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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 improper solicitation?

  1. Contacting a potential client who has not expressed an interest in legal services

  2. Offering to provide legal services for a fee that is contingent on the outcome of the case

  3. Advertising legal services in a way that is false or misleading

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

Improper solicitation is any attempt to obtain a client by means that are false, misleading, or coercive.

Multiple choice

Which of the following is NOT a common type of engineering contract?

  1. Fixed-price contract

  2. Cost-plus contract

  3. Time-and-materials contract

  4. Guaranteed maximum price contract
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A guaranteed maximum price contract is not a common type of engineering contract. The other three options are all common types of engineering contracts.

Multiple choice

Which of the following is NOT a method of discharging a contract?

  1. Performance

  2. Agreement

  3. Frustration

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

Novation is not a method of discharging a contract, but rather a method of creating a new contract that replaces an existing one.

Multiple choice

When a contract is discharged by performance, what must be done?

  1. All parties must perform their obligations under the contract.

  2. Only one party must perform their obligations under the contract.

  3. The parties must agree to terminate the contract.

  4. The court must order the contract to be discharged.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In order for a contract to be discharged by performance, all parties must fulfill their obligations as agreed upon in the contract.

Multiple choice

What is the legal term for an agreement between parties to terminate a contract?

  1. Rescission

  2. Novation

  3. Frustration

  4. Breach
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Rescission is the legal term for an agreement between parties to terminate a contract, restoring the parties to the positions they were in before the contract was entered into.

Multiple choice

When a contract is discharged by frustration, what has occurred?

  1. An unforeseen event has made it impossible or impracticable to perform the contract.

  2. One party has breached the contract.

  3. The parties have agreed to terminate the contract.

  4. The court has ordered the contract to be discharged.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Frustration occurs when an unforeseen event makes it impossible or impracticable to perform the contract, such as a natural disaster or a change in law.

Multiple choice

What is the legal term for a party's failure to fulfill their obligations under a contract?

  1. Performance

  2. Agreement

  3. Frustration

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

Breach is the legal term for a party's failure to fulfill their obligations under a contract.

Multiple choice

What is the legal term for the termination of a contract by operation of law?

  1. Rescission

  2. Novation

  3. Frustration

  4. Operation of Law
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Operation of law is the legal term for the termination of a contract by operation of law, such as the death of a party or the bankruptcy of a company.

Multiple choice

What is the legal term for the process of replacing an existing contract with a new contract?

  1. Rescission

  2. Novation

  3. Frustration

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

Novation is the legal term for the process of replacing an existing contract with a new contract.

Multiple choice

What is the legal term for the process of correcting a mistake in a written contract?

  1. Restitution

  2. Reformation

  3. Novation

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

Reformation is the legal term for the process of correcting a mistake in a written contract.

Multiple choice

What is the legal term for the process of replacing an existing contract with a new contract that is substantially different?

  1. Restitution

  2. Reformation

  3. Novation

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

Novation is the legal term for the process of replacing an existing contract with a new contract that is substantially different.

Multiple choice

Which of the following is an example of a standardized OTC derivative contract?

  1. Forward contract

  2. Swap contract

  3. Option contract

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

Forward, swap, and option contracts are all standardized OTC derivative contracts with predetermined terms and conditions.

Multiple choice

Which of the following is NOT a type of quasi-contract?

  1. Restitution

  2. Implied-in-fact contract

  3. Unjust enrichment

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

Implied-in-fact contracts are actual contracts formed by the conduct of the parties, whereas quasi-contracts are implied by law to prevent unjust enrichment.

Multiple choice

What is the basic principle underlying quasi-contracts?

  1. Preventing unjust enrichment

  2. Enforcing promises made without consideration

  3. Protecting the rights of minors

  4. Recovering damages for breach of contract
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Quasi-contracts are based on the principle that one person should not be unjustly enriched at the expense of another.

Multiple choice

In a quasi-contractual relationship, what is the legal obligation of the parties?

  1. To perform the terms of an express contract

  2. To prevent unjust enrichment

  3. To pay damages for breach of contract

  4. To return property or benefits received without consideration
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In a quasi-contractual relationship, the legal obligation of the parties is to prevent unjust enrichment, rather than to perform the terms of an express contract or to pay damages for breach of contract.