Question 1

Painter and Hawe discussed the possibility of Hawe entering the employ of Painter as the general manager of Painter's firm. A written contract was prepared and signed by the parties on December 1^st, 1989. The contract provided for a salary of $3,000 per month, and specified that the contract was to run for a period of two years from January 2^nd, 1990. On December 28^th, 1989, Painter notified Hawe that he was cancelling the contract. Hawe sued Painter immediately. The Statute of Frauds would render the contract illegal if it was not in writing and signed.

Accepted Answer

False

Question 2

The effect of the Statute of Frauds (or any other statutory provision in provinces that have repealed it) is that none of the following may be brought in a court of law unless they are in writing and signed by the party to be charged:
A) a contract concerning an interest in land
B) a promise by an executor or administrator to settle a claim out of his or her own personal estate
C) a guarantee agreement
D) a contract concerning an interest in land and a guarantee agreement
E) All of the responses are correct.

Accepted Answer

The Statute of Frauds requires certain types of contracts to be in writing to be legally enforceable. This includes contracts for the sale of land (A), promises by executors or administrators to pay debts from their own funds (B), and guarantee agreements where one party agrees to be responsible for another's debt or obligation (C). Therefore, all the responses (A, B, C, and D which combines A and C) are correct examples of contracts that fall under the Statute of Frauds or similar statutory provisions.

Question 3

Cal has just co-signed a car loan for his friend, Peter. This action made Cal the guarantor of the loan. In the event that Peter defaults on payment, Cal has been made liable for payment. After a few months without incident, Cal receives a notice from the bank that Peter missed a payment, and that Cal is to pay. After writing a cheque, Cal confronts Peter who said he could not afford it this month because he bought a new stereo. Cal is annoyed with Peter's irresponsible actions and informs Peter that next month he will have to pay two installments, one to the bank and one to him to make up for this month.
A) Cal does not have the right to be reimbursed by Peter because the co-signing by Cal as guarantor automatically shifts the liability to him in the case of default and he is therefore responsible for the loss personally.
B) Cal has the right to request the missed payment because he can assume the role of a creditor after he has made the missed payment after Peter's default.
C) Cal can not reclaim the payment from Peter because Peter has not put into writing the intention to repay Cal in case of default, which makes the demand of repayment unenforceable.
D) Cal is in the risky position of becoming the principal debtor on Peter's car loan in this situation.
E) Cal can not reclaim the payment from Peter because Peter has not put into writing the intention to repay Cal in case of default which makes the demand of repayment unenforceable and Cal does not have the right to be reimbursed by Peter because the co-signing by Cal as guarantor automatically shifts the liability to him in the case of default and he is therefore responsible for the loss personally.

Accepted Answer

As a guarantor of the loan, Cal has the right to request the missed payment from Peter after he has made the payment to the bank. He can assume the role of a creditor and demand repayment from Peter as he is now out of pocket. This does not require a separate agreement or intention to repay in writing. Cal is not automatically responsible for the loss personally; he can seek reimbursement from Peter.

Question 4

Travis verbally ordered a new $500 dinette set from Timpson's Furniture and the salesman accepted the order verbally. Taking his name and address, the salesman having run out of sales contracts, said he would send Travis a copy of the contract the following day, and asked Travis to sign and return it. When the copy of contract arrived, Travis did not sign it and he refused delivery of the dinette set when it arrived. Timpson's sued Travis for breach of contract.
A) Timpson's cannot enforce the contract because, under the legislation governing sales such as this, the contract had to be in writing to be enforceable.
B) Travis cannot raise the defence that the contract had to be in writing to be enforceable.
C) If Travis had accepted delivery of the dinette set, and then had returned it and refused to pay, Timpson's could still not enforce the contract.
D) The contract sent to Travis would defeat his defence that the contract was not evidenced in writing.
E) All of the responses are correct.

Accepted Answer

Under the legislation governing sales, contracts for goods over a certain amount (such as $500) must be in writing to be enforceable. Since Travis did not sign the written contract, Timpson's cannot enforce the verbal agreement.

Question 5

The parol evidence rule
A) widens the scope to admit into evidence facts proving other agreed terms of a contract.
B) applies to both written and verbal contracts.
C) is circumvented by the existence of a condition precedent.
D) is irrelevant where a written contract cannot be performed within one year.
E) supplies terms to a contract that are otherwise only implied, and by operation of the rule, need not be proven in evidence.

Accepted Answer

The parol evidence rule is circumvented by the existence of a condition precedent, allowing for external (parol) evidence to be admitted to prove that the contract's effectiveness is contingent upon a certain condition being met.

Question 6

Greentree Financing Ltd. enters into an agreement to lend $25,000 to Mai for the purchase of a car. The loan is guaranteed by her father, Mao. What agreements have to be in writing to be enforceable?
A) Loan Agreement
B) Guarantee Agreement
C) The loan agreement if Mai is a minor
D) Both the Loan Agreement and the Guarantee Agreement
E) Neither the Loan Agreement nor the Guarantee Agreement

Accepted Answer

The answer of Greentree Financing Ltd. enters into an agreement...

Question 7

Mary verbally agrees to purchase Carrie's cottage for $75,000 and gives her a deposit cheque for $7,500. Carrie later sends her a letter thanking her for the cheque and confirming all the details of the contract. Mary later refuses to go through with the deal.
A) Carrie can sue Mary for specific performance of the contract since there is a written memorandum of it.
B) Carrie cannot sue Mary for specific performance but is entitled to keep the deposit.
C) Carrie can sue Mary for specific performance because the deposit was part performance.
D) Carrie can sue Mary for specific performance of the contract since there is a written memorandum of it and Carrie can sue Mary for specific performance because the deposit was part performance.
E) None of the responses are correct.

Accepted Answer

While Mary did give a deposit, without a signed contract or agreement, Carrie cannot force her to go through with the sale. However, Carrie is entitled to keep the deposit as compensation for the time and effort put into the transaction.

Question 8

Greentree Financing Ltd. enters into an agreement to lend $20,000 to Mark for the purchase of a boat. On the loan application Mark provided the following information: address, telephone, social insurance number, employer, annual earnings and banking information. Mark agreed to the collection of the information for the purpose of assessing his suitability for the loan. How else can Greentree use this information?
A) Soliciting Mark with other offers for other financial products offered by Greentree.
B) Providing the information to Greentree affiliate companies.
C) Selling the information to other unaffiliated companies to solicit Mark with other offers for financial products.
D) Contacting his employer to determine if he is in a permanent job.
E) Greentree cannot use the information for any of these purposes.

Accepted Answer

The answer of Greentree Financing Ltd. enters into an agreement...

Question 9

In the presence of several witnesses, A verbally agreed to purchase B's farm for $175,000. The next day, B changed his mind, and refused to sell the farm to
A. On the strength of the verbal agreement of purchase and sale made in the presence of witnesses, A sued B for breach of contract and for a decree of specific performance to compel B to sell him the farm. The verbal agreement is unenforceable.

Accepted Answer

The answer of In the presence of several witnesses, A...

Question 10

Greentree Financing Ltd. enters into an agreement to lend $20,000 to Mark for the purchase of a boat. On the loan application Mark provided the following information: address, telephone, social insurance number, employer, annual earnings and banking information. Mark agreed to the collection of the information for the purpose of assessing his suitability for the loan. What steps must Greentree take to protect Mark's information?
A) Greentree must designate an individual accountable for compliance with the Act.
B) Greentree must make information about its policies and practices regarding personal information available to Mark.
C) Mark may have access to his information, upon request.
D) Greentree must have appropriate safeguards to protect the information.
E) All of the steps are required.

Accepted Answer

All of the steps listed are required under the Personal Information Protection and Electronic Documents Act (PIPEDA) to protect Mark's personal information. Designating an individual accountable for compliance with the Act (A), making information about policies and practices available (B), providing Mark with access to his information upon request (C), and having appropriate safeguards to protect the information (D) are all requirements.

Question 11

Martin enters into a verbal contract with Marlowe Ltd. to investigate their operations and their accounting systems, make recommendations as to how to improve them, and help implement the changes Marlowe Ltd. accepts. In the negotiations, Martin makes it clear that he cannot give Marlowe Ltd. a definite timetable and that it is clear that the whole process will take longer than a year. Part of their agreement is that either party may terminate the contract on 60 days' written notice to the other if the work is progressing unsatisfactorily. In this situation,
A) Since the contract is for an indefinite period, it falls under the Statute of Frauds and is not enforceable.
B) If this contract is not completed within a year, it will fall under the Statute of Frauds and will become unenforceable at that point.
C) Since this is a contract for services, it is not covered by the Statute of Frauds and is enforceable.
D) Since this contract cannot be performed within the period of one year from the date it was made, it falls under the Statute of Frauds and is not enforceable.
E) Since this contract could be terminated within one year of being made, it does not fall under the Statute of Frauds even if it is not terminated within the year and is enforceable.

Accepted Answer

The answer of Martin enters into a verbal contract with...

Question 12

Painter and Hawe discussed the possibility of Hawe entering the employ of Painter as the general manager of Painter's firm. A written contract was prepared and signed by the parties on December 1^st, 1989. The contract provided for a salary of $3,000 per month, and specified that the contract was to run for a period of two years from January 2^nd, 1990. On December 28^th, 1989, Painter notified Hawe that he was cancelling the contract. Hawe sued Painter immediately. The Statute of Frauds requires the contract to be in writing, and signed, to be enforceable by Hawe against Painter.

Accepted Answer

The fact that the contract was in writing and signed by both parties satisfies the requirement of the Statute of Frauds. Therefore, the contract is enforceable by Hawe against Painter.

Question 13

In the presence of several witnesses, A verbally agreed to purchase B's farm for $175,000. The next day, B changed his mind, and refused to sell the farm to
A. On the strength of the verbal agreement of purchase and sale made in the presence of witnesses, A sued B for breach of contract and for a decree of specific performance to compel B to sell him the farm. The verbal agreement is valid and enforceable if the witnesses testify in court that an agreement of purchase and sale was made.

Accepted Answer

The answer of In the presence of several witnesses, A...

Question 14

Painter and Hawe discussed the possibility of Hawe entering the employ of Painter as the general manager of Painter's firm. A written contract was prepared and signed by the parties on December 1^st, 1989. The contract provided for a salary of $3,000 per month, and specified that the contract was to run for a period of two years from January 2^nd, 1990. On December 28^th, 1989, Painter notified Hawe that he was cancelling the contract. Hawe sued Painter immediately. When Painter cancelled the contract, Hawe was released from his obligation to perform.

Accepted Answer

The answer of Painter and Hawe discussed the possibility of...

Question 15

Martin enters into a verbal contract with Marlowe Ltd. to investigate their operations and their accounting systems, make recommendations as to how to improve them, and help implement the changes Marlowe Ltd. accepts. In the negotiations, Martin makes it clear that he cannot give Marlowe Ltd. a definite timetable and that it is clear that the whole process will take longer than a year. Part of their agreement is that either party may terminate the contract on 60 days' written notice to the other if the work is progressing unsatisfactorily. The agreement that the arrangement can be terminated is
A) a condition precedent.
B) a collateral agreement.
C) an implied term of the contract.
D) a condition subsequent.
E) past performance.

Accepted Answer

The agreement that either party may terminate the contract on 60 days' written notice to the other if the work is progressing unsatisfactorily is a condition subsequent. This means that if the condition (unsatisfactory progress) is met, the contract can be terminated.

Question 16

What is the name of the federal government's legislation governing the gathering of personal information?
A) Privacy Act
B) Personal Information Act
C) Personal Information Protection and Electronic Documents Act
D) Personal Privacy Act
E) Personal Act

Accepted Answer

The federal government's legislation governing the gathering of personal information is the Personal Information Protection and Electronic Documents Act (PIPEDA). This legislation sets out rules for how private sector organizations can collect, use, and disclose personal information in the course of commercial activity.

Question 17

Steve orally agrees, at a family reunion picnic, to buy Bob's farm for $250,000, and all the terms of the agreement are settled. Bob agrees to let Steve come onto the property before the closing date so that Steve can renovate the farmhouse kitchen and build a new barn before he takes over formally. By the time Bob tells Steve that he has changed his mind and that he will not be completing the transaction on the closing date, Steve has spent $40,000 on the property.
A) Because of the Statute of Frauds, Steve cannot get the farm, but he can sue Bob for the tort of deceit and recover the $40,000.
B) Under the Statute of Frauds, since their agreement was not evidenced in writing, Steve cannot enforce it in court, and cannot recover the $40,000.
C) Steve can use the doctrine of promissory estoppel to force Bob to complete the transaction and give him the farm in exchange for $250,000.
D) Steve can ask a court to order specific performance of the contract because he has spent a lot of money on the property.
E) Under the doctrine of part performance, Steve can request that the court order specific performance of the contract.

Accepted Answer

The doctrine of part performance allows for the enforcement of oral contracts in certain situations, particularly in real estate transactions, when one party has taken significant actions based on the agreement. Steve's substantial improvements to the property, based on the oral agreement, could be seen as part performance, allowing the court to enforce the contract despite the Statute of Frauds.

Question 18

Greentree Financing Ltd. enters into an agreement to lend $25,000 to Mai for the purchase of a car. The loan is guaranteed by her father, Mao. At a minimum, what must be in writing to constitute a written agreement in accordance with the Statute of Frauds?
A) Date, parties identified, terms of agreement, signature of both parties
B) Parties identified, terms of agreement, signature of both parties
C) Date, parties identified, terms, signature of guarantor
D) Parties identified, terms, signature of guarantor
E) Date, terms, signature of both parties

Accepted Answer

The Statute of Frauds requires that certain contracts, including those involving a guarantor, be in writing to be enforceable. The essential elements that must be in writing are the identification of the parties involved, the terms of the agreement, and the signature of the party assuming responsibility, in this case, the guarantor (Mao). The date and the signature of both primary parties (Mai and Greentree Financing Ltd.) are not strictly required under the Statute of Frauds for the guarantee to be enforceable.

Question 19

Painter and Hawe discussed the possibility of Hawe entering the employ of Painter as the general manager of Painter's firm. A written contract was prepared and signed by the parties on December 1^st, 1989. The contract provided for a salary of $3,000 per month, and specified that the contract was to run for a period of two years from January 2^nd, 1990. On December 28^th, 1989, Painter notified Hawe that he was cancelling the contract. Hawe sued Painter immediately. Hawe may sue Painter for breach of the contract.

Accepted Answer

The contract was valid and binding from the moment it was signed. The fact that Painter cancelled the contract without any valid reason constitutes a breach of contract, allowing Hawe to sue for damages.

Question 20

In the presence of several witnesses, A verbally agreed to purchase B's farm for $25,000. The next day, B changed his mind and refused to sell the farm toA. On the strength of the verbal agreement of purchase and sale in the presence of witnesses, A sued B for breach of contract and for a decree of specific performance to compel B to sell him the farm.
A) The verbal agreement is valid and enforceable if the witnesses testify in court that an agreement of purchase and sale was made.
B) The verbal agreement is unenforceable.
C) The verbal agreement is void.
D) B may successfully plead the Statue of Frauds as a defence.
E) The verbal agreement is unenforceable and B may successfully plead the Statue of Frauds as a defence.

Accepted Answer

The Statute of Frauds requires certain contracts, including those for the sale of land, to be in writing to be enforceable. Therefore, the verbal agreement is unenforceable, and B can use the Statute of Frauds as a defense.

Quiz 10: Failure to Create an Enforceable Contract

The effect of the Statute of Frauds (or any other statutory provision in provinces that have repealed it) is that none of the following may be brought in a court of law unless they are in writing and signed by the party to be charged:

The parol evidence rule

Greentree Financing Ltd. enters into an agreement to lend $25,000 to Mai for the purchase of a car. The loan is guaranteed by her father, Mao. What agreements have to be in writing to be enforceable?

Mary verbally agrees to purchase Carrie's cottage for $75,000 and gives her a deposit cheque for $7,500. Carrie later sends her a letter thanking her for the cheque and confirming all the details of the contract. Mary later refuses to go through with the deal.

What is the name of the federal government's legislation governing the gathering of personal information?

Greentree Financing Ltd. enters into an agreement to lend $25,000 to Mai for the purchase of a car. The loan is guaranteed by her father, Mao. At a minimum, what must be in writing to constitute a written agreement in accordance with the Statute of Frauds?