1.

When the debtor binds himself to pay when his means permit him to do so, the obligation is: a. Conditional b. Pure c. Simple d. With a Period 2. Contracts which cannot be sued upon unless ratified, thus it is as if they have no effect yet are: a. Voidable b. Rescissible c. Void d. Unenforceable

3. If the obligation of the debtor is "I will pay you my debt after I have arrived from abroad," this is a. Unenforceable b. With a Period c. Void d. Conditional

4. When the characters of the creditor and the debtor are merged in one and the same person, there is extinguishment of the obligation by: a. Compensation b. Merger of Rights c. Novation d. Remission

5. Through insidious words or machinations, A was able to induce B to enter into a contract which without them B would not have agreed to it. There is: a. Undue Influence b. Fraud c. Mistake d. Misrepresentation 6. "A sells to B his lot and house in the city if A decides to transfer and live in the countryside" is an example of:

a. Mixed Condition b. Potestative Condition c. Casual Condition d. Resolutory Condition ANSWER: B 7. It is a mode of extinguishing an obligation when two persons in their own right are creditors of each other. a. Confusion b. Reformation c. Compensation d. Novation

8. A contract is in the stage of conception when: a. There is meeting of the minds. b. Negotiations are in progress. c. The parties come to an agreement. d. The contract is perfected.

9. If the obligor binds himself to perform his obligation as soon as "he shall have obtained a loan" from a certain bank, this obligation is: a. With a Term b. Conditional c. Suspensive d. Resolutory

10. Contracts entered into in a state of drunkenness or during a hypnotic spell are: a. Void b. Valid c. Voidable d. Legal 11. Delay in the giving or delivering of a thing a. Mora solvendi ex re

b. Mora solvendi ex persona c. Mora accipiende ex re d. Mora accipiende ex persona

12. Which of the following statements is false? a. Obligations to give definite things and those that are not susceptible of partial performance shall be deemed divisible. b. Execution of a certain number of days of work shall be divisible. c. Accomplishment of work by metrical units are divisible d. An obligation to pay a certain amount in ten annual installments is divisible. 13. This contract is without effect unless ratified: a. Marriage between first degree cousins b. Contract of sale between two insane persons c. Contract of sale between husband and wife d. Donation between husband and wife 14. Which of the following contracts is not void ab initio? a. Those whose object is outside the commerce of men b. That whose object did not exist at the time of transaction c. That which contemplates an impossible service d. That which is undertaken in fraud of creditors

15. Rescission of contract can take place in this case a. When the thing which is the object of the contract is legally in the possession of a third person who acted in bad faith b. When he who demands rescission can return whatever he may be obliged to restore c. When the party seeking resolution can perform only as to part and as to remainder d. When the seller cannot return the installments paid to him by the buyer

16. A defective contract where damage or lesion is essential a. Rescissible

b. Voidable c. Unenforceable d. Void

17. An instrument may be reformed d a. Simple donations inter vivos wherein no condition is imposed b. Wills c. When the instrument does not express the true intention of the parties due to mistake d. When the real agreement is void

18. Three of the following contracts are void. Which one is not? a. Oral contract of partnership of three partners and capital contribution is more than P3,000 in cash b. Written contract contemplating impossible services c. Oral contract of partnership where real estate is contributed as capital d. Agent's authority to sell land is given orally.

19. When a third person assumes the payment of the obligation even without the knowledge and consent of the debtor but with the consent of the creditor a. There is novation b. There is delegation if debtor is released c. There is subrogation d. There is expromission if debtor is released

20. Which of the following is not an element of legal compensation? a. Debts to be compensated are due and demandable b. There is controversy or adverse claim over any debts to be compensated c. There are two or more debts of the same kind d. There are two or more persons who are creditor or debtors of each other.

Formation of a Contract: Consideration, and Intention to Create Legal Relations

1.

Maxine, a wealthy widow, was approached by her alma mater university for a donation that the school intended to use to construct a residence for women. Maxine offered to donate an amount that would cover fifty percent of the capital required for the building. If Maxine were to later refuse to fulfill the pledge, could the university force her to pay? Yes, if the university can show that they commenced construction of the residence in reliance on Maxine's pledge. No, because Maxine's pledge is merely a gratuitous promise. No, because the university does not need a womens residence. Yes, because Maxine has a moral obligation to fulfill the pledge. Yes, because all the essential elements of a contract are presentoffer, acceptance, and consideration.

2.

Scott offered to shovel snow from Trishas driveway after she sprained her ankle late in January. For the remainder of January and throughout February, true to his word, Scott shoveled her driveway approximately 5 times. On March 1, when Trishas ankle had sufficiently healed and she was able to look after her driveway again, Trisha told Scott how thankful she was for his efforts and that she would give him $20 for each time he shoveled her driveway (or a total of $100). Scott accepted Trisha's offer, but later Trisha refused to pay the $20. Can Scott force Trisha to pay? Yes, because Trisha has a moral obligation to fulfill the promise. Yes, because Scott changed his course of action and shoveled her snow thinking that he might be paid. No, because Trisha's promise is merely a gratuitous promise since the consideration is in the past. No, because $20 is too much for shoveling snow. Yes, because all the essential elements of a contract are presentoffer, acceptance, and consideration.

3.

Which of the following statements best describes what the law expects the value of consideration to be? Consideration must always be calculated in terms of its monetary value. The consideration exchanged need not be of equal value but should reflect a good bargain. Courts as a rule do not assess the adequacy of the consideration exchanged. The consideration exchanged by the two parties should be roughly equal. Courts always examine on an objective basis the adequacy of the consideration exchanged.

4.

Betty asked her friend Marnie, an accountant, if she could help her with her tax return. Marnie owed Betty $300, and offered to help Betty if Betty would agree to forgive Marnies debt to her. Betty agreed and Marnie helped Betty prepare her tax return, which resulted in a $2 000 refund. A month later, Betty called Marnie and asked her to repay the $300; Marnie refused, citing the deal about the tax return. Betty replied: That was no deal. Ill see you in Small Claims Court! If Betty presses ahead with her case, what will the court say? There was no consideration hereit was an example of past consideration.

The forgiveness of the debt could have been consideration, but the amount of the debt far exceeded the value of the services and therefore the consideration was inadequate. This was a gratuitous reduction of a debt and not enforceable; Marnie still owes the debt. There was a binding contract, and as consideration for the tax services, Betty agreed to forgive Marnies debt. There was no consideration hereconsideration must be paid, not a promise not to do something. 5. Alomar rescued Bells son from a burning building. Afterwards, Bell promised to pay Alomar $5 000 out of gratitude. If Bell refuses to pay, can Alomar force him to? Yes, because the consideration is not out of proportion to the labour or act required. No, because the labour or act was done before the promise to pay was made and thus was past consideration. No, because the act was doneor the consideration was paidto Bells son and not to Bell. No, because the consideration is out of proportion to the labour or act required. Yes, because all the essential terms of a contract are presentoffer, acceptance, and consideration. 6. Dennis had Sean repair his sports car and on January 31, Sean sent him a bill for $2 500. Dennis paid $1 500 and owes Sean $1 000, due on March 1. On February 28, Dennis is a little short of cash so he asks Sean to accept $900 in satisfaction of the debt. Sean accepts the $900 and two days later commences a lawsuit against Dennis for the remaining $100. Can Sean succeed in the lawsuit? Yes, because $900 is not adequate consideration for a $1 000 debt. Yes, because terms of a contract cannot be varied once the agreement is signed. No, because Dennis relied on Sean's agreement to accept $900. Yes, because Dennis has not fulfilled his obligations since the full amount was not paid. No, because accepting the money one day early is consideration for the reduction. 7. The Kingston Hospital solicits pledges from any person visiting friends or relatives in the hospital, to help finance the construction of a new wing. Fred is so happy with the care his mother has received at KH that he completes and signs a pledge card indicating that he intends to give $20 000 to the hospital. Fred never donates the money. Can the hospital sue him in order to receive that money? No. When Fred made the pledge he was incapable of making a rational decision because of his euphoria over his mothers recovery. No, this is a gratuitous promise and not enforceable against Fred. Yes. Fred is in breach of a properly formed contract. Yes. While charitable pledges ordinarily are not enforceable, when they are in writing and signed, they are enforceable. No. Charitable organizations are not permitted to sue donors. 8. Assume the same set of facts as were set out in Question #7. In this case, however, when Fred

hands his pledge card to the Kingston Hospitals charitable officer, the officer says: Oh thank you Fred. With this kind donation we can hire architects to design the new wing. The hospital later that day signs a contract with a local architectural firm and the architects immediately begin working on plans. Fred never makes the donation and the architectural firm has billed the hospital for $18 000 worth of services. In this case, can the hospital successfully sue Fred for the money? Very likely, so long as it can show that a reasonable person in Freds place would have understood that the hospital was relying on his promise to undertake further obligations No. When Fred made the pledge he was incapable of making a rational decision because of his euphoria over his mothers recovery. No. Charitable organizations are not permitted to sue donors. No, this is a gratuitous promise and not enforceable against Fred. Yes. While charitable pledges ordinarily are not enforceable, when they are in writing and signed, they are enforceable. 9. Ben asked an investment advisor, Sherry, for advice concerning the appropriate composition of his portfolio. After the advice was provided, Ben asked Sherry her fee and Sherry suggested a reasonable sum. Ben refused to pay the figure. Can Sherry successfully sue Ben for the sum mentioned? Yes, because the essential elements of a contract are presentoffer, acceptance, and consideration. No, because Ben and Sherry had no intention to create legal relations. Yes, because a reasonable payment is required when there has been a request for services. No, because past consideration is no consideration. No, because Sherry's provision of investment advice was a gratuitous service. 10 . What is the effect of a seal on a written promise? It eliminates the need for the requirement of acceptance. It acts as a replacement for consideration. It is the only way a gratuitous promise can be made binding on the promisor. It is a mere formality without any legal significance. None of the above. 11 . The difference between injurious reliance and promissory estoppel is: Injurious reliance is an American concept and promissory estoppel is an English concept. Injurious reliance is a cause of action and promissory estoppel is a defence in a contracts lawsuit. Injurious reliance looks at a situation from the promisees point of view and promissory estoppel looks at the situation from the promisors point of view. All of the above. None of the above.

12 .

John, who has just ordered a new playground set for his children, tells his friend Irene that he will give her his old smaller swingset as soon as the new playground set arrives. To make room for the swingset, Irene will have to have five trees cleared from her backyard, and engages a firm to do this work at a cost of $1 200. Subsequently, John's brother reminds him that he had promised the old swingset to him, and rather than promote a family quarrel, John tells Irene she cannot have the swingset. Can Irene successfully sue John? Yes, because Iris reasonably relied on John's promise to her detriment and incurred significant reliance costs. No, because the promise to John's brother was made first. Yes, because the contract between John and Iris had all the essential elements - offer, acceptance, and consideration. No, because past consideration is no consideration. Yes, because Iris reasonably relied on John's promise to her detriment and incurred significant reliance costs.

13 .

At their childrens soccer game one summer evening, Sue and Ted are discussing Sues plan to convert part of her house into a retail store. Ted, a property lawyer, tells sue that a recently enacted city by-law will not permit her customers to access her store through a front door, contrary to her plan. She thanks him profusely for his advice and the next day advises the contractors to alter their plans. Two days later, Sue receives a bill for professional services from Ted for $200. Does Sue have to pay this bill? She has no duty under contract law to pay this bill, but she does have a duty in tort to pay a professional for his services. Yes, she benefited from Teds advice and has a moral duty to pay it. Yes, based on the principle of quantum meruit. No. Professional advice rendered in social situations can never be considered as billable. No, as there was no implication from their conversation that she was requesting this opinion, it was given gratuitously.

14 .

What is the practical significance of consideration? It reflects business peoples understanding of what a contract should be. It ensures that every benefit received is paid for. There is really no practical significance to consideration, it is an old common law formality that must be observed. Like a seal, it is tangible evidence of the parties intention to enter legal relations. It is needed because offer and acceptance alone are not sufficient evidence of a bargain.

15 .

Is the fact that a charitable donor will receive a tax deduction upon completing his donation sufficient to indicate that consideration is present when he makes his pledge? No, because the consideration must flow from the charitable organization for a binding contract. Yes, because any consideration is sufficient. No, because not all charitable organizations issue tax receipts.

No, because no one is required to claim a charitable donation on their income taxes. Yes, because the law may provide the consideration necessary for a contract.

Formation of a Contract: Offer and Acceptance 1. Jack owned three vintage automobiles that he stored in his oversized garage. Over the telephone, Jack said to his friend Sandy, "I will sell you one of the cars for $50,000." Sandy replied, "I accept." Is there a binding contract? Yes, because Jack communicated his offer to Sandy and it was not revoked prior to her acceptance. Yes, because there was an offer and an acceptance. No, because the contract does not specify which of the three cars is involved. No, because contracts must be in writing. No, because they are friends and friends cannot enter into contracts with each other. 2. Professor Smith addressed his class one day with the following: I will award any student 10 bonus marks if he or she paints the walls of my office. Most of the students giggle, and no student says anything to Smith. Later in the term, Jenny, desperate for a higher grade, obtains the keys to Professor Smiths office from his secretary and proceeds to paint 3 walls of the office before she must leave for a class. How many marks must Professor Smith award her for her work? 7.5, because she substantially completed what was required of her under the terms of Smiths offer, but she should not be compensated to a greater extent than what she actually performed. 0, because no reasonable student would have taken Smiths offer seriously. 0, because she neither verbally accepted Smiths offer, nor did she complete all of her obligations in order to accept the unilateral contract. 10, because she substantially completed what was required of her under the terms of Smiths offer. 0, because she never told Smith she would accept his offer. 3. Professor Smith addressed his class one day with the following: I will award any student 10 bonus marks if he or she paints the walls of my office. Most of the students giggle, and no student says anything to Smith. Later in the term, Jenny, desperate for a higher grade, obtains the keys to Professor Smiths office from his secretary and proceeds to paint the 4 walls of his office. Smith arrives at his office just as she is finishing, and demands to know why Jenny is in his office and why she is painting his office such a hideous colour. She tells him that she was merely accepting his offer. How many marks is Jenny entitled to? Maybe 10 marks or maybe 0 marks, depending on an assessment as to whether a reasonable person in Jennys position would have reasonably relied on Smiths statement as a binding offer to enter a contract. 10, because she substantially completed what was required of her under the terms of Smiths offer. 0, because she never verbally accepted Smiths offer.

10, because Jenny has enriched Smith by the amount of her painting services. 0, because in order to be enforceable, a contract such as this would have had to be in writing. 4. new multiplechoice question: Penny sent a letter to Victor offering to buy his house $150 000. Two days later, on Tuesday the 29th, Victor sent a letter back stating he would sell the house for $160 000. Victor's letter was received by Penny on Friday the 1st. On Tuesday the 5th, Penny mailed a letter to Victor accepting the offer, with the letter being received by Victor on Thursday the 7th. However, on Saturday the 2nd, Victor had agreed to sell the house to Trent for $170 000; on the same day he mailed a letter to Penny revoking his offer. The letter of revocation is received by Penny on Wednesday the 6th. To whom is Victor legally bound to sell his house? With Trent because Victor's letter of revocation was mailed before Penny's letter of acceptance was mailed. With Penny because her letter of acceptance was mailed before the letter of revocation was received. With Trent because Victor's letter of revocation was received before Penny's letter of acceptance was received. With Trent because that contract was concluded first. With Penny because Victor had no right to negotiate with Trent after he had sent his offer to Penny. 5. On June 3, Sam offered to sell Patty his cottage for $80 000. The offer did not include an expiry date, but in it Sam indicated that he was short of cash and needed to sell the cottage within two weeks or he would be forced into bankruptcy. On June 18, Patty sent Sam a letter by courier saying she accepted his offer, had arranged financing, and was ready to close the deal in two days. George sent a message back that he had sold the cottage on June 10 to Tate. Can Patty sue Sam for breach of contract? No, because Sam's offer to Patty had lapsed. No, because Sam's statement was just an invitation to treat so it could not be accepted. Yes, because Sam never revoked the offer to Patty. No, because Sam revoked the offer to Patty when he agreed to sell the cottage to Tate. No, because Sam revoked the offer to Patty when he agreed to sell the cottage to Tate. 6. Bill has advertised in the local newspaper that he will sell his 5 year old car. The advertisement describes the car in some detail, but lists no offering price. Jim calls the telephone number Bill has included in the ad, and not getting an answer, leaves the following message on voice mail: Bill, I, Jim, will buy your car for $5000. I live at 123 Main Street. Please drive the car to my house next Tuesday the 15th at 7:00 p.m. and I will give you a cheque. If you have any difficulties with this, please call me. Bill never shows up at Jims house on the night of the 15th. When Jim calls him on the morning of the 16th, Bill tells him that he sold the car to Joyce for $5500 two days earlier. Can Jim sue Bill for breach of contract? No, because Bill never called Jim back after Jim left his message. No, because Jims acceptance of Bills offer was not in writing. Yes, because Jim accepted Bills offer before he could revoke it and sell to Joyce.

No, because Bills ad was an invitation to people like Jim to make offers to buy the car and Bill never accepted Jims offer. No, because Jim never accepted Bills offer. 7. On October 12, Frank wrote to Jane asking at what price she would be willing to sell her house. Jane wrote back on the 14th, stating the asking price was $75 000. On the 16th, Frank wrote back and asked, "Would you take $50 000?" On the 20th, Jane replied, "I won't go lower than $70 000." On the 25th, the letter from Frank stated, "You've got a deal at $68 000." On the 26th, Jane called Frank and agreed to $68 000. How would each communication be described? 12th - offer; 14th - invitation to treat; 16th - offer; 20th - counter-offer; 25th - revocation; 26th - acceptance. 12th - invitation to treat; 14th - offer; 16th - counter-offer; 20th - revocation; 25th - offer; 26th - counter-offer. 12th - invitation to treat; 14th - offer; 16th - counter-offer; 20th - counter-offer; 25th counter-offer; 26th - acceptance. 12th - offer; 14th - invitation to treat; 16th - offer; 20th - counter-offer; 25th - counter-offer; 26th - acceptance. 12th - invitation to treat; 14th - offer; 16th - revocation; 20th - offer; 25th - counter-offer; 26th - acceptance. In early October, Irene buys a ticket on Confederation Airlines to fly home from Toronto to Calgary on December 12, the day after her only scheduled final exam. Irene learns on November 29 that her exam, originally scheduled for December 11, has now been rescheduled to December 17 because of a conflict. Irene contacts Confederation Airlines to change her flight and is told that one of the terms of purchaseprinted in small print on the ticket she received from the airline provides that she cannot cancel her ticket more than 30 days after purchase. She therefore must pay for a second ticket for a flight to Calgary leaving Toronto on December 18. Does she have a right to demand her money back for the first ticket? Yes, because airlines are not permitted to use standard form terms pre-printed on their tickets. No, the terms of the contract clearly state she cannot get her money back more than 30 days after its purchase. Yes, because the term limiting the time for refunds was unfair. Yes, because never read the term limiting the time for refunds. Yes, because this was an unusual or unexpected term that was not highlighted to her when she received the ticket. 9. ABC Developments Inc. is planning to build a set of townhouses on a downtown lot that is partially vacant, and partially occupied by 6 property owners. In order to complete the project as planned, ABC needs all of the owners of the occupied lots to sell their land to it. ABC has had the experience that once property owners know that a developer requires a number of lots, they hold out for a higher price, knowing that their land is that much more valuable to the developer. What is the best way for ABC to ensure that it is able to purchase all of the lots and at a reasonable price? Enter into contracts with each owner who agrees and hope that no one holds out. Ask each owner to make ABC an offer and then accept none of them until every owner has made an offer. Enter into contracts with each owner who agrees and ask each owner not to tell their neighbours about the deal.

8.

Make an offer to each owner and do not acknowledge any acceptance until acceptances are received from every owner. Enter into an option with each owner that is not exercised until every owner has agreed to the option. 10 . On October 25, Geraldine said to Peter that she would pay him $250 if he would rake all of the leaves in her yard. On October 26, Peter starts raking the leaves, finishing on October 29. He then asks Geraldine for the $250. Geraldine refuses to pay Peter and thanks him for the gift of the raking. Can Peter force Geraldine to pay him? No, because Geraldine's statement was merely an invitation to treat. Yes, because Peter's conduct in raking all of the leaves amounted to communication of acceptance. No, because Geraldine's offer had lapsed so could not be accepted. Yes, because an owner of a house has to pay anybody who does work on the house. No, because Peter never communicated his acceptance of the offer to Geraldine. 11 . The City of Kingston needs extensive road work done and publishes a Request for Tenders in a local newspaper. In response, three local construction firms submit tenders, and all of the tenders address all of the issues raised in the Citys Request for Tenders. The City decides to award the contract to a firm from Toronto it has heard does good work. The contract price agreed to is more than the bids of all three local firms that submitted tenders. It is revealed that the City never considered the tenders of the local firms. What should the local firms do in response to the Citys actions? They could all sue for breach of contract as there is an implied contract that all bids submitted pursuant to a tender request will be considered. Nothing. Their tenders were merely offers that the City never accepted. Nothing. Their tenders were invitations to the City to make offers to the local firms on the terms suggested in their tenders. The firm with the lowest priced bid should sue for breach of contract because it should have been selected. Nothing, it is the Citys prerogative to choose whatever contractors it wishes. 12 . Is the mailbox rule more relevant for acceptances or revocations? Revocations. Acceptance is only effective when a letter is received and revocation occurs when the letter is mailed, provided that it is properly addressed and stamped. Neither. Acceptance and revocation are only effective when the letter is received. Neither. The mailbox rule relates only to the communication of an offer through a letter The rule is equally relevant for both. Acceptance and revocation occur when a letter is mailed, provided that it is properly addressed and stamped. Acceptances. Acceptances are effective when the letter is mailed, provided that it is properly addressed and stamped, but revocation can only occur when the letter is received. 13 . Which of the following most accurately describes a bilateral contract? It is the only type of contract enforceable under Canadian contract laws. The offeror and offeree exchange promises to perform.

It is any binding contract involving two people. The offeree accepts an offer through performance. The offeree accepts an offer through either performance or a promise to perform. 14 . An offeror may be bound to keep her offer open for a certain period of time because: The offer was made in the form of an option contract. The offer was communicated to the offeree in person. Both answers 1 and 2. The offer was made in writing under seal. The offer is in writing and provides a date on which the offer will expire. 15 . Walter arrived home from college one day to find a set of encyclopaedias on his doorstep. They were sent on a 30-day trial basis. All of the following are statements correctly describe Walters legal position EXCEPT: Walter may accept the offer by keeping and using the books. Answer #1 (above) is an example of a unilateral contract. If Walter does nothing he will be bound. If Walter accepts by letter, a contract will be formed when he puts a properly addressed and stamped letter in the mail. Walter may accept the offer by letter, telegram or telephone.

Formation of a Contract: Capacity to Contract and Legality of Object

1.

When Jen was 17 years old, she took her bicycle into Joes Bike Repair Shop for an extensive repair job, which cost $175. If she does not pay, can the Joe successfully sue her? No, because there was no consideration for the contract. Yes, because the contract was of a continuous nature. Yes, because the contract was for a necessary." No, because the contract was not of a continuous nature. No, because the contract was not for a necessary."

2.

If Jen leaves her bicycle at Joes for 2 weeks for repairs, and in the interim, she celebrates her 18th birthday. She then picks up her repaired bike, but does not pay. Can Joe successfully sue

her in this case? No, because on attaining the age of majority, she did not ratify the contract she had entered into as a minor. No, because this was not a contract for a necessary." No, because she was a minor when she entered the contract and it can never subsequently be binding against her. Yes, because she is no longer a minor and therefore the contract is enforceable. Yes, because this is a contract of a continuous nature and she did not repudiate her liability upon turning 18. 3. At 17 years of age, Wilma entered into a contract of employment with a large retail clothing outlet to join its one-year training program. The program included travel to the companys head office in Toronto and several of its stores across Canada, for promising young employees. Shortly after Wilma went to work for the company, it proposed to send her to work in its largest store in Saskatoon for a few months as part of the training program, at her regular salary. If Wilma refuses to go, can the company successfully sue her? Yes, because it is a contract of an ongoing or continuous nature. Yes, because it is part of a contract for necessaries." No, because it is part of an exploitive contract of service. No, because it is part of a contract for non-necessaries of life. Yes, because it is part of a beneficial contract of service. 4. Sally, a 17-year-old, is desperate for a car so that she can obtain a job delivering pizzas. She borrows $2 000 from an adult family friend to buy a used car. If Sally fails to repay the debt, can the family friend successfully sue Sally for the debt? No, because not all the essential elements of a contract are present offer, acceptance and consideration. Yes, because the money was used to purchase a non-necessary item. Yes, because the loaning of money is a necessary. No, because the loaning of money is not a necessary. Yes, because the money was used to purchase a car that was necessary for her employment. 5. In order to become a licensed electrician, 16-year-old Josh must work with a licensed electrician for a period of 1 year. He has some difficulty finding an experienced electrician who will hire him for this training period, but finally enters into an agreement with Barney, an older electrical contractor. Barneys business is rather slow, and he is unable to pay Josh very well. Two months later, Josh learns that two of his friends are apprenticing for electricians and making twice as much money per hour as Josh is. Josh wants to break his agreement with Barney, but Barney has come to rely on Josh. Can Josh repudiate this contract? No, because this contract is not beneficial to Josh, it is beneficial to Barney. No, he cannot repudiate it until he is 18 and the contract will be over before that time.

Yes, it is illegal to employ minors to contracts for professional services. Yes, as a minor he can repudiate any contract while still under the age of majority. Unlikely, because this appears to be a contract of service beneficial to Josh in that it allows Josh to meet the requirements of his profession. 6. Ron, a 15-year-old hockey enthusiast, was surfing the Internet one evening looking for rare hockey cards. He finds a site selling what he is looking for and using the online purchase form, agrees to purchase a Wayne Gretzky rookie card and three Russian produced cards of prominent hockey stars. He agrees to pay $600 for the 4 cards, which is to be paid on delivery." The next day, Ron spends $600 on other hockey cards of interest he discovers in a local card store. When the internet-ordered cards arrive, Ron determines that he has already spent all of his money on the cards he found in the store and refuses to pay the delivery person. Can the online seller sue Ron for breach of contract? No, the proper elements of contract formation were not present. Yes, there is no way that the online card seller could have known that Ron was a minor and therefore the contract is enforceable. No, the contract was neither a beneficial contract of services nor a contract for necessaries and therefore is not enforceable against the minor. Yes, but only if Ron stated on the form that he was at least 18 years of age. Yes, because Ron cannot repudiate after the purchased cards have been delivered. 7. Ron, a 70-year-old hockey enthusiast who suffers from mild Alzheimers disease, was surfing the Internet one evening looking for rare hockey cards. He finds a site selling what he is looking for and using the online purchase form, agrees to purchase a Wayne Gretzky rookie card and three Russian produced cards of prominent hockey stars. He agrees to pay $600 for the 4 cards, which is to be paid on delivery." When the internet-ordered cards arrive several days later, Ron has no recollection of making such a purchase and refuses to pay the delivery person. Can the online seller sue Ron for breach of contract? Yes. The contract was properly formed and Ron cannot assert the defence of diminished capacity because the seller did not know of his mental state when he made the online order. Yes. Online contracts are enforceable against all adults. No. Ron suffered from diminished capacity when he entered into the contract and it is not enforceable against him. No. The online dealer had a duty to determine the capacity of the purchaser it was dealing with. No. Ron has the right to repudiate this contract when he is lucid. 8. Brendan, aged 16, purchased a bicycle on credit for the purpose of transportation to and from his place of employment. He made no payments on the bicycle. Can the seller successfully sue Brendan for the debt? Yes, because the bike is considered a non-necessity since it is needed to get to his place of employment. No, because the bike is considered a non-necessity since it is needed to get to his place of employment. Yes, because the bike is considered a necessity since it is needed to get to his place of employment.

No, because the bike is considered a necessity since it is needed to get to his place of employment. Yes, because Brendan has used the bike for free for a number of months. 9. Black got into Whites taxi at the Toronto Airport. Black notices that White does not display the Toronto Airports Authority sticker which is required for any cab to pick up a fare at the Toronto airport. She says nothing about this until White has driven her across the city to her home in Scarborough and asks her to pay a fare of $45.00. She replies that she will not pay. Does she have a right to take this position? No, because despite being unregistered, White has provided a clear benefit to Black. No. If she does not pay, she will have committed a crime equivalent to theft. No, she must pay, but she can report White to the police who will charge him with the crime of carrying on business without registration. Yes, because he did not tell her that he was not registered. Yes, because White is not properly registered and cannot by law enforce the contract against her. 10 . John, a university student, participated in a pub-crawl for new students and then spent the rest of the evening drinking in the university pub. By 2 a.m. not only he is incapable of driving but is barely able to walk. John hails a cab to drive him home even though he lives less than 1 km from campus. He has trouble remembering his address since he only moved in that day. After driving around for 30 minutes, the cab finally arrives at the correct house, but John discovers he has no money. The cab driver is fed up with this customer so agrees to come back the next day for payment. The next day, after he has sobered up, John refuses to pay the $50 fare the cab driver now demands of him. Can the cab driver successfully sue John for the fare? Yes, because the fare was a reasonable price for the drive. No, because John was too drunk at the time to have entered into a binding contract for a non-necessary. No, because the contract was for a non-necessary and the driver was aware John was drunk. Yes, because, unlike minors, adults are responsible for any contracts that they enter. Yes, because the contract was for a necessary and the driver was aware John was drunk. 11 . Which defence is harder to prove: incapacity because of age or incapacity because of diminished capacity? There is no difference, as both require the same elements to be proven. Incapacity, because of age because many 16 and 17 year olds look and act similarly to 18 year olds. Incapacity, because of age, because the defendant must prove the other contracting party knew he was a minor at the time of the contract. Diminished capacity, because it is difficult to prove that the other contracting party knew that the defendant was of unsound mind at the time of the contract. Diminished capacity, because it is hard to prove that one was not of sound mind at any given time. 12 . Why is a wagering contract unenforceable and an insurance contract is enforceable by our courts?

The insurance contract involves an insurable interest and the wagering contract does not. The wagering contract is illegal and the insurance contract is not. Wagering contracts are only legal with government sanction and insurance contracts are legal by themselves. All of the above. None of the above. 13 . Why are restrictive covenants that prevent one contracting party from competing with the other generally considered by our courts to be contrary to public policy? Because they contravene the federal Competition Act. Because the courts consider competition to be a necessary element of Canadian commercial life and development. Because only the courts can determine when a party may compete with another party and when it may not. Because they contravene trade legislation found in most provinces. Because such clauses are usually found in standard form contracts which are deemed unfair by the courts. 14 . Ted bought the only taxi in a small town from Larry. As part of the consideration for the purchase of the cab, Larry agreed that he would not operate a taxi anywhere in the Province of Ontario for 2 years. One year later, Larry started to drive a taxi in a town 40 km from Teds town and Ted sued Larry for breach of contract. Will he be successful? No. The restrictive covenant will offend public policy because 2 years is too long a restriction to place on Larry. Yes. Larry is driving a cab in Ontario, contrary to the agreement. Yes, the court will narrow the restrictive covenant to an area within 50 km of Teds town and then enforce it. No. Larry is not competing with Ted if he is in another town. No. The restrictive covenant will offend public policy because it places far too broad a geographic restriction on Larry. 15 . Which of the following is/are illegal? An agreement not to testify at a trial. A bet on who will win the Grey Cup. An agreement to exclude an employee from the benefits of Workers Compensation. All of the above. None of the above.