Contract Law and Formation Flashcards
7 cards from real CLA/CP Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contract Law and Formation flashcards as text
In contract law, 'past consideration' is generally:
Answer: Insufficient to support a new promise
Past consideration—something already given before the new promise—cannot serve as consideration because it was not bargained for in exchange.
When an offeree makes a counteroffer, the legal effect on the original offer is that it:
Answer: Is immediately terminated
Under the mirror-image rule, a counteroffer operates as a rejection of the original offer and simultaneously creates a new offer.
Mutual assent in contract law is determined by which standard?
Answer: The purely objective standard of what a reasonable person would understand
Courts apply an objective standard, examining what a reasonable person in the position of each party would have understood, not the parties' hidden intent.
A contract that is impossible to perform due to a law enacted after formation is typically discharged under the doctrine of:
Answer: Supervening illegality
When a contract becomes illegal due to a subsequent change in law, it is discharged under supervening illegality, relieving both parties of their obligations.
Which of the following best describes a 'firm offer' under UCC Article 2?
Answer: A written, signed offer by a merchant that assures it will be held open, enforceable without consideration
UCC § 2-205 provides that a signed, written offer by a merchant to buy or sell goods, with an assurance it will be held open, is irrevocable without consideration for up to three months.
Under the doctrine of misrepresentation, a contract induced by an innocent but material misrepresentation is generally:
Answer: Voidable at the option of the innocent party
Even innocent misrepresentation renders a contract voidable if it was material and the other party justifiably relied on it.
A promise to refrain from filing a lawsuit constitutes valid consideration only if:
Answer: The party surrendering the claim had a good-faith, reasonable belief the claim was valid
Forbearance from asserting a claim is valid consideration when the claim is not frivolous and is surrendered in good faith, even if ultimately meritless.