AIC 301 Question and Answer [2026] | UPDATED
ACTUAL Exam | 100% Verified Answers
• What are the similarities and differences between bilateral and unilateral
contracts? -✓✓ In bilateral contracts, each party promises to perform an act in
exchange for the act of the other party. In a unilateral contract, one party promises
to pay for an act of the other party. If the act isn't performed, no payment is
required
• What are the similarities and differences between voidable and void contracts? -
✓✓ A voidable contract is a valid contract that can continue in force, and the
parties can execute it completely unless an innocent or injured party chooses to
avoid it. The behavior of one of the contracting parties, such as an act of fraud or
illegal deceit, can also make a contract voidable. A void contract is an agreement
that never met the necessary criteria to be considered a contract
• What are the two remedies available to the plaintiff if fraud is proved in a given
case? -✓✓ If fraud is proved, the plaintiff can seek one of two remedies: •
Rescission—If the court rescinds the contract, the plaintiff has no further duties
under it and is entitled to reimbursement of all payments made to the defendant.
The plaintiff also must return anything of value received under the contract. The
court's goal is to restore the parties to the condition they were in before they
entered the contract.
• Sue for damages—If rescission wouldn't make the plaintiff whole, the plaintiff
can sue for damages in a tort action. The plaintiff can seek compensatory damages
for quantifiable harm and punitive damages to further punish the defendant and
deter future, similar fraudulent actions. The plaintiff must prove the extent of the
loss to receive damages.
,• What are two things the insurer must prove to establish that fraudulent
concealment occurred? -✓✓ To establish that fraudulent concealment occurred, the
insurer must prove two things:
• The insured knew that the fact concealed was material.
• The insured concealed the fact with the intent to defraud.
• What is the difference between unilateral and bilateral mistakes in a contract? -
✓✓ A unilateral mistake is made by one party to a contract. Bilateral mistakes
occur when both parties to a contract make the same mistake involving a material
fact.
• On what grounds can a person who has reasonably relied on an innocently
misrepresented material fact later avoid a contract? -✓✓ A person who relies on a
misrepresented material fact can later avoid a resulting contract because he or she
didn't achieve mutual assent
• What is the purpose of the parol evidence rule? -✓✓ The parol evidence rule
serves three purposes:
• Carry out the parties' presumed intention.
• Achieve certainty and finality as to the parties' rights and duties
. • Exclude fraudulent and perjured claims
• How do courts resolve doubts and ambiguities in the language of a contract? -✓✓
Courts use well-accepted interpretation guidelines to resolve doubts and
ambiguities in an existing contract. These guidelines are not strict legal rules, and
they aren't designed to create a new contract or rewrite an old one
, • . What's the difference between entire and divisible contracts? -✓✓ Contracts can
be characterized as entire or divisible. In an entire contract, one party must fulfill
all terms of the contract to be entitled to the other party's specified act. In a
divisible contract, one party is entitled to payment for each portion of the contract
completed
• How do courts prioritize the types of changes that can be made to printed contract
forms? -✓✓ Courts prioritize any changes to printed contract forms in this order:
• Handwriting prevails over printing.
• Words prevail over numbers
• Why might contract rights be unassignable? -✓✓ Contract rights are unassignable
if:
• Laws restrict prior assignment of such rights as veterans disability benefits,
government pensions, wages, inheritances, and workers compensation benefits.
• The parties to an agreement specify that they cannot, under the contract, assign
the rights.
• They are personal rights.
• An assignment materially alters or varies the obligor's performance.
• A judgment is pending in a personal injury case.
• Charlotte is an assignee in a contractual assignment. She contends that her rights
should extend beyond Marvin's, the assignor, because she bears the brunt of the
contractual burden. What can Charlotte learn about the validity of her argument? -
✓✓ As a general rule, the assignee's rights are those of the assignor and do not
extend beyond them. So Charlotte will learn that her argument likely cannot be
enforced
ACTUAL Exam | 100% Verified Answers
• What are the similarities and differences between bilateral and unilateral
contracts? -✓✓ In bilateral contracts, each party promises to perform an act in
exchange for the act of the other party. In a unilateral contract, one party promises
to pay for an act of the other party. If the act isn't performed, no payment is
required
• What are the similarities and differences between voidable and void contracts? -
✓✓ A voidable contract is a valid contract that can continue in force, and the
parties can execute it completely unless an innocent or injured party chooses to
avoid it. The behavior of one of the contracting parties, such as an act of fraud or
illegal deceit, can also make a contract voidable. A void contract is an agreement
that never met the necessary criteria to be considered a contract
• What are the two remedies available to the plaintiff if fraud is proved in a given
case? -✓✓ If fraud is proved, the plaintiff can seek one of two remedies: •
Rescission—If the court rescinds the contract, the plaintiff has no further duties
under it and is entitled to reimbursement of all payments made to the defendant.
The plaintiff also must return anything of value received under the contract. The
court's goal is to restore the parties to the condition they were in before they
entered the contract.
• Sue for damages—If rescission wouldn't make the plaintiff whole, the plaintiff
can sue for damages in a tort action. The plaintiff can seek compensatory damages
for quantifiable harm and punitive damages to further punish the defendant and
deter future, similar fraudulent actions. The plaintiff must prove the extent of the
loss to receive damages.
,• What are two things the insurer must prove to establish that fraudulent
concealment occurred? -✓✓ To establish that fraudulent concealment occurred, the
insurer must prove two things:
• The insured knew that the fact concealed was material.
• The insured concealed the fact with the intent to defraud.
• What is the difference between unilateral and bilateral mistakes in a contract? -
✓✓ A unilateral mistake is made by one party to a contract. Bilateral mistakes
occur when both parties to a contract make the same mistake involving a material
fact.
• On what grounds can a person who has reasonably relied on an innocently
misrepresented material fact later avoid a contract? -✓✓ A person who relies on a
misrepresented material fact can later avoid a resulting contract because he or she
didn't achieve mutual assent
• What is the purpose of the parol evidence rule? -✓✓ The parol evidence rule
serves three purposes:
• Carry out the parties' presumed intention.
• Achieve certainty and finality as to the parties' rights and duties
. • Exclude fraudulent and perjured claims
• How do courts resolve doubts and ambiguities in the language of a contract? -✓✓
Courts use well-accepted interpretation guidelines to resolve doubts and
ambiguities in an existing contract. These guidelines are not strict legal rules, and
they aren't designed to create a new contract or rewrite an old one
, • . What's the difference between entire and divisible contracts? -✓✓ Contracts can
be characterized as entire or divisible. In an entire contract, one party must fulfill
all terms of the contract to be entitled to the other party's specified act. In a
divisible contract, one party is entitled to payment for each portion of the contract
completed
• How do courts prioritize the types of changes that can be made to printed contract
forms? -✓✓ Courts prioritize any changes to printed contract forms in this order:
• Handwriting prevails over printing.
• Words prevail over numbers
• Why might contract rights be unassignable? -✓✓ Contract rights are unassignable
if:
• Laws restrict prior assignment of such rights as veterans disability benefits,
government pensions, wages, inheritances, and workers compensation benefits.
• The parties to an agreement specify that they cannot, under the contract, assign
the rights.
• They are personal rights.
• An assignment materially alters or varies the obligor's performance.
• A judgment is pending in a personal injury case.
• Charlotte is an assignee in a contractual assignment. She contends that her rights
should extend beyond Marvin's, the assignor, because she bears the brunt of the
contractual burden. What can Charlotte learn about the validity of her argument? -
✓✓ As a general rule, the assignee's rights are those of the assignor and do not
extend beyond them. So Charlotte will learn that her argument likely cannot be
enforced
