QUESTION 26

When one person requests the services of another, and the other performs those services, the law

a) requires that the plaintiff prove there was a promise to pay.b) treats the services as being provided gratuitously.c) implies a promise to pay.d) recognizes no implied promise to pay.e) requires that the service provider pay a specific amount.

QUESTION 27

The making of a promise under seal has the following effect at law

a) the promisor's obligation is now optional with respect to the promisee.b) the promisor is now under a moral duty to perform.c) there is no need for the promisee to give consideration for the promise to be binding.d) little effect at law since this is merely a formality devoid of legal value.e) little effect at law since the practice is rarely done in modern business.

QUESTION 28

Minors will be liable for contracts

a) if the contracts concern necessaries.b) if the minor completes a declaration stating that he or she has read and understood the terms of the contract.c) if they signed the contract.d) if the parent of the minor was present at the time the minor was signing the contract.e) if the minor is deemed to be of well-above-average intelligence.

QUESTION 29

Capacity to contract means a party is

a) able to make an offer or accept an offer.b) competent to enter into a legally binding contract.c) able to pay damages in the event of a breach of contract.d) able to make a promise.e) able to comprehend the terms of a contract.

QUESTION 30

Sam buys a car from Denise for $3,500 "as is". They agree to the terms of the contract orally. In attempting to reduce the contract to writing, Sam mistakenly writes down the amount as "$2,500". Both parties sign the contract. If either party resists any attempt to correct the document by denying a common mistake the court may

a) treat the agreement as void.b) treat the agreement as unenforceable but order costs.c) correct the written document to reflect accurately the contract made by the parties.d) dismiss any action on the basis of non est factum.e) rescind the agreement.

QUESTION 31

Non est factum is based not only on the principle of placing loss on the person guilty of carelessness, but also upon recognition of the need for certainty and security in commerce. For these reasons, the application of the principle

a) must always result in the enforcement of the contract.b) must always result in the unenforceability of the contract.c) must depend on the circumstances of each case.d) needs to be decided by a jury.e) because of its equitable nature, needs to be decided by a judge alone.

QUESTION 32

Erin was told by the store's produce manager that the Acerola cherries were of a variety that had an extremely high level of vitamin C so she bought a case for her health club's garden party. At the party, the guests enjoyed eating up all the cherries. When Erin was next in the store, the manager corrected his prior statement, saying that the cherries were not Acerola cherries like he had thought. Does Erin have a legal claim for rescission?

a) Yes, she does, because it is the only legal avenue to pursue.b) Yes, she does, because this is innocent misrepresentation.c) Yes, she does, since the store admits to the error.d) No, she doesn't, because rescission is impossible.e) No, she doesn't, because this is a case for damages.

QUESTION 33

Julie is a successful business woman who owns and operates a fast food franchise. In order to obtain an extension of the business' line of credit, she requests that her husband pledge his inherited family homestead towards the loan she has arranged at the bank. He seems perfectly willing to do this. Yet to avoid a possible later legal claim of undue influence by Julie's husband, which would be wisest for the bank to do?

a) have Julie's husband get independent legal counsel.b) explain very carefully what would transpire.c) place all transactions under seal.d) have the husband sign a paper to the effect that he was not unduly influenced.e) have Julie's lawyer thoroughly explain to Julie's husband the legal implications.

QUESTION 34

James purchases an antique chair at a garage sale for $150.00. Later he sells it to Jacqueline for $300 and makes a nice profit. A few months later the Antiques Road Show comes to town and Jacqueline takes the chair to the show to be valued. She is advised that the chair dates as far back as 1866 and is worth approximately $5000. Which of the following is true?

a) James made a mistake about the value of the chair and so the contract will be set aside by a court.

b) James did not make a legal mistake because he was careless in determining the right price.

c) James can plead non est factum.

d) James did not make a mistake about the value of the chair because the radically different price is one of the risks expected in the contract.

e) if Jacqueline sells the chair, the court will order that Jacqueline pay a portion of the proceeds of sale to James because James made a mistake.

QUESTION 35

A court will admit parol evidence about a missing term in relation to any of the following circumstances EXCEPT

a) the written agreement does not contain the whole agreement.b) the written agreement is unambiguous.c) the missing term is part of a subsequent oral agreement.d) the missing term is part of a collateral agreement.e) the missing term is a condition precedent to the written agreement.

QUESTION 36

Mohammed needs a three by seventeen metre concrete driveway. He also needs it financed and completed by August 10th. ABC Paving, Ltd. agrees to install the driveway to Mohammed's specifications and finance the $4000 deal at 7% in 12 equal monthly payments. The only part reduced to writing is the financial arrangement. Will the courts enforce all provisions of this contract?

a) No, because of the operation of the parol evidence rule.b) Yes, because of the operation of the parol evidence rule.c) Yes, since the written form was not intended to embody the whole contract.d) No, because it's more than $50 and falls under the Sale of Goods Act.e) No, since the only enforceable part is the written part

QUESTION 37

The Statute of Frauds

a) requires that contracts with minors be in writing.b) prevents contracts with minors.c) renders unenforceable certain types of contracts unless they are in writing.d) is an English law that does not apply in Canada.e) renders unenforceable contracts with minors.

QUESTION 38

An implied term is

a) a term that the court will ask the jury to consider implying in the contract.b) a term that the promisor intended to include in the contract.c) an express term that is removed from the contract.d) a term that the parties advise the court can be implied into the contract.e) a term that is not included in the contract but which the parties, as reasonable persons, would have included had they thought about it.

QUESTION 39

The general rule is that a contract does not give any benefits to or impose any obligations on which of the following

a) the original promisor.b) the original promisee.c) a seller of goods.d) a third party to the contract.e) a manufacturer of goods.

QUESTION 40

A third party can perform contractual obligations on behalf of the promisor (who of course remains responsible for proper performance)EXCEPTin circumstances where

a) personal performance is required.

b) the contract is silent on the issue of performance.

c) a business has taken on more work than it can complete.

d) the original promisor goes bankrupt.

e) the original promisor dies.

QUESTION 41

Eric provides snow removal services to a number of businesses. He cannot personally perform all of his obligations under each contract, so he arranges for third parties to do perform some of the work. In these circumstances, Eric cannot

a) unilaterally assign his contractual obligations to the third parties to escape liability.

b) pay the third parties any more than the contract price.

c) fail to advise his customers that third parties are performing the work.

d) take a vacation while the work is being performed.

e) hire his own employees to do the work.

QUESTION 42

Occasionally,atthetime of contract formation,the existence of P is not disclosed by the agent A to third party.Then, the third party who formed contract by dealing with Adiscovers thatA was acting as P's agent.Thecontracting party "P" who, unknown to the other third party,was represented by an agent is called:

a) a secondary agent.

b) a principal.

c) an undisclosed principal.

d) a collateral agent.

e) a collateral principal.

QUESTION 43

A party to a contract can unilaterally assign

a) liabilities but not rights.

b) obligations but not benefits

.c) obligations and benefits.

d) rights but not liabilities.

e) rights as well as liabilities.

QUESTION 44

An assignment of rights and a sale of goods are similar. In a sale of goods, the subject matter of the transfer is the ownership in goods. In an assignment, the subject matter of the transfer is

a) a chose in possession.b) an intangible asset - an unperformed contractual right.c) an equitable assignment.d) a receiving order.e) a tangible asset - all chattels personal.

QUESTION 45

A novation agreement is only effective if

a) the parties to the original contract and the new party introduced by novation consent.b) the original parties to the contract have already performed their obligations under the agreement.c) the assignee and assignor serve a notice in writing upon the debtor.d) the assignor takes the assignment subject to the equities.e) a new party is substituted into the contract unilaterally by promisor.