Question 1

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
-A court will strike down an unreasonable restriction,thereby leaving the purchaser unprotected from competition from the seller.

Accepted Answer

The passage states that "A court will strike down an unreasonable restriction, thereby leaving the purchaser unprotected from competition from the seller." This means that the court may strike down the non-compete agreement if it is deemed to be unreasonable, which would leave Austin unprotected from competition from Corbin.

Question 2

Mr.Groves,a successful lawyer,is asked by his daughter's day care to do their legal work on a voluntary,unpaid basis and,since it is minimal,he agrees.As the result of an error he makes in drawing up the day care's standard employment contract,a mistake that would not have been made by the reasonable lawyer,the day care has to compensate an employee who was let go for failure to meet the job requirements.Since Mr.Groves received no consideration for his work,the day care cannot hold him liable for its loss.

Accepted Answer

Mr. Groves did not receive any consideration for his work, so the day care cannot hold him liable for its loss.

Question 3

In a letter to his nephew,Peter,Mortimer promised to leave Peter all his money when he died,in memory of Peter's father for whom Mortimer had great respect.There is nothing Peter could do to ensure that Mortimer will keep his promise since it is gratuitous and a gratuitous promise can never be made enforceable.

Accepted Answer

The answer of In a letter to his nephew,Peter,Mortimer promised...

Question 4

Franklin Motors Ltd.makes an agreement to buy 3,000 widgets for $1,000 from Stovely's Engineering Co.The law presumes that,unless one of the companies proves otherwise,they intended this agreement to be a legally binding one.

Accepted Answer

The statement is true. The law presumes that a contract or agreement is intended to be legally binding unless proven otherwise.

Question 5

Victor has breakfast at the Kute Kafey.From the menu,he orders buttered muffins "homemade like your mother's," jam "made with loving care and fresh ingredients," and tea "fresh picked from the cool hillsides of an Indian plantation." The waiter has accepted his order.Actually,the muffins are nothing like Victor's mum's muffins and are baked in a factory;the jam is mass-produced from industrial-quality frozen fruit;and the tea is made with generic tea bags.Victor has a good case for breach of contract.

Accepted Answer

Victor has a good case for breach of contract because the descriptions in the menu can be considered as express terms or representations, and if they are false, it may constitute a misrepresentation or breach of contract.

Question 6

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
-If the restrictive covenant was considered to be unreasonable by the court,the restriction would be amended to make it reasonable.

Accepted Answer

In most jurisdictions, if a court finds a restrictive covenant to be unreasonable, it may choose to either void the covenant entirely or modify it to make it reasonable, depending on the legal principles applicable in that jurisdiction. However, not all courts will amend the covenant; some may simply invalidate it.

Question 7

Jeremy agrees not to sue Angela for having crashed into his car if she agrees to pay for his repairs.Since he promised only not to do something that he could have done,he has not given consideration for her promise to pay.

Accepted Answer

Jeremy has given consideration by promising not to sue Angela, which is something he could have done. This is a valid example of a compromise agreement where both parties give consideration. Angela's promise to pay for Jeremy's repairs is also a valid consideration.

Question 8

Jill has been negotiating the purchase of a speedboat with Sandi during the last two weeks.Two days ago,she wrote to Sandi,saying "I won't go any higher than $8,000.Take it or leave it,but that's my final offer." By coincidence,Sandi sent a letter the same day that said "I won't take less than $8,000,so if you can't accept that,I'll have to look elsewhere for a buyer." The letters have both arrived today at their destinations.There is a contract between Jill and Sandi.

Accepted Answer

The answer of Jill has been negotiating the purchase of...

Question 9

A trader on the floor of the stock exchange makes a deal with another trader by hand signals for the sale of a block of shares.This is a binding contract.

Accepted Answer

Hand signals are a common way for traders to communicate and make deals on the floor of the stock exchange. These agreements are considered binding contracts and are legally enforceable.

Question 10

Rosa offers Valerie the chance to buy Rosa's cottage for $25,000.Two days later,while Valerie is still considering the offer,Rosa's sister mentions to Valerie that Rosa has sold the cottage to Ben for $30,000.If Valerie now accepts,Rosa will be liable for breach of contract.

Accepted Answer

Rosa did not enter into a contract with Valerie and therefore cannot be liable for breach of contract. The offer was merely an invitation to treat and Rosa was free to sell the cottage to someone else at a higher price.

Question 11

Paulette Paulson Furs advertises mink coats for sale at 30 percent off.The demand was much greater than anyone could have predicted,and 14 people who came to the store could not be provided with one of the sale coats.Since they had accepted Paulson's offer,she will have to find coats for them or be in breach of their contracts.

Accepted Answer

In this scenario, the advertisement is considered an invitation to treat, not an offer. Therefore, no contract is formed until the store accepts the customer's offer to purchase, meaning Paulson is not obligated to provide coats to those 14 people.

Question 12

Andy offers to sell his car to Bob,but Bob needs to arrange financing,so Andy says he will give Bob three days to do so.Andy can revoke the offer before the three days are up.

Accepted Answer

Andy has given Bob a limited time to arrange financing, but until that time limit expires, the offer stands. However, Andy does have the right to revoke the offer before the three-day period is up.

Question 13

Tom offers to buy Jenny's fishing tackle for $500,but she says she wants $600.Tom then proposes a price of $550,but Jenny says she is not interested.Tom is afraid she will walk away from a deal,so he says "OK.I'll accept your offer to sell for $600." There is now a contract between them.

Accepted Answer

Jenny's statement that she wants $600 after Tom's offer of $550 constitutes a rejection of Tom's offer and a counteroffer. When Tom agrees to the $600, he is accepting Jenny's counteroffer, thus forming a contract at that point, not before.

Question 14

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
-The "five-year,five-mile radius" restriction is probably reasonable,as it protects the goodwill purchased by Austin,and does not unnecessarily restrict Corbin's right to set up business elsewhere.

Accepted Answer

The restriction is reasonable as it protects the goodwill purchased by Austin and does not overly restrict Corbin's rights.

Question 15

Susan offered to pay $500 for a ring that Daria has agreed to sell to her.Each woman has given consideration to the other for her promise.

Accepted Answer

Both Susan and Daria have exchanged consideration (money for the ring) in exchange for their promises. This meets the requirements for a valid contract.

Question 16

Alliston enters into an agreement with Berkley that,for $2,000,gives him the right to agree to purchase Berkley's screen printing business within the next 30 days for $50,000.If Alliston decides to buy,they agree that the $2,000 will be the down payment on the purchase price.This agreement is an option.

Accepted Answer

The answer of Alliston enters into an agreement with Berkley...

Question 17

Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
-The agreement that restricts Corbin's right to set up a business in competition with Austin will be enforceable only if it is reasonable and necessary.

Accepted Answer

Non-compete agreements are generally enforceable if they are reasonable in scope and duration and necessary to protect the legitimate business interests of the employer or buyer. In this case, the agreement restricts Corbin from setting up a similar business in a narrow geographic area for a limited time period, which could be seen as reasonable and necessary to protect Austin's investment in the business.

Question 18

The world of commerce requires that the intention to create a legal relationship be proven before any contract can be found to exist between the parties.

Accepted Answer

The answer of The world of commerce requires that the...

Question 19

Arnold,a professional baseball player,negotiated with the Soxville Eagles for a one-year contract.He was given one week to consider the offer and was to sign it by the opening day of the season,one week away.Arnold,in the meantime,was offered a better contract with the Baxton Bulldogs,which he accepted.On opening day,Arnold walked onto the field in the uniform of Baxton.Soxville can successfully sue Arnold for a breach of contract.

Accepted Answer

Arnold did not sign the contract with the Soxville Eagles, so there was no binding agreement. Without a signed contract, there is no breach of contract.

Question 20

Jack makes an offer to Jill by mail,because she cannot be reached by telephone.She replies by mail,accepting the offer.Canada Post loses her reply for several weeks.Jack,who has given up waiting to hear from her,has entered into the contract with someone else after waiting for a reasonable time.Jill can successfully sue Jack for breach of contract.

Accepted Answer

Under the "mailbox rule" in contract law, an acceptance is effective once it is dispatched, not when it is received. Since Jill accepted the offer by mail, a contract was formed when she sent her acceptance, regardless of the delay caused by Canada Post.

Quiz 3: Formation of a Valid Contract