Les 305 Clark asu exam 2
UPDATED Exam Questions
and CORRECT Answers
SECTION 1: CONTRACT FORMATION & ESSENTIAL
ELEMENTS
1. What are the four required elements of a valid contract?
A. Offer, Acceptance, Consideration, Capacity
B. Mutual assent, Consideration, Capacity, Legality
C. Offer, Acceptance, Consideration, Legality
D. Mutual assent, Offer, Acceptance, Legality
Answer: B
Rationale: The four required elements of a valid contract are mutual assent, consideration,
capacity, and legality . Without all four elements, a contract is not enforceable .
2. What is mutual assent in contract law?
,A. Both parties agree to the same price
B. A "meeting of the minds" where parties understand and agree to the essential terms
C. Both parties sign a written agreement
D. The contract is approved by a court
Answer: B
Rationale: Mutual assent requires a "meeting of the minds" where all parties understand
and agree to the essential terms of the contract . This is typically established through offer
and acceptance .
3. In the Rose of Aberlone case involving a barren cow, what was the outcome?
A. The buyer had to keep the cow
B. The seller had to rescind (cancel) the contract
C. The cow had to be replaced
D. The contract was enforced as written
Answer: B
Rationale: In the Rose of Aberlone case (barren cow case), the seller had to rescind (cancel)
the contract because the cow was barren, which was a basic assumption of the contract .
4. An oral contract is generally:
A. Never enforceable
B. May be enforceable unless required by the Statute of Frauds to be in writing
C. Always enforceable if witnesses are present
D. Only enforceable for amounts under $500
Answer: B
Rationale: Oral contracts may be enforceable unless the contract falls within the Statute of
Frauds, which requires certain contracts to be in writing .
,5. A bilateral contract involves:
A. One promise and one performance
B. Two promises and two performances
C. Only one party making a promise
D. A promise exchanged for an act
Answer: B
Rationale: A bilateral contract involves two promises and two performances—both parties
exchange promises to perform . This is the most common type of contract .
6. A unilateral contract involves:
A. Two promises and two performances
B. One promise and one performance
C. Both parties signing the contract
D. A promise exchanged for another promise
Answer: B
Rationale: A unilateral contract involves one promise and one performance—one party
makes a promise that can only be accepted by the other party's performance .
7. An express contract is formed when:
A. Parties reach an agreement through their actions
B. Parties knowingly and intentionally agree on promises and performances
C. A court creates the agreement to prevent unjust enrichment
D. The contract is implied by law
Answer: B
Rationale: An express contract is formed when parties knowingly and intentionally agree
on promises and performances, either verbally or in writing .
, 8. An implied contract is formed when:
A. Parties knowingly agree in writing
B. An agreement is reached by the parties' actions
C. A court creates the agreement
D. The contract is verbal
Answer: B
Rationale: An implied contract is formed when an agreement is reached by the parties'
actions rather than explicit words .
9. A quasi-contract is:
A. A valid contract with full legal effect
B. An agreement in legal fiction created by law to prevent unjust enrichment
C. An oral agreement that is enforceable
D. A contract that must be in writing
Answer: B
Rationale: A quasi-contract is an agreement in legal fiction created by law to prevent
unjust enrichment when no actual contract exists .
10. A voidable contract is one where:
A. The contract is completely invalid
B. One party can cancel an otherwise valid contract due to circumstances
C. The contract is enforceable by law
D. The contract cannot be enforced
Answer: B
UPDATED Exam Questions
and CORRECT Answers
SECTION 1: CONTRACT FORMATION & ESSENTIAL
ELEMENTS
1. What are the four required elements of a valid contract?
A. Offer, Acceptance, Consideration, Capacity
B. Mutual assent, Consideration, Capacity, Legality
C. Offer, Acceptance, Consideration, Legality
D. Mutual assent, Offer, Acceptance, Legality
Answer: B
Rationale: The four required elements of a valid contract are mutual assent, consideration,
capacity, and legality . Without all four elements, a contract is not enforceable .
2. What is mutual assent in contract law?
,A. Both parties agree to the same price
B. A "meeting of the minds" where parties understand and agree to the essential terms
C. Both parties sign a written agreement
D. The contract is approved by a court
Answer: B
Rationale: Mutual assent requires a "meeting of the minds" where all parties understand
and agree to the essential terms of the contract . This is typically established through offer
and acceptance .
3. In the Rose of Aberlone case involving a barren cow, what was the outcome?
A. The buyer had to keep the cow
B. The seller had to rescind (cancel) the contract
C. The cow had to be replaced
D. The contract was enforced as written
Answer: B
Rationale: In the Rose of Aberlone case (barren cow case), the seller had to rescind (cancel)
the contract because the cow was barren, which was a basic assumption of the contract .
4. An oral contract is generally:
A. Never enforceable
B. May be enforceable unless required by the Statute of Frauds to be in writing
C. Always enforceable if witnesses are present
D. Only enforceable for amounts under $500
Answer: B
Rationale: Oral contracts may be enforceable unless the contract falls within the Statute of
Frauds, which requires certain contracts to be in writing .
,5. A bilateral contract involves:
A. One promise and one performance
B. Two promises and two performances
C. Only one party making a promise
D. A promise exchanged for an act
Answer: B
Rationale: A bilateral contract involves two promises and two performances—both parties
exchange promises to perform . This is the most common type of contract .
6. A unilateral contract involves:
A. Two promises and two performances
B. One promise and one performance
C. Both parties signing the contract
D. A promise exchanged for another promise
Answer: B
Rationale: A unilateral contract involves one promise and one performance—one party
makes a promise that can only be accepted by the other party's performance .
7. An express contract is formed when:
A. Parties reach an agreement through their actions
B. Parties knowingly and intentionally agree on promises and performances
C. A court creates the agreement to prevent unjust enrichment
D. The contract is implied by law
Answer: B
Rationale: An express contract is formed when parties knowingly and intentionally agree
on promises and performances, either verbally or in writing .
, 8. An implied contract is formed when:
A. Parties knowingly agree in writing
B. An agreement is reached by the parties' actions
C. A court creates the agreement
D. The contract is verbal
Answer: B
Rationale: An implied contract is formed when an agreement is reached by the parties'
actions rather than explicit words .
9. A quasi-contract is:
A. A valid contract with full legal effect
B. An agreement in legal fiction created by law to prevent unjust enrichment
C. An oral agreement that is enforceable
D. A contract that must be in writing
Answer: B
Rationale: A quasi-contract is an agreement in legal fiction created by law to prevent
unjust enrichment when no actual contract exists .
10. A voidable contract is one where:
A. The contract is completely invalid
B. One party can cancel an otherwise valid contract due to circumstances
C. The contract is enforceable by law
D. The contract cannot be enforced
Answer: B
