AIC 301 CHAPTER 1 TEST WITH COMPLETE SOLUTIONS
Bilateral Mistake - Answer-A perception by both parties to a contract that does not agree with the facts.
Undue Influence - Answer-The improper use of power or trust to deprive a person of free will and substitute another's objective, resulting in...
AIC 301 CHAPTER 1 TEST WITH
COMPLETE SOLUTIONS
Bilateral Mistake - Answer-A perception by both parties to a contract that does not
agree with the facts.
Undue Influence - Answer-The improper use of power or trust to deprive a person of
free will and substitute another's objective, resulting in lack of genuine assent to a
contract
Parol Evidence Rule - Answer-A provision that prevents the terms of a contract from
being modified by evidence of oral or other agreements after the contract has been
written.
Real property (realty) - Answer-Tangible property consisting of land, all structures
permanently attached to the land, and whatever is growing on the land.
contract - Answer-a legally enforceable agreement between two or more parties
promisee (offeree) - Answer-the party to a contract to whom a promise is made
third party beneficiary - 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.
Offeror - Answer-the party to a contract who promises to give something in return for a
promise or an act by another party
Promisor - Answer-A person who makes a promise.
privity of contract - Answer-The relationship that exists between the promisor and the
promisee of a contract.
breach of contract - Answer-The failure, without legal excuse, to fulfill a contractual
promise
Offeree - Answer-the party to a contract who makes a promise or acts in return for
something offered by another party
Compensatory Damages - Answer-A payment awarded by a court to reimburse a victim
for actual harm.
Punitive Damages (exemplary damages) - Answer-A payment awarded by a court to
punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct;
the award need not bear any relation to a party's actual damages.
, Extracontractual damages - Answer-A payment awarded by a court that exceeds the
usual contract damages for a breach of contract.
Liquidated Damages - Answer-A reasonable estimation of actual damages, agreed to
by contracting parties and included in the contract, to be paid in the event of a breach or
for negligence.
Material Breach of Contract - Answer-Violation of the agreement that would justify an
owner's termination of the contract.
Consequential Damages - Answer-A payment awarded by a court to indemnify an
injured party for losses that result indirectly from a wrong such as a breach of contract
or a tort.
bad faith - Answer-An insurer's intentional or reckless act (extreme or outrageous in
nature) or denial of coverage without proper cause, often causing emotional distress
and resulting in extracontractual and/or punitive damages.
Mitigation of Damages - Answer-A duty owed by an injured party to a claim to take
reasonable measures to minimize or avoid additional injury or loss.
implied-in-law contract - 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
Void Contract - Answer-An agreement that, despite the parties' intentions, never
reaches contract status and is therefore not legally enforceable or binding.
fraud - Answer-an intentional misrepresentation resulting in harm to a person or an
organization
Material Fact - Answer-a fact that is significant to a decision or matter at hand
Bilateral Contract - Answer-contract in which each party promises a performance
Executed Contract - Answer-A contract that has been completely performed by both
parties.
expressed contract - Answer-a contract whose terms and intentions are explicitly stated
implied-in-fact contract - Answer-a contract that is not express but that the parties
presumably intended, either by tacit understanding or by the assumption that it existed.
injunction - Answer-A court-ordered equitable remedy requiring a party to act or refrain
from acting.
Specific Performance - Answer-A court-ordered equitable remedy requiring a party to
perform a certain act, often - but not always - as a result of breach of a contract.
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