Lawyer Contract Law 1 — Questions and Answers
Question 1: What three elements are required to form a valid contract under common law?
- Offer, acceptance, and consideration (Correct answer)
- Agreement, capacity, and a written document
- Offer, signature, and exchange of money
- Proposal, mutual assent, and notarization
Correct answer: Offer, acceptance, and consideration
A binding common law contract requires a valid offer, unequivocal acceptance of that offer, and legally sufficient consideration from each party.
Question 2: What is 'consideration' in contract law?
- A bargained-for exchange where each party gives something of legal value (Correct answer)
- The price agreed upon in any commercial transaction
- The written terms of a contract signed by both parties
- A judge's approval of the contract's fairness
Correct answer: A bargained-for exchange where each party gives something of legal value
Consideration is a bargained-for legal detriment or benefit — each party must give up something of legal value in exchange for the other's promise.
Question 3: Under the Statute of Frauds, which type of contract must be in writing to be enforceable?
- Contracts for the sale of real estate (Correct answer)
- All contracts worth more than $100
- Employment contracts lasting more than one month
- Any contract between two business entities
Correct answer: Contracts for the sale of real estate
The Statute of Frauds requires contracts for the sale of land to be in writing; other covered categories include contracts that cannot be performed within one year and contracts for goods over $500 (UCC).
Question 4: What is 'promissory estoppel' and when does it allow enforcement of a promise without consideration?
- When a party reasonably relies on a promise to their detriment, the promisor is estopped from denying the promise (Correct answer)
- When a contract lacks a required signature but both parties performed
- When a court finds an implied duty of good faith in commercial dealings
- When a written agreement omits standard terms assumed by the parties
Correct answer: When a party reasonably relies on a promise to their detriment, the promisor is estopped from denying the promise
Promissory estoppel enforces a promise despite lack of consideration when: a promise is made, reasonable reliance occurs, detriment results, and injustice can only be avoided by enforcement.
Question 5: What is the 'mirror image rule' in common law contract formation?
- An acceptance must match the offer exactly; any change creates a counteroffer (Correct answer)
- Both parties must sign identical copies of the contract
- The price offered must equal the fair market value of the subject matter
- Contract terms apply equally to both parties symmetrically
Correct answer: An acceptance must match the offer exactly; any change creates a counteroffer
Under the mirror image rule, the acceptance must be the precise mirror of the offer; any deviation constitutes a rejection and counteroffer rather than an acceptance.
Question 6: What remedies are available for breach of contract under US common law?
- Expectation damages, reliance damages, restitution, and specific performance (Correct answer)
- Only monetary damages equivalent to the contract price
- Criminal penalties and civil fines in commercial cases
- Automatic rescission and return to pre-contract status
Correct answer: Expectation damages, reliance damages, restitution, and specific performance
Common law contract remedies include expectation damages (benefit of the bargain), reliance damages, restitution (unjust enrichment), and specific performance for unique goods or land.
Lawyer Contract Law 1
What three elements are required to form a valid contract under common law?