Administrative & Building Law Quiz

What are the requirements for a valid and binding contract?

• a) Offer, acceptance, consideration, and intention to create legal relations.

• b) Offer, acceptance, certainty, practicality, and intention to create legal relations.

• c) Offer, acceptance, certainty, consideration, and reasonableness.

• d) Offer, acceptance, certainty, consideration, and intention to create legal relations.

Answer explanation

The correct choice is a) Offer, acceptance, consideration, and intention to create legal relations. These elements are essential for a contract to be valid and binding, ensuring mutual agreement and enforceability.

An offer can be terminated in a number of ways. Which one of the following is NOT an effective way to terminate an offer?

• a) Rejection by the offeree.

• b) Failure of a condition precedent.

• c) Revoking the offer following acceptance.

• d) Lapse of a reasonable time.

Answer explanation

c) Revoking the offer following acceptance is NOT effective because once an offer is accepted, a binding contract is formed, and the offer cannot be revoked.

Which one of the following statements regarding acceptance is true?

• a) Silence does not constitute valid acceptance.

• b) An offeree can accept an offer of which he was not aware.

• c) Generally, there is no need for an offeree to communicate his acceptance to the offeror.

• d) Generally, acceptance need not precisely match the terms of the offer.

Answer explanation

The correct choice is a) Silence does not constitute valid acceptance. In contract law, acceptance must be communicated, and silence typically does not indicate acceptance unless there is a prior agreement stating otherwise.

What is the principal effect of a counter-offer?

• a) A counter-offer destroys the original offer and replace it with a new offer.

• b) A counter-offer creates a binding contract based on the terms of the counter-offer.

• c) A counter-offer creates a new offer, but the original offer is still capable of being accepted.

• d) A counter-offer creates a binding contract based on the terms of the original offer.

Answer explanation

A counter-offer effectively nullifies the original offer, replacing it with new terms. Therefore, option a) is correct as it states that a counter-offer destroys the original offer and replaces it with a new offer.

Which one of the following statements is true?

• a) If a condition in a contract is breached the injured party may treat the whole contract as discharged.

• b) If a warranty in a contract is breached the injured party may treat the whole contract as discharged.

• c) If a condition in a contract is breached the injured party may claim damages but must continue with the contract otherwise he will be in breach of contract.

• d) If a warranty in a contract is breached the injured party has no remedy.

Answer explanation

Choice a is correct because a breach of a condition allows the injured party to treat the contract as discharged, unlike a warranty breach, which only allows for damages without discharging the contract.

Where a term of a contract is worded broadly to cover a number of potential breaches and it is not possible to decide whether breach of the term would have important or trivial consequences that term is described as:

• a) A condition

• b) A representation.

• c) A warranty.

• d) An innominate term.

Answer explanation

The term described is an innominate term, as it encompasses various breaches with uncertain consequences, distinguishing it from conditions and warranties which have clear implications.

The taking back of an offer by the offeror is

• a) revocation

• b) rejection

• c) cancellation

• d) consideration

Answer explanation

The taking back of an offer by the offeror is known as revocation. This term specifically refers to the withdrawal of an offer before it has been accepted, making option a) revocation the correct choice.

A contract that amounts to nothing and has no legal effect is

• a) bilateral

• b) voidable

• c) void

• d) unilateral

Answer explanation

A contract that is deemed 'void' has no legal effect and cannot be enforced. Therefore, the correct answer is c) void, as it signifies that the contract is essentially non-existent in the eyes of the law.

An offer must be definite, communicated to the offeree, and ____________________.

• signed

• implied

• seriously intended

• timely

Answer explanation

An offer must be seriously intended to create a binding agreement. This means the offeror must genuinely intend to enter into a contract, distinguishing it from mere negotiations or casual remarks.

Consideration in a contract means that:

• a person has mental capacity to enter into contract

• the two parties deal with the contract in a polite manner

• the contract is legal and fully binding

• something of value is exchanged between the parties

Answer explanation

Consideration in a contract refers to something of value exchanged between the parties, which is essential for a contract to be valid. This distinguishes it from other aspects like mental capacity or politeness.