Free CLA/CP Contract Formation and Enforcement Questions and Answers — Questions and Answers
Question 1: A painter offers to paint a homeowner's house for $5,000. The homeowner replies, "I accept, but you must also paint my garden shed for the same price." Under the common law, which of the following is true?
- The homeowner has made a counteroffer, which terminates the original offer. (Correct answer)
- A valid contract has been formed for the house and the shed.
- A valid contract has been formed for the house only.
- The painter's original offer remains open for a reasonable time.
Correct answer: The homeowner has made a counteroffer, which terminates the original offer.
Under the common law's 'mirror image rule,' an acceptance must be an exact and unconditional assent to the terms of the offer. By adding the condition of painting the shed, the homeowner has not mirrored the original offer. Instead, this response constitutes a counteroffer, which simultaneously rejects the original offer and creates a new offer that the painter can either accept or reject.
Question 2: Which of the following contracts is typically required to be in writing to be enforceable under the Statute of Frauds?
- A contract for the sale of a motorcycle for $400.
- An agreement to provide consulting services for the next 6 months.
- A contract for the sale of a small parcel of land. (Correct answer)
- A promise to repair a friend's computer.
Correct answer: A contract for the sale of a small parcel of land.
The Statute of Frauds is a legal doctrine that requires certain types of contracts to be in writing to be enforceable. One of the most common categories covered by the statute is contracts involving the sale of an interest in real property (land). Contracts for the sale of goods under $500 and contracts that can be performed within one year are generally not required to be in writing.
Question 3: A company that manufactures custom furniture experiences a fire that destroys its only workshop. As a result, the company cannot fulfill a contract to deliver a custom dining set to a client. Which legal doctrine would most likely be used as a defense against a breach of contract claim?
- Unconscionability
- Statute of Frauds
- Impossibility of Performance (Correct answer)
- Duress
Correct answer: Impossibility of Performance
The doctrine of impossibility of performance (or impracticability) can be used as a defense when unforeseen circumstances make it objectively impossible for a party to perform their contractual obligations. The destruction of the unique means of performance (the workshop) without the fault of the manufacturer makes it impossible to build the custom furniture, thus discharging the company's duties under the contract.
Question 4: What is the essential element of a contract that refers to the bargained-for exchange of something of legal value between the parties?
- Mutual Assent
- Capacity
- Legality
- Consideration (Correct answer)
Correct answer: Consideration
Consideration is a core element required for a contract to be legally binding. It is defined as the bargained-for exchange where each party gives something of legal value (an act, a forbearance, or a return promise) in return for what they receive from the other party.
Question 5: A homeowner is in default on their mortgage. A neighbor, feeling sorry for the homeowner, calls the bank and says, "If my neighbor doesn't make their payment by Friday, I will pay it for them." This promise is MOST likely unenforceable because it violates the:
- Parol Evidence Rule
- Best Evidence Rule
- Statute of Frauds (Correct answer)
- Doctrine of Laches
Correct answer: Statute of Frauds
This scenario involves a suretyship agreement, which is a promise to answer for the debt of another. The Statute of Frauds requires that suretyship contracts be in writing to be enforceable. Since the neighbor's promise to the bank was made orally, it falls within the Statute of Frauds and is likely unenforceable.
Question 6: In the absence of a formal contract, a court may impose an obligation on a party to prevent unjust enrichment. This equitable remedy is known as:
- Promissory Estoppel
- Quasi-Contract (Correct answer)
- Specific Performance
- Reformation
Correct answer: Quasi-Contract
A quasi-contract is not a true contract but an obligation imposed by a court to avoid an injustice or to prevent one party from being unjustly enriched at the expense of another. It is used when there is no formal contract, but one party has received a benefit from another for which it would be inequitable to retain without payment.
Free CLA/CP Contract Formation and Enforcement Questions and Answers
A painter offers to paint a homeowner's house for $5,000.
The homeowner replies, "I accept, but you must also paint my garden shed for the same price." Under the common law, which of the following is true?