Question 1

Which one of the following is an example of a contract that is binding on an infant in British Columbia?

Accepted Answer

In British Columbia, contracts for necessities, such as education, are generally considered binding on minors. A student loan, being for the purpose of financing education, falls into the category of necessities, making it binding on an infant (a person under the age of majority). Contracts for non-essential items, like stereos, cameras, baseball tickets, and DVDs, are not typically binding on minors.

Question 2

In which of the following situations would an infant be bound by the contract he has entered into?

Accepted Answer

Generally, contracts entered into by infants (individuals under the legal age of majority) are voidable at the option of the infant. However, there are exceptions to this rule, one of which includes contracts for necessities. Necessities typically include items essential for the infant's survival and well-being, such as food, clothing, shelter, and in some jurisdictions, education. A government student loan can be considered a contract for a necessity, as it is intended to provide for the infant's education, which is deemed essential for their development and future livelihood. This is why an infant would be bound by a government student loan agreement.

Question 3

Parents are responsible for their children's actions in which of the following situations?

Accepted Answer

E

Question 4

Which of the following is incorrect with respect to the law of incapacity?

Accepted Answer

The statement about insanity and escaping a contract is incorrect because, in many jurisdictions, the standard for escaping a contract due to insanity requires not only that the person did not know what they were doing at the time the contract was formed but also that the other party was aware or should have been aware of the person's incapacity.

Question 5

Clem had wanted a piano for a long time. Although he was a minor, his mom gave him $300 and he took this with some savings and made a $500 down payment on a $3000 piano. The balance was to be paid over a three-year period. His mom signed the contract as a guarantor. Clem made the first three payments, but he damaged the piano trying to move it from the living room to his upstairs bedroom. He didn't have the money to get it fixed. He quit playing, lost interest, and quit making his payments. On these facts, which of the following is false?

Accepted Answer

EOption D is false because being an infant (minor) does not inherently prevent Clem from suing the seller if the piano were defective. Minors can initiate lawsuits through guardians or representatives.Option E is false because the requirement for a guarantee to be in writing depends on the statute of frauds applicable in the jurisdiction. However, the statement that Clem's mother will only be liable if the guarantee is in writing is not universally true, as oral guarantees can also be enforceable under certain conditions.

Question 6

Ted, a seventeen-year-old high school student, was hired to perform in four episodes of Gossip Gidget. To keep up with his schoolwork and gaming, he contracted with Mr. Tech of Technoland for a $2000 laptop computer. He agreed to pay $500 down and the balance by monthly payments of $250. Read each of the following separately and indicate which is true.

Accepted Answer

EContracts entered into by minors are generally voidable at the option of the minor. However, contracts for necessities, such as food, clothing, and in some cases, items required for a job or education, can be enforceable. Since Ted is using the laptop presumably for his education and possibly for work related to his acting job, the contract can be considered for a necessity, making it enforceable. Thus, Ted can enforce the contract if he chooses, and it can also be enforceable against him, especially if he has ratified the contract by making payments or by keeping the laptop past the age of majority.

Question 7

Which one of the following is an example of a contract that is binding on an infant in jurisdictions other than British Columbia?

Accepted Answer

In many jurisdictions, contracts for necessities, such as housing (rent), are considered binding on minors (infants) to ensure they can secure essential services. Contracts for non-essential items, like stereos, cameras, baseball tickets, or hairstyling, are typically not binding on minors.

Question 8

One afternoon while Mr. Reston was going home on the bus, his neighbour, Mr. Outovit, offered to sell Reston his car for $4000, a bit below the market value. Reston said, "You might change your mind on that. Better not be too hasty with your offers." Outovit answered, "I want to sell it quickly," and wrote on the back of an envelope, "I hereby offer my neighbour, Reston, my 2011 Chevrolet for $4000 cash." He signed his name. Reston wrote, "I accept." The next day, Reston went to his neighbour's house to pay the money and get the car. He learned that Outovit was in hospital, unconscious from a reaction to medicines given to him the day before. If Outovit (or his legal representative) refuses to honour the contract on the basis of mental incapacity, which of the following is true?

Accepted Answer

The answer of One afternoon while Mr. Reston was going...

Question 9

A requirement for the existence of an enforceable contract is that the parties have the legal capacity to contract. Which of the following is incorrect with respect to the law of incapacity?

Accepted Answer

The incorrect statement is E because generally, merely being under the influence of alcohol or drugs during contract negotiations does not automatically give a party the right to have the contract set aside, especially if they were aware of their condition and proceeded with the negotiations. The ability to void the contract typically requires proving that the intoxication was to such a degree that understanding the nature and consequences of the agreement was impossible, and the other party took unfair advantage of this state.

Question 10

Joe was in a bar and saw his friend Sam. Sam had had a considerable amount to drink. Sam offered to sell Joe his Porsche automobile for only $15,000. Joe made sure to have Sam sign a written agreement to that effect. The next day, Joe went to pick up the car, but Sam didn't remember anything about it. Even when Joe showed him the written agreement signed by him, Sam refused to deliver the car. Joe sued. Which of the following correctly states the legal position of the parties?

Accepted Answer

If Joe can show that there was no indication that Sam was drunk, even though Sam was completely incapacitated, he will be required to go through with the deal. This is because a contract can be voidable if one party was incapacitated, but the other party must have been aware of the incapacity.

Question 11

Which of the following are in no way incapacitated when entering into contracts?

Accepted Answer

The answer of Which of the following are in no...

Question 12

What does the decision in Bayview Credit Union Ltd. v. Daigle illustrate?

Accepted Answer

The decision in Bayview Credit Union Ltd. v. Daigle illustrates that businesspeople are at risk when dealing with minors as if they are adults, highlighting the legal challenges and potential voidability of contracts entered into with minors.

Question 13

Which of the following is incorrect with respect to the law of infants and their parents?

Accepted Answer

E is incorrect because, as a general rule, parents are not automatically responsible for the obligations of their children in both tort and contract law. Responsibility in these areas typically depends on specific circumstances, such as parental negligence or direct involvement.

Question 14

Randy, as his two older brothers before him, moved out of the house when he was quite young. When he was 17, he and his older brother, Ted, wanted to buy a condominium in Nelson. They both had jobs and the bank was willing to lend them money and take a mortgage on the condo. Which of the following is a correct statement about the law governing this situation?

Accepted Answer

Contracts involving minors (persons under the age of majority) can become binding upon reaching the age of majority if the individual continues to act in a manner that affirms the contract, such as making payments on a mortgage. This is because the continuation of payments is seen as an affirmation of the contract by the now-adult party.

Question 15

When John bought a car from his father's old classmate, Joe, he was only seventeen years old. The price of the car was $5000. He paid $1000 down and was to pay the remaining $4000 over time. With these facts in mind, which of the following statements is true? (Read each statement separately.)

Accepted Answer

Contracts with minors are generally voidable at the option of the minor. However, if the minor chooses to affirm the contract (for instance, by suing for breach), they can do so. In this case, if the car is defective, John could potentially sue Joe for breach of contract, even though he is a minor. The fact that Joe might have difficulties suing John (due to his minority) does not prevent John from initiating a lawsuit if the car is defective.

Question 16

Requirements of a contract include capacity of the parties to contract, legality, and intention of the parties to be legally bound. Which of the following is false with regard to these elements?

Accepted Answer

C is false because in many jurisdictions, while a minor (infant) may not be held to the terms of a contract, they can still initiate a lawsuit if the other party to the contract breaches it. This is because the law often provides protections to minors in contracts to prevent exploitation, allowing them to void contracts they entered into while underage, but it does not entirely strip them of their rights to seek remedy if they are wronged.

Question 17

The case of Canadian Imperial Bank of Commerce v. Milhomens examined the effect of one party's insanity on a contract. What did the Court find?

Accepted Answer

The Court found that for a contract to be voidable due to insanity, it is necessary that one party was indeed insane at the time of making the contract and that the other party was aware or should have been aware of this insanity.

Question 18

In jurisdictions other than British Columbia, which of the following is correct with respect to the law of infants?

Accepted Answer

An infant is bound by contracts for necessaries and beneficial contracts of service, as these are exceptions to the general rule that contracts with infants are voidable.

Question 19

In Royal Bank of Canada v. Holoboff, the Bank sued Holoboff, a minor, who had sold his client card and personal identification number (PIN) to a third party who defrauded the bank. What was the result?

Accepted Answer

Minors can be held liable for their torts, and in this case, Holoboff was found liable for the tort of conspiracy to commit fraud.

Question 20

Which one of the following correctly indicates the position of the parties in respect to contracts involving minors?

Accepted Answer

The answer of Which one of the following correctly indicates...

Quiz 7: The Elements of a Contract: Capacity, Legality, and Intention