BUSFIN 3500 FINAL EXAM TEST PAPER 2026
FULL SOLUTION VERIFIED
◉ Elements of a Contract. Answer: -Agreement (offer and
acceptance)
-Consideration (the bargained-for exchange)
-Contractual Capacity (parties are of age, no defects)
-Legal purpose (subject matter does not violate law or public policy)
◉ Objective Theory of Contracts. Answer: -Look at what you say and
what you do but don't care about what's in your head (motives,
thoughts)
-Ex. going to sell some land to someone; you care about this land
deeply; the person buying it secretly wants to make it into a mall -
we don't care about your thoughts
◉ Sources of Contract Law. Answer: -*Case law (common law)
(Restatements)
-*Uniform Commercial Code (UCC), article 2
-Convention on Contracts for International Sales of Goods (CISG)
◉ Bilateral Contract. Answer: -A promise + a promise
-ex. Bill promises to clean the garage, Tom promises to pay Bill $50
,◉ Unilateral Contract. Answer: -A promise + A requested action
-ex. Tom promises to pay Bill $50 if Bill cleans the garage
◉ Express Contracts. Answer: A contract in which all the terms are
clearly set forth in either written or spoken words.
◉ Implied Contracts. Answer: -A contract that arises not from words
of agreement but from the conduct of the parties.
-Ex. you have a dental emergency and the dentist pulls out your
severely infected tooth without prior negotiation about payment,
you have an implied contract for payment of her services.
◉ Quasi Contracts. Answer: -Sometimes called implied-in-law
contracts
-Not actually contracts, but a court-imposed contractual obligation
to prevent unjust enrichment.
◉ Valid Contract. Answer: A term applied to a contract that includes
all four elements of a contract—agreement (offer and acceptance),
consideration, contractual capacity, and legal object—and thus is
*enforceable*.
,◉ Unenforceable Contract. Answer: A term applied to a contract
that, because of a law, cannot be enforced by the courts.
◉ Void Contract. Answer: -object is illegal has serious defect
-not a contract at all
◉ Voidable. Answer: A term applied to a contract that one or both
parties have the ability to either withdraw from or enforce.
◉ Executed Contract. Answer: A term applied to a contract whose
terms have all been fully performed.
◉ Executory Contract. Answer: A term applied to a contract whose
terms have not all been fully performed.
◉ Formal Contracts. Answer: -have special form or must be created
in a specific manner
-The Restatement of Contracts identifies the 4 types of contracts:
1. contracts under seal
2. recognizances
3. letters of credit
4. Negotiable instruments
, ◉ Recognizances. Answer: a party acknowledges in court that he or
she will perform some specified act and/or pay a price on failure to
do so.
◉ Letter of credit. Answer: agreement by the issuer to pay another
party a sum of money on receipt of an invoice and other documents
◉ Negotiable Instruments. Answer: -unconditional written promises
to pay holder a specific sum of money on demand or at a certain
time
-ex. check
◉ Informal/Simple Contract. Answer: A contract that requires no
formalities
◉ Plain Meaning Rule. Answer: if a writing, or a term in question,
appears to be plain/ambiguous on its face, we must determine its
meaning from just the "four corners" of the document, without
resorting to outside evidence, and give word to their meaning
◉ 3 Elements of an Offer. Answer: 1. Serious intent by offeror
2. Reasonable definite terms
3. Communication to the offeree
FULL SOLUTION VERIFIED
◉ Elements of a Contract. Answer: -Agreement (offer and
acceptance)
-Consideration (the bargained-for exchange)
-Contractual Capacity (parties are of age, no defects)
-Legal purpose (subject matter does not violate law or public policy)
◉ Objective Theory of Contracts. Answer: -Look at what you say and
what you do but don't care about what's in your head (motives,
thoughts)
-Ex. going to sell some land to someone; you care about this land
deeply; the person buying it secretly wants to make it into a mall -
we don't care about your thoughts
◉ Sources of Contract Law. Answer: -*Case law (common law)
(Restatements)
-*Uniform Commercial Code (UCC), article 2
-Convention on Contracts for International Sales of Goods (CISG)
◉ Bilateral Contract. Answer: -A promise + a promise
-ex. Bill promises to clean the garage, Tom promises to pay Bill $50
,◉ Unilateral Contract. Answer: -A promise + A requested action
-ex. Tom promises to pay Bill $50 if Bill cleans the garage
◉ Express Contracts. Answer: A contract in which all the terms are
clearly set forth in either written or spoken words.
◉ Implied Contracts. Answer: -A contract that arises not from words
of agreement but from the conduct of the parties.
-Ex. you have a dental emergency and the dentist pulls out your
severely infected tooth without prior negotiation about payment,
you have an implied contract for payment of her services.
◉ Quasi Contracts. Answer: -Sometimes called implied-in-law
contracts
-Not actually contracts, but a court-imposed contractual obligation
to prevent unjust enrichment.
◉ Valid Contract. Answer: A term applied to a contract that includes
all four elements of a contract—agreement (offer and acceptance),
consideration, contractual capacity, and legal object—and thus is
*enforceable*.
,◉ Unenforceable Contract. Answer: A term applied to a contract
that, because of a law, cannot be enforced by the courts.
◉ Void Contract. Answer: -object is illegal has serious defect
-not a contract at all
◉ Voidable. Answer: A term applied to a contract that one or both
parties have the ability to either withdraw from or enforce.
◉ Executed Contract. Answer: A term applied to a contract whose
terms have all been fully performed.
◉ Executory Contract. Answer: A term applied to a contract whose
terms have not all been fully performed.
◉ Formal Contracts. Answer: -have special form or must be created
in a specific manner
-The Restatement of Contracts identifies the 4 types of contracts:
1. contracts under seal
2. recognizances
3. letters of credit
4. Negotiable instruments
, ◉ Recognizances. Answer: a party acknowledges in court that he or
she will perform some specified act and/or pay a price on failure to
do so.
◉ Letter of credit. Answer: agreement by the issuer to pay another
party a sum of money on receipt of an invoice and other documents
◉ Negotiable Instruments. Answer: -unconditional written promises
to pay holder a specific sum of money on demand or at a certain
time
-ex. check
◉ Informal/Simple Contract. Answer: A contract that requires no
formalities
◉ Plain Meaning Rule. Answer: if a writing, or a term in question,
appears to be plain/ambiguous on its face, we must determine its
meaning from just the "four corners" of the document, without
resorting to outside evidence, and give word to their meaning
◉ 3 Elements of an Offer. Answer: 1. Serious intent by offeror
2. Reasonable definite terms
3. Communication to the offeree
