Ch 6

Question 1

T or F: Fairness is required in order to have a valid contract

Answer 1

False

Question 2

5 elements of a contract that must be present for there to be a valid contract

Answer 2

1. Consensus
2. Consideration
3. Capacity
4. Legality
5. Intention

Question 3

T or F: An “invitation to treat” is an invitation to begin the contract formation process.

Answer 3

True

Question 4

T or F: Rejection of an offer and the presentation of a counteroffer will not bring the original offer to an end.

Answer 4

False

Question 5

You have decided to sell your 2005 Toyota Corolla to your roommate because you are short of money. The appraised value of your car is $7,000. Which of the following would not be valid consideration in a contract for the sale of your car to your roommate:

(a) $5000.00 cash
(b) $5500.00 in Canadian Tire money
(c) $60.00 per week for 100 weeks
(d) Nothing now and full payment of $6467.23 in 6 months
(e) A “fair and reasonable” price

Answer 5

(e) A “fair and reasonable” price - not specific.

Question 6

T or F: If a contract is under seal, no consideration is required.

Answer 6

True