Exam Name___________________________________ TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 1) A contract is an exchange of promises between two or more parties which can be enforced by the court. Answer: 2) True True True 10) False 11) False Express terms are those terms negotiated specifically by the parties and specified in the contract. Answer: 9) False Keeping a contract short is the best way to avoid legal disputes arising from the contract. Answer: 12) True 8) False A simple agreement between friends is an enforceable contract. Answer: 11) True 7) False A contract can exist in either a written, verbal, or implied form. Answer: 10) True 6) False Businesses use contracts to buy and sell goods and services. Answer: 9) True 5) False A contract is formed when there is a meeting of the minds. Answer: 8) True 4) False There are no exceptions to the substantive aspects of contracts within the control of the parties. Answer: 7) True 3) False There are no exceptions to the parties' ability to create any enforceable agreement they desire. Answer: 6) True 2) False Contract law deals with the legal principles and rules that allow enforceable agreements to be created. Answer: 5) True From a risk management perspective, contracts do not need to be in writing. Answer: 4) False Contracts are the most common and basic legal document used by a business. Answer: 3) True 1) False 1 12) 13) Implied terms are those terms not specifically negotiated by the parties but are implied in the contract. Answer: 14) True True 24) False 25) False 26) The person receiving an offer is the offeror. Answer: True 23) False The person making an offer is the offeree. Answer: 26) True 22) False The person making an offer is the offeror. Answer: 25) True 21) False All levels of Canadian government are working on laws to recognize e-commerce contracts as valid enforceable contracts. Answer: 24) True 20) False International e-commerce contracts are not valid in Canada. Answer: 23) True 19) False Basic contract law does apply to online contracts. Answer: 22) True 18) False Basic contract law does not apply to online contracts. Answer: 21) True 17) False If you enter into a valid contract that was not in your best interest, the Court will assist you in getting out of the contract. Answer: 20) True 16) False The courts generally presume parties intend to be legally bound by a contract. Answer: 19) True 15) False Each province has enacted statute law to govern all business contract disputes. Answer: 18) True 14) False A contract is a business's basic protection in a commercial transaction. Answer: 17) True Express terms are those terms not specifically negotiated by the parties but are implied in the contract. Answer: 16) False Implied terms are those terms negotiated specifically by the parties and specified in the contract. Answer: 15) True 13) False 2 27) Answer: 28) True True True True True True True True 33) False 34) False 35) False 36) False 37) False 38) False 39) False Andy offers to sell his car to Bob, but Bob needs to arrange financing, so Andy says he will give Bob three days to do so. Andy can revoke the offer before the three days are up. Answer: 32) False A counter offer creates a new offer. Answer: 40) True 31) False Parties to a contract must intend to create legally binding obligations. Answer: 39) True Susan offered to pay $500 for a ring that Donna has agreed to sell to her. Each woman has given consideration to the other for her promise. Answer: 38) False Consideration is the value one is willing to pay or receive for the promise agreed to in an offer. Answer: 37) 30) Acceptance must be communicated by the offeree to the offeror. Answer: 36) True 29) False Acceptance is when one party agrees to the terms of the offer. Answer: 35) True An offer is when both parties understand and agree to the terms of a contract. Answer: 34) False An offer specifies the parties involved, the product, and the price. Answer: 33) True There are four (4) requirements to contract formation. Answer: 32) 28) An invitation to treat is another term for offer. Answer: 31) False An invitation to treat is a willingness to form a contract. Answer: 30) True An offer is a willingness to form a contract. Answer: 29) 27) The person receiving an offer is the offeree. False 3 40) 41) Jill has been negotiating the purchase of a speedboat with Sandi for the last two weeks. Two days ago, she emailed Sandi, saying "I won't go any higher than $8,000 and that includes the trailer. Take it or leave it, but that's my final offer." Sandi sent an email the same day that said "I will accept $8,000, but not including the trailer." There is a contract between Jill and Sandi. Answer: 42) True True True 48) False 49) False A person can be required to perform on a contract for a service provided gratuitously. Answer: 47) False Quantum meruit means paying as much is deserved. Answer: 50) True 46) False McSweeney agrees to clear out Broad's basement, but no price is set at the time. Broad argues, once McSweeney has done the work, that since no price was agreed upon, he should pay only a reasonable price and not the excessive amount stated in the bill presented to him by McSweeney. He is right. Answer: 49) True 45) False Jeremy agrees not to sue Angela for having crashed into his car if she agrees to pay for his repairs. Since he promised only not to do something that he could have done, he has not given consideration for her promise to pay. Answer: 48) True 44) False Mary loves to shop online, particularly from one online retailer. She recently purchased two items that were sent to her home. She contacted the company and wanted to return the items. The Company said "You clicked the 'I agree' button. We do not accept returns." Mary should be able to successfully argue that there was no contract as she did not agree to the "no return" policy. Answer: 47) True 43) False Under the Electronic Commerce Act, acceptance occurs when the offeror receives and opens the email. Answer: 46) True 42) False Under the Electronic Commerce Act, acceptance occurs when the offeree sends the email. Answer: 45) True The post box rule governs acceptance of an offer over a distance. Answer: 44) False Unless otherwise stated acceptance of an offer can be by any reasonable method. Answer: 43) True 41) False 4 50) 51) In business relationships, the courts will presume that parties have an intention to enter into a contact. Answer: 52) True True True 61) False 62) False Important terms should be expressed in a contract. Answer: 60) False Important terms can be implied in a contract. Answer: 63) True 59) False Judges may add express terms to a contract to give meaning to the words in the contract. Answer: 62) True 58) False Judge may add implied terms to a contract to give meaning to the words in the contract. Answer: 61) True 57) False Implied terms in a contract must be clear and not ambiguous. Answer: 60) True 56) False Express terms in a contract must be clear and not ambiguous. Answer: 59) True 55) False An option agreement is enforceable when separate consideration is paid to the offeree. Answer: 58) True 54) False An option agreement allows for a contract to remain open for a specified time. Answer: 57) True 53) False Alliston enters into an agreement with Berkley that, for $2,000, gives him the right to agree to purchase Berkley's screen printing business within the next 30 days for $50,000. If Alliston decides to buy, they agree that the $2,000 will be the down payment on the purchase price. This agreement is an option. Answer: 56) True 52) False In business relationships, the courts will not presume that parties have an intention to enter into a contract. Answer: 55) True In contracts between family members, the courts will not presume that parties have an intention to enter into a contact. Answer: 54) False In contracts between family members, the courts will presume that parties have an intention to enter into a contract. Answer: 53) True 51) False 5 63) 64) Answer: 65) True True True True 72) False 73) False 74) False Standard form contracts are like all other contracts, the parties can negotiate the terms prior to signing. Answer: 71) False Standard form contracts are contracts drafted by one party and usually for their benefit. Answer: 75) True 70) False Electronic contracts are not required to be in a special format. Answer: 74) True 69) False Electronic contracts are required to be in a special format. Answer: 73) True 68) False Contracts can be both partially written and oral. Answer: 72) True 67) False Contracts for guarantees are not required to be in writing. Answer: 71) True 66) False Contracts for guarantees are required to be in writing. Answer: 70) True 65) False Contracts for the purchase and sale of land can be oral. Answer: 69) True Contracts for the purchase and sale of land must be in writing. Answer: 68) False Having contracts reduced to writing is a form of risk management. Answer: 67) True Terms of an oral contract are easier to prove in court. Answer: 66) 64) All contracts must be in writing. 75) False MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 76) James says he would like to buy Mike's motorbike for $3,000. Mike responds by saying he would accept $4,000 given all the work he has put into it. James says "Ok. I'll give that. Here's $2,000 now, and I'll pay the balance in two installments." A) This is not a contract B) This is an acceptance This is a contract C) D) This is an offer Answer: C 6 76) 77) You have an agreement with a friend to meet for coffee after class. Your friend does not show up. You had turned down an opportunity to work and as a result lost 8 hours of wages. You decide to sue your friend. Which of the following statements is true? A) You and your friend have a simple agreement that the court would enforce B) You and your friend have a simple agreement that the court would not enforce C) You and your friend have a valid contract that the courts would not enforce D) You and your friend have a valid contract that the courts would enforce 77) Answer: B 78) In Canada, the objective of the Uniform Electronic Commerce Act (UECA) is primarily to: A) Define what constitutes a privacy violation in a contract B) Provide remedies for internet commerce and breach of contract C) Restrict internet gambling and online purchases D) Make electronic contracts as binding on parties as written ones 78) Answer: D 79) Which one of the following is an offer as opposed to an "invitation to treat"? A) A notice posted on Kijiji "I'll pay $100 to whoever finds and returns my lost black lab puppy" B) A notice in an email "15% off the price of all tablets until January" C) A sweater displayed in the window of a shop with the price tag attached and showing D) A display of goods on the shelves of Safeway 79) Answer: A 80) Which of the following is not a requirement for a valid contract? A) Acceptance B) Writing C) Intention 80) D) Consideration D) Acceptance Answer: B 81) Which of the following is a requirement for a valid contract? A) Writing B) Fairness C) Implied 81) Answer: D 82) Mr. Jones went into a supermarket where he saw a new kind of toothpaste on a shelf, ticketed at $2.69. He decided to try it, so he took it to the checkout and placed it on the moving counter. The staff member at the checkout rang up the sale, took Mr. Jones money, put the toothpaste in a bag, and handed it with the receipt and the change to Mr. Jones. A contract was formed when: A) The supermarket employee rang in the sale and took Mr. Jones money B) Mr. Jones paid for the toothpaste C) The supermarket employee put the toothpaste on display for Mr. Jones to see D) Mr. Jones picked up the toothpaste Answer: A 7 82) 83) On June 1, the Mega Marketing Research Firm sent out a mail survey to 5,000 potential customers of Mega's client company. The survey stated that everyone who completed the survey and mailed it back would receive a prize. Mega did not expect everyone to respond to the survey and had only 1,000 prizes on hand for the respondents. On July 14, Sam mailed back his response and eagerly awaited his prize. On July 15, Mega sent out the last prize it had. Sam's response arrived on July 16. It was the 1001st response, and Mega wrote back telling Sam that because all the prizes were gone, he would not be able to have one. A) No contract was formed here as there was no communication of Sam's acceptance before Mega's offer lapse. B) Mega may assert that silence is not acceptance and Sam did not communicate his acceptance on time. C) Mega had essentially revoked its offer before Sam accepted. D) A valid contract was formed between Mega and Sam. 83) Answer: B 84) Which of the following statements is incorrect with respect to an offer? A) It must contain a willingness to be bound B) It must not contain uncertainties C) It must be in writing D) It must contain all major terms 84) Answer: C 85) Which of the following would best satisfy the requirements for a valid offer? A) I'll pay $150 for a printer, the model is yet to be determined B) I'll give you $15 for your laptop C) I'll pay $150 for a laptop, the model is yet to be determined D) I'll give you $300 for your bike and maybe more if it is fast 85) Answer: A 86) James offered to sell the vehicle for $20,000 "offer to remains open until noon on Thursday, April 1, 2017." Which one of the following situations will not end the offer? A) An expiration of the time to accept before offeree accepts B) James sells the vehicle to another purchaser C) A counter-offer from the offeree D) James falls ill and suddenly dies 86) Answer: B 87) 87) Which of the following will not end an offer? A) Offeror sells to another C) Offeror dies B) Offer lapses D) Offeree makes counter-offer Answer: A 8 88) A gratuitous promise is: A) A legal obligation to do what is promised B) A promise where no legal obligation is created C) An arrangement that the courts will enforce D) A gift that creates contractual obligations 88) Answer: B 89) Quantum meruit means: A) An agreement with no expectation of payment B) What one has earned C) A meeting of the minds D) A decision to stand on 89) Answer: B 90) Which of the following is incorrect with respect to intention to enter into a valid contract? A) Intention is presumed in family contracts B) Intention is presumed in commercial contracts C) Courts apply the reasonable stated intention of the parties in a contract D) Courts protect reasonable expectations of parties in a contract 90) Answer: A 91) If you pay $2,000 for a 60-day option on a business that is offered for sale at $400,000, which of the following is true? A) You have agreed to accept the offer of the business within the 60-day period B) You have entered into a contract that allows you to get your money back if you don't accept after the 60 days C) You have purchased a 60-day period of time within which you may or may not accept the offer D) You have entered into two contracts, one for time and one for the purchase of business 91) Answer: C 92) Which of the following contracts needs to be in writing? A) Contract for the purchase and sale of land B) Contract for the purchase and sale of a motor vehicle C) Contract for the purchase and sale of a business D) Contract for the purchase and sale of cell phones Answer: A 9 92) 93) Which of the following statements regarding online transactions is true? A) Electronic contracts are unenforceable unless also reduced to writing B) Common law has set precedents for entering into contracts online C) Clicking "I Accept" may constitute valid acceptance of a contract D) Entering into contracts online negates the need to satisfy all elements of a contract 93) Answer: C 94) With regard to online contracts, which of the following statements is most accurate? A) Electronic documents are effective when the consumer receives a copy B) Electronic documents are unenforceable unless in writing C) Consumers will not be held liable for terms that they did not actually read D) Consumers may have to resolve their disputes in a foreign jurisdiction 94) Answer: D 95) Electronic commerce (E-commerce) legislation consists of: A) Laws specifying the regulations and restrictions for Internet communication between businesses B) Laws specifying the regulation of digital communication between businesses C) Laws specifying the time and place of an electronic contract formation D) Laws specifying the jurisdiction that will apply to an online contract dispute Answer: C 10 95)
