CLA/CP Exam Contract Law and Formation 3

Question 1

In contract law, 'past consideration' is generally:

Accepted Answer

Insufficient to support a new promise

Answer

Past consideration—something already given before the new promise—cannot serve as consideration because it was not bargained for in exchange.

Question 2

When an offeree makes a counteroffer, the legal effect on the original offer is that it:

Accepted Answer

Is immediately terminated

Answer

Under the mirror-image rule, a counteroffer operates as a rejection of the original offer and simultaneously creates a new offer.

Question 3

Mutual assent in contract law is determined by which standard?

Accepted Answer

The purely objective standard of what a reasonable person would understand

Answer

Courts apply an objective standard, examining what a reasonable person in the position of each party would have understood, not the parties' hidden intent.

Question 4

A contract that is impossible to perform due to a law enacted after formation is typically discharged under the doctrine of:

Accepted Answer

Supervening illegality

Answer

When a contract becomes illegal due to a subsequent change in law, it is discharged under supervening illegality, relieving both parties of their obligations.

Question 5

Which of the following best describes a 'firm offer' under UCC Article 2?

Accepted Answer

A written, signed offer by a merchant that assures it will be held open, enforceable without consideration

Answer

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.

CLA/CP Exam Practice Test

CLA/CP Exam Practice Test

CLA/CP Exam Contract Law and Formation 3