Contract Basics

What is an offer in a contract?

• An expression of gratitude

• A proposal made by one party to another party indicating a willingness to enter into a legally binding agreement under certain terms and conditions.

• A verbal agreement between friends

• A written document outlining future plans

Define acceptance in the context of contracts.

• Agreement by the offeree to the terms of the offer, creating a binding contract.

• Modification of the offer terms

• Rejection of the offer

• Silence as a form of acceptance

Explain the concept of competence in contract law.

• Competence in contract law refers to the color of the contract paper.

• Competence in contract law refers to the weather on the day the contract was signed.

• Competence in contract law refers to the legal capacity of parties to enter into a contract.

• Competence in contract law refers to the taste of the ink used in the contract.

Why is intention to create legal relations important in contracts?

• It distinguishes between social agreements and legally binding contracts.

• It allows for changes to be made to the contract without consequences.

• It ensures the contract is fair for all parties involved.

• It guarantees the contract will be enforced by the court.

What is consideration and why is it necessary for a contract?

• Consideration is optional in contracts

• Consideration is only needed for verbal contracts

• Consideration is always monetary in nature

• Consideration is necessary for a contract to be legally binding as it ensures each party is giving up something of value in exchange.

Differentiate between specialty contracts and simple contracts.

• Specialty contracts are legally binding, while simple contracts are not

• Specialty contracts are verbal agreements, while simple contracts are written agreements

• Specialty contracts involve unique terms tailored to the parties, while simple contracts have standard terms.

• Specialty contracts are used in business, while simple contracts are used in personal matters

Give an example of a specialty contract.

• Contract between a doctor and a patient

• Contract between a professional athlete and a sports team

• Contract between a landlord and a tenant

• Contract between a teacher and a student

What are the key elements of a simple contract?

• Offer, acceptance, consideration, legal capacity, legal purpose

• Agreement, rejection, payment, legal capacity, legal purpose

• Offer, acceptance, consideration, legal capacity, illegal purpose

• Proposal, approval, compensation, legal capacity, legal purpose

How can a contract be considered voidable?

• When both parties fully agree to the terms of the contract

• When one party has the option to either enforce or terminate the contract due to legal reasons such as misrepresentation, undue influence, coercion, incapacity, or lack of genuine consent.

• When the contract is signed by a minor

• If the contract is written in a language other than English

Discuss the role of capacity in contract formation.

• Capacity in contract formation ensures that all parties have the legal ability to enter into a contract.

• Capacity in contract formation is not important

• Capacity in contract formation is determined by the contract value

• Capacity in contract formation only applies to one party