Quiz Show

Contract Law Key TermsDonna M. Kesot, CPCU©

The act of giving up or the promise to give up a legal right

Forebearance

TRUE or FALSE?TRUE or FALSE?

Generally contracts by intoxicated persons are not voidable.

Match the device to what it measures:

Voidable Contract

Void Contract

Revocation

Estoppel

Usury contract

High interest loan

Withdrawal before acceptance

Party can reject based on a circumstance in execution

Agreement never reaches contract status

Lacks consideration

TRUE or FALSE?TRUE or FALSE?

For a novation to be effective, all parties must agree to the substitution, the remaining party must agree to accept the new party and to permit substitution of the withdrawing party. The withdrawing party must agree.

A.

B.

C.

D.

E.

First element of a contract

Enforceability

Binding Promise

Consideration

Capacity to contract

Agreement

A contract that includes two or more promises, each of which a court can enforce separately

Severable

Bilateral contract

One in which each party becomes both a promisor and a promisee. If a default occurs, either party may enforce the other’s promise. A contract is not formed until performance

occurs.

Voidable contract

A valid contract that can continue in force unless an innocent party, e.g. minor, chooses to avoid it, once of the contracting parties commits fraud, or the contract is found to be the result of duress of one of the parties.

A void contract is an agreement that is not really a contract because it is not legalally enforceable, i. e., an agreement to commit a crime.

What is required to contract?

Intent, Definite Terms, Communication to the OffereeThe first requirement is the intent to contract. The offeror must intend, or appear to intend, to create a legally enforceable contract if the offeree accepts the offer.

The second requirement of the offer is definite terms.

The third requirement to contract is communication to the offeree.

What is an executed contract?

A contract that has been completely performed by both parties

Misrepresentation

Contestable Period

Contract of Indemnity

Utmost Good Faith

Principal of Indemnity

Benefit no greater than loss suffered

pay an amount directly related to the covered loss

False statement

Life carrier right of challenge

An obligation

Connect the Element of the concept

A.

B.

C.

D.

E.

Element of a conditional contract

A contract for which consideration is given

A contract where the parties must perform only under certain circumstances

An insurance policy

A contract with unconditional and unequivocal acceptance

All of the above

A perception that does not agree with the facts

Mistake

A.

B.

C.

D.

E.

What is duress?

The improper use of power or trust to deprive a person of free will and substitiue another’s objective, resulting in lack of genuine assent to a contract

The use of restraint, violence, or threats of violence to compel a party to act contrary to his or her wishes or interest