Question

estions for Review

1. “In determining whether a child has contractual capacity, the court will attempt to determine if she actually understood the transaction.” True or false? Explain your answer.

2. Explain the circumstances in which a minor may escape liability for a contract and the circumstances in which a minor is bound by a contract.

3. What is the significance of a minor’s contract being designated as a beneficial contract of employment or for service?

4. In addition to debts incurred for necessaries, when will a minor be liable for a debt he incurred?

5. What are the three stages of a contractual relationship? Describe the legal situation of a minor in each of these stages.

6. If there is no relevant legislation, when will the parents of a minor be responsible for the minor’s contracts? When will they be liable for the torts of the minor?

7. When can an adult sue a minor in tort even though there is a contract between them?

8. What must an insane or drunk person establish to escape liability under a contract?

9. Explain what care businesspeople must exercise when entering into contracts with government corporations or bodies.

10. Explain four other situations where businesspeople must be careful that those they deal with have the capacity to contract.

11. Explain the difference between a contract that is performed illegally and an illegal contract.

12. What decisions can a court make if performance of a contract violates a regulatory statute?

13. What are the two reasons that can cause contracts to be illegal?

14. How has the law regarding the judicial treatment of illegal contracts changed?

15. Give five examples of contracts deemed by the courts to be against public policy, and describe the effect of such a designation.

16. “All contracts that restrain trade are illegal.” True or false? Explain your answer.

17. Describe the test the court will use in determining whether the parties had an intention to be bound when they made an agreement.

18. With respect to the element of intention, explain how the courts’ treatment of domestic agreements differs from their treatment of commercial transactions.

19. How will a court determine if there was contractual intention when there is a dispute between a brother and sister over how to operate their business?

20. What is the significance of a written document in contractual relations?

21. Explain why some people have suggested that the Statute of Frauds has led to more frauds than it has prevented.

22. Give examples of the types of contracts currently included under the Statute of Frauds.

23. What “evidence in writing” is required to satisfy the requirements of the Statute of Frauds?

24. “A contract that does not satisfy the Statute of Frauds is void.” True or false? Explain your answer.

25. Will a contract formed online with electronic signatures be enforced by the courts? Why or why not?

26. Under what circumstances will a contract falling under the jurisdiction of the Statute of Frauds be enforceable even though it is not evidenced by writing?

Answer 1

1. In determining whether a child has contractual capacity, the court will attempt to determine if she actually understood the transaction” True or false

Answer:-

False, for those under the age of capacity in your province, by law they lack the legal capacity to enter into a binding law contract.

2. Explain the circumstances in which a minor may escape liability for a contract and the circumstances in which a minor is bound by a contract.

Answer:-

An infant may escape liability for a contract and the circumstances in which an infant is bound by a contract ( infants are not bound by the contracts they enter into unless, they are for necessities (food, clothing, lodging, transportation) or are beneficial contracts of service.

3. 3 stages of a contractual relationship

ANSWER:-

Executory contract – the parties have entered into the contract, but the minor has not yet received any benefit from it and has not yet paid. (minor not bound to the contract)

Partially executed contract – the minor has received the goods but has not yet paid. The minor may not be bound, but must return the goods and is then entitled to a refund of any money already paid.

Executed contract – minors have received benefit under the contract and have paid. In most provinces, minors will be bound unless what they received was of no value. If the contract is prejudicial to the interests of the minor, it will be void.

4. (No relevant legislation) When will the parents of a minor be responsible for the minor’s contracts? When will they be liable for the torts of a minor?

Answer:-

-IN contract law parents are not responsible for the contracts of their children unless it can be demonstrated that an agency relationship existed between parent and child. In tort law parents are not liable unless it can be demonstrated they were negligent in their own right.

5. When can an adult see a minor in tort even though there is a contract between them?

Answer;-

The minor uses the subject matter in some way that is not anticipated under the contract and damages it, the adult can sue in tort and escape the limitations imposed by the minor’s lack of contractual capacity.

6. Difference between a contract that is performed illegally and an illegal contract?

Answer:-

Illegal contract covers an illegal activity (unlawful and can’t be enforced)

Contract itself is legal and it was only in the performance than an illegal activity occurred, then innocent parties are entitled to the benefits of the contract .

7. Two reasons that can cause a contract to be illegal?

Answer:-

-Commission of some prohibited conduct set out in statute, or immoral conduct that is against public policy Contracts between close family members and friends, courts presume there is no intention to be legally bound, thus, there is no contract .

-Commercial contract is involved ( intention to be legally bound and this has to be disproved by the parties in order to escape a contract on the basis of lack of intention.