AIC 301 Exam Actual Exam 2025 _ Complete
Questions and Correct Answers _ Graded A+ _
Verified Answers
.What are the elements of a legally binding contract? - (ANSWER)To be legally
binding, contracts must:
• Contain an agreement between all parties
• Involve parties with the legal capacity to contract
• Contain mutual assent
• Involve consideration
• Have a legal purpose
• Be in the form prescribed by law
What are the similarities and differences between bilateral and unilateral
contracts? - (ANSWER)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? -
(ANSWER)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? - (ANSWER)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? - (ANSWER)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? -
(ANSWER)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? - (ANSWER)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? - (ANSWER)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? -
(ANSWER)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? -
(ANSWER)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
Questions and Correct Answers _ Graded A+ _
Verified Answers
.What are the elements of a legally binding contract? - (ANSWER)To be legally
binding, contracts must:
• Contain an agreement between all parties
• Involve parties with the legal capacity to contract
• Contain mutual assent
• Involve consideration
• Have a legal purpose
• Be in the form prescribed by law
What are the similarities and differences between bilateral and unilateral
contracts? - (ANSWER)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? -
(ANSWER)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? - (ANSWER)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? - (ANSWER)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? -
(ANSWER)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? - (ANSWER)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? - (ANSWER)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? -
(ANSWER)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? -
(ANSWER)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
