Sarah moved out of the house when she was quite young. When Sarah was 17, she and her older brother, Ted, wanted to buy a condominium in Vernon. 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?

a.These contracts would be binding on Sarah only if she disclosed the fact that she was a minor to the other parties.

b.All contracts with infants are void.

c.The mortgage agreement would be binding on Sarah as an adult if she continued to make payments after reaching the age of majority.

d.A mortgage granted by Sarah to the bank is not a smart decision by Sarah.

e.All infants' contracts are enforceable as soon as they become adults.

Joe wanted to buy a new necklace for his girlfriend. While in a pawn store, he saw one that he really liked priced at $100. Joe offers the shop owner $75. The shop owner says, "I'll take $95." Joe answers "$80!" Shop owner says, "Man, you're pushing me a bit, aren't you? I'll take $90, that's it." Joe says, "OK I'll pay $90 if you throw in the earrings too. Shop owner says, "Forget it and asks Joe to leave. Joe finally says Okay I accept your offer but does not get a response. If Joe sues for breach of contract, which of the following is true?

Select one:

a.There is no contract because his offer to sell for $95 lapsed after a reasonable time.

b.There is a contract because at one time he offered to sell the necklace for $95 and Joe accepted it.

c.There is a contract because he wanted to sell the necklace for $95 and Joe was willing to pay that much.

d.There is no contract because his offer to sell the necklace for $95 was rejected by counter-offer, and Joes offer to buy it for $90 wasn't accepted.

e.There is no contract because his offers to sell the necklace for $95 and $90 were revoked and he didn't accept Joes offers.

The courts may decide that a contract is void, voidable, unenforceable, or illegal. Which of the following is true with regards to these terms and how the courts will use them?

Select one:

a.Unenforceable is the same as void

b.A void contract is a contract, and any party can end it

c.If a contract is void, it was never a contract

d.A voidable contract is a valid contract, and any party can end it

e.In the case of illegal contracts, the courts will restore the parties to their original positions and award damages

If two friends enter into an agreement for one to give the other a ride to school every Monday and Tuesday, and after a month the driver breaches the agreement, what would the legal position be?

Select one:

a.The presumption is that the parties intended to be legally bound to each other and therefore an action for breach of contract is possible.

b.The parties were mistaken about the terms of the contract and therefore the law of mistake would dictate that there could not have been a contract between them. The contract would be void.

c.The presumption is that the parties did not intend to be legally bound to each other because the agreement was made in a social setting.

d.There was a misrepresentation on the part of one party, which renders the contract voidable.

e.The agreement is enforceable against the driver, and the co-worker can ask to be compensated for damages.

A fundamental principle of contract law is that parties can enter into an agreement with whomever they wish to contract with"in other words, the court will not intervene. Which of the following would be an exception to this principle?

Select one:

a.If one of the parties can prove duress.

b.If one of the parties is a limited liability company.

c.If both parties failed to obtain independent legal advice.

d.If the contract value is for less than $50.00.

e.If the amount agreed upon by the parties is 500% above market rate

The breach of a condition in a contract allows for which of the following remedies?

Select one:

a.The non-breaching party can terminate the contract and/or sue for damages.

b.The non-breaching party is only entitled to sue for damages.

c.The non-breaching party can terminate the contract only if the subject is rare or unique.

d.The non-breaching party can sue for only damages that are less than $500,000.

e.The non-breaching party can sue only if damages are more than $5000.

The contract for a Kelowna home had been signed by both parties. What needs to occur for the contract to be set aside on the grounds of misrepresentation?

Select one:

a.The misrepresentation must have been a false statement of a fact; false statements of opinion are never misrepresentations.

b.The misrepresentation must have been a term of the contract.

c.The misrepresentation must have induced the party to enter the contract.

d.The misrepresentation must have been in writing because Kelowna real estate is in high demand.

e.The misrepresentation must have been made recklessly or willfully (either one).

Suppliers of goods and services try to eliminate their liability, and the courts have discouraged this by applying the principle that some failures are so significant that there is no performance of the contract. This concept is known as:

Select one:

a.repudiation.

b.frustration.

c.anticipatory breach.

d.fundamental breach.

e.exclusion clause.

In which of the following situations will damages not be available as a remedy for breach of contract?

Select one:

a.Mary, although being careful, makes an innocent misrepresentation persuading Don to enter a contract with her.

b.Mary makes a fraudulent misrepresentation, persuading Don to enter a contract with her.

c.Mary makes a negligent misstatement, persuading Don to enter a contract with her.

d.A false statement made by Mary becomes a term of the contract.

e.Mary makes an intentional misrepresentation of fact in order to get Don to sign the agreement.

Paul is avid hockey fan and his favorite player has always been Wayne Gretzky. Paul sees an ad online for a Game used Gretzky hockey stick for $10,000. A Game used Gretzky stick would be an integral part of his Gretzky memorabilia collection. Without hesitation, Paul pays $10,000 for the stick. After taking delivery of the stick, Paul discovers that the stick was used by Wayne Gretzky but only in practice, not in a game. He is suing the seller, Mr. Ray. In which of the following cases would Paul NOT be entitled to a remedy? (Assume that in each case the facts could be proven.)

Select one:

a.Fraudulent misrepresentation by Mr. Ray

b.Innocent misrepresentation by Mr. Ray

c.Breach of contract by Mr. Ray

d.Negligent misrepresentation by Mr. Ray

e.Unilateral mistake by Paul

Mary verbally agreed to build a new deck for Phil, just in time for a lavish garden party he was planning. The agreement was that the deck would be built for $1000 by September 1st. On August 15th, Phil became concerned that the deck would not be ready on time. He told Mary that he would pay her an additional $200 to finish the deck on time. Mary agreed and finished the deck by September 1st. Based on these facts, which of the following is true?

Select one:

a.Phil owes Mary $1000, and there is no binding obligation with respect to the additional $200 because Mary had a duty to finish the deck on time

b.Phil owes Mary $1200, because that is what they agreed to and all contracts are binding

c.Problems of consideration only occur in commercial transactions

d.No legal obligations arise because the agreement was not in writing

e.There is no contract between Phil and Mary because the terms were changed

In which of the following cases would an exemption clause allow the seller to escape liability if the buyer suffers a loss?

Select one:

a.The purchase of a new computer at a national store chain

b.The purchase of an expensive computer software, with an invoice on which was printed the exemption clause, received a month after the purchase

c.The purchase of a used lawnmower, with a signed contract with an as is clause in bold letters

d.A customer loses a wallet in the change room of a store, where a sign was posted saying Not responsible for stolen articles

e.The purchase of a used vacuum cleaner that turns out to be completely defective

Which one of the following does not terminate a contract?

Select one:

a.The buyer and seller agree orally to cancel their contract when neither one has performed his obligations under it.

b.Minnie and Mickey agree that Minnie will take less than the amount Mickey owes as full payment of his debt, and Mickey will pay her two days early.

c.Twain had contracted to build a model of a proposed building for architects who were to meet with their clients on March 10. The model was destroyed the night of March 9 when a car left the road and crashed into the workshop and destroyed the model.

d.Fred no longer wants to honour his contract to sell Mitra his printer but tells Mitra he'll substitute a $500 boat. Mitra agrees.

e.When Ben's new car is delivered, the seats are cloth rather than leather as ordered.

Debbie is a famous artist who agrees to showcase one of her paintings at the local art show. The art show will pay her $2000 to display her painting. Showcasing such a famous artist will surely drive the masses. The day before the show, Debbies studio, where the painting was stored, burns down. Which of the following represents the most likely outcome?

a.The contract has been discharged through frustration.

b.Debbie has breached the contract by failing to deliver the painting.

c.Debbie can simply provide a different painting to satisfy the contract.

d.The art shoe will still need to pay Debbie the same price agreed to in the contract because the fire was not Debbie's fault.

e.The contract is void.

Ben sees his dream car in the window of Lous car dealership and agrees to purchase it for the listed price. But instead of delivering the car to Ben, Lou sells it to another customer who offered him more money. Which of the following is the appropriate remedy in these circumstances?

Select one:

a.Specific performance

b.Damages

c.Injunction

d.No remedy

e.Rescission