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Law and Business Administration in Canada, Canadian 14th Edition By Smyth – Test Bank

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  • ISBN-10 ‏ : ‎ 0133251675
  • ISBN-13 ‏ : ‎ 978-0133251678

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SKU:tb1002260

Law and Business Administration in Canada, Canadian 14th Edition By Smyth – Test Bank

Chapter 08

1) Capacity to contract means
a. the ability to make an offer or accept an offer.
b. the competence to enter into a legally binding contract.
c. the ability to pay damages in the event of a breach of contract.
d. the ability to make a promise.
e. the ability to comprehend the terms of a contract.

Answer: b
Diff: 1
Type: MC
Topic: The Meaning of Capacity to Contract
Skill: Recall

2) Although there has been an offer and acceptance and consideration, and the parties intended to enter into a contract, a court will set aside a contract as void because of
a. the social standing of one of the parties.
b. the lack of capacity of one of the parties.
c. the wealth of one of the parties.
d. the signature on the contract being unclear.
e. the impecuniosity of one of the parties.

Answer: b
Diff: 1
Type: MC
Topic: The Meaning of Capacity to Contract
Skill: Recall

3) A minor is
a. a person who is small in stature.
b. a person who enters into an agreement to work in a coal mine.
c. a person who performs minor tasks pursuant to a contract.
d. a person who is small in stature but is able to enter into certain contract.
e. a person who has not attained the age of majority.

Answer: e
Diff: 1
Type: MC
Topic: Minors (or Infants)
Skill: Applied

4) Mary is 13 years old, and she enters into an agreement with a modelling agent pursuant to which the agent agrees to represent her. Which of the following is NOT true?
a. The agent can only enforce a contract regarding necessaries against the minor.
b. A minor may repudiate contracts for non-necessaries because he or she is not bound by them.
c. The contract is enforceable against the agent.
d. The contract is not enforceable by Mary against the agent.
e. The agent cannot enforce the contract against Mary.

Answer: d
Diff: 1
Type: MC
Topic: Minors (or Infants)
Skill: Recall

5) A minor may repudiate all contracts entered into by her with the exception of
a. contracts for necessaries.
b. contracts entered into under duress.
c. contracts that are beneficial to the minor.
d. contracts pertaining to real estate.
e. contracts entered into with relatives.

Answer: a
Diff: 1
Type: MC
Topic: Minors (or Infants)
Skill: Recall

6) Jack is 13 years old and a young musical legend. Jack enters into negotiations with a studio pertaining to a starring role in a series of movies. Prior to the negotiations, and as a condition to entering into the negotiations, Jack and the studios enter into an agreement under which the studio agrees to buy Jack a limousine for his personal use. The studio buys the limousine. A few months later Jack repudiates the contract and his chauffeur has an accident with the limousine. Which of the following is true?
a. Jack may sell the limousine and then pay the proceeds to the studio.
b. Jack will have to return the limousine in the state it is in.
c. The studio can sue Jack for breach of contract.
d. Jack may keep the limousine but has to pay for it.
e. Jack will have to repair the limousine and then return it.

Answer: b
Diff: 1
Type: MC
Topic: Minors (or Infants)
Skill: Recall

7) On January 1, Jack, a minor, orders some computer software programs from a computer company. Jack needs the programs for school. The software programs cost $4000.00. On January 5, just before the computer company sends the software programs out, Jack has a change of heart. So he calls the computer company and tells them that he no longer wants the programs. In this situation,
a. Jack cannot cancel the contract, because there has been offer and acceptance.
b. Jack cannot cancel the contract, because the programs are necessaries.
c. Jack cannot cancel the contract, because it is a beneficial contract of service.
d. Jack can cancel the contract, because the software programs are non-necessaries and he has not taken delivery of them.
e. Jack can cancel the contract, because minors do not have to pay large sums of money.

Answer: d
Diff: 2
Type: MC
Topic: Minors (or Infants)
Skill: Recall

8) When Mary was 17 years old, she was asked to become a partner in an clothing design shop because she created brilliant clothing designs. Mary liked the idea at the time and signed a partnership agreement/contract. However, after working for a month, she decided that it was not something she wanted to do. After Mary turned 18, she decided to stop being a partner in the clothing shop. In this situation,
a. Mary can repudiate the partnership contract because it is not a beneficial contract of service.
b. so long as Mary does not affirm or ratify the partnership contract, she can repudiate it.
c. there is nothing that Mary can do because she is now 18 years of age.
d. there is nothing that Mary can do because she is bound by a beneficial contract of service.
e. there is nothing Mary can do because she signed the partnership agreement/contract.

Answer: b
Diff: 1
Type: MC
Topic: Minors (or Infants)
Skill: Recall/Applied

9) Upon attaining the age of majority, a minor may be bound by two kinds of voidable contracts, namely,
a. contracts that create an interest of a continuous and permanent nature, and contracts that are ratified by the minor.
b. contracts pertaining to real estate, and contracts pertaining to intellectual property.
c. contracts of service and contracts of employment
d. contracts of purchase, and contracts of sale.
e. contracts that concern necessaries, and contracts that concern non-necessaries.

Answer: a
Diff: 2
Type: MC
Topic: Minors (or Infants)
Skill: Recall

10) Which of the following is NOT true?
a. A corporation has no physical existence.
b. A corporation is a legal fiction.
c. A corporation is a creature of law.
d. A corporation does not have the attributes of a natural person.
e. A corporation has the same attributes as a natural person.

Answer: d
Diff: 2
Type: MC
Topic: Corporations
Skill: Recall

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