LEGL 210 BUSINESS LAW Judy Koch

Chapter 7 Contract Law TEST YOURSELF

TRUE OR FALSE?

_____ 1. Because of the foundational concept of freedom to enter into a contract, all parties
of any description have full capacity to contract.

_____ 2. In some provinces, including Alberta, contracts that are deemed to be for
necessaries are enforceable against a minor.

_____ 3. Generally, if you cant successfully sue a minor in contract, you can still sue in tort
law to recover damages from the minor.

_____ 4. The burden of proving insanity or drunkenness in order to get out of a contract rests
with the party claiming to be incapacitated.

_____ 5. The issue of the contractual capacity of a corporation is complex typically it

depends upon the jurisdiction where the company was incorporated.

_____ 6. Regarding agreements between friends or family of a non-business nature, it is

presumed that the parties to the agreement do not intend to be legally bound.

_____7. Because of the foundational concept of freedom of contract, parties may legally
enter into any agreement they choose, regardless of subject matter or purpose of the
agreement.

_____ 8. An agreement between two businesses to fix prices in a certain geographic area,
with the object of eliminating their competition, is valid and enforceable.

______ 9. A restrictive covenant between vendor and purchaser of a business is easier to

enforce than a restrictive covenant between employer and employee.

_____ 10. Contracts of employment must be in writing in order to be enforceable.

______ 11. Part performance of a contract regarding an interest in land creates an exception
to the requirement of writing.

_____ 12. All contracts dont HAVE to be in writing to be legal, but they SHOULD be in
writing.

TOTAL: ________________