Yates ch06 - test bank PDF

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Business Law in Canada, 11e (Yates) Chapter 6 The Elements of a Contract: Consensus and Consideration1) Which of the following is an ingredient necessary to form a contract? A) Exemption clauses B) Assignment C) Capacity D) Moral E) Fairness Answer: C Diff: 1 Type: MC Page Ref: 185 Topic: Ch. 6 - El...

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Business Law in Canada, 11e (Yates) Chapter 6 The Elements of a Contract: Consensus and Consideration 1) Which of the following is an ingredient necessary to form a contract? A) Exemption clauses B) Assignment C) Capacity D) Moral E) Fairness Answer: C Diff: 1 Type: MC Page Ref: 185 Topic: Ch. 6 - Elements of a Contract Skill: Recall Objective: Chapter 6: 1. Discuss the fundamentals of the contractual relationship. Bloom's Taxonomy: Knowledge 2) Berman made a documentary on the life of musician Artie Shaw. Shaw's representative was cooperative and gave her permission to use certain songs if she received proper permission from the copyright holders. The cost of the film was funded by her own savings, a private investor, the Canada Council, the Ontario Arts Council, and deferred salaries and material costs. In March of 1987, the film won an Academy Award as the best feature documentary for 1986. In November of 1987, Shaw's lawyer contacted Berman's lawyer: "... This letter states that Artie Shaw has a 35% profit participation in the motion picture... ." Which of the following accurately sets out the legal position of the parties? A) Shaw has a right to this share because the movie is about him. B) The court will imply an agreement to this effect between the parties. C) Shaw has no claim since there was no such agreement. D) A public celebrity has the right to prevent this kind of exploitation if Berman refuses this demand. E) The court will award Shaw a reasonable profit because it is fair. Answer: C Diff: 3 Type: MC Page Ref: 185 Topic: Ch. 6 - Elements of a Contract Skill: Applied Objective: Chapter 6: 1. Discuss the fundamentals of the contractual relationship. Bloom's Taxonomy: Knowledge

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3) Which of the following is not an example of a contract? A) A written promise to give your husband a ring for Christmas B) A verbal agreement to work for someone starting next week C) A verbal agreement for the sale of a car where neither the money or the car has yet changed hands D) An agreement not to sue someone for negligence in exchange for their promise to pay you a specified amount E) An implied promise to pay for a meal when you order it Answer: A Diff: 1 Type: MC Page Ref: 185 Topic: Ch. 6 - Elements of a Contract Skill: Applied Objective: Chapter 6: 1. Discuss the fundamentals of the contractual relationship. Bloom's Taxonomy: Knowledge 4) Which of the following is an example of a unilateral contract? A) Joe agrees to paint Sam's house for $500. B) Joe pays $50 for groceries at a grocery store. C) C returns a lost dog and claims the $50 reward. D) Joe promises to give Harry his old boat when he gets his new one. E) Sam orders a meal in a restaurant. Answer: C Diff: 1 Type: MC Page Ref: 185 Topic: Ch. 6 - Elements of a Contract Skill: Applied Objective: Chapter 6: 1. Discuss the fundamentals of the contractual relationship. Bloom's Taxonomy: Knowledge 5) Sam placed an announcement in the newspaper as follows: "$200 reward for the return of two lost Siamese kittens." Joe read the ad, found the kittens, and returned them. This is an example of which of the following? A) Invitation to treat B) Offer C) Gratuitous promise D) Bilateral contract E) Unilateral contract Answer: E Diff: 1 Type: MC Page Ref: 185 Topic: Ch. 6 - Elements of a Contract Skill: Recall Objective: Chapter 6: 1. Discuss the fundamentals of the contractual relationship. Bloom's Taxonomy: Knowledge

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6) Which one of the following is enforceable? A) Mr. Ho promised to give his needy friend Mr. Jahn $100. B) 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. 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) Ms. Goode promised to send $10 to Mr. Paul, who kindly came and warned her when he saw a tow truck approach her car. E) 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. Answer: C Diff: 2 Type: MC Page Ref: 185 Topic: Ch. 6 - Elements of a Contract Skill: Applied Objective: Chapter 6: 1. Discuss the fundamentals of the contractual relationship. Bloom's Taxonomy: Knowledge 7) When Mr. Adams tells the local Boys' and Girls' Club that he will give them $5,000 if they promise to use the funds for their summer camping program, this is an example of which one of the following? A) Gratuitous promise B) When accepted by the club, a bilateral contract C) When accepted by the club, a unilateral contract D) Promissory estoppel E) Inadequate consideration Answer: B Diff: 1 Type: MC Page Ref: 185 Topic: Ch. 6 - Elements of a Contract Skill: Recall Objective: Chapter 6: 1. Discuss the fundamentals of the contractual relationship. Bloom's Taxonomy: Knowledge 8) An ad in the morning newspaper read "Absolutely the best offer anywhere in Calgary. We'll give you a StarSystem tablet/laptop with a Roland PR-1011 wi-fi printer for only $1299!!! Pick it up today." This is an example of which of the following? A) Offer B) Invitation to treat C) Gratuitous promise D) Bilateral contract E) Unilateral contract Answer: B Diff: 1 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Recall Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 3 Copyright © 2017 Pearson Canada, Inc.

9) The owner of a new building wanted four maple trees, 6 metres tall, planted on the north side of the building. Lloyd Landscaper submitted his offer of four 6-metre maples planted for $800. The owner said he would pay $600 for that. Lloyd said, for $600 he would supply four smaller, 5-metre trees. The owner said, "$600 for 5-metre trees plus a Christmas tree for my kids." Lloyd was disgusted and said, "Forget it. I don't need this job." As he was leaving the owner said, "All right, I'll accept your offer of $600 for the 5-metre maples planted." Lloyd kept on walking. Which of the following is true? A) There is no contract because Lloyd's last offer was revoked. B) There is no contract because Lloyd's last offer had been rejected by a counter-offer. C) There is no contract because Lloyd's last offer had lapsed after a reasonable time. D) There is a contract because at one point in the conversation Lloyd was willing to sell and the owner was willing to buy four trees. E) There is no contract because there is a presumption in law in these circumstances that the parties did not intend to create a legal relationship. Answer: B Diff: 3 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 10) An ad in the morning paper read: "Brand new Spartan 6s smartphone $349. No payment until January. We make your first payment." This is an example of which of the following? A) Invitation to treat B) Offer C) Gratuitous promise D) Bilateral contract E) Unilateral contract Answer: A Diff: 1 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Recall Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge

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11) If an offeror makes an offer that states, "This offer to be open until noon tomorrow," which of the following does not, in law, end the offer? A) An inquiry by the offeree if he can do any better B) The insanity of the offeror C) A counter-offer by the offeree D) Revocation of the offer by the offeror before the time specified (i.e., before "noon tomorrow") E) Lapse of the offer at the time specified Answer: A Diff: 1 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Recall Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 12) Jon was developing a computer program for use by owners of track clubs to aid them in keeping records of the members, their runs, times, injuries, etc. Eager to finish the program, Jon, in Edmonton, called his friend Sam, in Calgary, and offered him $4000 to help: five hours working per day, for five days week, for five weeks. Sam said that he would have to think about it. Jon told Sam that he was eager to get going, but that he would hold the offer open until Friday, February 6, at noon. Which of the following is true? (Read each separately.) A) If Sam accepts by phone within the time specified in the offer, the place of contract would be Calgary. B) If Jon goes ahead and hires Betsy from Edmonton at noon on February 3, it would be too late for Sam to accept. C) If Jon revokes his offer before Friday noon, Sam could sue him for breach of contract because he promised to hold it open. D) If the court held that acceptance by mail was reasonable in the circumstances, if Sam accepts by mail the place of contract is Edmonton. E) If Sam wants to ensure the promise to keep the offer open until noon, February 6, he should give Jon some consideration (that is, allow him to purchase an option). Answer: E Diff: 2 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge

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13) If you pay $1000 for a 90-day option on property offered to you at $200,000, which of the following is true? A) You have bought a 90-day period of time within which you may or may not accept the offer of the land. B) With the signing of the option agreement, you have entered into two contracts—a contract for time and another for land. C) You have agreed that you will accept the offer of land within the 90-day period. D) If you do not exercise the option, you can get your $1000 back. E) The seller of the land can revoke the offer of the land any time before acceptance. Answer: A Diff: 2 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Recall Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 14) Which of the following is false with regard to contract law? A) A counter-offer ends an offer. B) A newspaper notice offering to pay a reward for the return of lost kittens is an invitation to treat. C) An important criterion for determining the place of the contract is the place where the acceptance is effective. D) An option is a contract in which one person is buying a period of time within which he may accept the offer contained within the option. E) A revocation is effective only when received. Answer: B Diff: 1 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Recall Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge

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15) Roberts has the chance to buy three adjacent city lots zoned "duplex." The most profitable return would be the building of four townhouses across the three lots, but that would necessitate getting permission from the city for the replotting, which would be a time-consuming process. If Roberts buys a 60-day option from the seller of the properties for $4000, which of the following would be true? A) The offer for the properties will expire before the end of the designated 60-day period if another person offers a higher price. B) If Roberts does not exercise the option during the option period, she can later force the seller to sell that property to her at that price. C) By buying the option, Roberts has bought a period of time during which she must accept the land offer. D) If Roberts does not exercise the option, she will get her $4000 back because she didn't get what she was bargaining for. E) The seller is bound by contract neither to sell the property to any other party or to revoke the offer within the option period. Answer: E Diff: 2 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 16) Which of the following is an offer as opposed to an invitation to treat? A) An ad in a real-estate paper: "Best offer in Vancouver! 3-bedroom home in Kitsilano for only $850,000!" B) A sweater displayed in the window of a shop with the price tag attached and showing. C) A notice in the Toronto Star: "I will pay $100 to whoever finds and returns my lost female calico cat which answers to the name Marx." D) The display of goods on the shelves of Costco. E) A notice in the catalogue from the gift shop of the Edmonton Aquarium: "15% off the price of all jewellery until January." Answer: C Diff: 3 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge

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17) Which of the following would best satisfy the requirements for a good legal offer? A) "I'll pay you at least $300 for your horse, Blackie, and even more if the horse is lucky." B) "I'll drive you to Seattle on Saturday." C) "The purchaser will pay $1000 for one of the seller's laser printers, the exact model to be determined at a later date." D) "I'll give you $1 for your new green bike." E) On a flyer placed on your windshield):"We have the best offer in town! A mint 1956 Chevrolet for $20,000." Answer: D Diff: 2 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 18) Sarah wanted an antique lamp for her bedroom. While in a second-hand shop, she saw a lamp that she really wanted marked $100. She offered the owner $75 for it. He said "I'll take $95." She answered "$80!" He said, "Lady, you're pushing me a bit, aren't you? I'll take $90, that's it." She said "OK I'll pay $90 if you throw in this old 'Vote-for-Pearson' button." He said, "Forget it, lady, my shop is closed," and asked her to leave. She said, "OK, I accept your offer of $95." He made no response. If she sues for breach of contract, which of the following is true? A) There is no contract because his offer to sell for $95 lapsed after a reasonable time. B) There is a contract because at one time he offered to sell the lamp for $95 and she accepted it. C) There is a contract because he wanted to sell the lamp for $95 and she was willing to pay that much. D) There is no contract because his offer to sell the lamp for $95 was rejected by counter-offer, and her offer to buy it for $95 wasn't accepted. E) There is no contract because his offers to sell the lamp for $95 and $90 were revoked and he didn't accept her offers. Answer: D Diff: 3 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge

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19) Mary bought a new computer and advertised her old computer for $1500. Mr. Jones offered to pay $1000. Mary said no, she wanted $1500. Mr. Jones offered $1250. Mary rejected that and said she wanted $1500, but then said to him, "I withdraw my offer, I've decided to give it to a school and apply for the tax benefit." Mr. Jones said, "All right, I'll accept your offer of $1500." Which of the following is true? A) There is a contract because at some point in time Mary was willing to sell and Mr. Jones was willing to buy the computer system for $1500. B) There is no contract because the last offer had lapsed. C) There is no contract because Mary revoked the offer before Mr. Jones attempted to accept it. D) There is a contract, because once a seller makes an offer she cannot change her mind; she is bound to receive an acceptance. E) There is a contract and Mr. Jones has to pay a reasonable price for Mary's old computer. Answer: C Diff: 3 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 20) Why is the case of Dickinson v. Dodds important? A) It confirms that contracts must be in writing to be valid. B) It says that property can be sold to two different purchasers. C) It clarifies that when an offeror says an offer will remain open, it must remain open. D) It illustrates the nature of an offer. E) It determines that offers, once made, can never be revoked. Answer: D Diff: 2 Type: MC Page Ref: 192 Topic: Ch. 6 - Offer Skill: Recall Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 21) In Martel Building Ltd. v. Canada, what did the Supreme Court of Canada decide? A) A call to tender is an offer to contract and a binding contract may arise when a bid is submitted. B) There is no requirement that bidders be treated fairly, as caveat emptor applies. C) In a call for tenders, there can be no discretion. D) A call for tenders is an invitation to treat which carries with it no legal status. E) In a call for tenders, standard form contracts must always be used. Answer: A Diff: 2 Type: MC Page Ref: 194 Topic: Ch. 6 - Offer Skill: Recall Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge

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22) Four days ago, Pete was reading the newspaper and saw the following: "Best offer in town! Zenith XX Laser Printer - $400! When he went to the store this afternoon and said he wanted one, they replied that they didn't have any left, nor could they get one. On these facts, which of the following is true? A) Pete could sue them for breach of contract because he was accepting the offer in the newspaper. B) The store had revoked the offer before he tried to accept. C) The offer by the store had lapsed before he tried to accept. D) The wording in the newspaper was merely an invitation to the public to do business, and no contract was formed. E) Pete could sue for breach of an option contract. Answer: D Diff: 2 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 23) Ann was offered a job that would pay $50,000, that would provide for 18 days of vacation after one year of employment, and that would begin one week after her graduation. She wrote back that she would accept the job, but that she would not begin until three weeks after graduation and needed at least 21 days of vacation after the first year of work. On these facts, which of the following is true? A) If she had not responded, there would have been a contract because silence is the standard form of acceptance. B) Since she accepted the offer, there is a contract. C) There is no contract because an acceptance must be unconditional, and her counteroffer has not been accepted. D) She is still free to reconsider and take the original offer even after the prospective employer received her letter. E) There is a contract as soon as she drops her letter in the mailbox. Answer: C Diff: 2 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge

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24) Sylvia had contracted with Produce Palace to sell her entire crop of elephant garlic (100 kilograms) and her entire crop of tomatoes (100 kilograms). On the day for delivery, Produce Palace took the garlic but not the tomatoes. In her effort to mitigate her loss, Sylvia called the owner of Val's Veggies and offered her the tomatoes at a reduced price with the words, "Let me know quickly, because they are ripe and must be moved out today." That afternoon, Val sent Sylvia a letter accepting the offer. On these facts, which is the most likely outcome? A) There is a contract between Sylvia and Val the moment Val dropped the letter of acceptance in the mailbox. B) There is a contract between Sylvia and Val the day the letter of acceptance is received by Sylvia. C) There is no contract between Sylvia and Val because Sylvia had revoked the offer. D) There is no contract between Sylvia and Val because the offer has probably lapsed before the acceptance was received by Sylvia. E) If the postbox rule does not apply, there would be a contract as soon as Val mailed the letter unless Sylvia had sold the tomatoes to someone else. Answer: D Diff: 2 Type: MC Page Ref: 188 Topic: Ch. 6 - Offer Skill: Applied Objective: Chapter 6: 3. Describe a valid offer. Bloom's Taxonomy: Knowledge 25) Mr. Goode, a neighbour of your parents, offered to sell yo...