AIC 301 EXAM 2026 COMPLETE QUESTIONS
AND VERIFIED CORRECT ANSWERS
⩥ Ordinarily, a party cannot sue for breach of contract without. Answer:
being in privity of contract with the other party.
⩥ True or false: For a contract to be considered legally enforceable, all
that is typically needed is agreement between two parties about what
each party promises to do for the other.. Answer: False. In addition to
agreement, contracts must contain these elements to be legally binding:
capacity, mutual assent, consideration, legal purpose, and the form
required by law.
⩥ For a contract to be legally enforceable. Answer: it must have these
elements: agreement, capacity, mutual assent, consideration, legal
purpose, and the form required by law
⩥ What must an agreement include. Answer: An agreement must include
an offer and its acceptance.
⩥ To create a legally enforceable contract, the offeror (party making the
offer) must use language that. Answer: clearly establishes a desire to
create a binding contract with the offeree.
,⩥ what must the offer include. Answer: It must include definite terms,
such as a price, quantity, and/or delivery date of specific goods or
services, so that all parties can easily determine whether agreed-to terms
have been fulfilled. Finally, the offer must be communicated to, and
received by, an offeree.
⩥ Acceptance requires the offeree to. Answer: agree to the offer
unconditionally and unequivocally.
⩥ what does capacity mean. Answer: For a contract to be legally
binding, all parties who enter into it must be mentally competent
⩥ who would not meet capacity requirement. Answer: minors, insane or
intoxicated individuals, and artificial entities (such as insurers) that are
restricted from entering into certain contracts.
⩥ what is mutual assent. Answer: the act of two or more parties
deliberately negotiating all terms to achieve consensus. The
corresponding agreement forms the basis of the contract.
⩥ what is consideration. Answer: Consideration goes hand in hand with
mutual assent and is something of value that is given in return for a
promise. It can be monetary or a promise to perform or refrain from an
act.
,⩥ what is a legal purpose. Answer: a purpose that is not illegal
⩥ can contracts be oral. Answer: Yes
⩥ What contracts have to be in writing. Answer: 1.The sale of real estate
2.Agreements that can't be performed within one year
3.Transactions worth $500 or more involving personal property (under
the Uniform Commercial Code)
4.Agreements to pay a debt owed by another person
5.Agreements where an executor of an estate promises to pay estate
debts from personal funds
⩥ do states allow oral insurance contacts. Answer: yes some do but most
insurance contracts end up being written because of their complexity.
Writing requirements vary by state.
⩥ types of contracts. Answer: bilateral or unilateral, executed or
executory, express or implied, voidable or void.
⩥ Bilateral contract. Answer: With bilateral contracts, each party
promises to perform an act in exchange for an act by the other party.
Most contracts are bilateral. Ex: Jay's promise to pay Tony $500 in
exchange for Tony's promise to paint Jay's garage creates a bilateral
contract in which each party becomes both a promisor and a promisee.
, ⩥ Unilateral contract. Answer: 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. Ex: Jay promises to pay $500 if Tony paints the
garage, Jay only has a binding requirement to pay Tony after Tony paints
the garage.
⩥ Executed contract. Answer: An executed contract requires nothing
more of either party to be fulfilled. For example, one party has bought
and paid for goods that another party delivered. contract is done
⩥ Executory contracts. Answer: An executory contract, on the other
hand, is one that hasn't been fully executed
⩥ Express contracts. Answer: In express contracts, the terms are clearly
stated. This can be done orally or in writing.
⩥ Implied contract. Answer: Implied contracts are created by the
nonverbal, nonwritten conduct of the parties.
⩥ types of implied contracts. Answer: implied-in-fact contracts or
implied-in-law contracts.
AND VERIFIED CORRECT ANSWERS
⩥ Ordinarily, a party cannot sue for breach of contract without. Answer:
being in privity of contract with the other party.
⩥ True or false: For a contract to be considered legally enforceable, all
that is typically needed is agreement between two parties about what
each party promises to do for the other.. Answer: False. In addition to
agreement, contracts must contain these elements to be legally binding:
capacity, mutual assent, consideration, legal purpose, and the form
required by law.
⩥ For a contract to be legally enforceable. Answer: it must have these
elements: agreement, capacity, mutual assent, consideration, legal
purpose, and the form required by law
⩥ What must an agreement include. Answer: An agreement must include
an offer and its acceptance.
⩥ To create a legally enforceable contract, the offeror (party making the
offer) must use language that. Answer: clearly establishes a desire to
create a binding contract with the offeree.
,⩥ what must the offer include. Answer: It must include definite terms,
such as a price, quantity, and/or delivery date of specific goods or
services, so that all parties can easily determine whether agreed-to terms
have been fulfilled. Finally, the offer must be communicated to, and
received by, an offeree.
⩥ Acceptance requires the offeree to. Answer: agree to the offer
unconditionally and unequivocally.
⩥ what does capacity mean. Answer: For a contract to be legally
binding, all parties who enter into it must be mentally competent
⩥ who would not meet capacity requirement. Answer: minors, insane or
intoxicated individuals, and artificial entities (such as insurers) that are
restricted from entering into certain contracts.
⩥ what is mutual assent. Answer: the act of two or more parties
deliberately negotiating all terms to achieve consensus. The
corresponding agreement forms the basis of the contract.
⩥ what is consideration. Answer: Consideration goes hand in hand with
mutual assent and is something of value that is given in return for a
promise. It can be monetary or a promise to perform or refrain from an
act.
,⩥ what is a legal purpose. Answer: a purpose that is not illegal
⩥ can contracts be oral. Answer: Yes
⩥ What contracts have to be in writing. Answer: 1.The sale of real estate
2.Agreements that can't be performed within one year
3.Transactions worth $500 or more involving personal property (under
the Uniform Commercial Code)
4.Agreements to pay a debt owed by another person
5.Agreements where an executor of an estate promises to pay estate
debts from personal funds
⩥ do states allow oral insurance contacts. Answer: yes some do but most
insurance contracts end up being written because of their complexity.
Writing requirements vary by state.
⩥ types of contracts. Answer: bilateral or unilateral, executed or
executory, express or implied, voidable or void.
⩥ Bilateral contract. Answer: With bilateral contracts, each party
promises to perform an act in exchange for an act by the other party.
Most contracts are bilateral. Ex: Jay's promise to pay Tony $500 in
exchange for Tony's promise to paint Jay's garage creates a bilateral
contract in which each party becomes both a promisor and a promisee.
, ⩥ Unilateral contract. Answer: 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. Ex: Jay promises to pay $500 if Tony paints the
garage, Jay only has a binding requirement to pay Tony after Tony paints
the garage.
⩥ Executed contract. Answer: An executed contract requires nothing
more of either party to be fulfilled. For example, one party has bought
and paid for goods that another party delivered. contract is done
⩥ Executory contracts. Answer: An executory contract, on the other
hand, is one that hasn't been fully executed
⩥ Express contracts. Answer: In express contracts, the terms are clearly
stated. This can be done orally or in writing.
⩥ Implied contract. Answer: Implied contracts are created by the
nonverbal, nonwritten conduct of the parties.
⩥ types of implied contracts. Answer: implied-in-fact contracts or
implied-in-law contracts.
