Q. If a party fails to perform their contractual obligations, this is known as:
-
A.
Breach of contract
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B.
Performance
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C.
Acceptance
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D.
Consideration
Solution
A failure to perform contractual obligations is termed a breach of contract.
Correct Answer:
A
— Breach of contract
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Q. In contract law, what does 'capacity' refer to?
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A.
The ability to perform contractual duties
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B.
The legal ability to enter into a contract
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C.
The financial ability to fulfill a contract
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D.
The ability to negotiate terms
Solution
Capacity refers to the legal ability of a party to enter into a contract.
Correct Answer:
B
— The legal ability to enter into a contract
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Q. What is required for a valid offer in contract formation?
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A.
Intention to create legal relations
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B.
A written document
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C.
Acceptance by the offeree
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D.
A counter-offer
Solution
A valid offer must demonstrate the intention to create legal relations.
Correct Answer:
A
— Intention to create legal relations
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Q. Which of the following can constitute a valid acceptance?
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A.
Silence
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B.
A counter-offer
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C.
A signed letter
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D.
A phone call
Solution
A signed letter can constitute a valid acceptance if it clearly indicates agreement to the terms of the offer.
Correct Answer:
C
— A signed letter
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Q. Which of the following is a condition precedent?
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A.
A condition that must be fulfilled before a contract becomes effective
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B.
A condition that must be fulfilled after a contract is formed
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C.
A condition that is implied by law
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D.
A condition that is not enforceable
Solution
A condition precedent is a condition that must be fulfilled before a contract becomes effective.
Correct Answer:
A
— A condition that must be fulfilled before a contract becomes effective
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Q. Which of the following is NOT a requirement for acceptance of an offer?
-
A.
Acceptance must be communicated
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B.
Acceptance must be unconditional
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C.
Acceptance can be implied by conduct
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D.
Acceptance must be in writing
Solution
Acceptance does not have to be in writing unless specified by the offeror.
Correct Answer:
D
— Acceptance must be in writing
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