Question 1

Which one of the following categories of persons do not have their capacity to enter into contracts limited?

Accepted Answer

Married women generally have the capacity to enter into contracts without limitations, unlike the other categories listed.

Question 2

Clem had wanted a piano for a long time. Although he was a minor, his mom gave him $300 and he took this with some savings and made a $500 down payment on a $3,000 piano. The balance was to be paid over a three-year period. His mom signed the contract as a guarantor. Clem made the first three payments, but he damaged the piano trying to move it from the living room to his upstairs bedroom. He didn't have the money to get it fixed. He quit playing, lost interest, and quit making his payments. On these facts, which of the following is false?

Accepted Answer

The fact that Clem is a minor does not prevent him from suing the seller for breach of contract. However, because he damaged the piano, he may not have a valid claim against the seller.

Question 3

Which of the following is incorrect with respect to the law of incapacity?

Accepted Answer

To escape a contract on the basis of insanity, the insane person must show that he did not understand the nature and consequences of the contract at the time it was formed. It is not enough to show that he did not know what he was doing.

Question 4

In British Columbia, which of the following is correct with respect to the law of infants?

Accepted Answer

The answer of In British Columbia, which of the following...

Question 5

Which of the following is true with regard to the intention of the parties to an agreement to enter into a legal relationship? Where appropriate, assume that all the other elements necessary to form a contract are present.

Accepted Answer

Parties to an agreement may expressly state their intention to be legally bound, in which case the court need not rely on presumptions.

Question 6

All of the following contracts would be illegal, and not binding on the parties, except

Accepted Answer

A contract in which a lawyer agrees to represent an accused, regardless of whether the accused committed the crime, is legal and binding as it is part of the legal right to defense.

Question 7

In his last year of high school, Larry, a minor, saw a friend's computer and felt that the word-processing function would help him get through high school. He visited Computer Heaven Ltd. and contracted for an Apple Macintosh, printer, paper, and the program. The total cost was $4,000. He paid $1,800 down and promised to pay another $300 next July 3, his birthday, the remainder to be paid in monthly installments of $100. Larry made the July 3 payment and some of the monthly payments, but by then had graduated, thanks to his passing mark in English, and didn't have a use for the computer anymore. Furthermore, he wanted to save his money for a down payment on a compact disc player and speakers. When he quit making payments to Computer Heaven, the balance outstanding was $1,700. On these facts, which of the following is true?

Accepted Answer

If Larry made the July 3 payment after reaching the age of majority, he effectively ratified the contract, making it enforceable against him.

Question 8

Joe was in a bar and saw his friend Sam. Sam had a considerable amount to drink. Sam offered to sell Joe his Porsche automobile for only $15,000. Joe made sure to have Sam sign a written agreement to that effect. The next day, Joe went to pick up the car, but Sam didn't remember anything about it. Even when Joe showed him the written agreement signed by him, Sam refused to deliver the car. Joe sued. Which of the following correctly states the legal position of the parties?

Accepted Answer

If Joe can show that there was no indication that Sam was drunk, even though Sam was completely incapacitated, he will be required to go through with the deal. Contracts made by intoxicated persons can be voidable if the other party knew or should have known of the intoxication.

Question 9

A provision in a contract for the sale and purchase of a business read as follows: "The vendor (Jones) shall not, directly or indirectly, in any capacity whatsoever, carry on a similar business in any location for one year." Six months later, Kates found that Jones was competing directly by opening up a similar business, contrary to the contract drafted by Kates. Kates sued Jones for breach of contract, namely, breach of the restrictive covenant. Which of the following best describes the legal position of the parties?

Accepted Answer

Although this provision would be void, the remainder of the contract for the sale of the business would be enforceable.

Question 10

Which one of the following is an example of a contract that is binding on an infant in jurisdictions other than British Columbia?

Accepted Answer

A contract for rent is considered a necessity, and contracts for necessities are typically binding on infants (minors) in many jurisdictions.

Question 11

In jurisdictions other than British Columbia, which of the following is correct with respect to the law of infants?

Accepted Answer

In most jurisdictions, including Canada (except for British Columbia), a contract with an infant is not "absolutely void." Instead, an infant is bound by his or her contracts for necessaries (i.e. goods or services needed for the infant's support and maintenance) and beneficial contracts of service (i.e. contracts of employment or apprenticeship). Therefore, choice B is correct. Choices A, C, D, and E are incorrect.

Question 12

Parents are responsible for their children's actions in which one of the following situations?

Accepted Answer

The answer of Parents are responsible for their children's actions...

Question 13

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

Accepted Answer

The Statute of Frauds requires that contracts for the sale of land be evidenced in writing to be enforceable. Contracts for the sale of goods over a certain value (usually $500 or more) also generally must be in writing under the statute. Employment contracts, retainers with lawyers, and domestic agreements are not typically subject to the Statute of Frauds.

Question 14

Which of the following contracts is void?

Accepted Answer

The contract to sell marijuana is void because it is an illegal contract.

Question 15

Mr. Buyer, the plaintiff in the action, was attempting to enforce a contract in which the defendant, Mr. Seller agreed to sell to buyer his property, Blackacre, for $100,000. Which of the following, by itself, would be sufficient to allow Mr. Seller to get out of the contract?

Accepted Answer

The answer of Mr. Buyer, the plaintiff in the action,...

Question 16

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

Accepted Answer

The answer of Which one of the following correctly indicates...

Question 17

Which one of the following is an example of a contract that is binding on an infant in British Columbia?

Accepted Answer

In British Columbia, a contract for a student loan is binding on an infant (a person under the age of majority) due to specific legislative provisions that allow minors to enter into such contracts.

Question 18

When John bought a car from his father's old classmate, Joe, he was only seventeen years old. The price of the car was $5000. He paid $1000 down and was to pay the remaining $4000 over time. With these facts in mind, which of the following statements is true? (Read each statement separately.)

Accepted Answer

Minors can disaffirm contracts, making them voidable at the minor's discretion. However, they can still sue for breach if the other party fails to fulfill their obligations.

Question 19

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

Accepted Answer

As a general rule, parents are not responsible for the obligations of their children in contract law. However, they are responsible for the obligations of their children in tort law, including the torts of their children. Additionally, a parent may be responsible for the debt of their child if they have guaranteed the loan. Finally, a parent can be liable for a tort committed by their child if they were negligent in supervising the child or contributed to the harm in some other way.

Question 20

Requirements of a contract include capacity of the parties to contract, legality, and intention of the parties to be legally bound. Which of the following is false with regard to these elements?

Accepted Answer

The answer of Requirements of a contract include capacity of...

Quiz 7: Formation of Contracts Continued