Question 1

Sashi and Leon were having marital problems and had an argument one morning over whether or not Leon should buy a motorbike. Sashi went to her sister Nancy's home where the two women talked about life and drank vast quantities of wine. Very drunk, Sashi decided everything was her fault. She went to a local motorbike store, selected one she knew Leon wanted, but had rejected as being too expensive, and paid for it with her credit card. The salesman had no idea she was drunk. The next day, she had no memory of the transaction and was horrified to find out what she had done. Sashi discovered the sales slip and the motorbike outside and called the company at once to tell them she is returning it immediately.

Accepted Answer

D

Question 2

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. The merchant was entitled to a return of the goods sold when Mariah repudiated the agreement to purchase the watch and silver bracelet.

Accepted Answer

Under most legal systems, contracts entered into by minors (persons under the age of 18) for non-essential items are voidable at the option of the minor. Essential items typically include necessities like food, clothing, and shelter, but not luxury items like expensive watches and jewelry. Since the watch and silver bracelet are not considered necessities, the merchant would be entitled to a return of these goods when Mariah, a minor, repudiated the agreement.

Question 3

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. If Mariah accidentally damaged the watch while it was in her possession, the merchant cannot hold her liable for the cost of repair.

Accepted Answer

A minor is not liable for contracts entered into during minority, except for necessaries such as food, clothing, and shelter.

Question 4

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. Mariah is not bound by the contract to purchase the silver bracelet, because it is a non-necessary item for a minor.

Accepted Answer

Minors are generally not bound by contracts for non-necessary items, such as luxury goods or gifts, as these do not fall under the category of necessities like food, clothing, or shelter, for which a minor may be held responsible.

Question 5

Eric, a 14-year-old, was an excellent painter. His teacher, Mr. Ryan, commissioned him to paint a picture of the city skyline and gave him a $50 deposit. Eric did not complete the painting. What is the position of Eric and Mr. Ryan?

Accepted Answer

Contracts involving minors are generally considered voidable at the minor's discretion. Since Eric is a minor and has not fulfilled the contract, he can opt out but must return the deposit to Mr. Ryan.

Question 6

In May, Joey, a 17-year-old from, Charlottetown, P.E.I., enters into a contract to factory order a car. He gives the dealer a $2,000 deposit. The car will be delivered in September. Joey reached the age of majority in July. In August he called the dealer to see if the car was still scheduled for delivery in September and assured him that he would be ready to take delivery at the Charlottetown, P.E. I. dealership. Is he bound by the contract and required to take delivery of the car in September?

Accepted Answer

The answer of In May, Joey, a 17-year-old from, Charlottetown,...

Question 7

The Competition Act is a statute that

Accepted Answer

The Competition Act is designed to prevent anti-competitive practices in the marketplace. It affects certain kinds of contracts, includes provisions that are considered criminal law, renders illegal any agreements that constrain competition, covers business practices contrary to public interest, and seeks to balance trade freedom with consumer protection.

Question 8

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. As a minor, Mariah would not be liable to pay any of the debts.

Accepted Answer

Mariah may be liable for the debts incurred for necessities, such as the new coat, depending on the jurisdiction's laws regarding contracts with minors. However, luxury items like the additional watch and silver bracelet may not be considered necessities, and thus she might not be legally obligated to pay for those. The enforceability of contracts with minors varies, but necessities often constitute an exception where minors can be held liable.

Question 9

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. All gifts purchased by minors are non-necessary items, and therefore Mariah is not bound by such a contract.

Accepted Answer

While it's true that contracts for non-necessary items entered into by minors can often be voided, the statement is overly broad and doesn't account for exceptions or specific jurisdictional laws. Additionally, the necessity of an item can be subjective and determined by the court, and not all gifts purchased by minors are automatically considered non-necessary.

Question 10

Dale, while in a drunken state, purchased a large sailboat from Sonja. Dale may avoid the contract with Sonja, if, on his return to a sober state, he promptly repudiates the contract, and can prove that Sonja was aware that he, Dale, was intoxicated at the time the contract was made.

Accepted Answer

Contracts entered into by an intoxicated person can be voidable if the person was unable to understand the nature and consequences of the transaction and the other party was aware of the intoxication. If Dale repudiates the contract upon regaining sobriety and can prove Sonja knew of his condition, he may avoid the contract.

Question 11

When Peter is 16, he enters into an agency agreement whereby he rents commercial property in exchange for a commission valued at 2% of the lease. When he turned 18 (the age of majority) he took no action. Does the contract continue?

Accepted Answer

Contracts entered into by minors are generally voidable at the minor's discretion. However, if upon reaching the age of majority, the individual does not repudiate the contract within a reasonable time, it remains binding.

Question 12

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. If Mariah already has an adequate supply of coats, the coat which she purchased would be a non-necessary item.

Accepted Answer

Under the law, a necessary item is something essential for a minor's (someone under the age of majority, which is often 18) sustenance, health, or education. Since Mariah already has an adequate supply of coats, the additional coat would not be considered a necessary item, as it is not essential for her sustenance, health, or education.

Question 13

Ross's family lives in Ontario. His parents gave him a credit card in his own name for his 14^th birthday. For the past 20 months they have always paid the bills for charges made on the card. Last night, Ross's father told him that they were tired of his extravagance and that from now on, he will have to pay any charges himself, including the one which triggered Ross's father's statement. This bill is for $1,200 for a Florida spring break holiday from which Ross has just returned.

Accepted Answer

Ross's parents are liable for any charges on the credit card until they inform the credit card company that they will no longer pay such bills, as they have been paying the bills consistently and the card is in Ross's name.

Question 14

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. Minors are not liable for non-necessary purchases, and Mariah would only be required to return a non-necessary coat to avoid the contract.

Accepted Answer

Minors are generally not legally bound by contracts for non-necessaries, and they can disaffirm such contracts, returning the goods to avoid liability.

Question 15

Wade, an Ontario resident, ordered a customized motorbike on February 1^st with delivery on June 1^st. On his 18^th birthday, on May 1^st, Wade decided that he wanted a windsurfer instead, so he called the motorbike company the next morning and cancelled the contract. The payments would have been made on a 24-month basis.

Accepted Answer

Wade repudiated the contract within a reasonable time after turning 18, which is generally allowed for contracts made as a minor.

Question 16

War has just been declared between Canada and the U.S.A. Ellen Lewis, a Canadian resident with American citizenship, has been carrying on her cosmetics manufacturing and direct sales business only in Canada for about 10 years. She has a contract with Basic Chemicals, a Canadian company, for the supplies she needs to make her cosmetics. i. Ms. Lewis is classified as an enemy alien because of her citizenship.
ii. The contract made between Ms. Lewis and Basic is void and illegal from the moment war is declared.
iii. Ms. Lewis is not an enemy alien.
iv. The Crown may grant Ms. Lewis the right to continue her business if it is in the public interest.
v. The contract between Ms. Lewis and Basic is not affected by the outbreak of war.

Accepted Answer

The answer of War has just been declared between Canada...

Question 17

Bernie Nohave is operating a scheme whereby investors' money is purportedly utilized to buy AIDS drugs in Africa. The money is then deductible as a charitable donation for tax purposes. Tom invests in this scheme to generate tax losses knowing that medicine is not being purchased. Is the contract valid?

Accepted Answer

The contract is not valid because the subject matter involves a scheme that is illegal, which is using investors' money under the pretense of buying AIDS drugs for charitable donations but not actually doing so. Contracts involving illegal activities are void and unenforceable.

Question 18

In May, Joey, a 17-year-old, enters into a contract to factory order a car. He gives the dealer a $2,000 deposit. The car will be delivered in September. Joey reached the age of majority in July. He took no action. Is he bound by the contract and required to take delivery of the car in September?

Accepted Answer

The answer of In May, Joey, a 17-year-old, enters into...

Question 19

Ruth sold her craft shop to Mary. The contract of sale had a clause which said that Ruth could not open a similar store for two years within a five-kilometre radius. This kind of clause is called

Accepted Answer

This clause is known as a restrictive covenant, which is a legal agreement that restricts or limits one party from performing certain actions. In this context, it prevents Ruth from opening a similar store within a specified area and time frame to protect Mary's business interests.

Question 20

Mariah, a young woman aged 17, went shopping. She purchased a new coat on credit at a clothing store. Later the same day, she took her expensive watch to a jewellery shop to have a new watch band installed. While in the shop, she purchased on credit an additional watch for herself, and a silver bracelet as a gift for a friend. When the merchants later requested payment, Mariah refused to pay. Mariah would be liable for the payment for the coat, if the coat was a "necessary."

Accepted Answer

Under the law, minors (those under the age of 18) can be held liable for contracts for necessities, which are goods or services essential for their well-being, such as clothing, food, and shelter. If the coat is considered a necessary for Mariah, she would be legally obligated to pay for it.

Quiz 9: Legal Capacity to Contract and the Requirement of Legality