AIC 301 EXAM SCRIPT 2026 COMPLETE
QUESTIONS AND DETAILED SOLUTIONS
⩥ 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
⩥ How do courts prioritize the types of changes that can be made to
printed contract forms? Answer: Courts prioritize any changes to printed
contract forms in this order:
• Handwriting prevails over printing.
• Words prevail over numbers
QUESTIONS AND DETAILED SOLUTIONS
⩥ 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
⩥ How do courts prioritize the types of changes that can be made to
printed contract forms? Answer: Courts prioritize any changes to printed
contract forms in this order:
• Handwriting prevails over printing.
• Words prevail over numbers
