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Contract Law Test Review
Contract Law Test Review
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1
What key ingredient must be present in order to distinguish a legally enforceable promise from one legally unenforceable
consideration
formalization
acceptance
revocation
2
What principle could you expect Canadian courts to apply when faced by cases dealing with standard form contracts
Pre-printed terms must be put inside a box to which reference is made
Customers' continued use amounts to acceptance of unilateral amendments
Ambiguous terms are interpreted against the party whoprepared the contract
Terms are to be set out in plain language
3
In order to form the basis for a contract, an offer must satisfy what condition?
It must contain all essential terms
It must state when the offer will expire
It must be in writing
It must contain a request
4
Which is not an element of a contract?
should be supported by a promise
Not necessarily in writing
Should be deliberately made
between 2 or more competent persons
5
Why should one NOT rely on the common law doctrine of frustration in contractual negotiations?
frustration says that you do not have to honour your obligations
frustration says the contract terms are settled at the time of acceptance
frustration operates in limited circumstances
frustration is unreliable operates in narrow cases
6
In what way is a void contract different from a voidable contract?
voidable contract fails to satisfy the Sale of Goods Act
voidable contract fails to meet the requirements of the Statute of Frauds
void contract cannot be enforced because it is contrary to public policy
void contract has a defect so substantial that it is of no force or effect
7
Which terms in a contract are the ones that are the foundation of the contract?
that there has been a formal intention to create legal relations
the binding commitments that form the essence of the contract
that all of the parties to the contract have legal capacity to contract
the time period within which all obligations must be performed
8
In what way is a void contract different from a voidable contract?
voidable contract fails to meet the requirements of the Statute of Frauds
void contract cannot be enforced because it is contrary to public policy
void contract has a defect so substantial that it is of no force or effect
voidable contract fails to satisfy the Sale of Goods Act
9
Luis believes his contract with ABC Homebuilder's Inc. is unconscionable. What must Luis prove in order to win his case?
Luis must prove inequality and an improvident bargain or exploitation
Luis must prove undue influence was present
Luis must prove the parties are in a relationship of utmost good faith
Luis must prove the presence of actual pressure
10
Which of the following statements is true regarding legally enforceable contracts?
The agreement must have been voluntary
The agreement must have been witnessed
The agreement must have been signed by the parties
The agreement must have been in writing
11
What element must be present to enable an innocent party to commence a lawsuit when a promise is broken?
The promise must be accepted
The work must be performed
The consideration must be adequate
The innocent party must agree to a "price" for the promise
12
What is the legal term for a clause that makes a contract enforceable only if the buyer is satisfied with an inspection?
a liquidated damages clause
a limitation of liability clause
a condition subsequent
a condition precedent
13
Which of the following statements regarding contract terms is correct?
Contract terms are an aid for a court to interpret a business arrangement
Contract terms may be express or implied
Contract terms must be in writing to be effective
Contract terms must be reasonable
14
What is the likely outcome if a court is asked to resolve a dispute where parties have reached an incomplete agreement
Using statute law the court will find a binding contract
The court will decline jurisdiction to provide a remedy
Using the common law, the court will find a binding contract
The court will forward the matter to mediation
15
A contract that allows a wronged party to withdraw from the contract is...
Void
Illegal
Devoid
Voidable
16
Holding a gun to ones head to induce them to enter a contract is which of the following legally exceptional circumstance
undue influence resulting from actual pressure
misrepresentation resulting from presumed pressure
undue inducement resulting from actual pressure
unconscionability resulting from presumed pressure
17
Under what circumstances would a court apply the objective standard test?
if the enforcement of the contract might cause harm to a third party
when deciding the amount of damages to award
where it is unclear whether the parties intended to form a contract
if there is inequality of bargaining power between the parties
18
Which of the following best explains the requirement that "contracts must be supported by mutual consideration"?
A contract involves a bargain or exchange between the parties.
Contracts require that the parties treat each other fairly.
Contracts must be in writing to be enforceable.
There must always be at least two parties to a contract.
19
What are the elements of importance emphasized by contract law as it pertains to the legal capacity to form contracts?
immunity from liability
essentials of a contract
offer and acceptance
consent and voluntariness
20
Which one is NOT an advantage of contracts?
They allow gratuitous promises to be relied upon
allow parties to plan their business affairs
there are various options fordispute resolution
permit both parties to rely on the terms they have negotiated
21
What is the legal definition of "mistake"?
a false statement of fact that causes someone to enter a contract
an unfair manipulation that compromises someone's free will
an error made by one or both parties that seriously undermines a contract
the threat of physical or economic harm that results in a contract
22
Which of the following best explains the requirement that "contracts must be supported by mutual consideration"?
Contracts must be in writing to be enforceable
There must always be at least two parties to a contract
Contracts require that the parties treat each other fairly
A contract involves a bargain or exchange between the parties
23
Which of the following best describes the relationship between bargaining power and the law of contract?
goal of law of contract is to reduce the bargaining power of the parties
law of contract seeks to correct inequalities in bargaining power
law of contract not concerned with the parties' relative bargaining power
law of contract is concerned with the relative bargaining power of parties
24
which of the following is correct ways in which a contract can be terminated
c) breach of contract
a) death of party
b) lapse of time
d)all of the above
25
Offeror has specified the method of communication. How would a c court determine whether acceptance had been perfected?
the offer must have been made using the same method of communication
Acceptance by other means is effective when received by the offeror
Acceptance by a specified method of communication must be reasonable
The offer cannot be accepted by another method of communication
26
Under what circumstances might a court apply the "Best Evidence Rule"?
where evidence has been lost before trial
when interpreting an implied term in a written contract
when applying an electronic contract
if the parties have entered into an oral contract with witnesses
27
What distinguishes the lapse of an offer from the rejection of an offer?
An option agreement cannot lapse, but it may be rejected
Acceptance of an offer will be subject to rejection
A lapse requires a communication of deliberate intent by the offeree
Acceptance has not occurred when an offer lapses
28
What must be present in order for a condition subsequent to be recognized as legally enforceable?
reasonable certainty and objectivity; otherwise, the condition will fail
sufficient detail; otherwise, the uncertain condition is unenforceable
reasonable certainty of an unforeseen occurrence of an event
sufficient fulfillment of each parties' collateral contractual obligations
29
What test will a court apply when asked to determine a matter involving a dispute regarding the formation of a contract?
whether the parties have legal capacity to enter into contracts
whether a reasonable person could conclude an offer and acceptance occured
whether the terms of the contract provide sufficient mutual consideration
whether the contract is sufficient to provide certainty to all parties
30
In order to form the basis for a contract, an offer must satisfy what condition?
It must state when the offer will expire
It must contain all essential terms
It must be in writing
It must contain a request
31
What is the term given to the guiding principles for interpreting the terms of a contract?
The Parol Evidence Rules
The Rules of Construction
The Rules of Interpretation
Thompson's Rules
32
Which of the following would provide that a supplier will NOT be liable to a retailer if it is fails to deliver products
an exemption clause
a limitation of liability clause
a liquidated damages clause
a condition precedent
33
In what way are promises between family members treated differently than promises between other parties?
Promises between family members are always treated as gratuitous promises
The law presumes promises between family members are non-contractual
Family members cannot sue one another for breach of contract
Contracts between family members are prohibited
34
What is the name given to a clause in which the parties agree that their contract is complete as written?
express term
parol evidence clause
exclusion clause
entire contract clause
35
Which of the following statements regarding contract terms is correct?
Contract terms must be reasonable
Contract terms must be in writing to be effective
Contract terms are an aid for a court to interpret a business arrangement
Contract terms may be express or implied
36
What is the function of an express term with respect to a contract?
It gives effect to the parties' intentions
It brings an existing contract to an end
It implicitly states contractual promises
It explicitly states contractual promises
37
An agreement or contract that is considered completely out of line
Unconscionable
Trade
uttering
verdict
38
Which terms in a contract are the ones that are the foundation of the contract?
the binding commitments that form the essence of the contract
the time period within which all obligations must be performed
that all of the parties to the contract have legal capacity to contract
that there has been a formal intention to create legal relations
39
What is the name given to a clause in which the parties agree that their contract is complete as written?
exclusion clause
parol evidence clause
express term
entire contract clause
40
what is a contract
legal binging agreement
agreement
agreement between parties
legal agreement between two person or party
41
What is the definition of "duress" with respect to contractual relationships?
inequality between the parties
unfair manipulation that compromises someone's free will
the threat of physical or economic harm that results in a contract
unfair criminal activity that seriously undermines a contract
42
Which of the following best describes the relationship between bargaining power and the law of contract?
law of contract is concerned with the relative bargaining power of parties
law of contract not concerned with the parties' relative bargaining power
goal of law of contract is to reduce the bargaining power of the parties
law of contract seeks to correct inequalities in bargaining power
43
When resolving contractual conflicts, what laws do the courts usually apply?
the Contracts Act
Judges apply common law and occasionally statutory law
the Sale of Goods Act
Judges make all decisions based on principles of fairness and equity
44
What distinguishes the lapse of an offer from the rejection of an offer?
A lapse requires a communication of deliberate intent by the offeree
An option agreement cannot lapse, but it may be rejected
Acceptance of an offer will be subject to rejection
Acceptance has not occurred when an offer lapses
45
The legal ingredients of a contract include all except..
consideration
acceptance
Offer
promise
46
Which of the following is NOT an example of an invitation to treat?
a display of goods in a retail store
a lost and found advertisement
a newspaper advertisement
an expression of interest to enter negotiations
47
What element must be present to enable an innocent party to commence a lawsuit when a promise is broken?
The innocent party must agree to a "price" for the defendant's promise
The promise must be accepted
The work must be performed
The consideration must be adequate
48
How would you expect a court to apply the parol evidence rule to an unclear contract
Abide by the rule and apply implied terms for clarification
Abide by the rule and use its discretion to infer a clarification
Disregard the rule and allow extrinsic evidence
Disregard the rule and apply the reasonable person test
49
What is meant by the term "contractual
quantum meruit
"?
as much as merited or deserved
as much as someone will pay
a term required to imply payment
a promise to pay a fair price
50
The purchase of stationery supplies from a retailer for cash, without an invoice or a receipt being provided in return,
a formal contract
a standard form agreement
an informal agreement
an incomplete agreement
