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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 rule regarding accord and satisfaction?

  1. Accord and satisfaction is a valid defense to a breach of contract action.

  2. Accord and satisfaction is not a valid defense to a breach of contract action.

  3. Accord and satisfaction is a valid defense to a breach of contract action only if it is in writing.

  4. Accord and satisfaction is a valid defense to a breach of contract action only if it is supported by a moral obligation.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Accord and satisfaction is a valid defense to a breach of contract action because it is a new agreement that replaces the original contract. The new agreement is supported by consideration and is therefore binding on the parties.

Multiple choice

What is the rule regarding novation?

  1. Novation is a valid defense to a breach of contract action.

  2. Novation is not a valid defense to a breach of contract action.

  3. Novation is a valid defense to a breach of contract action only if it is in writing.

  4. Novation is a valid defense to a breach of contract action only if it is supported by a moral obligation.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Novation is a valid defense to a breach of contract action because it is a new agreement that replaces the original contract. The new agreement is supported by consideration and is therefore binding on the parties.

Multiple choice

What is the rule regarding rescission?

  1. Rescission is a valid remedy for breach of contract.

  2. Rescission is not a valid remedy for breach of contract.

  3. Rescission is a valid remedy for breach of contract only if it is in writing.

  4. Rescission is a valid remedy for breach of contract only if it is supported by a moral obligation.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Rescission is a valid remedy for breach of contract because it allows the non-breaching party to cancel the contract and be restored to the position they were in before the contract was entered into.

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 requires the buyer to buy or sell an underlying asset at a specified price on or before a specified date.

  3. 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.

  4. A contract that requires the seller 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 requires the buyer to buy or sell an underlying asset at a specified price on or before a specified date.

  2. 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.

  3. A contract that requires the seller 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 right, but not 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

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

Multiple choice

When is specific performance an appropriate remedy?

  1. When the subject matter of the contract is unique

  2. When the non-breaching party has suffered significant financial losses

  3. When the breaching party is insolvent

  4. When the contract is for the sale of land
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Specific performance is an appropriate remedy when the subject matter of the contract is unique and cannot be easily replaced.

Multiple choice

What is an injunction?

  1. A court order that requires a party to do or refrain from doing a specific act

  2. A court order that awards damages to the non-breaching party

  3. A court order that rescinds a contract

  4. A court order that cancels a contract
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An injunction is a court order that requires a party to do or refrain from doing a specific act.

Multiple choice

What are the consequences of an anticipatory breach of contract?

  1. The non-breaching party can terminate the contract

  2. The non-breaching party can sue for damages

  3. The non-breaching party can seek an injunction

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

The consequences of an anticipatory breach of contract include the non-breaching party's right to terminate the contract, sue for damages, and seek an injunction.

Multiple choice

Which of the following is an essential element of a valid contract?

  1. Offer

  2. Acceptance

  3. Consideration

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

A valid contract requires an offer, acceptance, consideration, and mutual assent.

Multiple choice

What is the legal term for a contract that is entered into for a specific period of time?

  1. Fixed-term contract

  2. Open-ended contract

  3. Voidable contract

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

A fixed-term contract is a legal term for a contract that is entered into for a specific period of time.

Multiple choice

What is the legal term for a contract that can be terminated by either party at any time?

  1. Fixed-term contract

  2. Open-ended contract

  3. Voidable contract

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

An open-ended contract is a legal term for a contract that can be terminated by either party at any time.

Multiple choice

What is the legal term for a contract that can be canceled by one party if certain conditions are not met?

  1. Fixed-term contract

  2. Open-ended contract

  3. Voidable contract

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

A voidable contract is a legal term for a contract that can be canceled by one party if certain conditions are not met.

Multiple choice

What is the legal term for a contract that is not legally binding?

  1. Fixed-term contract

  2. Open-ended contract

  3. Voidable contract

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

An unenforceable contract is a legal term for a contract that is not legally binding.

Multiple choice

Can temporary orders be modified?

  1. Yes, if there is a substantial change in circumstances.

  2. No, they are permanent.

  3. Only if both parties agree.

  4. None of the above.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Temporary orders can be modified if there is a substantial change in circumstances, such as a change in income or a change in the needs of the children.

Multiple choice

Can the WEP be waived?

  1. Yes

  2. No
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The WEP cannot be waived. The WEP is a mandatory provision that applies to all individuals who are subject to the WEP.