's decision-making, indicating that some form of pressure or coercion was indeed present.

Question 6

Some Canadian common law courts have ruled that,where proper circumstances allow,a party's lack of a practical or realistic alternative can establish valid evidence of economic duress.

Accepted Answer

Canadian common law courts have recognized that in certain circumstances, a party's lack of a practical or realistic alternative can indeed constitute evidence of economic duress, thereby affecting the validity of a contract or agreement. This principle acknowledges that undue pressure or coercion, including economic pressure, can undermine the free will necessary for a contract to be considered valid.

Question 7

Only misrepresentations that were significant to the decision to enter into the contract are actionable.

Accepted Answer

Only misrepresentations that materially affect the decision to enter into a contract are considered actionable because they are significant enough to influence the aggrieved party's decision-making process.

Question 8

A contract will be set aside for mistake only if one party realized the other party was mistaken at the time of entering the contract.

Accepted Answer

A contract can be set aside for mistake not only if one party realized the other was mistaken, but also if there was a mutual mistake where both parties were mistaken about a fundamental fact regarding the contract, or if there was a unilateral mistake that was material to the contract and the other party either knew or should have known of the mistake.

Question 9

The remedy of rescission is only available in the case of fraudulent or negligent misrepresentation.

Accepted Answer

Rescission can also be available in cases of innocent misrepresentation, where there was no intent to deceive but the information provided was still incorrect, leading to a contract being formed under false pretenses.

Question 10

Which of the following would be a valid provision under the various provincial acts dealing with the sale of goods?

Accepted Answer

Partial payment or acceptance by the buyer can make an oral contract enforceable under the Sale of Goods Act in many jurisdictions.

Question 11

Carelessly signing a document without reading it will be sufficient to avoid enforceability.

Accepted Answer

Signing a document without reading it does not generally exempt one from its terms or obligations, as individuals are assumed to understand and agree to what they sign.

Question 12

A contract with an individual who lacks mental capacity is always unenforceable.

Accepted Answer

A contract with an individual who lacks mental capacity is not always unenforceable; it can be voidable at the option of the incapacitated person, but it may also be considered valid if the person was capable of understanding the contract at the time of agreement or if the contract provided necessary items for life support (necessaries).

Question 13

People seeking to avoid a contract owing to mental capacity,duress,undue influence,or unconscionability must do so promptly.

Accepted Answer

In contract law, a party seeking to void a contract due to mental incapacity, duress, undue influence, or unconscionability must act promptly to avoid the contract, as delay may imply affirmation or acceptance of the contract terms.

Question 14

In order to count as misrepresentation,it must be proven that the party making the statement knew it was untrue.

Accepted Answer

Misrepresentation can occur even if the party making the statement believed it to be true but it was not factually correct, as it includes negligent (unintentional) misrepresentations where the party did not exercise reasonable care to ensure the truthfulness of their statement.

Question 15

The value in obtaining a certificate of independent legal advice is that it can help prove a contract was freely entered into.

Accepted Answer

A certificate of independent legal advice can demonstrate that a party fully understood the terms and implications of a contract and entered into it without undue influence or pressure, thereby supporting the contract's validity.

Question 16

A void contract is considered to have never existed at all.

Accepted Answer

A void contract is treated as if it has never been valid or enforceable from the moment it was created, due to factors such as illegality or impossibility.

Question 17

Ranjit,Quan Lu,and Ng are all directors of BigSkyInvestments Inc.who have a beneficial interest in a contract that BigSkyInvestments' management is considering and each must disclose their status to management in accordance with statute requirements.

Accepted Answer

As directors with a beneficial interest in a contract being considered by the company they manage, Ranjit, Quan Lu, and Ng are typically required by corporate governance laws and regulations to disclose their interest to ensure transparency and manage conflicts of interest.

Question 18

Proof of unconscionability requires proof of inequality between the parties.

Accepted Answer

Unconscionability in contract law often involves situations where there is a significant inequality between the parties, either in terms of bargaining power, knowledge, or circumstances, which leads to an unfair advantage for one party over the other.

Question 19

A simple oversight or error by one negotiating party does not constitute a legal mistake and provides no basis for voiding a contract.

Accepted Answer

A simple oversight or error by one party is typically considered a unilateral mistake, which generally does not void a contract unless the other party knew or should have known about the mistake.

Question 20

When a relationship exists between a lawyer and a client,the court is entitled to assume presumed pressure amounting to undue influence.

Accepted Answer

In many legal systems, when a relationship exists between a lawyer and a client, the court often recognizes an inherent power imbalance. This can lead to a presumption of undue influence, especially in cases where the lawyer benefits personally from transactions or decisions made by the client. This presumption is based on the understanding that the client may be particularly vulnerable to the lawyer's advice and influence due to the trust and confidence placed in the lawyer.

Quiz 8: Non-Enforcement of Contracts