Contract Law Midterm Review Exam | Core Principles &
Contract Formation|Complete Questions Verified with
A+ Graded Answers Latest Update 2026
contract
a legally enforceable agreement that meets certain specified legal requirements between two
or more parties in which each party agrees to give and receive something of legal value.
six requisite elements of every valid contract
1) offer; 2) acceptance; 3) consideration; 4) legality of subject matter; 5) contractual capacity;
and 6) contractual intent.
offer
proposal by one party to another manifesting an intention to enter into a valid contract. (every
valid contractual relationship starts with one).
example of an offer
"will you buy my used contracts book for $5?"
acceptance
the party to whom the offer is made must accept the proposal to create the contract.
example of an acceptance
"okay i'll take the book."
mutal assent
the agreement that the parties do intend to be contractually bound to each other (the offer and
the acceptance together).
consideration
is the subject matter of the contract it is the thing for which the parties have bargained. (each
party gives and receives consideration, something of value).
example of consideration
the consideration is both the $5 and the book itself.
offer, acceptance, consideration
,three most important aspects of every valid contract because they form the provisions of the
contract itself.
legality of subject matter
a contract can only be formed for a legal purpose and must fulfill any statutory regulations with
respect to form.
example of legality of subject matter
a major producer of automobile tires, enters into an agreement, with Goodyear to run Dunlap
tire out of business by fixing prices. (contract is unenforceable because it is not formed for a
legal purpose).
contractual capacity
refers to the ability of a person to enter into a valid contract. (typical examples of capacity (or
rather, the lack of capacity) deal with the age of the party and the person's mental condition).
example of contractual capacity
a 14 year old wants to invest in real estate (his age and presumable lack of experience make him
contractually incapable.
contractual intent
it must be shown that the parties did subjectively intend to form a contractual relationship (not
readily discernible and by the words of the parties themselves, and surrounding circumstances
must be analyzed to determine whether a contract exists in many instances
example of lack of contractual intent
kevin has been forced to sign a contract at gun point
classification of contracts
1) type of obligation; method of creation; type of form; timing; and enforceability
type of obligation
1) bilateral: a bilateral contract is a promise for
a promise.
2) unilateral: a unilateral contract is a promise
for an act.
method of creation
, 1) express contract: mutual assent of the
parties is manifested in words, either orally or in
writing.
2) implied-in-fact contract: promises of the
parties are inferred from their actions or
conduct as opposed to specific words being
used.
3) implied in Law contract (also known as
quasi-contract): situations that look like a
contract but are not because one of the
requisite elements is missing.
type of form
1) formal: limited group of contracts that
different states have declared valid and
enforceable if certain statutory requirements
are met.
2) informal: all non-formal contracts;
agreements that meet all the requirements of
valid contracts.
timing
1) executory contract: a contract in which one
or both of the parties still have obligations to
perform.
2) executed contract: a contract that is
complete and final with respect to all of its
terms and conditions.
enforceability
valid, void, and voidable
valid
an enforceable contract that meets all of
the six requirements
void
Contract Formation|Complete Questions Verified with
A+ Graded Answers Latest Update 2026
contract
a legally enforceable agreement that meets certain specified legal requirements between two
or more parties in which each party agrees to give and receive something of legal value.
six requisite elements of every valid contract
1) offer; 2) acceptance; 3) consideration; 4) legality of subject matter; 5) contractual capacity;
and 6) contractual intent.
offer
proposal by one party to another manifesting an intention to enter into a valid contract. (every
valid contractual relationship starts with one).
example of an offer
"will you buy my used contracts book for $5?"
acceptance
the party to whom the offer is made must accept the proposal to create the contract.
example of an acceptance
"okay i'll take the book."
mutal assent
the agreement that the parties do intend to be contractually bound to each other (the offer and
the acceptance together).
consideration
is the subject matter of the contract it is the thing for which the parties have bargained. (each
party gives and receives consideration, something of value).
example of consideration
the consideration is both the $5 and the book itself.
offer, acceptance, consideration
,three most important aspects of every valid contract because they form the provisions of the
contract itself.
legality of subject matter
a contract can only be formed for a legal purpose and must fulfill any statutory regulations with
respect to form.
example of legality of subject matter
a major producer of automobile tires, enters into an agreement, with Goodyear to run Dunlap
tire out of business by fixing prices. (contract is unenforceable because it is not formed for a
legal purpose).
contractual capacity
refers to the ability of a person to enter into a valid contract. (typical examples of capacity (or
rather, the lack of capacity) deal with the age of the party and the person's mental condition).
example of contractual capacity
a 14 year old wants to invest in real estate (his age and presumable lack of experience make him
contractually incapable.
contractual intent
it must be shown that the parties did subjectively intend to form a contractual relationship (not
readily discernible and by the words of the parties themselves, and surrounding circumstances
must be analyzed to determine whether a contract exists in many instances
example of lack of contractual intent
kevin has been forced to sign a contract at gun point
classification of contracts
1) type of obligation; method of creation; type of form; timing; and enforceability
type of obligation
1) bilateral: a bilateral contract is a promise for
a promise.
2) unilateral: a unilateral contract is a promise
for an act.
method of creation
, 1) express contract: mutual assent of the
parties is manifested in words, either orally or in
writing.
2) implied-in-fact contract: promises of the
parties are inferred from their actions or
conduct as opposed to specific words being
used.
3) implied in Law contract (also known as
quasi-contract): situations that look like a
contract but are not because one of the
requisite elements is missing.
type of form
1) formal: limited group of contracts that
different states have declared valid and
enforceable if certain statutory requirements
are met.
2) informal: all non-formal contracts;
agreements that meet all the requirements of
valid contracts.
timing
1) executory contract: a contract in which one
or both of the parties still have obligations to
perform.
2) executed contract: a contract that is
complete and final with respect to all of its
terms and conditions.
enforceability
valid, void, and voidable
valid
an enforceable contract that meets all of
the six requirements
void
