1. QUESTION 1 Mabel entered into a contract on her 17th birthday to buy a piano. She agreed to pay for the piano in 36 equal monthly instalments. Which one of the following is correct? a If Mabel had warranty work completed on the piano after her . 18th birthday, she may be considered to have affirmed or ratified the contract as an adult. b A piano could never be considered a beneficial contract, so . Mabel has no obligation at any time. c A piano is not a necessary, so Mabel has no obligation at any . time. d If Mabel chooses to treat the contract as voidable, she must . inform the seller before her 18th birthday. e Mabel can notify the seller of the piano any time during the 36 . months that she wishes to treat the contract as void. 10 points QUESTION 2 1. Gus went drinking with friends and became quite drunk. He did not show his intoxication, and he appeared to be perfectly sober. He wandered into a tattoo parlour and had the "weekend special" applied. The tattoo artist could smell alcohol on Gus' breath. When Gus regained sobriety the next day he realized his mistake but decided that he would only seek reimbursement of the tattoo parlour fee once his girlfriend gave her opinion when she returned from a business trip in one week's time. Gus will be able to repudiate his contract with the tattoo parlour. Tru e b Fals . e a . 10 points 1. QUESTION 3 Hubert is having difficulty paying his bills. He has decided to assign himself into bankruptcy. Which of the following is incorrect? a Persons dealing with Hubert should be careful. . b Hubert is still liable for necessaries while bankrupt. . c Bankruptcy has an effect on Hubert's contractual capacity. . d Once discharged from bankruptcy, Hubert will still have limited . contractual capacity. e Hubert has a trustee to handle his financial affairs while he is . in bankruptcy. 10 points QUESTION 4 1. A bet in a government-run casino is illegal. Tru e b Fals . e a . 10 points 1. QUESTION 5 Bert and Betty sold their business, Rugged Tire Ltd., to Art and Erin. Bert and Betty agreed to stay on as employees to help in the transition so that the new owners, Art and Erin, could "learn the ropes." Bert and Betty intended to retire and spend their golden years in Florida. They thought that they would take six months to show the new owners all that was needed to run Rugged Tire Ltd. During the first three months, Bert was very nostalgic for the early days of Rugged. He regretted selling the business to Art and Erin. Bert decided to open a new business instead of going to Florida. The new business was called Old Timer Tire Ltd. Bert was operating Old Timer at the same time as helping Art and Erin run Rugged Tire. Bert's old customers would come to Rugged but immediately go to Old Timer Tire to buy their tires. On the basis of these facts which is the likeliest conclusion? a There are no legal remedies possible here. Someone should . have consulted a lawyer. b If there was proof that Bert used information gained by his . employment that was harmful to Art and Erin or Rugged, then Bert may be ordered by the court to compensate the affected parties. c Art and Erin would have to point to a contractual duty of Bert . to act in their best interests. d Bert owes no duty to Art and Erin; he was only trying to help . the new owners. He cannot control where customers buy their tires e Art and Erin should have asked for a restrictive covenant from . Bert. Without the restrictive covenant, they have no remedy against Bert. 10 points QUESTION 6 1. Jen, Jeff and Mary usually have dinner together every Friday night during term. Each would take turns paying for the meal. This Friday is Jeff's turn but he has to study for the mid-term next Monday so he phoned to say he is busy and can't make it. Which one of the following is the best statement about the legal position of the parties? a Jen and Mary should go for dinner anyway and send the bill to . Jeff who has a legal obligation to pay. b If it can be shown that all three had an intention to make a . binding contract, the court will enforce the terms. c There is not enough information to make a decision. . d Jeff . should send to Jen and Mary an amount of money to cover at least his share of the bill. e This is not a social relationship and the agreement will always . be binding on the parties. 10 points 1. QUESTION 7 Not every contract need be in writing. In fact, numerically speaking, the vast majority of contracts are oral. All the same, identify one correct reason why it is a good idea for contracts to be in writing even where there is no legal requirement for a written contract. a Writing means hand-written but not type-written. . b Written . terms are a good idea because even well-intentioned persons can have honest disputes when recollecting the terms of an oral agreement. c Writing is a good idea because when both or all parties to a . contract write the document by hand, people will remember the terms more easily. d Since there is no legal requirement for writing in all contracts, . there is no advantage to having a written contract. e If there is no writing, there is a factual basis for the tort of . nuisance. 10 points QUESTION 8 1. If writing is required by the Statute of Frauds then the lack of writing makes the contract (choose the correct statement): a Void . b Enforceable . if part performance is established c Invalid . d Voidable . e Illegal . 10 points 1. QUESTION 9 A written contract must be signed by both or all of the parties to the contract to satisfy the requirement of writing. a . Tru e b Fals . e 10 points QUESTION 10 1. An employee signed a confidentiality agreement with his employer before commencing work. The agreement said that he could not work for a competitor for five years after leaving his job. Which one of the following is true? a This is a reasonable restriction because employees always . come into contact with confidential information that they could use to harm their employer once they leave their jobs. b Employees are always presumed to use information gained . from one employer to benefit future employers. c The employee must abide with the terms of the agreement. . Unless there is evidence of duress, he is always bound by its terms. d There is not enough information to make a determination. . e . For an employer to act on this clause, the court would have to be satisfied that the former employee was in a position to harm a former employer. Question 1 10 out of 10 points Mabel entered into a contract on her 17th birthday to buy a piano. She agreed to pay for the piano in 36 equal monthly instalments. Which one of the following is correct? Selected Answer: a. If Mabel had warranty work completed on the piano after her 18th birthday, she may be considered to have affirmed or ratified the contract as an adult. Answers: a. If Mabel had warranty work completed on the piano after her 18th birthday, she may be considered to have affirmed or ratified the contract as an adult. b. A piano could never be considered a beneficial contract, so Mabel has no obligation at any time. c. A piano is not a necessary, so Mabel has no obligation at any time. d. If Mabel chooses to treat the contract as voidable, she must inform the seller before her 18th birthday. e. Mabel can notify the seller of the piano any time during the 36 months that she wishes to treat the contract as void. Question 2 0 out of 10 points Gus went drinking with friends and became quite drunk. He did not show his intoxication, and he appeared to be perfectly sober. He wandered into a tattoo parlour and had the "weekend special" applied. The tattoo artist could smell alcohol on Gus' breath. When Gus regained sobriety the next day he realized his mistake but decided that he would only seek reimbursement of the tattoo parlour fee once his girlfriend gave her opinion when she returned from a business trip in one week's time. Gus will be able to repudiate his contract with the tattoo parlour. Selected Answer: Answers: a. Tru e a. Tru e b. Fals e Question 3 0 out of 10 points Hubert is having difficulty paying his bills. He has decided to assign himself into bankruptcy. Which of the following is incorrect? Selected Answer: Answers: b. Hubert is still liable for necessaries while bankrupt. a. Persons dealing with Hubert should be careful. b. Hubert is still liable for necessaries while bankrupt. c. Bankruptcy has an effect on Hubert's contractual capacity. d. Once discharged from bankruptcy, Hubert will still have limited contractual capacity. e. Hubert has a trustee to handle his financial affairs while he is in bankruptcy. Question 4 10 out of 10 points A bet in a government-run casino is illegal. Selected Answer: Answers: b. Fals e a. Tru e b. Fals e Question 5 0 out of 10 points Bert and Betty sold their business, Rugged Tire Ltd., to Art and Erin. Bert and Betty agreed to stay on as employees to help in the transition so that the new owners, Art and Erin, could "learn the ropes." Bert and Betty intended to retire and spend their golden years in Florida. They thought that they would take six months to show the new owners all that was needed to run Rugged Tire Ltd. During the first three months, Bert was very nostalgic for the early days of Rugged. He regretted selling the business to Art and Erin. Bert decided to open a new business instead of going to Florida. The new business was called Old Timer Tire Ltd. Bert was operating Old Timer at the same time as helping Art and Erin run Rugged Tire. Bert's old customers would come to Rugged but immediately go to Old Timer Tire to buy their tires. On the basis of these facts which is the likeliest conclusion? Selected Answer: e. Art and Erin should have asked for a restrictive covenant from Bert. Without the restrictive covenant, they have no remedy against Bert. Answers: a. There are no legal remedies possible here. Someone should have consulted a lawyer. b. If there was proof that Bert used information gained by his employment that was harmful to Art and Erin or Rugged, then Bert may be ordered by the court to compensate the affected parties. c. Art and Erin would have to point to a contractual duty of Bert to act in their best interests. d. Bert owes no duty to Art and Erin; he was only trying to help the new owners. He cannot control where customers buy their tires e. Art and Erin should have asked for a restrictive covenant from Bert. Without the restrictive covenant, they have no remedy against Bert. Question 6 0 out of 10 points Jen, Jeff and Mary usually have dinner together every Friday night during term. Each would take turns paying for the meal. This Friday is Jeff's turn but he has to study for the mid-term next Monday so he phoned to say he is busy and can't make it. Which one of the following is the best statement about the legal position of the parties? Selected Answer: Answers: c. There is not enough information to make a decision. a. Jen and Mary should go for dinner anyway and send the bill to Jeff who has a legal obligation to pay. b. If it can be shown that all three had an intention to make a binding contract, the court will enforce the terms. c. There is not enough information to make a decision. d. Jeff should send to Jen and Mary an amount of money to cover at least his share of the bill. e. This is not a social relationship and the agreement will always be binding on the parties. Question 7 10 out of 10 points Not every contract need be in writing. In fact, numerically speaking, the vast majority of contracts are oral. All the same, identify one correct reason why it is a good idea for contracts to be in writing even where there is no legal requirement for a written contract. Selected Answer: Answers: b. Written terms are a good idea because even wellintentioned persons can have honest disputes when recollecting the terms of an oral agreement. a. Writing means hand-written but not type-written. b. Written terms are a good idea because even wellintentioned persons can have honest disputes when recollecting the terms of an oral agreement. c. Writing is a good idea because when both or all parties to a contract write the document by hand, people will remember the terms more easily. d. Since there is no legal requirement for writing in all contracts, there is no advantage to having a written contract. e. If there is no writing, there is a factual basis for the tort of nuisance. Question 8 0 out of 10 points If writing is required by the Statute of Frauds then the lack of writing makes the contract (choose the correct statement): Selected Answer: Invalid Answers: a. c. Void b. Enforceable if part performance is established c. Invalid d. Voidable e. Illegal Question 9 10 out of 10 points A written contract must be signed by both or all of the parties to the contract to satisfy the requirement of writing. Selected Answer: b. Fals e Answers: a. Tru e b. Fals e Question 10 10 out of 10 points An employee signed a confidentiality agreement with his employer before commencing work. The agreement said that he could not work for a competitor for five years after leaving his job. Which one of the following is true? Selected Answer: Answers: e. For an employer to act on this clause, the court would have to be satisfied that the former employee was in a position to harm a former employer. a. This is a reasonable restriction because employees always come into contact with confidential information that they could use to harm their employer once they leave their jobs. b. Employees are always presumed to use information gained from one employer to benefit future employers. c. The employee must abide with the terms of the agreement. Unless there is evidence of duress, he is always bound by its terms. d. There is not enough information to make a determination. e. For an employer to act on this clause, the court would have to be satisfied that the former employee was in a position to harm a former employer