Question 1

Aboriginal peoples may have limited capacity to enter into contracts.

Accepted Answer

This is because Indigenous peoples historically have not been recognized as legal entities or had access to the same legal resources and protections as non-Indigenous people. This has led to concerns about the ability of some Indigenous individuals and communities to fully understand and provide informed consent to contract terms. However, efforts are being made to address this issue and support Indigenous peoples in contract negotiations and agreements.

Question 2

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

Accepted Answer

Non est factum is a defense that can be used when a party signs a document that they believe to be something else, such as signing a contract written in a language they do not understand or signing without knowledge of the nature of the contract.

Question 3

Contracts with minors for necessaries are enforceable.

Accepted Answer

Contracts for necessaries, such as food, clothing, and medical care, are enforceable with minors.

Question 4

A person lacking capacity determines if the contract is voidable.

Accepted Answer

A contract involving a person lacking capacity (due to minority, mental incapacity, or intoxication, for example) is generally considered voidable at the option of the person lacking capacity, meaning they can choose to either affirm or void the contract.

Question 5

Generally, contracts with minors are enforceable.

Accepted Answer

In most cases, contracts with minors are not enforceable because minors are not legally able to enter into binding contracts. There are some exceptions, such as contracts for necessaries (things needed for survival, such as food or clothing) or contracts that have been ratified by the minor after they reach the age of majority.

Question 6

Labor unions may have limited capacity to enter into contracts.

Accepted Answer

Labor unions, while they can enter into contracts, such as collective bargaining agreements with employers, their capacity to do so may be limited by various factors including legal restrictions, the scope of their representation, and the specific terms of their charter or bylaws.

Question 7

In Canada, the age of majority is 21.

Accepted Answer

The age of majority in Canada is 18, not 21.

Question 8

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

Accepted Answer

A mistake in contract law refers to a wrongful belief about one or more terms of the contract that causes a person to enter into the contract. This can make the contract voidable, meaning that the mistaken party can choose to rescind or cancel the contract.

Question 9

Enemy aliens may have limited capacity to enter into contracts.

Accepted Answer

Enemy aliens are individuals who are citizens or residents of a country that is hostile to the country they are in. As a result, they may have limited capacity to enter into contracts due to restrictions on their ability to conduct business or engage in other legal activities.

Question 10

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

Accepted Answer

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

Question 11

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

Accepted Answer

Even if the person was intoxicated at the time of signing the contract, if they do not attempt to cancel or void the contract once sober, they will still be held to the terms of the agreement.

Question 12

Corporations may have limited capacity to enter into contracts.

Accepted Answer

Corporations have limited capacity to enter into contracts as they can only engage in activities within the scope of their corporate purpose as defined in their charter or articles of incorporation.

Question 13

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

Accepted Answer

This is known as capacity to contract and it is a fundamental requirement for a legally binding agreement. If one of the parties lacks capacity, the contract can be voidable or unenforceable.

Question 14

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

Accepted Answer

A court will consider whether a reasonable person in the same situation would have made the same mistake in order to determine whether a mistake was reasonable and therefore excusable.

Question 15

Even reasonable contracts with minors are unenforceable.

Accepted Answer

Contracts with minors are generally voidable, not unenforceable, meaning the minor can choose to affirm or void the contract upon reaching the age of majority. However, certain contracts for necessities may be enforceable.

Question 16

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

Accepted Answer

A mistake occurs when one or both parties have a misunderstanding or false belief about the terms of the contract. This can include errors in pricing, delivery dates, or other key terms that are essential to the agreement. If the mistake is significant enough to impact the agreement, it may be necessary to renegotiate or terminate the contract.

Question 17

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

Accepted Answer

Rectification allows the court to correct a mistake in a contract, which can include typographical errors.

Question 18

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

Accepted Answer

Capacity to enter into a contract means the legal ability to do so. Minors do not have full capacity to enter into contracts and cannot be held to the same level of responsibility as an adult. However, in most cases, they cannot enter into legally binding contracts including purchases on monthly payments. Therefore, they cannot get out of a contract and keep the goods.

Question 19

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

Accepted Answer

A court may consider the intent and purpose behind entering into a contract when determining whether it should be ended.

Question 20

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

Accepted Answer

Each province in Canada has its own statute that determines the age of majority, which can vary from 18 to 19 years old.

Quiz 6: Contracts: Problems With Formation