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To be legally binding, contracts must:
• Contain an agreement between all parties
• Involve parties with the legal capacity to contract
.What are the elements of a legally binding
• Contain mutual assent
contract?
• Involve consideration
• Have a legal purpose
• Be in the form prescribed by law
In bilateral contracts, each party promises to perform an act in exchange for the act
What are the similarities and differences
of the other party. In a unilateral contract, one party promises to pay for an act of the
between bilateral and unilateral contracts?
other party. If the act isn't performed, no payment is required
See an expert-written 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
What are the similarities and differences
behavior of one of the contracting parties, such as an act of fraud or illegal deceit,
between voidable and void contracts?
can also make a contract voidable. A void contract is an agreement that never met
the necessary criteria to be considered a contract
, 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
What are the two remedies available to the
contract.
plaintiff if fraud is proved in a given case?
• 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.
To establish that fraudulent concealment occurred, the insurer must prove two
things:
What are two things the insurer must prove
to establish that fraudulent concealment
• The insured knew that the fact concealed was material.
occurred?
• The insured concealed the fact with the intent to defraud.
What is the difference between unilateral A unilateral mistake is made by one party to a contract. Bilateral mistakes occur when
and bilateral mistakes in a contract? both parties to a contract make the same mistake involving a material fact.
On what grounds can a person who has A person who relies on a misrepresented material fact can later avoid a resulting
reasonably relied on an innocently contract because he or she didn't achieve mutual assent
misrepresented material fact later avoid a
contract?
The parol evidence rule serves three purposes:
What is the purpose of the parol evidence • Carry out the parties' presumed intention.
rule? • Achieve certainty and finality as to the parties' rights and duties
. • Exclude fraudulent and perjured claims
Courts use well-accepted interpretation guidelines to resolve doubts and
How do courts resolve doubts and
ambiguities in an existing contract. These guidelines are not strict legal rules, and
ambiguities in the language of a contract?
they aren't designed to create a new contract or rewrite an old one
Contracts can be characterized as entire or divisible. In an entire contract, one party
. What's the difference between entire and must fulfill all terms of the contract to be entitled to the other party's specified act. In
divisible contracts? a divisible contract, one party is entitled to payment for each portion of the contract
completed
How do courts prioritize the types of Courts prioritize any changes to printed contract forms in this order:
changes that can be made to printed • Handwriting prevails over printing.
contract forms? • Words prevail over numbers
Contract rights are unassignable if:
• Laws restrict prior assignment of such rights as veterans disability benefits,
government pensions, wages, inheritances, and workers compensation benefits.
Why might contract rights be • The parties to an agreement specify that they cannot, under the contract, assign the
unassignable? rights.
• They are personal rights.
• An assignment materially alters or varies the obligor's performance.
• A judgment is pending in a personal injury case.
AIC 301 Exam Questions & Answers | With Well
Elaborated and Verified Questions |100%
Verified solutions | 2025\2026 Latest!!
Save
Students also studied
Flashcard sets Study guides Practice tests
ATPL - AIRLAW 3/4 PCL Exam Ag Law Exam 3 Ferrell Lifegua
Teacher 49 terms Teacher 55 terms Teacher 50 terms Teacher
Tutor_Jean Preview victpr123 Preview Goated750 Preview dor
To be legally binding, contracts must:
• Contain an agreement between all parties
• Involve parties with the legal capacity to contract
.What are the elements of a legally binding
• Contain mutual assent
contract?
• Involve consideration
• Have a legal purpose
• Be in the form prescribed by law
In bilateral contracts, each party promises to perform an act in exchange for the act
What are the similarities and differences
of the other party. In a unilateral contract, one party promises to pay for an act of the
between bilateral and unilateral contracts?
other party. If the act isn't performed, no payment is required
See an expert-written 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
What are the similarities and differences
behavior of one of the contracting parties, such as an act of fraud or illegal deceit,
between voidable and void contracts?
can also make a contract voidable. A void contract is an agreement that never met
the necessary criteria to be considered a contract
, 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
What are the two remedies available to the
contract.
plaintiff if fraud is proved in a given case?
• 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.
To establish that fraudulent concealment occurred, the insurer must prove two
things:
What are two things the insurer must prove
to establish that fraudulent concealment
• The insured knew that the fact concealed was material.
occurred?
• The insured concealed the fact with the intent to defraud.
What is the difference between unilateral A unilateral mistake is made by one party to a contract. Bilateral mistakes occur when
and bilateral mistakes in a contract? both parties to a contract make the same mistake involving a material fact.
On what grounds can a person who has A person who relies on a misrepresented material fact can later avoid a resulting
reasonably relied on an innocently contract because he or she didn't achieve mutual assent
misrepresented material fact later avoid a
contract?
The parol evidence rule serves three purposes:
What is the purpose of the parol evidence • Carry out the parties' presumed intention.
rule? • Achieve certainty and finality as to the parties' rights and duties
. • Exclude fraudulent and perjured claims
Courts use well-accepted interpretation guidelines to resolve doubts and
How do courts resolve doubts and
ambiguities in an existing contract. These guidelines are not strict legal rules, and
ambiguities in the language of a contract?
they aren't designed to create a new contract or rewrite an old one
Contracts can be characterized as entire or divisible. In an entire contract, one party
. What's the difference between entire and must fulfill all terms of the contract to be entitled to the other party's specified act. In
divisible contracts? a divisible contract, one party is entitled to payment for each portion of the contract
completed
How do courts prioritize the types of Courts prioritize any changes to printed contract forms in this order:
changes that can be made to printed • Handwriting prevails over printing.
contract forms? • Words prevail over numbers
Contract rights are unassignable if:
• Laws restrict prior assignment of such rights as veterans disability benefits,
government pensions, wages, inheritances, and workers compensation benefits.
Why might contract rights be • The parties to an agreement specify that they cannot, under the contract, assign the
unassignable? rights.
• They are personal rights.
• An assignment materially alters or varies the obligor's performance.
• A judgment is pending in a personal injury case.
