Question

1. If a business promises to pay all of its employees $500 to quit smoking, such an arrangement is a(n) ______________.

Select one:

a. gratuitous promise

b. commitment

c. valid, binding contract

d. quantum meruit

e. obligation

2. A contract is binding if the consideration involved is a _______________.

Select one:

a. gift

b. firm promise to perform

c. firm handshake

d. demand

e. commitment not to do something

3. The courts will use ___________ to determine how much should be paid when a person providing the services is not allowed, by a breaching party, to finish the job.

Select one:

a. past consideration

b. quantum meruit

c. a non-gratuitous promise

d. legislation

e. specific consideration

4. Which one of the following is enforceable?

Select one:

a. Ms. Jones promised to pay an additional $100 to Mr. Wood if Wood finished the existing contract on time, according to the terms of the contract

b. Ms. Goode promised to send $10 to Mr. Paul, who kindly came and warned her when he saw a tow truck approach her car.

c. Mr. Baker was so sick of an old chair that, when Mr. Venson offered him $10 for it, he agreed (i.e., promised to sell it to him), although the market value of the chair was $80.

d. An ad in the paper promises to pay $5 for the return of a lost ring, but the person who finds and returns the ring never saw the offer in the newspaper.

e. Mr. Ho promised to give his needy friend Mr. Jahn $100.

5. When two parties are involved in a mutual mistake (misunderstanding) as to the meaning of a term of the contract, which of the following is usually applied by the court to settle the matter?

Select one:

a. The court will find that there is no contract because there is no meeting of the minds.

b. The reasonable person test

c. The equitable remedy of rectification

d. Caveat emptor

e. Non est factum

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

Select one:

a. A contract for the purchase of theatre tickets

b. A contract for the purchase of a new leather jacket, where the merchant was not aware that he had several other jackets at home.

c. A contract for the purchase of a bike with which to race.

d. A written contract for the purchase of a new stereo

e. A government student loan.

7. Which of following attempts to form a contract would the court hold to be void?

Select one:

a. An oral agreement for the sale of land.

b. A promise by one person to pay another to defame a third.

c. An oral agreement for a lease of land for two years.

d. One of the parties got into an argument with another party and tore up a written contract agreement.

e. A written promise to guarantee the debt of another person

8. The ad in the Real Estate Weekly read: "Best offer in Toronto! 3-bedroom home in the Annex for only $700,000!" This is an example of which of the following?

Select one:

a. Offer

b. Gratuitous promise

c. Bilateral contract

d. Invitation to treat

e. Unilateral contract

Answer 1

1) In this particular case, the correct answer would be option c. or valid, binding contract on behalf of both the parties involved in such an agreement. From a legal standpoint, a contract is binding or valid when it is officially enforceable under the court of law and any breach of the contractual terms and conditions can perhaps result in legal prosecution, penalty, or reprimand of the party involved in such conduct. Therefore, any concerned party that has failed to appropriately fulfill the necessary obligation or commitment as specified under the contractual terms or agreement can be penalized by the court. In this case, if the business does not pay $500 to its employees as promised can be legally prosecuted can be legalized provided that the employees have successfully quitted smoking as per the initial condition of the promise. The same can be applied for the employees if they are not able to quit smoking and still claim $500 from the business organization.

2) The answer in this particular case would be option b. or firm promise to perform. A binding or valid contract is an official contract between two concerned parties or entities which is usually enforceable under legal jurisdictions and the court holds the right to legally penalize any of the parties if it fails to fulfill or perform its stipulated obligation or commitment as specified by the mandates or the conditions of the contract. Therefore, any failure to fulfill the specified obligation or commitment as agreed by the concerned parties involved in a binding contract can result in legal reprimand or penalty.

3) In this instance, the answer would be option b. or quantum meruit. The court will essentially use quantum meruit to determine the amount of the compensation that has to paid by the party that has breached the other party for not allowing to finish the job as initially agreed upon under the contract. Under the quantum meruit, the party breaching the contract has to pay a commensurate amount based on what the other party deserves to fulfill the concerned obligation or commitment.

4) The correct answer based on the various contractual scenarios presented in the question would be option c. or Mr. Baker was so sick of an old chair that, when Mr. Venson offered him $10 for it, he agreed (i.e., promised to sell it to him), although the market value of the chair was $80. Now, initially, when Mr. Vernon offered to purchase the chair from Mr. Baker in exchange for $10, he instantly agrees to accept the offer and sells the chair to Mr. Vernon for $0. However, the actual market value or price of the chair was $80 which is a discrepancy that is not mentioned or clarified by Mr.Baker to Mr. Vernon when the chair was sold. Hence, based on the concealment of the relevant facts or information by Mr. Baker pertaining to the commercial transaction that has been made in this case, it can be legally enforceable under the court of law if such discrepancy escalates to such extent.

5) In this particular case, the court will use the reasonable person test or option b. given in the answer choices. Under the circumstance leading to the mutual misunderstanding of the concerned contractual terms and conditions, the court can use a reasonable person test to resolve any consequent dispute or contradictions. Under a reasonable person test, a hypothetical and independent third party individual is assigned the determine the legal standards and parameters to determine the resolution of any legal dispute or intricacy. This individual uses his reasonable and discretionary understanding of the legal contractual conditions and mandates to reach a rational or reasonable conclusion regarding the resolution of the concerned matter.

6) The correct answer here would be option e. or government student loan. A government student loan is an educational loan provided to any particular legible student pursuing a certain formal course, diploma or degree program. A government student loan basically implies a financial obligation on behalf of the government to provide necessary financial support to the concerned student and the particular student is also obligated to repay the loan in full with periodic interest payments. Any breach of such obligatory commitments from both parties can be subject to legal prosecution or penalty. Therefore, in such cases, the contractual obligation under the loan agreement is legally enforceable.

7) The answer in this particular case would be option b. or A promise by one person to pay another to defame a third. In such circumstances, the court will nullify the terms of the contract or will consider the contract as void which will not be enforceable under the court of law. As such contract agreement represent or encourage an immoral, unethical, or wrongful act or conduct on behalf of both the parties. A court cannot approve intentional and premeditated defamation of any independent entity or individual under any contractual condition or agreement. Hence, such a contractual term will be legally nullified on grounds of immorality or unethical conduct or practice.

8) The answer, in this case, would be option d. or invitation to treat. In this instance, the particular advertisement published in the Real Estate Weekly is basically inviting the participants to enter into another offer or a commercial deal which legally makes it an invitation to treat or offer.