CLA/CP Exam CLA/CP Contract Law and Formation 1

Question 1

Which of the following best describes an 'illusory promise' in contract law?

Accepted Answer

A promise that appears binding but leaves performance entirely to the promisor's discretion

Answer

An illusory promise is one that gives the promisor complete discretion over whether to perform, meaning it imposes no real obligation. Because no true commitment exists, it fails as consideration, making any resulting agreement unenforceable.

Question 2

Under the common law mirror image rule, what happens when an offeree responds to an offer with modified terms?

Accepted Answer

The response operates as a counteroffer and rejects the original offer

Answer

Under the mirror image rule, an acceptance must match the offer exactly. Any change in terms constitutes a counteroffer, which simultaneously rejects the original offer and places the power of acceptance with the original offeror.

Question 3

Which of the following transactions is governed by Article 2 of the Uniform Commercial Code rather than the common law of contracts?

Accepted Answer

A contract for the sale of 500 widgets

Answer

Article 2 of the UCC governs contracts for the sale of goods — movable, tangible personal property. The sale of 500 widgets qualifies as a goods transaction. Real property leases, personal service contracts, and partnership agreements are governed by common law.

Question 4

A contractor offers to build a deck for $8,000. Before the homeowner accepts, the contractor calls to revoke the offer. The homeowner argues the offer was irrevocable. Under common law, which fact would make the offer irrevocable?

Accepted Answer

The homeowner paid the contractor $50 to keep the offer open for 30 days

Answer

Under common law, an offer is freely revocable unless it is supported by separate consideration — creating an option contract. Paying $50 to keep the offer open for 30 days provides that consideration, making it binding. Merely specifying a time window does not prevent revocation without consideration.

Question 5

What is the legal effect of a contract formed under economic duress?

Accepted Answer

The contract is voidable at the election of the party who was coerced

Answer

A contract formed under duress — including economic duress — is voidable, not void. This means it remains in effect until the coerced party chooses to disaffirm it. The victim has the power to enforce or avoid the contract, but it is not automatically nullified.

CLA/CP Exam Practice Test

CLA/CP Exam Practice Test

CLA/CP Exam CLA/CP Contract Law and Formation 1