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Contract Law

1,497 Questions

Contract Law encompasses the rules and statutes governing legally binding agreements between parties. This hub provides practice questions on essential topics like legal obligations, breach of contract, and termination clauses. These concepts are frequently tested in law entrance tests and various other competitive government examinations.

Legal obligationsVoid contractsBreach of contractCommunication of acceptanceStatute of FraudsContract clauses

Contract Law Questions

Multiple choice

What is the legal term for the exchange of something of value between parties to a contract?

  1. Offer.

  2. Acceptance.

  3. Consideration.

  4. Capacity.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Consideration is the legal term for the exchange of something of value between parties to a contract, such as money, goods, or services.

Multiple choice

Which of the following is NOT a valid form of consideration?

  1. Money.

  2. Goods.

  3. Services.

  4. A promise to do something in the future.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A promise to do something in the future is not a valid form of consideration because it is not a present exchange of value.

Multiple choice

Who is NOT considered to have the capacity to enter into a valid contract?

  1. Minors.

  2. Mentally incompetent individuals.

  3. Intoxicated individuals.

  4. All of the above.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Minors, mentally incompetent individuals, and intoxicated individuals are all considered to lack the capacity to enter into a valid contract.

Multiple choice

Which of the following is NOT a valid way to terminate a contract?

  1. By mutual agreement of the parties.

  2. By performance of the contract.

  3. By breach of contract.

  4. By operation of law.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Termination by operation of law is not a valid way to terminate a contract. Contracts can only be terminated by mutual agreement of the parties, by performance of the contract, or by breach of contract.

Multiple choice

What is the legal term for a promise made in exchange for a promise?

  1. Offer.

  2. Acceptance.

  3. Consideration.

  4. Bilateral contract.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A bilateral contract is a contract in which both parties make promises to each other in exchange for each other's promises.

Multiple choice

Which of the following is NOT a type of bilateral contract?

  1. Sale of goods.

  2. Employment contract.

  3. Lease agreement.

  4. Unilateral contract.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A unilateral contract is not a type of bilateral contract. In a unilateral contract, only one party makes a promise in exchange for the other party's performance.

Multiple choice

What is the legal term for a promise made in exchange for an act?

  1. Offer.

  2. Acceptance.

  3. Consideration.

  4. Unilateral contract.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A unilateral contract is a contract in which one party makes a promise in exchange for the other party's performance.

Multiple choice

Which of the following is NOT a valid way to accept an offer?

  1. By words.

  2. By conduct.

  3. By silence.

  4. By counteroffer.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Silence is not a valid way to accept an offer. Acceptance must be communicated to the offeror in some way, either by words or by conduct.

Multiple choice

What is the legal term for a counteroffer?

  1. Rejection.

  2. Revocation.

  3. Acceptance.

  4. Modification.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A counteroffer is a new offer made by the offeree in response to the offeror's offer. It is considered a modification of the original offer and terminates the original offer.

Multiple choice

What is an option?

  1. A contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.

  2. A contract that gives the seller the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.

  3. A contract that gives the buyer the obligation to buy or sell an underlying asset at a specified price on or before a specified date.

  4. A contract that gives the seller the obligation to buy or sell an underlying asset at a specified price on or before a specified date.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.

Multiple choice

What is a future?

  1. A contract that obligates the buyer to buy or sell an underlying asset at a specified price on a specified date.

  2. A contract that obligates the seller to buy or sell an underlying asset at a specified price on a specified date.

  3. A contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on a specified date.

  4. A contract that gives the seller the right, but not the obligation, to buy or sell an underlying asset at a specified price on a specified date.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A future is a contract that obligates the buyer to buy or sell an underlying asset at a specified price on a specified date.

Multiple choice

Which legal doctrine allows athletes to terminate their contracts if their team relocates to a different city?

  1. Force Majeure

  2. Frustration of Purpose

  3. Constructive Discharge

  4. Unconscionability
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The doctrine of frustration of purpose allows athletes to terminate their contracts if the purpose of the contract (i.e., playing for a team in a specific city) is frustrated by an unforeseen event, such as the team's relocation.

Multiple choice

Which legal doctrine allows athletes to challenge the validity of their contracts on the grounds that they were signed under duress or undue influence?

  1. Unconscionability

  2. Frustration of Purpose

  3. Force Majeure

  4. Duress
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Duress is a legal doctrine that allows athletes to challenge the validity of their contracts if they were signed under pressure or coercion. This can include threats, intimidation, or other forms of undue influence.

Multiple choice

Which legal doctrine allows athletes to terminate their contracts if they are traded to a new team without their consent?

  1. Force Majeure

  2. Frustration of Purpose

  3. Constructive Discharge

  4. Unconscionability
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Constructive discharge is a legal doctrine that allows athletes to terminate their contracts if they are subjected to intolerable working conditions, such as being traded to a new team without their consent. This doctrine is based on the principle that an employer cannot unilaterally change the terms of an employment contract without the employee's consent.

Multiple choice

Which legal doctrine allows athletes to terminate their contracts if they are traded to a new team without their consent?

  1. Force Majeure

  2. Frustration of Purpose

  3. Constructive Discharge

  4. Unconscionability
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Constructive discharge is a legal doctrine that allows athletes to terminate their contracts if they are subjected to intolerable working conditions, such as being traded to a new team without their consent. This doctrine is based on the principle that an employer cannot unilaterally change the terms of an employment contract without the employee's consent.