Gabriel Entered into a Contract with Paradise Equestrian Services (PES)

question 34

Multiple Choice

Gabriel entered into a contract with Paradise Equestrian Services (PES) .The purpose of the contract was to allow Gabriel's son,Archie,to learn to ride horses.The situation was somewhat complicated by the fact that while Gabriel lived in Prince Edward Island,Archie was starting college in British Columbia,where PES was also located.In an attempt to make it easier for Archie to take action on the contract,if any problems arose,Gabriel made sure that the agreement contained Paragraph 13,which says,"The promise given by PES is hereby made to Gabriel by PES and the benefits of that promises are held in trust by PES for the benefit of Archie." Which of the following statements is TRUE?

• A)Archie is a party to the contract by virtue of an assignment.
• B)The facts demonstrate the concept of vicarious performance.
• C)The tactic that Gabriel tried to use in this case was abolished by the Privy Council in Vandepitte v Preferred Accident Insurance Co.
• D)Archie can sue on the contract only if he personally provided consideration.
• E)As a result of Paragraph 13 of the contract,Archie can properly be classified as trust beneficiary and can enforce the promise of PES.

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Definitions:

Subsidiary Ledger

A detailed ledger that contains supporting information for a main accounting ledger, often used for accounts receivable or accounts payable.

Cash Receipts Journal

An accounting ledger in which all cash inflows or receipts are recorded.

Accounts Payable Subsidiary

A detailed ledger containing all individual creditor accounts, supporting the summary-level accounts payable figure in the general ledger.

Control Account

An account in the general ledger that summarizes and checks the accuracy of individual records in subsidiary ledgers.