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Contemporary Canadian Business Law

Business

Quiz 9 :

Legal Capacity to Contract and the Requirement of Legality

Quiz 9 :

Legal Capacity to Contract and the Requirement of Legality

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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.
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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. The merchant was entitled to a return of the goods sold when Mariah repudiated the agreement to purchase the watch and silver bracelet.
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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. If Mariah accidentally damaged the watch while it was in her possession, the merchant cannot hold her liable for the cost of repair.
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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. Mariah is not bound by the contract to purchase the silver bracelet, because it is a non-necessary item for a minor.
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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?
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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?
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The Competition Act is a statute that
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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.
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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. All gifts purchased by minors are non-necessary items, and therefore Mariah is not bound by such a contract.
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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.
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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?
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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. If Mariah already has an adequate supply of coats, the coat which she purchased would be a non-necessary item.
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Ross's family lives in Ontario. His parents gave him a credit card in his own name for his 14th 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.
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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. Minors are not liable for non-necessary purchases, and Mariah would only be required to return a non-necessary coat to avoid the contract.
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Wade, an Ontario resident, ordered a customized motorbike on February 1st with delivery on June 1st. On his 18th birthday, on May 1st, 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.
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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.
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Bernie Nohave is operating a scheme whereby investors' money is purportedly 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?
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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?
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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
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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. Mariah would be liable for the payment for the coat, if the coat was a "necessary."
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