Deck 6: Contracts: Problems With Formation

Question 1

A voidable contract is one that one party can enforce if they wish.

Answer 1

True

Question 2

Courts are required to enforce contracts that are not illegal but are merely against public policy.

Answer 2

False

Question 3

The purpose of a contract must be legal and enforceable by a court.

Answer 3

True

Question 4

If a contract is against public policy, the court will deem the contract void and refuse to enforce it.

Question 5

Legality is the contractual element to protect a vulnerable person from being taken advantage of.

Question 6

A court will not enforce a contract that is against public policy.

Question 7

Legality is a contractual element that allows the contract to be evaluated by society.

Question 8

Capacity is a contractual element that allows the contract to be evaluated by society.

Question 9

Courts will enforce contracts that are not illegal but merely against public policy.

Question 10

A void contract is one that never existed.

Question 11

Public policy can change over time and make a once illegal contract legal.

Question 12

A voidable contract is one that never existed.

Question 13

If a contract conflicts with the interests of society it is against public policy and not enforceable.

Question 14

A void contract is one that one party can enforce if they wish.

Question 15

You can enforce a contract with a friend for not paying the amount owed during a poker game.

Question 16

Voluntariness in a contract means you entered into it freely.

Question 17

Although some acts may not be illegal, the courts will not enforce a contract that is against public policy.

Question 18

Forcing someone into a contract makes the purpose of the contract illegal.

Question 19

Capacity is the contractual element to protect a vulnerable person from being taken advantage of.

Question 20

When a party is not capable of understanding a contract they may lack the required element of capacity.

Question 21

Aboriginal peoples may have limited capacity to enter into contracts.

Question 22

When a party is unaware of the nature of a contract they can argue non est factum to have the contract set aside.

Question 23

Contracts with minors for necessaries are enforceable.

Question 24

A person lacking capacity determines if the contract is voidable.

Question 25

Generally, contracts with minors are enforceable.

Question 26

Labor unions may have limited capacity to enter into contracts.

Question 27

In Canada, the age of majority is 21.

Question 28

A mistake is a wrongful belief about the terms of a contract that caused the person to enter into the contract.

Question 29

Enemy aliens may have limited capacity to enter into contracts.

Question 30

An apprenticeship contract with a minor is a beneficial contract of service and is unenforceable.

Question 31

An intoxicated person who does not try to set aside the contract upon becoming sober will be bound by the contract.

Question 32

Corporations may have limited capacity to enter into contracts.

Question 33

The parties to a contract must be capable of understanding what they are getting into.

Question 34

A court applies the reasonable person test to determine a mistake.

Question 35

Even reasonable contracts with minors are unenforceable.

Question 36

A mistake is a misunderstanding about the terms of the contract.

Question 37

Rectification is a remedy the court uses to correct a typographical error in a contract.

Question 38

If a minor purchased a computer on monthly payments, capacity allows a minor to get out of a contract but keep the goods.

Question 39

When deciding whether to end a contract, a court will examine why a party entered into a contract.

Question 40

Each province has a statute that determines the age of majority.

Question 41

Undue influence is presumed for certain relationships of trust and confidence.

Question 42

Duress is a form of threat that forces a person into entering a contract against their will.

Question 43

If the subject matter of a contract was destroyed prior to contract formation, the contract is voidable.

Question 44

A person signing a contract can avoid the consequences if they have not been careless and the mistake is a serious one.

Question 45

Misrepresentation is a false statement of fact that induces the other party into the contract.

Question 46

Suppliers in online contractual transactions have no special duties when dealing with customers.

Question 47

The duty of utmost good faith requires parties in a special relationship to make full disclosure before entering into a contract.

Question 48

A misrepresentation must be the statement that induced the party to enter into the contract.

Question 49

It is up to the dominant contracting party to overcome the presumption of undue influence.

Question 50

The same remedies are available for both fraudulent and innocent misrepresentation.

Question 51

Rescission and damages are remedies for innocent misrepresentation.

Question 52

Unjust enrichment is when one party to a contract mistakenly gives a benefit to the other party.

Question 53

The party relying on an exemption clause only need prove it is reasonable.

Question 54

Purposely making a false statement to induce another into a contract is innocent misrepresentation.

Question 55

In online transactions, suppliers have a duty to disclose terms that a reasonable person may not expect in a contract.

Question 56

An exemption clause is an attempt to limit liability under a contract.

Question 57

Having the other party to a contract obtain independent legal advice prior to signing the contract will rebut the presumption of undue influence.

Question 58

Duress is coercing a party into entering a contract through threat or the use of harm to the person.

Question 59

Purposely making a false statement to induce another into a contract is fraudulent misrepresentation.

Question 60

Rescission and damages are remedies for fraudulent misrepresentation.

Question 61

Mary and Janet both agree on a sale price for the vehicle of $8000. They reduce their contract to writing and incorrectly put the price at $800. The usual remedy by a court in this situation is:

A) Rescission
B) Rectification
C) Ratification
D) Repudiation

Question 62

Andy agrees to sell his painting to Bill. At the time the contract is made, the painting is destroyed by fire. The legal effect of this contract is:

A) Voidable
B) Unenforceable
C) Enforceable
D) Void

Question 63

If the court determines that there was undue influence in a contract, then that contract is:

A) Legal
B) Void
C) Voidable
D) Illegal

Question 64

Andy thinks he is selling an ordinary painting for $50. Bill knows that he is in fact buying something by Robert Bateman. The legal effect of this contract is:

A) Voidable
B) Unenforceable
C) Void
D) Enforceable

Question 65

In which of the following situations can a minor end a contract with no liability?

A) A contract for the rent on an apartment
B) A contract for a future vacation
C) A contract for the purchase of clothes
D) A contract for the medical services

Question 66

John and Mary are thinking of buying a house. They see one they like and arrange to view it. The current owner, Emelda shows them over the house stating, "I've owned this house for 20 years, and it is completely sound. There are no problems." In fact, as John and Mary discover later, the house is infested with termites. If Emelda did know there were termites and was desperate to sell, this would be an example of:

A) Innocent misrepresentation
B) Undue influence
C) Duress
D) Fraudulent misrepresentation

Question 67

A person can use mistake as a defence to void a contract dispute if:

A) The mistake is that both parties have changed their mind
B) The mistake is about the subject matter
C) The mistake is a typographical error in the contract
D) The mistake is unknown to both when they signed the contract

Question 68

Both parties have signed an agreement regarding the purchase and sale of a new vehicle. Which of the following would allow the contract to be set aside on the basis of misrepresentation?

A) The misrepresentation must have been made knowingly.
B) The misrepresentation must have induced the party to buy the vehicle.
C) The misrepresentation must have been in writing.
D) The misrepresentation must have been a false statement.

Question 69

Which of the following would not be considered a necessary?

A) Clothing
B) Television
C) Bus fare
D) Food

Question 70

Which of the following is not a requirement for a valid contract?

A) Legality
B) Capacity
C) Fairness
D) Voluntariness

Question 71

John and Mary are thinking of buying a house. They see one they like and arrange to view it. The current owner, Emelda shows them over the house stating, "I've owned this house for 20 years, and it is completely sound. There are no problems." In fact, as John and Mary discover later, the house is infested with termites. If Emelda did not know there were termites, this would be an example of:

A) Undue influence
B) Innocent misrepresentation
C) Fraudulent misrepresentation
D) Duress

Question 72

Which of the following will not impact the voluntariness of one party's agreement to the contract?

A) Mistake
B) Fairness
C) Misrepresentation
D) Undue influence

Question 73

Andy thinks he has agreed to paint Bill's portrait for $500, not including canvass and paints. Bill thinks the $500 rice covers both labour and materials. If neither party's interpretation is reasonable OR both are equally reasonable, the legal effect of this contract is:

A) Unenforceable
B) Void
C) Voidable
D) Enforceable

Question 74

Which of the following groups does not have a limit on their capacity to contract?

A) Aboriginal people
B) Women
C) Minors
D) Corporations

Question 75

Which of the following is not a requirement to prove non est factum?

A) The subject matter was not what the signer believed it to be
B) The signer could not read the contract
C) The signer was not careless in signing the contract
D) The subject matter was exactly what the signer believed it to be

Question 76

When a court determines that a contract is illegal the court will:

A) Declare the contract void and put the parties back into the position they were before the contract
B) Declare the contract void and not offer any assistance to the parties
C) Declare the contract voidable and put the parties back into the position they were before the contract
D) Declare the contract voidable and treat it like any other breach of contract

Question 77

Which of the following is against public policy?

A) Hiring someone to make a false insurance claim
B) Hiring someone to clean your house
C) Hiring someone to steal a car
D) Hiring someone to marry your son

Question 78

Mary and Janet entered into a contract for the purchase of a used vehicle. Mary thinks she is selling her 2010 Kia Soul and Janet thinks she is selling her 2012 Audi. This is an example of:

A) Misrepresentation
B) Undue Influence
C) Duress
D) Mistake

Question 79

A contract made under the threat of violence to the person is void.

Question 80

A person claiming insanity to set aside a contract must show that:

A) The other person was not aware of the insanity
B) The insanity was only temporary
C) The other person knew of the insanity
D) The insanity was a permanent condition