Contract law is a fundamental area of legal practice that governs the creation, interpretation, and enforcement of agreements between parties. At its core, it ensures that promises and obligations made in contracts are upheld, providing a framework for fair dealings in both personal and commercial contexts.
A contract typically requires several essential elements to be valid: an offer from one party, acceptance by another, consideration (something of value exchanged), mutual intent to create a legal agreement, capacity of the parties to enter into the contract, and legality of the subject matter. Contracts can be expressed explicitly through written or spoken words, or implied through the conduct of the parties.
Common types include bilateral contracts, where both parties exchange promises; unilateral contracts, where one party promises in exchange for an act; and voidable contracts, which may be canceled under certain conditions, such as duress or misrepresentation.
In the event of a breach—such as non-performance, failure to fulfill obligations, or interference—contract law provides remedies. These may include compensatory damages to cover losses, specific performance to enforce the original terms, or rescission to cancel the contract and restore parties to their pre-contract positions.
Globally, contract law varies by jurisdiction, often drawing from common law traditions (as in the U.S. and U.K.) or civil law systems (as in many European countries), but its principles promote stability, predictability, and trust in agreements.
Table of contents
- Part 1: OnlineExamMaker AI quiz generator – The easiest way to make quizzes online
- Part 2: 20 contract law quiz questions & answers
- Part 3: Try OnlineExamMaker AI Question Generator to create quiz questions
Part 1: OnlineExamMaker AI quiz generator – The easiest way to make quizzes online
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Part 2: 20 contract law quiz questions & answers
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1. Question: What is required for an offer to be valid in contract law?
A. It must be made with the intention to create legal relations.
B. It must be vague and open to interpretation.
C. It must be communicated only to a specific person.
D. It must include a promise of payment.
Answer: A
Explanation: An offer must demonstrate an intention to be bound by the terms, ensuring it is a serious proposal that can be accepted to form a contract.
2. Question: In contract law, what constitutes acceptance of an offer?
A. A counteroffer that modifies the original terms.
B. Silence or inaction by the offeree.
C. Unconditional agreement to the exact terms of the offer.
D. Partial payment without full agreement.
Answer: C
Explanation: Acceptance must mirror the offer exactly (mirror image rule) to form a binding contract, without any variations.
3. Question: What is consideration in a contract?
A. A promise to perform a future act.
B. Something of value exchanged between parties.
C. The written documentation of the agreement.
D. The capacity of the parties involved.
Answer: B
Explanation: Consideration is essential as it represents the bargained-for exchange, making the promise enforceable.
4. Question: When is a contract voidable due to lack of capacity?
A. When one party is a minor.
B. When the contract involves illegal activities.
C. When the offer is withdrawn before acceptance.
D. When there is no consideration.
Answer: A
Explanation: Minors, mentally incapacitated persons, or those under duress may lack capacity, allowing them to void the contract.
5. Question: What does the Statute of Frauds require for certain contracts?
A. They must be performed within one year.
B. They must be in writing to be enforceable.
C. They must involve consideration.
D. They must be made orally.
Answer: B
Explanation: Contracts for land, marriage, or those that cannot be performed within one year must be in writing to prevent fraud.
6. Question: What is a unilateral contract?
A. A contract where both parties exchange promises.
B. A contract formed by an offer that can be accepted by performance.
C. A contract that is void from the start.
D. A contract requiring mutual agreement in writing.
Answer: B
Explanation: In a unilateral contract, acceptance occurs through the completion of the requested act, not through a promise.
7. Question: How can a contract be discharged by performance?
A. When one party breaches the terms.
B. When both parties fully complete their obligations.
C. When the contract is mutually rescinded.
D. When a force majeure event occurs.
Answer: B
Explanation: Proper and complete performance by all parties fulfills the contract, ending their obligations.
8. Question: What remedy is available for a material breach of contract?
A. Specific performance.
B. Damages to compensate for losses.
C. Injunction to prevent further breach.
D. All of the above.
Answer: D
Explanation: Depending on the circumstances, remedies can include damages, specific performance, or injunctions to address the breach.
9. Question: What is the mailbox rule in contract acceptance?
A. Acceptance is effective when mailed.
B. Acceptance must be delivered in person.
C. Offers can only be made via mail.
D. Revocation must be sent by mail.
Answer: A
Explanation: Under the mailbox rule, an acceptance is considered valid when it is properly posted, even if not yet received.
10. Question: When is duress a ground for voiding a contract?
A. When one party is under economic pressure.
B. When a party is forced into the contract through threats.
C. When the contract lacks consideration.
D. When the terms are unfair.
Answer: B
Explanation: Duress involves improper threats that undermine free will, making the contract voidable.
11. Question: What is implied contract?
A. A contract explicitly stated in writing.
B. A contract inferred from conduct and circumstances.
C. A contract that is oral only.
D. A contract that is voidable.
Answer: B
Explanation: An implied contract arises from the parties’ actions, even without express words, based on mutual understanding.
12. Question: In contract law, what is anticipatory repudiation?
A. Early performance of the contract.
B. A party’s clear indication they will not perform.
C. Mutual agreement to end the contract.
D. A minor breach of terms.
Answer: B
Explanation: Anticipatory repudiation allows the other party to treat the contract as breached immediately and seek remedies.
13. Question: What role does the parol evidence rule play?
A. It allows oral evidence to contradict written contracts.
B. It prohibits using prior agreements to alter a final written contract.
C. It requires all contracts to be oral.
D. It applies only to illegal contracts.
Answer: B
Explanation: The parol evidence rule prevents introducing extrinsic evidence to contradict or modify the terms of a fully integrated written agreement.
14. Question: When can a contract be rescinded?
A. For mutual mistake of fact.
B. When performance is complete.
C. When there is adequate consideration.
D. For offers that are withdrawn.
Answer: A
Explanation: Rescission is possible if both parties were mistaken about a fundamental fact, making the contract voidable.
15. Question: What is liquidated damages in a contract?
A. Punitive damages for breach.
B. Pre-agreed amount of compensation for a specific breach.
C. Damages awarded by a court.
D. Compensation for unforeseen losses.
Answer: B
Explanation: Liquidated damages are stipulated in the contract as a reasonable estimate of potential losses, enforceable if not a penalty.
16. Question: How does frustration of purpose affect a contract?
A. It excuses performance due to unforeseen events.
B. It allows for renegotiation of terms.
C. It requires immediate breach.
D. It applies only to illegal contracts.
Answer: A
Explanation: If an unforeseen event makes the contract’s purpose impossible, frustration discharges the parties from obligations.
17. Question: What is a novation in contract law?
A. Substitution of a new contract for an old one.
B. Addition of new terms to an existing contract.
C. Breach of the original agreement.
D. Termination without notice.
Answer: A
Explanation: Novation replaces an original party or contract with a new one, releasing the original parties from their duties.
18. Question: When is a contract unenforceable due to illegality?
A. When it violates public policy or law.
B. When it lacks a written form.
C. When there is no consideration.
D. When parties are of equal capacity.
Answer: A
Explanation: Contracts that involve illegal activities or contravene statutes are void and unenforceable.
19. Question: What is the difference between void and voidable contracts?
A. Void contracts are enforceable; voidable ones are not.
B. Void contracts have no legal effect; voidable ones can be affirmed or rejected.
C. Void contracts require consideration; voidable ones do not.
D. Void contracts are oral; voidable ones are written.
Answer: B
Explanation: A void contract is invalid from the outset, while a voidable contract is initially valid but can be voided by one party.
20. Question: What must be proven for promissory estoppel to apply?
A. A written promise with consideration.
B. Reliance on a promise to one’s detriment.
C. Mutual agreement between parties.
D. Performance of the contract.
Answer: B
Explanation: Promissory estoppel enforces a promise when the promisee has reasonably relied on it and suffered harm, even without traditional consideration.
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