AIC 301 Study Guide Exam Questions and Answers (Verified Answers) Most Recent exam COMPLETE (2025)
(Latest Update 2025) UPDATE!!
a legally enforceable agreement between 2 or more parties - (ANSWER)contract
not all __________________ are legally binding contracts - (ANSWER)agreements
6 elements of a legally binding contract - (ANSWER)1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law
party making a promise - (ANSWER)promisor
party to whom a promise is made - (ANSWER)promisee
the relationship that exists between 2 parties to a contract - (ANSWER)privity of contract
a party cannot sue for breach of contract without being in ______________ of contract with the other
party - (ANSWER)privity
a person who is not a party to a contract but who benefits from it and has a legal right to enforce the
contract if it is breached by either of the contracting parties - (ANSWER)third-party beneficiary
the failure without legal excuse, to fulfill a contractual promise - (ANSWER)breach of contract
must include an offer and its acceptance - (ANSWER)agreement
party making the offer - (ANSWER)offeror
,AIC 301 Study Guide Exam Questions and Answers (Verified Answers) Most Recent exam COMPLETE (2025)
(Latest Update 2025) UPDATE!!
party who makes a promise or acts in return for something offered by another party - (ANSWER)offeree
offers must include _____________ terms and be communicated to and received by the offeree -
(ANSWER)definite
if the offeree requests changes to conditions of the offer - (ANSWER)counteroffer
all parties must be ______________ _________________ for a contract to be legally binding -
(ANSWER)mentally competent
the act of 2 or more parties deliberately negotiating all terms to achieve consensus - (ANSWER)mutual
assent
something of value that is given in return for a promise - (ANSWER)consideration
a contract must serve a legal purpose to be legally enforceable - (ANSWER)legal purpose
contracts must be in a proper, legally stipulated form to be binding - (ANSWER)form required by law
4 examples of contracts that have to be in writing - (ANSWER)1) sale of real estate
2) agreements that can't be performed within 1 year
3) transactions > $500
4) agreements to pay a debt owed
a contract where each party promises to perform an act in exchange for an act by the other party -
(ANSWER)bilateral contract
,AIC 301 Study Guide Exam Questions and Answers (Verified Answers) Most Recent exam COMPLETE (2025)
(Latest Update 2025) UPDATE!!
a contract where one party promises to pay for the act of the other party - (ANSWER)unilateral contract
contract where nothing more is required of either party to be fulfilled - (ANSWER)executed contract
a contract that hasn't been fully executed - (ANSWER)executory contract
contract where terms and intentions are clearly stated - (ANSWER)express contract
contract where terms and intentions are indicated by the actions of the parties to the contract and the
surrounding circumstances - (ANSWER)implied contract
parties presumably intended, either by tacit understanding or by the assumption that it already existed -
(ANSWER)implied-in-fact contracts
an obligation that is not an actual contract but that is imposed by law because of the parties' conduct or
some special relationship between them or because one of them would otherwise be unjustly enriched -
(ANSWER)implied-in-law contracts
sometimes called "quasi-contracts" - (ANSWER)implied-in-law contracts
a contract that one of the parties can reject (avoid) based on some circumstances regarding its
execution - (ANSWER)voidable contract
the _______________ of one of the contracting parties can make a contract voidable -
(ANSWER)behavior
an agreement that despite that parties' intentions, never reaches contract status and is therefore not
legally enforceable or binding - (ANSWER)void contract
, AIC 301 Study Guide Exam Questions and Answers (Verified Answers) Most Recent exam COMPLETE (2025)
(Latest Update 2025) UPDATE!!
ex. agreement to commit a crime (what type of contract?) - (ANSWER)void contact
5 factors lacking for mutual assent - (ANSWER)1) fraud
2) mistake
3) duress
4) undue influence
5) innocent misrepresentation
an intentional misrepresentation resulting in harm to a person or an organization - (ANSWER)fraud
2 remedies that can be sought if fraud is proven - (ANSWER)1) rescission
2) sue for damages
a legal act of cancelling something and making it void - (ANSWER)rescission
action taken if rescission can't make the plaintiff whole - (ANSWER)sue for damages
2 things insurers need to prove to establish fraudulent concealment - (ANSWER)1) insured knew the fact
concealed was material
2) insured concealed the fact with the intent to defraud
mistakes can be ______________ or _________________ - (ANSWER)unilateral; bilateral
the use of restraint, violence, threats of violence, or wrongful pressure to compel a party to act contrary
to their wishes or interests - (ANSWER)duress
the improper use of power or trust to deprive a person of free will and substitute another's objective,
resulting in lack of genuine assent to a contract - (ANSWER)undue influence
(Latest Update 2025) UPDATE!!
a legally enforceable agreement between 2 or more parties - (ANSWER)contract
not all __________________ are legally binding contracts - (ANSWER)agreements
6 elements of a legally binding contract - (ANSWER)1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law
party making a promise - (ANSWER)promisor
party to whom a promise is made - (ANSWER)promisee
the relationship that exists between 2 parties to a contract - (ANSWER)privity of contract
a party cannot sue for breach of contract without being in ______________ of contract with the other
party - (ANSWER)privity
a person who is not a party to a contract but who benefits from it and has a legal right to enforce the
contract if it is breached by either of the contracting parties - (ANSWER)third-party beneficiary
the failure without legal excuse, to fulfill a contractual promise - (ANSWER)breach of contract
must include an offer and its acceptance - (ANSWER)agreement
party making the offer - (ANSWER)offeror
,AIC 301 Study Guide Exam Questions and Answers (Verified Answers) Most Recent exam COMPLETE (2025)
(Latest Update 2025) UPDATE!!
party who makes a promise or acts in return for something offered by another party - (ANSWER)offeree
offers must include _____________ terms and be communicated to and received by the offeree -
(ANSWER)definite
if the offeree requests changes to conditions of the offer - (ANSWER)counteroffer
all parties must be ______________ _________________ for a contract to be legally binding -
(ANSWER)mentally competent
the act of 2 or more parties deliberately negotiating all terms to achieve consensus - (ANSWER)mutual
assent
something of value that is given in return for a promise - (ANSWER)consideration
a contract must serve a legal purpose to be legally enforceable - (ANSWER)legal purpose
contracts must be in a proper, legally stipulated form to be binding - (ANSWER)form required by law
4 examples of contracts that have to be in writing - (ANSWER)1) sale of real estate
2) agreements that can't be performed within 1 year
3) transactions > $500
4) agreements to pay a debt owed
a contract where each party promises to perform an act in exchange for an act by the other party -
(ANSWER)bilateral contract
,AIC 301 Study Guide Exam Questions and Answers (Verified Answers) Most Recent exam COMPLETE (2025)
(Latest Update 2025) UPDATE!!
a contract where one party promises to pay for the act of the other party - (ANSWER)unilateral contract
contract where nothing more is required of either party to be fulfilled - (ANSWER)executed contract
a contract that hasn't been fully executed - (ANSWER)executory contract
contract where terms and intentions are clearly stated - (ANSWER)express contract
contract where terms and intentions are indicated by the actions of the parties to the contract and the
surrounding circumstances - (ANSWER)implied contract
parties presumably intended, either by tacit understanding or by the assumption that it already existed -
(ANSWER)implied-in-fact contracts
an obligation that is not an actual contract but that is imposed by law because of the parties' conduct or
some special relationship between them or because one of them would otherwise be unjustly enriched -
(ANSWER)implied-in-law contracts
sometimes called "quasi-contracts" - (ANSWER)implied-in-law contracts
a contract that one of the parties can reject (avoid) based on some circumstances regarding its
execution - (ANSWER)voidable contract
the _______________ of one of the contracting parties can make a contract voidable -
(ANSWER)behavior
an agreement that despite that parties' intentions, never reaches contract status and is therefore not
legally enforceable or binding - (ANSWER)void contract
, AIC 301 Study Guide Exam Questions and Answers (Verified Answers) Most Recent exam COMPLETE (2025)
(Latest Update 2025) UPDATE!!
ex. agreement to commit a crime (what type of contract?) - (ANSWER)void contact
5 factors lacking for mutual assent - (ANSWER)1) fraud
2) mistake
3) duress
4) undue influence
5) innocent misrepresentation
an intentional misrepresentation resulting in harm to a person or an organization - (ANSWER)fraud
2 remedies that can be sought if fraud is proven - (ANSWER)1) rescission
2) sue for damages
a legal act of cancelling something and making it void - (ANSWER)rescission
action taken if rescission can't make the plaintiff whole - (ANSWER)sue for damages
2 things insurers need to prove to establish fraudulent concealment - (ANSWER)1) insured knew the fact
concealed was material
2) insured concealed the fact with the intent to defraud
mistakes can be ______________ or _________________ - (ANSWER)unilateral; bilateral
the use of restraint, violence, threats of violence, or wrongful pressure to compel a party to act contrary
to their wishes or interests - (ANSWER)duress
the improper use of power or trust to deprive a person of free will and substitute another's objective,
resulting in lack of genuine assent to a contract - (ANSWER)undue influence
