AIC 301 Exam Study Guide With 100%
Complete Solution
contract - Correct Answer-a legally
enforceable agreement between 2 or more
parties
agreements - Correct Answer-not all
__________________ are legally binding contracts
1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law - Correct Answer-6
elements of a legally binding contract
promisor - Correct Answer-party making a
promise
promisee - Correct Answer-party to whom a
promise is made
privity of contract - Correct Answer-the
relationship that exists between 2 parties to a
contract
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,privity - Correct Answer-a party cannot sue
for breach of contract without being in
______________ of contract with the other party
third-party beneficiary - Correct Answer-a
person who is not a party to a contract but
who benefits from it and has a legal right to
enforce the contract if it is breached by either
of the contracting parties
breach of contract - Correct Answer-the
failure without legal excuse, to fulfill a
contractual promise
agreement - Correct Answer-must include an
offer and its acceptance
offeror - Correct Answer-party making the
offer
offeree - Correct Answer-party who makes a
promise or acts in return for something
offered by another party
definite - Correct Answer-offers must include
_____________ terms and be communicated to
and received by the offeree
counteroffer - Correct Answer-if the offeree
requests changes to conditions of the offer
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,mentally competent - Correct Answer-all
parties must be ______________ _________________
for a contract to be legally binding
mutual assent - Correct Answer-the act of 2
or more parties deliberately negotiating all
terms to achieve consensus
consideration - Correct Answer-something of
value that is given in return for a promise
legal purpose - Correct Answer-a contract must serve a legal
purpose to be legally enforceable
form required by law - Correct Answer-contracts must be in
a proper, legally stipulated form to be binding
1) sale of real estate
2) agreements that can't be performed within 1 year
3) transactions > $500
4) agreements to pay a debt owed - Correct Answer-4
examples of contracts that have to be in writing
bilateral contract - Correct Answer-a contract where each
party promises to perform an act in exchange for an act by
the other party
unilateral contract - Correct Answer-a contract where one
party promises to pay for the act of the other party
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, executed contract - Correct Answer-contract where nothing
more is required of either party to be fulfilled
executory contract - Correct Answer-a contract that hasn't
been fully executed
express contract - Correct Answer-contract where terms and
intentions are clearly stated
implied contract - Correct Answer-contract where terms
and intentions are indicated by the actions of the parties to
the contract and the surrounding circumstances
implied-in-fact contracts - Correct Answer-parties
presumably intended, either by tacit understanding or by
the assumption that it already existed
implied-in-law contracts - Correct Answer-an obligation that
is not an actual contract but that is imposed by law because
of the parties' conduct or some special relationship between
them or because one of them would otherwise be unjustly
enriched
implied-in-law contracts - Correct Answer-sometimes called
"quasi-contracts"
voidable contract - Correct Answer-a contract that one of
the parties can reject (avoid) based on some circumstances
regarding its execution
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