Chapter 10

Question 1

bilateral
contract

Answer 1

contract where both parties
make promises and
undertake obligations to
each other, creating
reciprocal rights and duties.

Question 2

consideration

Answer 2

Something of value
exchanged between parties
to a contract

Question 3

contract

Answer 3

agreement between two
or more parties that creates
legal obligations and can be
enforced by law.

Question 4

counteroffer

Answer 4

response to an offer that
modifies the terms or
conditions, rejecting the
original offer and creating a
new proposal.

Question 5

executory
contract

Answer 5

contract where one or both
parties have not yet fulfilled
their obligations or
performed their promises

Question 6

express
warranty

Answer 6

Terms of a contract that are
explicitly stated by the
parties, either orally or in
writing.

Question 7

implied
warranty

Answer 7

Terms of a contract that are
not explicitly stated but are
inferred from the
circumstances or the parties’
conduct

Question 8

offer and
acceptance

Answer 8

basic elements of a
contract where one party (the
offeror) makes a proposal or
promise to another party (the
offeree), who accepts the
offer, creating a binding
agreement

Question 9

rescission

Answer 9

cancellation or
annulment of a contract,
returning the parties to their
pre-contractual positions
and releasing them from
further obligations

Question 10

statute of
frauds

Answer 10

legal rule requiring certain
types of contracts to be in
writing to be enforceable

Question 11

unenforceable

Answer 11

contract that cannot be
enforced by a court because
it lacks certain legal
requirements or violates
public policy

Question 12

unilateral
contract

Answer 12

contract where only one
party makes a promise or
undertakes an obligation,
and the other party is not
required to perform unless
they choose to do so

Question 13

valid

Answer 13

contract that meets all
legal requirements and is
enforceable by law.

Question 14

void

Answer 14

contract that is considered
invalid and has no legal effect
from the beginning.

Question 15

voidable

Answer 15

contract that is valid but
can be rescinded or canceled
by one of the parties due to
legal reasons, such as fraud,
duress, or incapacity.

Question 16

A buyer submits an offer to a seller and then dies in a car accident. Before learning of the buyer’s death, the seller accepts the offer. Which of the following is true?

Answer 16

The buyer’s death terminated the offer

Question 17

What actions or circumstances can terminate an offer?

Answer 17

acceptance, rejection, recovation, lapse of time, counteroffer, death, insanity

Question 18

A party sells a summer cottage appraised at $300,000 to a stranger for $150,000. The seller’s family wants to challenge the validity of the sale contract. The most apparent weakness of the contract that they might be able to attack is the

Answer 18

insufficiency of the consideration exchanged for the property

Question 19

An unscrupulous investor completes a contract with a buyer to sell a property the investor does not own. The sale contract for this transaction

Answer 19

is void

Question 20

The necessary condition of mutual consent may be found lacking in a contract if

Answer 20

the offer which was accepted is vague

Question 21

As part of a construction contract between a contractor and a buyer, the contractor promises to complete construction by November 20. This promise can be construed as

Answer 21

valuable consideration

Question 22

Valuable consideration

Answer 22

something of tangible value, such as money, or something a party promises to do or not do

Question 23

An important legal feature of a contract is

Answer 23

it represents a “meeting of the minds.”

Question 24

A bilateral contract is one in which

Answer 24

both parties promise to do something in exchange for the other party’s performance

Question 25

According to contract law, every valid contract is also

Answer 25

enforceable or unenforceable

Question 26

A contract is discharged whenever

Answer 26

it is performed

Question 27

How much time does a seller have to accept a buyer’s offer?

Answer 27

A “reasonable” time, or until the expiration date on the offer

Question 28

A homeseller signs a listing agreement with a broker and the next week decides not to sell and revokes the listing. Which of the following is true?

Answer 28

The broker may have a claim for damages

Question 29

A landlord suddenly terminates a tenant’s lease in violation of the lease terms. The tenant takes action to compel the landlord to comply with the violated terms. This is an example of a suit for

Answer 29

specific performance

Question 30

suit for specific performance

Answer 30

an attempt to force the defaulting party to comply with the terms of the contract

Question 31

A contract that conveys an interest in real estate must

Answer 31

contain a legal description of the property

Question 32

A homeowner encourages an agent to aggressively persuade a buyer to purchase his house by overinflating historical appreciation rates. The agent and the seller agree that 25% annual appreciation would work, even though this figure is four times actual rates. The pitch succeeds, and the seller accepts the buyer’s resulting offer. This contract is

Answer 32

voidable