CHAPTER 5

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1. The forms that a contract can take include

informal and brief exchanges of cash for goods without any documentation
one-shot deals supported by careful documentation
being part of long-standing and valued commercial relationships
all of the above
none of the above

2. Legal action to enforce a contract can be taken by

the crown prosecutor
anyone who is privy to all of the terms of the contract
anyone who has privity in the contract
anyone who participated in the negotiations leading to formation of the contract
anyone who is affected by a breach of the contract

3. A contract will be set aside by the court if

the parties do not have equality of bargaining power
one of the parties is a company and the other is a company
a request to annul the contract is filed with the court
there has been exploitation of bargaining power
the court is unable to determine who is guilty of breach of contract

4. In order for a contract to be enforceable,

the contract must be written
the parties must both be incorporated companies
the agreement between the parties must be complete
the contract must be made "under seal"
one of the parties must take legal proceedings against the other

5. Standard form contracts are commonly used in

automobile sales
automobile rentals
residential mortgages
all of the above
none of the above

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6. It may be preferable to breach a contract and pay damages rather than perform contractual obligations when

it is unprofitable to perform the contractual obligations
it is profitable to perform the contractual obligations
the other party will sustain heavy losses if there is a breach
a reputation for reliability is crucial to success
all of the above

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7. The legal remedies for breach of contact are designed to

prevent the occurrence of breach of contract
establish penalties for breach of contract
ensure that contracts are not formed unless they will be performed
prevent minors from being sued for breach of contract
provide compensation to innocent parties

8. The objective standard or reasonable person test is used by the courts to

determine whether there is a contract
determine what case law applies to the case
determine what statute law applies to the case
determine which level of government has jurisdiction<
determine whether lawyers will be allowed to present evidence

9. The terms of a contract must include

agreement by one party to do or not do something
agreement by both parties to do or not do something
agreement by one party to pay money to the other
agreement by both parties to pay money to each other
none of the above

10. Every contractual relationship begins with

purchase of goods
sale of goods
transfer of funds
communication
disagreements