Chapter 8

Question 1

Voidable contract

Answer 1

a contract that in certain circumstances, an aggrieved party can choose to keep in force or bring to an end

Question 2

Void contract

Answer 2

A contract involving a defect so substantial that is of no force or effect.

Question 3

Legal capacity

Answer 3

the ability to make binding contracts

Question 4

Economic Duress

Answer 4

The threat of economic harm that coerces the will of the other party and results in a contract.

Question 5

Physical duress

Answer 5

threats of physical harm

Question 6

Actual pressure

Answer 6

one party has exerted unfair influence on the other

Question 7

undue influence

Answer 7

unfair manipulation that compromises someone’s free will or choice

Question 8

Unconscionable contract

Answer 8

an unfair contract formed when one party takes advantage of the weakness of another

Question 9

Misrepresentation

Answer 9

A false statement of face that causes someone to enter a contract

Question 10

Rescission

Answer 10

the remedy that results in the parties being returned to their pre-contractual positions

Question 11

Remedy

Answer 11

damages for breach

Question 12

mistake

Answer 12

an error made by one or both parties that seriously undermines a contract

Question 13

common mistake

Answer 13

both parties to the agreement share the same fundamental mistake

Question 14

Rectification

Answer 14

a remedy available where parties have made a mistake in recording their agreement and based on establishing the specific terms actually agreed to

Question 15

Illegal contract

Answer 15

A contract that cannot be enforced because it is contrary to legislation or public policy

Question 16

Public policy

Answer 16

the community’s common sense and common conscience

Question 17

Contracts of guarantee

Answer 17

a guarantee is to promise to pay the debt of someone else, should that person default on the obligation

Question 18

Contracts Not to be Performed Within a Year

Answer 18

the rationale for requiring a written record for these kinds of contracts is the difficulty of proving promises that were possibly made in the distant past

Question 19

Contracts dealing with land

Answer 19

contracts concerning land – including leases and sales – generally must be evidenced in writing in order to be enforceable

Question 20

Electronic signature

Answer 20

contracts are generally enforceable, no matter what form they take, but there are important exceptions

Question 21

Sales of goods act

Answer 21

contracts for sale of goods (valued more than $50) must be in writing

Question 22

Supreme Court held

Answer 22

the restrictive covenant in the employment agreement was valid