Contract Law Exam Questions With Appropriate
Explanations.
contract - accurate answers-a legally enforceable and binding agreement
between parties wherein a promise to do or not do something is given in
exchange for valuable consideration. (Forbearance is a term you'll hear for a
promise to NOT do something.)
for·bear·ance - accurate answers-the action of refraining from exercising a
legal right, especially enforcing the payment of a debt.
Valuable Consideration - accurate answers-a term used to describe
consideration that is deemed sufficient or appropriate for that which is
offered in exchange.
If the consideration given is not comparable in value to that which is being
offered, the agreement could be looked at as a gift rather than a valid contract
— or, in some instances, as evidence of bad faith in the negotiation.
If a party willingly enters into a valid contract, they are obligated to its terms
and the promises and duties it places upon them. - accurate answers-
Offer and acceptance - accurate answers-another way to describe the meeting
of the minds that has to occur for a valid contract to come about. Also known
as mutual assent, it's the fully agreed-upon exchange of promises by the
parties — even if it took some back-n-forth of offers and counteroffers to get
there.
Consideration - accurate answers-something valuable that each party
exchanges in order to demonstrate that they agree to the contract's terms.
It can be a promise, money, property, forbearance, or services. In most real
estate transactions, consideration is met in the form of a promise for a
promise.
Without consideration, a contract is not legally binding. The legal philosophy
is that a person cannot do something of value without receiving something of
value in turn.
Good consideration (goodwill) - accurate answers-Good consideration
(goodwill), such as love and affection, can be acceptable in lieu of valuable
consideration in a valid contract.
, When real estate is gifted in exchange for good consideration — usually seen
in transactions where property is given to a relative — the term gift deed is
used to describe the conveyance.
For a contract to be valid and legally enforceable, the parties involved in the
contract must be legally competent. Legal competency implies two things:
The individual has reached the age of majority (18 years of age in Georgia) or
had their disabilities of minority removed by a court.
The individual is not mentally incompetent or intoxicated by drugs or alcohol.
- accurate answers-
Age of majority laws protect minors from entering into agreements that they
may not have the experience or knowledge to understand. This means that if
anyone under the age of 18 enters into a contract, the contract is considered
voidable — at the option of the minor but NOT the other party.
All contracts entered into with a minor as one of the parties may become valid
when the minor reaches the age of majority if they do not exercise the right to
void the contract within a reasonable time of achieving legal age. - accurate
answers-
Individuals who have been declared mentally incompetent by a judge and
individuals temporarily incapable of comprehending contracts (but have not
been declared incompetent by a judge) cannot enter into a contract. This
includes individuals who might be temporarily mentally incompetent because
of alcohol intoxication, drug use, or other reasons. - accurate answers-
Offer and acceptance - accurate answers-Offer and acceptance speaks to the
complete and unreserved agreement of terms and conditions, whereas reality
of consent focuses on the fact that the agreement was arrived at as a voluntary
act of good faith.
For there to be a voluntary act of good faith, there cannot be any evidence of
fraud, misrepresentation, mutual mistake, or misunderstanding — and
certainly no undue influence or duress.
Lawful objective - accurate answers-Lawful objective means that the contract
cannot require any illegal activities or outcomes. When a contract contains
lawful objective, it takes all necessary laws and statutes into consideration.
Any contract that involves illegal conduct is considered void and is
Explanations.
contract - accurate answers-a legally enforceable and binding agreement
between parties wherein a promise to do or not do something is given in
exchange for valuable consideration. (Forbearance is a term you'll hear for a
promise to NOT do something.)
for·bear·ance - accurate answers-the action of refraining from exercising a
legal right, especially enforcing the payment of a debt.
Valuable Consideration - accurate answers-a term used to describe
consideration that is deemed sufficient or appropriate for that which is
offered in exchange.
If the consideration given is not comparable in value to that which is being
offered, the agreement could be looked at as a gift rather than a valid contract
— or, in some instances, as evidence of bad faith in the negotiation.
If a party willingly enters into a valid contract, they are obligated to its terms
and the promises and duties it places upon them. - accurate answers-
Offer and acceptance - accurate answers-another way to describe the meeting
of the minds that has to occur for a valid contract to come about. Also known
as mutual assent, it's the fully agreed-upon exchange of promises by the
parties — even if it took some back-n-forth of offers and counteroffers to get
there.
Consideration - accurate answers-something valuable that each party
exchanges in order to demonstrate that they agree to the contract's terms.
It can be a promise, money, property, forbearance, or services. In most real
estate transactions, consideration is met in the form of a promise for a
promise.
Without consideration, a contract is not legally binding. The legal philosophy
is that a person cannot do something of value without receiving something of
value in turn.
Good consideration (goodwill) - accurate answers-Good consideration
(goodwill), such as love and affection, can be acceptable in lieu of valuable
consideration in a valid contract.
, When real estate is gifted in exchange for good consideration — usually seen
in transactions where property is given to a relative — the term gift deed is
used to describe the conveyance.
For a contract to be valid and legally enforceable, the parties involved in the
contract must be legally competent. Legal competency implies two things:
The individual has reached the age of majority (18 years of age in Georgia) or
had their disabilities of minority removed by a court.
The individual is not mentally incompetent or intoxicated by drugs or alcohol.
- accurate answers-
Age of majority laws protect minors from entering into agreements that they
may not have the experience or knowledge to understand. This means that if
anyone under the age of 18 enters into a contract, the contract is considered
voidable — at the option of the minor but NOT the other party.
All contracts entered into with a minor as one of the parties may become valid
when the minor reaches the age of majority if they do not exercise the right to
void the contract within a reasonable time of achieving legal age. - accurate
answers-
Individuals who have been declared mentally incompetent by a judge and
individuals temporarily incapable of comprehending contracts (but have not
been declared incompetent by a judge) cannot enter into a contract. This
includes individuals who might be temporarily mentally incompetent because
of alcohol intoxication, drug use, or other reasons. - accurate answers-
Offer and acceptance - accurate answers-Offer and acceptance speaks to the
complete and unreserved agreement of terms and conditions, whereas reality
of consent focuses on the fact that the agreement was arrived at as a voluntary
act of good faith.
For there to be a voluntary act of good faith, there cannot be any evidence of
fraud, misrepresentation, mutual mistake, or misunderstanding — and
certainly no undue influence or duress.
Lawful objective - accurate answers-Lawful objective means that the contract
cannot require any illegal activities or outcomes. When a contract contains
lawful objective, it takes all necessary laws and statutes into consideration.
Any contract that involves illegal conduct is considered void and is
