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MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

1) The substance of a contract may have a variety of


a. statutes.
b. forms.
c. parties.
d. attributes.
e. beneficiaries.

Answer: b
Diff: 1
Type: MC
Topic: The Distinction Between Substance and Form
Skill: Recall

2) A distinction must always be drawn between the substance of a contract and its
a. parties.
b. benefits.
c. principles.
d. form.
e. beneficiaries.

Answer: d
Diff: 2
Type: MC
Topic: The Distinction Between Substance and Form
Skill: Applied

3) The form of contract includes


a. contracts whose terms are entirely in writing in several documents.
b. contracts whose terms are entirely oral.
c. contracts whose terms are entirely in writing in one document.
d. contracts whose terms are both oral and in writing.
e. all of the above

Answer: e
Diff: 2
Type: MC
Copyright © 2013 Pearson Canada Inc.
9-1
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

Topic: The Distinction Between Substance and Form


Skill: Recall

4) It is good business practice of have a written record of a contract because


a. provisions of long-term contracts will not have to be committed to memory.
b. many disputes can be avoided by keeping an accurate record.
c. a written record is more accurate than human memory.
d. human memory is fallible.
e. all of the above

Answer: e
Diff: 2
Type: MC
Topic: The Distinction Between Substance and Form
Skill: Recall

5) It has often been said that by defeating the reasonable expectation of the parties, the
Statute of Frauds promotes
a. certainty and predictability.
b. more frauds than it prevents.
c. guarantees and indemnities.
d. good faith bargaining.
e. binding contractual relations.

Answer: b
Diff: 3
Type: MC
Topic: The Statute of Frauds
Skill: Recall

6) The Statute of Frauds


a. requires that contracts with minors be in writing.
b. prevents contracts with minors.
c. renders unenforceable certain types of contracts unless they are in writing.
d. is an English law that does not apply in Canada.
e. renders unenforceable contracts with minors.
Copyright © 2013 Pearson Canada Inc.
9-2
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

Answer: c
Diff: 1
Type: MC
Topic: The Distinction Between Substance and Form
Skill: Recall

7) When dealing with the prohibition in the Statute of Frauds regarding oral contracts not
to be performed in a year, which of the following is true?
a. An oral contract that is for an indefinite period, but could be performed within a year,
is not prohibited by the Statute.
b. An oral contract that is to be performed over a period of one year, commencing the day
after the formation of the contract, is not prohibited by the Statute.
c. An oral contract that is to be performed over a period of one year, but commences two
days after the conclusion of the contract, is prohibited by the Statute.
d. An oral contract that provides for a specific period for performance of more than a
year, but also confers a power of determination that may be exercised within the year, is
prohibited by the Statute.
e. all of the above

Answer: e
Diff: 3
Type: MC
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Applied

8) Happy Go Lucky Company (HGLC) enters into an oral employment agreement with
Albert under which Albert becomes the managing director of HGLC for a period of two
years. The employment agreement provides that both Albert and HGLC have the right to
terminate the contract on six months’ notice to the other. After working for the company
for eight months, HGLC gives Albert two months’ notice of termination. In this situation,
a. the Statute of Frauds does not apply because the essential terms of the contract are
present, so Albert can enforce the term that he be given six months’ notice.
b. the Statute of Frauds applies, because there has not been part performance by Albert,
so Albert cannot enforce the term that he be given six months’ notice.
c. the Statute of Frauds does not apply, because the contract is one for an indefinite
period, so Albert can enforce the term that he be given six months’ notice.
d. the Statute of Frauds applies, because the contract extends over a period of more than a
year, so Albert cannot enforce the term that he be given six months’ notice.

Copyright © 2013 Pearson Canada Inc.


9-3
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

e. none of the above

Answer: d
Diff: 3
Type: MC
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Applied

9) George owes Michael Moneybags $1000. Susan, George's sister, goes to Michael
Moneybags and makes this statement: "If my brother is unable to pay, I shall make
payment." Susan's statement is
a. a representation.
b. a promise of guarantee.
c. a promise of indemnity and a promise of guarantee.
d. a promise of indemnity.
e. a misrepresentation.

Answer: b
Diff: 2
Type: MC
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Applied

10) George owes Michael Moneybags $1000. Susan, George's sister, goes to Michael
Moneybags and makes this statement: "I shall pay the debt of my brother." This
statement is
a. a promise of indemnity.
b. a promise of guarantee.
c. a misrepresentation.
d. a promise of guarantee and indemnity.
e. a representation.

Answer: a
Diff: 2
Type: MC
Page Reference: 190
Topic: The Types of Contract Affected by the Statute of Frauds

Copyright © 2013 Pearson Canada Inc.


9-4
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

Skill: Applied

11) Edward and his wife, Mary, go into a bank. Edward wants to loan $10 000.00 from
the bank, but the bank manager wants some kind of security. Because they are in a hurry,
Mary says, "Give Edward the money and I will pay Edward's loan." The bank manager
looks at her and, being afraid that the bank will not loan Edward the money, Mary says,
"Please, if Edward does not pay the loan, I will." The bank manager has Mary sign a
document with both of her statements in it. In this situation,
a. Mary is an indemnifier.
b. Mary has indemnified the loan to the bank.
c. Mary is a guarantor of Edward.
d. Mary has guaranteed the loan to the bank.
e. all of the above

Answer: e
Diff: 3
Type: MC
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Applied

12) A enters into an oral contract under which A is to sell his land to B, and B gives A a
deposit of $100 000.00. B now changes his mind and wants his deposit back from A. In
an action by B to recover the deposit,
a. A can raise the validity of the agreement as a defence to B's action.
b. A cannot use the validity of the agreement as a defence to B's action.
c. A cannot use the validity of the agreement as a defence to B's action because the
agreement is unenforceable.
d. B cannot sue A at all because the contract is unenforceable to B's action.
e. none of the above

Answer: a
Diff: 3
Type: MC
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Applied

13) John orally agrees to sell his land to Mary for $50 000.00, and Mary gives John a
deposit of $15 000.00. The agreement is to close (be completed) in 30 days. Two days

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9-5
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

later, John gives Mary a note saying, "I know that you are buying the land to develop it."
Five days after this, John tells Mary he has changed his mind and refuses to sell her the
land, and Mary accepts this. In a lawsuit by Mary to recover her deposit,
a. the deposit will be recoverable on the basis of a total failure of consideration.
b. the deposit will not be recoverable because the time for completion has not yet
occurred.
c. the deposit will not be recoverable because the agreement is not in writing.
d. the deposit will be recoverable because Mary has done nothing wrong.
e. none of the above

Answer: a
Diff: 3
Type: MC
Topic: Requirements for a Written Memorandum
Skill: Applied

14) Allan and Nora enter into an oral agreement for the sale of Allan's land to Nora for a
price to be decided on later, and Allan sends Nora a written memorandum setting this out.
In the memorandum Allan goes on to state that settling on the price of the land is very
important. In a lawsuit by Nora to get the land,
a. Nora will succeed on a quantum meruit basis.
b. Nora will not succeed since the memorandum is not sufficient compliance with the
Statute of Frauds.
c. Nora will not succeed since the essential terms of the contract are not present.
d. Nora will succeed since the essential terms of the contract are present.
e. Nora will succeed since the memorandum is sufficient compliance with the Statute of
Frauds.

Answer: c
Diff: 2
Type: MC
Topic: Requirements for a Written Memorandum
Skill: Applied

15) Use these fact situations to answer the related questions that follow.
Fact Situation 1:
John is the 20-year-old nephew of Mary, who is 80 years of age and unable to get around
or do things herself. Mary owns two properties in Toronto: 121 Thornton Lane and 122

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MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

Thornton Lane. Mary, who lives at 121 Thornton Lane, orally agrees with John that if he
is good to her and does whatever services for her that she asks him to do from time to
time during the rest of her life, she will leave John 121 Thornton Lane. John does not live
with Mary, but does a number of things that Mary asks him to do, including taking her on
trips, doing some errands, and also doing some odd jobs for both properties over the
course of a year, after which Mary dies without leaving John 121 Thornton Lane. Now
John sues her estate to get the house.

Fact Situation 2:
In 1921 Gus met Dick, and in the spring of 1922 Gus went to work for Dick as a farm
labourer. For the first two years after that, Gus was paid $50.00 a month, plus room and
board and meals. In 1924, Dick was in an accident and became disabled. Although Dick
could not pay Gus wages, he promised to leave Gus his farm after he died if Gus stayed
and worked the land. From 1924 on, Gus, who often considered leaving Dick's farm and
had ample opportunity to do so, stayed and worked the farm on Dick's continued promise
that if he stayed and worked the farm, the farm would be his after Dick's death. During
this time Gus planted the fields, decided on what crops to plant, did repairs to Dick's
house, and on Dick's behalf purchased livestock and then took care of it. Dick died in
1930 before he had a chance to make a will leaving Gus the land.

In Fact Situation 1, if John sues Mary's estate to get the house,


a. John's acts of taking Mary on trips and doing the errands and odd jobs on the properties
are immaterial because the contract was one of services for an indefinite period, so he
will succeed.
b. the agreement between John and Mary is one for a period of a year and John cannot
succeed.
c. John's acts of taking Mary on trips and doing the errands and odd jobs on the properties
come within the doctrine of part performance and John will succeed.
d. the agreement between John and Mary contains all the essential terms necessary to
create a binding agreement that does not come within the Statute of Frauds, so John will
succeed.
e. John's acts of taking Mary on trips and doing the errands and odd jobs on the properties
do not come within the doctrine of part performance and John will not succeed.

Answer: e
Diff: 2
Type: MC
Topic: The Doctrine of Part Performance
Skill: Applied

Copyright © 2013 Pearson Canada Inc.


9-7
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

16) Use the fact situation in Q15 to answer the related question that follows.
In Fact Situation 2, in a lawsuit by Gus to get ownership of the land,
a. Gus will succeed by virtue of the doctrine of part performance.
b. Gus will not succeed because the agreement between Dick and Gus is unenforceable
under the Statute of Frauds.
c. Gus will not succeed because the agreement between Dick and Gus is void under the
Statute of Frauds.
d. Gus will not succeed, but will be entitled to a quantum meruit claim for the work and
services he did for Dick.
e. the agreement between Dick and Gus does not contain all the essential terms necessary
to create a binding agreement.

Answer: a
Diff: 2
Type: MC
Topic: The Doctrine of Part Performance
Skill: Applied

17) Use the fact situation in Q15 to answer the related question that follows.
Review Fact Situations 1 and 2. What is the difference between them?
a. In Fact Situation 1, John's performance is strictly referable to 121 Thornton Lane,
while in Fact Situation 2, Gus's performance is not strictly referable to Dick's farm.
b. In Fact Situation 1, the essential terms of the agreement are not present, but they are
present in Fact Situation 2.
c. In Fact Situation 1, John's performance is not strictly referable to 121 Thornton Lane,
while in Fact Situation 2, Gus's performance is strictly referable to Dick's farm.
d. In Fact Situation 1, all of the essential terms of the agreement are present, but they are
not present in Fact Situation 2.
e. There is no difference between the two fact situations.

Answer: a
Diff: 3
Type: MC
Topic: The Doctrine of Part Performance
Skill: Applied

18) The phrase "no action shall be brought" in the Statute of Frauds applies to procedure
and not validity. This means that

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9-8
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

a. a party can bring a legal action, but only if a new contract is proven to supersede the
original.
b. a party cannot bring a legal action, since the contract is void.
c. a party cannot bring a legal action, because the Statute affects the validity of the
contract.
d. although no action may be brought on the contract itself, the contract may still affect
the legal relations between the parties in several ways.
e. a party cannot bring a legal action at all because one or more of the essential terms of
the contract are missing.

Answer: d
Diff: 2
Type: MC
Topic: The Distinction Between Substance and Form
Skill: Recall/Applied

19) A guarantee is
a. a promise to be primarily liable for the debt of a debtor.
b. a promise to enter into an agreement when a debtor defaults.
c. a promise to pay only if the debtor defaults.
d. a promise to purchase goods.
e. a promise to add one's signature to a legal document.

Answer: c
Diff: 1
Type: MC
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall

20) Under the Statute of Frauds, a "promise to answer for the miscarriage of another" has
been interpreted to mean
a. a promise to pay for goods not paid for by a purchaser.
b. a promise to pay for the injury caused by the tort of another.
c. a promise to perform a contract that has been breached by another.
d. a promise to pay for the injury caused by the tort of another and a promise to perform a
contract that has been breached by another.
e. a promise to settle a debt owed by another.

Copyright © 2013 Pearson Canada Inc.


9-9
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

Answer: b
Diff: 1
Type: MC
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall

21) The doctrine of part performance as it relates to the Statute of Frauds means that
a. if the plaintiff can show that it has partly performed a contract, then the defendant will
have to pay for the portion of the contract performed.
b. a defendant who partly performs an oral contract is entitled to enforce the oral contract.
c. if a plaintiff can show that he or she has partly performed an oral contract concerning
land in reliance on the contract, the court will accept the part performance as evidence of
the contract in place of the written contract.
d. a plaintiff who partly performs an oral contract is entitled to rely on such performance
as evidence of the contract.
e. if a plaintiff can show that he or she has performed part of any oral contract, the court
will accept such part performance as evidence of the contract in place of the written
contract.

Answer: c
Diff: 1
Type: MC
Topic: The Doctrine of Part Performance
Skill: Recall

22) Which of the following is NOT one of the kinds of conduct that must be established
by a party who seeks to enforce an agreement, under the Sale of Goods Act, that is not in
writing?
a. the provision of consideration
b. acceptance by the buyer
c. actual receipt of the goods by the buyer
d. part payment tendered by the buyer and accepted by the seller
e. something by way of earnest given by the buyer to the seller

Answer: a
Diff: 1
Type: MC

Copyright © 2013 Pearson Canada Inc.


9-10
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

Topic: Requirements of the Sale of Goods Act


Skill: Recall

23) In respect of a contract to which the Statute of Frauds applies, which of the following
is NOT true?
a. Both parties must sign the contract.
b. The essential elements of the contract must be in writing.
c. The defendant must sign the contract.
d. The contract must be under seal.
e. Both A and D are not true.

Answer: e
Diff: 2
Type: MC
Topic: Requirements for a Written Memorandum
Skill: Recall

24) Acceptance under the Sale of Goods Act means


a. an unconditional willingness to enter into an agreement with the seller on terms
specified.
b. conduct by the buyer to accept the offer made by the seller.
c. accepting the goods.
d. accepting the terms of the contract of sale.
e. any conduct by the buyer in relation to the goods that amounts to a recognition of the
existence of a contract.

Answer: e
Diff: 1
Type: MC
Topic: Requirements of the Sale of Goods Act
Skill: Recall

25) When a contract is wholly oral, the first problem of the court is
a. to determine the liberal meaning of the words.
b. to speak to the parties.
c. to read the contract.

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MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

d. to determine the dictionary meaning of the provisions.


e. to determine what exactly the parties agreed to.

Answer: e
Diff: 1
Type: MC
Topic: The Distinction Between Substance and Form
Skill: Recall

26) Which of the following is true with regard to a contract that has to be in writing?
a. If the contract is handwritten, it must be in ink.
b. All implied terms must be carefully identified.
c. If the contract is a guarantee, consideration must be identified.
d. The parties must meet to discuss the terms.
e. The contract does not have to be wholly within a single document. Several written
notes may be taken together to satisfy the Statute of Frauds.

Answer: e
Diff: 2
Type: MC
Topic: Requirements for a Written Memorandum
Skill: Applied

27) Which of the following is true about consumer protection statutes?


a. Provincial legislation is not as encompassing as federal legislation.
b. The federal government believes there is the need to be a big brother upon which one
can call.
c. It covers businesses as well as consumers.
d. It only addresses the buying and selling of goods.
e. It is concerned with only one party to the contract, the purchaser.

Answer: e
Diff: 1
Type: MC
Topic: Consumer Protection Legislation
Skill: Recall

Copyright © 2013 Pearson Canada Inc.


9-12
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

28) The essential elements of a contract that must be in a written memorandum are the
parties and the price.
a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 1
Type: TF
Topic: Requirements for a Written Memorandum
Skill: Recall

29) When we say that a contract is unenforceable under the Statute of Frauds, we mean
that there never was a contract at all.
a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 2
Type: TF
Topic: The Effect of the Statute on Contracts Within Its Scope
Skill: Recall

30) A contract that is unenforceable under the Statute of Frauds may be saved by a
subsequent written memorandum.
a. True
Correct: Correct
b. False
Incorrect: Incorrect

Answer: a
Diff: 1
Type: TF
Topic: Requirements for a Written Memorandum
Skill: Recall

Copyright © 2013 Pearson Canada Inc.


9-13
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

31) A written document can contain both a guarantee and an indemnity.


a. True
Correct: Correct
b. False
Incorrect: Incorrect

Answer: a
Diff: 2
Type: TF
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall/Applied

32) An oral contract concerning land will always be unenforceable under the Statute of
Frauds.
a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 2
Type: TF
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall/Applied

33) When a contract is oral, the first task of a court is to determine what the parties
agreed to.
a. True
Correct: Correct
b. False
Incorrect: Incorrect

Answer: a
Diff: 1
Type: TF
Topic: Requirements for a Written Memorandum
Skill: Recall

Copyright © 2013 Pearson Canada Inc.


9-14
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

34) At common law, once the terms of a contract are determined, it is irrelevant that it is
only a verbal contract.
a. True
Correct: Correct
b. False
Incorrect: Incorrect

Answer: a
Diff: 1
Type: TF
Topic: The Distinction Between Substance and Form
Skill: Applied

35) One Ontario Consumer Protection Act provision prohibits a motor vehicle repairer
from charging for work unless an estimate meeting the prescribed requirements has been
given or waived.
a. True
Correct: Correct
b. False
Incorrect: Incorrect

Answer: a
Diff: 3
Type: TF
Topic: Consumer Protection Legislation
Skill: Recall

36) The Statute of Frauds requires that contracts with minors must be in writing.
a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 1
Type: TF
Topic: The Effect of the Statute on Contracts Within Its Scope
Skill: Recall

Copyright © 2013 Pearson Canada Inc.


9-15
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

37) A guarantee to be enforceable must be in writing; however, a promise of indemnity


does not have to be in writing to be enforceable.
a. True
Correct: Correct
b. False
Incorrect: Incorrect

Answer: a
Diff: 1
Type: TF
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall

38) Under the Statute of Frauds, a promise of indemnity and a promise of guarantee must
be in writing to be enforceable.
a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 1
Type: TF
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall

39) Mary tells John, "I shall pay the debt my sister owes you." This statement is a
promise of guarantee.
a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 1
Type: TF
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall/Applied

Copyright © 2013 Pearson Canada Inc.


9-16
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

40) An unenforceable contract is a void contract.


a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 2
Type: TF
Topic: The Distinction Between Substance and Form
Skill: Applied

41) Consumer protection statutes address the form and content of consumer contracts
relating to goods only.
a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 3
Type: TF
Topic: Consumer Protection Legislation
Skill: Applied

42) The best way to ensure that terms advantageous to a business are enforceable against
a consumer is to use a detailed standard form contract that meets the requirements of
consumer protection legislation.
a. True
Correct: Correct
b. False
Incorrect: Incorrect

Answer: a
Diff: 3
Type: TF
Topic: Strategies to Manage the Legal Risks
Skill: Applied

Copyright © 2013 Pearson Canada Inc.


9-17
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

43) An oral contract determined to be unenforceable pursuant to the Statute of Frauds is


void.
a. True
Incorrect: Incorrect
b. False
Correct: Correct

Answer: b
Diff: 3
Type: TF
Topic: Statute of Frauds
Skill: Recall

44) In what way does the Sale of Goods Act differ from the Statute of Frauds where there
is no written contract?

Answer:
In such a situation, the contract would be unenforceable under the Statute of Frauds;
however, under the Sale of Goods Act, the contract will be enforced if the purchaser can
show one of the following: acceptance of the goods, part payment accepted by the seller,
or something "by way of earnest" given by the buyer to the seller.

Diff: 2
Type: ES
Topic: Requirements of the Sale of Goods Act
Skill: Recall/Applied

45) What are the essential elements of a written memorandum?

Answer:
They are the parties, the subject matter, and the price.

Diff: 1
Type: ES
Topic: Requirements for a Written Memorandum
Skill: Recall

46) Generally speaking, in what three situations will the question of the applicability of
the Statute of Frauds arise?

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9-18
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

Answer:
The three situations are where the contract is entirely oral, where the contract is partly
oral and partly written, and where the contract is entirely in writing, whether in one
document or spread through several documents.

Diff: 2
Type: ES
Topic: The Distinction Between Substance and Form
Skill: Recall/Applied

47) What is the difference between a promise of guarantee and a promise of indemnity?

Answer:
A promise of guarantee is a promise given by a party to be secondarily liable for a debt in
the event that the debtor is unable to pay. A promise of indemnity is a promise by a party
to be primarily liable for a debt in place of the debtor.

Diff: 2
Type: ES
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall/Applied

48) What is the doctrine of part performance?

Answer:
The doctrine of part performance is the doctrine that provides that where a party has
partly performed an oral contract related to an interest in land, the court will accept such
part performance as evidence of the contract in place of the written contract.

Diff: 1
Type: ES
Topic: The Doctrine of Part Performance
Skill: Recall

49) Why would the Statute of Frauds apply to an agreement to lease an apartment but not
to a contract to renovate an apartment?

Answer:

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9-19
MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

The Statute of Frauds applies to contract concerning interests in land. A lease is an


interest in land, but a construction contract is not an interest in land.

Diff: 2
Type: ES
Topic: The Effect of the Statute on Contracts Within Its Scope
Skill: Recall/Applied

50) Explain the doctrine of part performance in the context of the Statute of Frauds.

Answer:
The Statute of Frauds renders unenforceable certain types of contracts where such
contracts are not in writing. One of these contracts are contracts concerning interests in
land. Under the doctrine of part performance, however, if a plaintiff can show to the
satisfaction of a court that he or she has partly performed an oral contract relating to an
interest in land, in reliance on the contract, the court will accept the performance as
evidence of the contract in place of the written contract.

Diff: 2
Type: ES
Topic: The Doctrine of Part Performance
Skill: Recall

51) Explain how an oral contract that is unenforceable because it is not in writing, may
still affect the relationship between the parties.

Answer:
The Statute of Frauds renders unenforceable certain oral contracts that are not in writing.
Although an oral contract may be unenforceable because it is not in writing, it can still
affect the relationship between the parties in various ways. For example, both parties to
the contract may choose to perform their obligations under the contract. Second, if a party
accepts goods and services under a contract that is unenforceable because of the Statute
of Frauds, that party cannot retain the benefit that he or she has received without paying
for it. Thirdly, although a contract may be unenforceable, the parties may enter into a
written memorandum after the contract is formed which will satisfy the requirement of
the Statute of Frauds. Finally, although a oral contract may not be enforceable under the
statute of frauds, it may have the effect of dissolving an earlier written contract which is
still binding on the parties.

Diff: 2
Type: ES

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MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

Topic: The Distinction Between Substance and Form


Skill: Applied

52) Regardless of the legal requirements, what are the practical advantages of a written
record?

Answer:
There are a significant number of advantages with a written record. First, the written
record provides a reliable record of the terms upon which agreement was reached.
Frequently, parties may disagree as to what was said; a written record reduces the
possibility that there will be disagreement about the nature of the terms of the agreement.
As well, human memory is not infallible. Persons who reach agreement may tend to
forget the terms of the agreement if they rely on their memories. It is better to trust a
written record than human memory. Finally, the existence of a written record assists in
the enforcement of a contract.

Diff: 2
Type: ES
Topic: The Distinction Between Substance and Form
Skill: Applied

53) Distinguish between a promise of guarantee and a promise of indemnity.

Answer:
A promise of guarantee is a promise given by a party to be secondarily liable for a debt in
the event that the debtor is unable to pay. A promise of indemnity is a promise by a party
to be primarily liable for a debt in place of the debtor.

Diff: 2
Type: ES
Topic: The Types of Contract Affected by the Statute of Frauds
Skill: Recall/Applied

54) A and B are negotiating a contract under which, if it is concluded, B will purchase
A's land. A sends a fax to B stating, "I will sell you the 40 acres of land that I own at
1234 Concession Road 2, County of Simcoe for $100 000.00.” B faxes the following
response: "I can't pay $100 000.00. Will you take $92 000.00?” On receiving this fax, A
responds by saying, “$92 000.00 is the lowest that I can go." After thinking about it for a
time, B faxes back to A saying, "I'll pay the $92 000.00, but I want you to throw in your
harvester machine." A then responds by fax, which says, "Done. But maybe we should
put the agreement in writing." No further response is forthcoming from B and the

Copyright © 2013 Pearson Canada Inc.


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MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 9: The Requirement of Writing

agreement is never put into a formal written document. A few days later, B bumps into A
and says, “I'm getting the money to pay you for your farm.” To which A replies, "Oh, I
changed my mind, and since we don't have written contract, the deal is off." In this
situation, what will both A and B argue, and who is most likely to succeed?

Answer:
A will argue that there is no formal written contract that contains all of the essential
elements necessary for a contract. Any oral contract, even with the essential elements, is
unenforceable by reason of the Statute of Frauds. On the other hand, B will present all of
the faxes that went back and forth between A and himself and will argue that, taken
together, they constitute a written contract which itself contains all of the essential
elements: the parties, A and B; the property, 1234 Concession Road 2, County of Simcoe
and the harvester, and the price $92 000.00. In this case, B will succeed because the court
will rely on the written faxes to evidence the contract.

Diff: 3
Type: ES
Topic: Requirements for a Written Memorandum
Skill: Applied

Copyright © 2013 Pearson Canada Inc.


9-22

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