CONTRACT LAW EXAM COMBINED
SET QUESTIONS AND ANSWERS
setting aside contracts - Answer-even after a contract has been validly entered into, it
can be set aside on a number of well established grounds
lack of legal capability - Answer-parties to a contract must have the ability to enter into
an agreement (bankrupts, criminals, mental illness, infants/minors, intoxinated)
infants - Answer-defined as a person who has not reached the age of 18 years
exemptions to infants - Answer-1. Contracts for necessaries
2. Contracts for the benefit of infants
3. Long term contracts- binding unless repudiated
4. Where an infant needs a contract for it to be binding
contracts for necessaries - Answer-a minor may contract for the necessary things to
maintain the standard of living which he or she enjoys. The infants social position, age,
and occupation are all relevant. Examples (food, shelter, education).
contracts for the benefits of infants - Answer-where the contract will provide a benefit for
a minor it is usually legally binding - examples: education services, apprenticeship,
arrangements to earn a living.
long term contracts - binding unless repudiated - Answer-a minor may enter into a long
term legally binding agreement such as buying shares. the minor may repudiate the
contract when he/she turns eighteen within a 'reasonable time'. If not, the contract
becomes legally binding.
where an infant needs a contract to be binding - Answer-aka ratificaiton; when reaching
18, the infant may elect to confirm an agreement made previously so that they become
legally bound by the terms of the contract.
lack of genuine consent - Answer-there must be a 'meeting of the minds' for a contract
to form. this means that a party did not freely and willingly agree to the terms, can
render a contract voidable
voidable contract - Answer-means it can be canceled by the injured party.
void - Answer-meaning it is invalid from the beginning
, mistake of the law - Answer-occurs when a party enters a contract based on a
misunderstanding or ignorance of the law.
mistake of fact - Answer-occurs when one or both parties to a contract are mistaken
about a fundamental fact that is essential to the agreement. can lead to contract being
void/voidable
warranties - Answer-A warranty is a contractual promise or assurance, often regarding
the quality, condition, or performance of goods or services
conditions - Answer-a crucial term or stipulation that, if breached, allows the non-
breaching party to terminate the contract and potentially claim damages. It's a
fundamental part of the agreement, and its breach is considered a serious matter.
clause - Answer-specific provision or section within a contract that outlines particular
terms, conditions, obligations, or rights. These clauses are essential for defining the
agreement between parties and clarifying their respective responsibilities and liabilities
(e.g: "The Buyer shall pay the Seller $10,000 within 30 days of the invoice date."). This
clause specifies the amount, timing, and method of payment.
exemption clauses - Answer-provision within a contract that aims to limit or exclude a
party's liability for certain actions or breaches. Essentially, it's a way for one party to
protect themselves from potential legal claims that might arise from the contract.
valid - Answer-it is what makes a contract legally enforceable. It must meet all the legal
requirements to be enforceable, meaning that the contract legally sound, binding, and
can be enforced if one party fails to fulfill their obligations.
void - Answer-it is what does not make a contract legally enforceable or legally allowed
to exist. this type of contract has no legal force or effect. It cannot be enforced by any
party, and no legal consequences arise from it.
ratification - Answer-the act of formally approving or confirming something, like a treaty,
contract, or constitutional amendment, making it valid and legally binding. It essentially
turns a previously unbinding action into an enforceable one.
repudiation - Answer-Occurs when a party demonstrates, by words or conduct, that they
don't intend to be bound by the contract. Can involve a clear refusal to perform
obligations, oral, or actions. It can also give the other party the right to terminate the
contract and potentially seek damages.
(e.g: A party loses their license necessary to fulfill the contract).
necessaries - Answer-refers to goods or services that are essential for a person's
health, well-being, and reasonable standard of living, considering their age, status, and
circumstances. These are typically things a person cannot reasonably exist without.
SET QUESTIONS AND ANSWERS
setting aside contracts - Answer-even after a contract has been validly entered into, it
can be set aside on a number of well established grounds
lack of legal capability - Answer-parties to a contract must have the ability to enter into
an agreement (bankrupts, criminals, mental illness, infants/minors, intoxinated)
infants - Answer-defined as a person who has not reached the age of 18 years
exemptions to infants - Answer-1. Contracts for necessaries
2. Contracts for the benefit of infants
3. Long term contracts- binding unless repudiated
4. Where an infant needs a contract for it to be binding
contracts for necessaries - Answer-a minor may contract for the necessary things to
maintain the standard of living which he or she enjoys. The infants social position, age,
and occupation are all relevant. Examples (food, shelter, education).
contracts for the benefits of infants - Answer-where the contract will provide a benefit for
a minor it is usually legally binding - examples: education services, apprenticeship,
arrangements to earn a living.
long term contracts - binding unless repudiated - Answer-a minor may enter into a long
term legally binding agreement such as buying shares. the minor may repudiate the
contract when he/she turns eighteen within a 'reasonable time'. If not, the contract
becomes legally binding.
where an infant needs a contract to be binding - Answer-aka ratificaiton; when reaching
18, the infant may elect to confirm an agreement made previously so that they become
legally bound by the terms of the contract.
lack of genuine consent - Answer-there must be a 'meeting of the minds' for a contract
to form. this means that a party did not freely and willingly agree to the terms, can
render a contract voidable
voidable contract - Answer-means it can be canceled by the injured party.
void - Answer-meaning it is invalid from the beginning
, mistake of the law - Answer-occurs when a party enters a contract based on a
misunderstanding or ignorance of the law.
mistake of fact - Answer-occurs when one or both parties to a contract are mistaken
about a fundamental fact that is essential to the agreement. can lead to contract being
void/voidable
warranties - Answer-A warranty is a contractual promise or assurance, often regarding
the quality, condition, or performance of goods or services
conditions - Answer-a crucial term or stipulation that, if breached, allows the non-
breaching party to terminate the contract and potentially claim damages. It's a
fundamental part of the agreement, and its breach is considered a serious matter.
clause - Answer-specific provision or section within a contract that outlines particular
terms, conditions, obligations, or rights. These clauses are essential for defining the
agreement between parties and clarifying their respective responsibilities and liabilities
(e.g: "The Buyer shall pay the Seller $10,000 within 30 days of the invoice date."). This
clause specifies the amount, timing, and method of payment.
exemption clauses - Answer-provision within a contract that aims to limit or exclude a
party's liability for certain actions or breaches. Essentially, it's a way for one party to
protect themselves from potential legal claims that might arise from the contract.
valid - Answer-it is what makes a contract legally enforceable. It must meet all the legal
requirements to be enforceable, meaning that the contract legally sound, binding, and
can be enforced if one party fails to fulfill their obligations.
void - Answer-it is what does not make a contract legally enforceable or legally allowed
to exist. this type of contract has no legal force or effect. It cannot be enforced by any
party, and no legal consequences arise from it.
ratification - Answer-the act of formally approving or confirming something, like a treaty,
contract, or constitutional amendment, making it valid and legally binding. It essentially
turns a previously unbinding action into an enforceable one.
repudiation - Answer-Occurs when a party demonstrates, by words or conduct, that they
don't intend to be bound by the contract. Can involve a clear refusal to perform
obligations, oral, or actions. It can also give the other party the right to terminate the
contract and potentially seek damages.
(e.g: A party loses their license necessary to fulfill the contract).
necessaries - Answer-refers to goods or services that are essential for a person's
health, well-being, and reasonable standard of living, considering their age, status, and
circumstances. These are typically things a person cannot reasonably exist without.
