Question 1

Which of the following would provide a party with an excellent chance of relying on the doctrine of promissory estoppel in a common law court?
A) the absence of undue pressure to alter contractual rights
B) the existence of a pre-existing right covering the scenario
C) payment of a smaller amount to satisfy an outstanding debt
D) a promise to rely on pre-existing contractual rights

Accepted Answer

Promissory estoppel can be invoked when a party reasonably relies on a promise to their detriment, and there is no undue pressure to alter contractual rights, making option A the correct choice.

Question 2

Which of the following is strongly linked to the contractual requirement of consideration?
A) the idea that consideration need not be monetary
B) the idea of equality during bargaining
C) the idea that a promise to pay be mutual
D) the idea of freedom of parties to bargain

Accepted Answer

The answer of Which of the following is strongly linked...

Question 3

A cancer hospital asked its privately owned medical isotope source to arrange an earlier shipment of an urgent order. The private supplier confirmed an earlier shipment was possible for a 30 percent surcharge on the contractual price. Because the hospital's cancer patients needed the isotopes desperately, the hospital faxed a written acceptance of the varied terms. The hospital subsequently refused to pay the price increase. What would a New Brunswick court hearing the ensuing dispute be most likely to determine?
A) Contractual variation supported by pre-existing duties is enforceable.
B) Where there is consent to a gratuitous variation, it is enforceable.
C) Contractual variation was supported by consideration, and therefore the variation is enforceable.
D) Contractual variation unsupported by consideration is enforceable.

Accepted Answer

The hospital faxed a written acceptance of the varied terms, which established a contractual variation between the parties. This variation was supported by consideration, as the hospital agreed to pay a 30 percent surcharge on the contractual price in exchange for an earlier shipment of the isotopes. Therefore, the contractual variation is enforceable.

Question 4

Recent legislation in some provincial jurisdictions overrides the common law that governed the acceptance of a payment of a lesser amount in full satisfaction of a debt. What is the policy rationale for the legislation?
A) to allow debtors to pay by instalments over time
B) to promote the settlement of debts on a final basis
C) to allow creditors to increase the collection of debts
D) to promote a reduction in consumer debt

Accepted Answer

The policy rationale for the legislation is to promote the settlement of debts on a final basis, meaning that if a creditor accepts a lesser amount in full satisfaction of a debt, the debt is considered fully settled and cannot be pursued further by the creditor. This is intended to provide certainty and finality in debt settlements and avoid disputes over the amount owed.

Question 5

Why is placing a seal beside the signature of a guarantor who signs a guarantee still enforced in modern-day Canadian society?
A) Absence of the seal renders the gratuitous promise in the guarantee unenforceable.
B) Absence of the seal suggests an absence of the intention of the parties to contract.
C) Absence of the seal suggests an absence of the acceptance of a firm offer.
D) Absence of the seal renders the acceptance of the offer of guarantee unenforceable.

Accepted Answer

The answer of Why is placing a seal beside the...

Question 6

Which of the following would immediately let you know that a promise is gratuitous?
A) the lack of sufficient consideration
B) the absence of consideration
C) the lack of adequate consideration
D) the absence of formalization

Accepted Answer

A gratuitous promise is one made without any consideration or benefit to the promisor. Choice B confirms the absence of consideration, which is the hallmark of a gratuitous promise. Choices A and C both suggest the presence of some consideration, albeit insufficient or inadequate, respectively. Choice D refers to the formalization or documentation of a promise, which is not indicative of whether it is gratuitous or not.

Question 7

Caroline agreed to purchase organic hemp fabric from an Ontario manufacturer. While making an inquiry to purchase organic dyes from a Manitoba producer, she learned they offered a superior organic hemp fabric at a much lower price than the Ontario manufacturer. Knowledge of what legal principle would immediately let Caroline know she made a costly error?
A) Parties must be informed as to the adequacy of price, as it is usually not open to challenge.
B) The consideration to be given for each party's duties is the other party's duties.
C) Parties must pay the price for a promise before they can sue when it is broken.
D) The traditional perspective that alteration of a pre-existing duty is enforceable.

Accepted Answer

A) The principle that parties must be informed as to the adequacy of price, and that it is usually not open to challenge, would immediately let Caroline know she made a costly error by not researching more thoroughly before agreeing to purchase from the Ontario manufacturer. This principle implies that once a deal is agreed upon, the fairness of the price is not typically grounds for altering the agreement.

Question 8

What is the meaning of the statement "Promissory estoppel may be used as a shield and not as a sword" with respect to the classical application of the common law doctrine of promissory estoppel?
A) The doctrine is unavailable as a defence in a lawsuit.
B) The doctrine is unavailable as the basis for a lawsuit.
C) The doctrine is unavailable to a person who has made a promise.
D) The doctrine is unavailable to a person who has broken a promise.

Accepted Answer

The statement means that promissory estoppel can only be used as a defence to prevent a promisor from denying a promise they have made, but it cannot be used as the basis of a lawsuit to enforce the promise. So, option B is the correct choice as it mentions the doctrine being unavailable as the basis for a lawsuit.

Question 9

Why would members of a family experience an uphill battle in a common law court with respect to the enforcement of contractual obligations owed to one another?
A) The law presumes promises between family members are non-contractual.
B) The law presumes all promises between family members are gratuitous.
C) The family members' intention to contract must be subjectively tested.
D) The family members must understand the legal consequences of a promise.

Accepted Answer

The answer of Why would members of a family experience...

Question 10

Karl, Robin's champion male German Shepherd, has been missing for two days. Robin posted an offer of a $1,000 reward for Karl's return throughout the two-kilometre radius surrounding his home. What is the correct legal term for the type of contract Robin has offered to enter into?
A) a bilateral contract
B) a unilateral contract
C) a unilingual contract
D) a multilateral contract

Accepted Answer

Robin has offered a unilateral contract, which is a promise to pay a reward in exchange for the act of returning Karl. In this case, only one party (the person who returns Karl) can accept the offer and perform the requested act to receive the reward.

Question 11

What key ingredient must be present in order to distinguish a legally enforceable promise from one that is legally unenforceable?
A) acceptance
B) formalization
C) consideration
D) revocation

Accepted Answer

Consideration is the key ingredient that distinguishes a legally enforceable promise from one that is legally unenforceable. Consideration refers to something of value that is exchanged between parties as part of a contract. Both parties must give and receive something of value for the promise to be legally enforceable. Without consideration, a promise may be considered a gift and is not legally enforceable. Acceptance and formalization are important parts of creating a contract, but they are not enough on their own to make a promise legally enforceable. Revocation refers to the act of withdrawing or canceling a promise, which can impact the enforceability of a contract, but it is not the key ingredient required to create a legally enforceable promise.

Question 12

In his decision, Lord Wilberforce stated, "No universal rule can cover all such cases; they must be resolved by reference to the intention of the parties, by sound business practice and in some cases by a judgment of where the risks should lie...." What legal rule did Lord Wilberforce establish in his ruling on this case?
A) the postage rule
B) the postman rule
C) the postbox rule
D) the post office rule

Accepted Answer

The answer of In his decision, Lord Wilberforce stated, "No...

Question 13

Albert's mother signed a three-month listing agreement with a real estate agent. Prior to considering or accepting either of two below-listing-price offers the agent brought to Albert's mother, she suffered a fatal stroke. What would a judge likely decide if the agent and/or the offerees attempt to legally force the mother's estate to accept one of the offers?
A) that someone who makes an offer and then dies would not be bound
B) that the death increased the chance of one of the offers being accepted
C) that the deceased party cannot personally perform, hence her offer also died
D) that the estate is obligated to complete the sale by accepting one of the offers

Accepted Answer

The death of the mother terminated her ability to personally perform under the contract, therefore the estate cannot be forced to accept one of the offers.

Question 14

What element must be present to enable an innocent party to commence a lawsuit when a promise is broken?
A) The innocent party must agree to a "price" for the defendant's promise.
B) The work must be performed.
C) The consideration must be adequate.
D) The promise must be accepted.

Accepted Answer

The answer of What element must be present to enable...

Question 15

What is the proper method of leading contrary evidence to challenge a legal presumption favouring one party?
A) a rebuttable presumption of the parties' intent to contract
B) the doctrine of rebuttable inference of refusal to contract
C) the doctrine of rebuttable assumption of pre-existing condition
D) a rebuttable promise for which no consideration is given

Accepted Answer

The method of leading contrary evidence to challenge a legal presumption is to present rebutting evidence. In this case, the legal presumption is a rebuttable presumption of the parties' intent to contract. Therefore, the best choice is A, as it is the only option that includes a rebuttable presumption related to contract formation.

Question 16

Under what circumstances would a judge who is determining a remedy to a commercial dispute consider that a contract does not exist even though all of the required elements of reaching an agreement are present?
A) A phrase indicates the agreement is subject to formal contract.
B) A contract lacks sufficient consideration for both parties.
C) A contract lacks adequate consideration for both parties.
D) A phrase indicates the agreement is subject to its exact wording.

Accepted Answer

If the contract contains a phrase indicating that the agreement is subject to a formal contract, this may suggest that the parties did not intend to be bound by their initial agreement until a more formal contract is executed. As a result, a judge may conclude that no contract existed until a formal contract was completed.

Question 17

In what way are a contractual promise and a contractual obligation similar?
A) Both must be adequate to be enforceable.
B) Both represent a pre-existing duty.
C) Both may be arbitrarily revoked.
D) Both must be present for validity.

Accepted Answer

The answer of In what way are a contractual promise...

Question 18

What is the purpose of the practical application of the rules governing the acceptance of an offer, which has been upheld in a number of decisions of the Canadian courts?
A) It ensures the application of the postal rule remains valid across Canada.
B) It qualifies any witness to the event who can testify to that effect.
C) A party must be aware it may become bound to contractual obligations.
D) It satisfies the need for proof that the necessary events occurred.

Accepted Answer

The answer of What is the purpose of the practical...

Question 19

Gandrel received an offer to purchase on his home. The offer provided for the payment of the asking price but required Gandrel's new appliances and riding lawnmower to be included in the purchase price. Does Gandrel's offer to sell his home still have legal substance?
A) Yes, the original offer could be conditionally accepted.
B) No, the lapse of time automatically terminates the original offer.
C) Yes, it forms the basis of the purchaser's counteroffer.
D) No, a counteroffer is a terminal rejection of an original offer.

Accepted Answer

The original offer still has legal substance as it forms the basis of the purchaser's counteroffer. Even though the counteroffer demands additional items to be included in the purchase price, it does not automatically terminate the original offer.

Question 20

With respect to electronic contracting, what solution did the Uniform Law Conference of Canada adopt to provide for the electronic acceptance of an electronic offer?
A) clicking an "accept" button
B) clicking an "I accept" button
C) clicking an "agreed" button
D) clicking an "I agree" button

Accepted Answer

The Uniform Law Conference of Canada adopted the solution of clicking an "I agree" button as a clear and affirmative action to indicate acceptance of an electronic offer.

Quiz 6: Forming Contractual Relationships

Which of the following would provide a party with an excellent chance of relying on the doctrine of promissory estoppel in a common law court?

Which of the following is strongly linked to the contractual requirement of consideration?

Recent legislation in some provincial jurisdictions overrides the common law that governed the acceptance of a payment of a lesser amount in full satisfaction of a debt. What is the policy rationale for the legislation?

Why is placing a seal beside the signature of a guarantor who signs a guarantee still enforced in modern-day Canadian society?

Which of the following would immediately let you know that a promise is gratuitous?

What is the meaning of the statement "Promissory estoppel may be used as a shield and not as a sword" with respect to the classical application of the common law doctrine of promissory estoppel?

Why would members of a family experience an uphill battle in a common law court with respect to the enforcement of contractual obligations owed to one another?

Karl, Robin's champion male German Shepherd, has been missing for two days. Robin posted an offer of a $1,000 reward for Karl's return throughout the two-kilometre radius surrounding his home. What is the correct legal term for the type of contract Robin has offered to enter into?

What key ingredient must be present in order to distinguish a legally enforceable promise from one that is legally unenforceable?

What element must be present to enable an innocent party to commence a lawsuit when a promise is broken?

What is the proper method of leading contrary evidence to challenge a legal presumption favouring one party?

Under what circumstances would a judge who is determining a remedy to a commercial dispute consider that a contract does not exist even though all of the required elements of reaching an agreement are present?

In what way are a contractual promise and a contractual obligation similar?

What is the purpose of the practical application of the rules governing the acceptance of an offer, which has been upheld in a number of decisions of the Canadian courts?

Gandrel received an offer to purchase on his home. The offer provided for the payment of the asking price but required Gandrel's new appliances and riding lawnmower to be included in the purchase price. Does Gandrel's offer to sell his home still have legal substance?

With respect to electronic contracting, what solution did the Uniform Law Conference of Canada adopt to provide for the electronic acceptance of an electronic offer?