AIC 301 STUDY GUIDE EXAM
QUESTIONS AND ANSWERS GRADED A+
2026
A legally enforceable agreement between 2 or more parties - ANS contract
not all __________________ are legally binding contracts - ANS agreements
6 elements of a legally binding contract - ANS 1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law
party making a promise - ANS promisor
party to whom a promise is made - ANS promisee
the relationship that exists between 2 parties to a contract - ANS privity of contract
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
1
,a party cannot sue for breach of contract without being in ______________ of contract with the
other party - ANS 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 - ANS third-party
beneficiary
the failure without legal excuse, to fulfill a contractual promise - ANS breach of contract
must include an offer and its acceptance - ANS agreement
party making the offer - ANS offeror
party who makes a promise or acts in return for something offered by another party -
ANS offeree
offers must include _____________ terms and be communicated to and received by the offeree
- ANS definite
if the offeree requests changes to conditions of the offer - ANS counteroffer
all parties must be ______________ _________________ for a contract to be legally binding -
ANS mentally competent
the act of 2 or more parties deliberately negotiating all terms to achieve consensus -
ANS mutual assent
something of value that is given in return for a promise - ANS consideration
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
2
,a contract must serve a legal purpose to be legally enforceable - ANS legal purpose
contracts must be in a proper, legally stipulated form to be binding - ANS form required by
law
4 examples of contracts that have to be in writing - ANS 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 - ANS bilateral contract
a contract where one party promises to pay for the act of the other party - ANS unilateral
contract
contract where nothing more is required of either party to be fulfilled - ANS executed
contract
a contract that hasn't been fully executed - ANS executory contract
contract where terms and intentions are clearly stated - ANS express contract
contract where terms and intentions are indicated by the actions of the parties to the contract
and the surrounding circumstances - ANS implied contract
parties presumably intended, either by tacit understanding or by the assumption that it already
existed - ANS implied-in-fact contracts
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
3
, 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 - ANS implied-in-law contracts
sometimes called "quasi-contracts" - ANS implied-in-law contracts
a contract that one of the parties can reject (avoid) based on some circumstances regarding its
execution - ANS voidable contract
the _______________ of one of the contracting parties can make a contract voidable -
ANS behavior
an agreement that despite that parties' intentions, never reaches contract status and is
therefore not legally enforceable or binding - ANS void contract
ex. agreement to commit a crime (what type of contract?) - ANS void contact
5 factors lacking for mutual assent - ANS 1) fraud
2) mistake
3) duress
4) undue influence
5) innocent misrepresentation
an intentional misrepresentation resulting in harm to a person or an organization - ANS fraud
2 remedies that can be sought if fraud is proven - ANS 1) rescission
2) sue for damages
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
4
QUESTIONS AND ANSWERS GRADED A+
2026
A legally enforceable agreement between 2 or more parties - ANS contract
not all __________________ are legally binding contracts - ANS agreements
6 elements of a legally binding contract - ANS 1) agreement
2) capacity
3) mutual assent
4) consideration
5) legal purpose
6) form required by law
party making a promise - ANS promisor
party to whom a promise is made - ANS promisee
the relationship that exists between 2 parties to a contract - ANS privity of contract
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
1
,a party cannot sue for breach of contract without being in ______________ of contract with the
other party - ANS 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 - ANS third-party
beneficiary
the failure without legal excuse, to fulfill a contractual promise - ANS breach of contract
must include an offer and its acceptance - ANS agreement
party making the offer - ANS offeror
party who makes a promise or acts in return for something offered by another party -
ANS offeree
offers must include _____________ terms and be communicated to and received by the offeree
- ANS definite
if the offeree requests changes to conditions of the offer - ANS counteroffer
all parties must be ______________ _________________ for a contract to be legally binding -
ANS mentally competent
the act of 2 or more parties deliberately negotiating all terms to achieve consensus -
ANS mutual assent
something of value that is given in return for a promise - ANS consideration
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
2
,a contract must serve a legal purpose to be legally enforceable - ANS legal purpose
contracts must be in a proper, legally stipulated form to be binding - ANS form required by
law
4 examples of contracts that have to be in writing - ANS 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 - ANS bilateral contract
a contract where one party promises to pay for the act of the other party - ANS unilateral
contract
contract where nothing more is required of either party to be fulfilled - ANS executed
contract
a contract that hasn't been fully executed - ANS executory contract
contract where terms and intentions are clearly stated - ANS express contract
contract where terms and intentions are indicated by the actions of the parties to the contract
and the surrounding circumstances - ANS implied contract
parties presumably intended, either by tacit understanding or by the assumption that it already
existed - ANS implied-in-fact contracts
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
3
, 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 - ANS implied-in-law contracts
sometimes called "quasi-contracts" - ANS implied-in-law contracts
a contract that one of the parties can reject (avoid) based on some circumstances regarding its
execution - ANS voidable contract
the _______________ of one of the contracting parties can make a contract voidable -
ANS behavior
an agreement that despite that parties' intentions, never reaches contract status and is
therefore not legally enforceable or binding - ANS void contract
ex. agreement to commit a crime (what type of contract?) - ANS void contact
5 factors lacking for mutual assent - ANS 1) fraud
2) mistake
3) duress
4) undue influence
5) innocent misrepresentation
an intentional misrepresentation resulting in harm to a person or an organization - ANS fraud
2 remedies that can be sought if fraud is proven - ANS 1) rescission
2) sue for damages
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
4
