Types of Contracts: A Comprehensive Guide for Business and Economics Students

Question 1

Which element is NOT essential for a contract to be legally binding?

Accepted Answer

Written form

Answer

Mutual agreement

Answer

Capacity to enter into a contract

Answer

Consideration

Question 2

Which type of contract requires a written and signed agreement to be legally enforceable?

Accepted Answer

Express contract

Answer

Implied contract

Answer

Bilateral contract

Answer

Unilateral contract

Question 3

A contract that is voidable is:

Accepted Answer

Legally binding on both parties unless one party chooses to cancel it

Answer

Legally binding on both parties

Answer

Legally binding on one party but not the other

Answer

Not legally binding on either party

Question 4

In a bilateral contract, both parties:

Accepted Answer

Make promises to each other in exchange for consideration

Answer

Make promises to a third party

Answer

Receive something of value from each other, but no promises are made

Answer

Are bound to perform their obligations even if the other party fails to perform

Question 5

Which of the following is essential for an implied contract?

Accepted Answer

The conduct of the parties that shows an intent to enter into a contract

Answer

An express offer and acceptance

Answer

A written agreement signed by both parties

Answer

Consideration exchanged between the parties

Question 6

The purpose of the parol evidence rule is to:

Accepted Answer

Prevent the introduction of evidence that contradicts or modifies the written terms of a contract

Answer

Allow the introduction of evidence that supplements the written terms of a contract

Answer

Invalidate contracts that are not in writing

Answer

Make contracts more difficult to enforce

Question 7

Among the requirements for a valid written contract, which is NOT essential?

Accepted Answer

Notarization

Answer

Signatures of both parties

Answer

Legal purpose

Answer

Sufficient consideration

Question 8

A contract in which both parties make promises is known as a:

Accepted Answer

Bilateral contract

Answer

Unilateral contract

Answer

Express contract

Answer

Implied contract

Question 9

Which type of contract is created when the parties' intentions can be inferred from their conduct, rather than from spoken or written words?

Accepted Answer

Implied contract

Answer

Express contract

Answer

Written contract

Answer

Oral contract

Question 10

Which of the following is NOT an essential element of a legally binding contract?

Accepted Answer

Witnesses

Answer

Offer

Answer

Acceptance

Answer

Consideration

Question 11

A contract where each party makes a promise to the other party is known as a:

Accepted Answer

Bilateral contract

Answer

Unilateral contract

Answer

Void contract

Answer

Executed contract

Question 12

Which of the following is NOT a defense to breach of contract?

Accepted Answer

Statute of frauds

Answer

Impossibility

Answer

Fraud

Answer

Mistake

Question 13

A contract requiring a signature for legal validity is classified as a:

Accepted Answer

Written contract

Answer

Implied contract

Answer

Oral contract

Answer

Bilateral contract

Question 14

A breach of contract occurs when:

Accepted Answer

One party fails to perform their obligations.

Answer

Both parties fail to perform their obligations.

Answer

One party modifies the contract without the other party's consent.

Answer

The contract is terminated by mutual agreement.

Question 15

Which type of contract requires a written document to be considered legally binding?

Accepted Answer

Written contract

Answer

Express contract

Answer

Oral contract

Answer

Implied contract

Question 16

A contract in which both parties make reciprocal promises to perform is known as a(n):

Accepted Answer

Bilateral contract

Answer

Executed contract

Answer

Unilateral contract

Answer

Implied contract

Question 17

Which of the following is NOT a requirement for a valid offer?

Accepted Answer

Consideration

Answer

Definiteness of terms

Answer

Communication to the other party

Answer

Intent to create a contract

Question 18

A contract that is not legally enforceable due to a defect in its formation is known as a(n):

Accepted Answer

Void contract

Answer

Executed contract

Answer

Voidable contract

Answer

Enforceable contract

Question 19

Which of the following is NOT a necessary element for a contract to be valid?

Accepted Answer

Intent to breach

Answer

Offer

Answer

Consideration

Answer

Acceptance

Question 20

A contract formed solely through spoken words is classified as a(n) __________ contract.

Accepted Answer

Oral

Answer

Express

Answer

Implied

Answer

Bilateral

Question 21

Which type of contract must be documented in writing to be legally binding?

Accepted Answer

Written

Answer

Implied

Answer

Oral

Question 22

A contract where both parties exchange promises is referred to as a(n) __________ contract.

Accepted Answer

Bilateral

Answer

Executed

Answer

Unilateral

Answer

Voidable

Question 23

A contract created when one party's actions indicate acceptance of an offer is known as a(n) __________ contract.

Accepted Answer

Implied

Answer

Express

Answer

Executed

Question 24

A contract that is invalid from its inception due to a fundamental legal flaw is known as a(n) __________ contract.

Accepted Answer

Void

Answer

Voidable

Answer

Unenforceable

Answer

Executed

Question 25

Which of the following can make a contract unenforceable?

Accepted Answer

Statute of Limitations

Answer

Offer

Answer

Acceptance

Question 26

Which type of contract is formed solely through spoken words without a written agreement?

Accepted Answer

Oral contract

Answer

Unilateral contract

Answer

Implied contract

Answer

Bilateral contract

Question 27

Which element of an express contract refers to the agreement of both parties on the terms of the contract?

Accepted Answer

Meeting of the minds

Answer

Consideration

Answer

Acceptance

Answer

Offer

Question 28

Which type of contract involves two parties making reciprocal promises to each other?

Accepted Answer

Bilateral contract

Answer

Implied contract

Answer

Unilateral contract

Question 29

Which type of contract is inferred from the conduct of the parties rather than explicit verbal or written agreements?

Accepted Answer

Implied contract

Answer

Bilateral contract

Answer

Unilateral contract

Answer

Express contract

Question 30

Which type of contract is a formal written agreement signed by both parties?

Accepted Answer

Written contract

Answer

Verbal contract

Answer

Implied contract

Answer

Unilateral contract

Question 31

Which of the following is a common example of a unilateral contract?

Accepted Answer

A reward offered for the return of a lost item

Answer

A contract for the sale of a car

Answer

A lease agreement

Answer

A partnership agreement

Question 32

Which element is NOT essential for a valid and enforceable contract?

Accepted Answer

Moral obligation

Answer

Consideration

Answer

Offer

Answer

Acceptance

Question 33

Which type of contract is formed through the actions of the parties rather than through express words or a written agreement?

Accepted Answer

Implied contract

Answer

Unilateral contract

Answer

Bilateral contract

Answer

Verbal contract

Question 34

Which of the following is an advantage of using written contracts in business transactions?

Accepted Answer

Provides a tangible record of the agreement

Answer

Less formal

Answer

More easily modified

Answer

Easier to memorize

Question 35

Which type of contract involves only one party making a promise or obligation?

Accepted Answer

Unilateral contract

Answer

Bilateral contract

Answer

Implied contract

Answer

Executed contract

Question 36

Which of the following is a valid legal reason to void a contract?

Accepted Answer

Duress

Answer

Change of heart

Answer

Regretting the agreed-upon price

Answer

Finding a better deal elsewhere

Question 37

What is the term for a contract where the terms are clearly stated, whether spoken or written?

Accepted Answer

Express Contract

Answer

Bilateral Contract

Answer

Unilateral Contract

Answer

Implied Contract

Question 38

What type of contract is formed through the actions of the parties rather than a specific agreement?

Accepted Answer

Implied Contract

Answer

Express Contract

Answer

Written Contract

Answer

Bilateral Contract

Question 39

What is the term for a contract that is documented in writing?

Accepted Answer

Written Contract

Answer

Express Contract

Answer

Oral Contract

Answer

Implied Contract

Question 40

What is the term for a contract established through spoken words instead of writing?

Accepted Answer

Oral Contract

Answer

Implied Contract

Answer

Written Contract

Answer

Unilateral Contract

Question 41

What is the term for a contract where both parties make a promise to perform specific actions?

Accepted Answer

Bilateral Contract

Answer

Implied Contract

Answer

Unilateral Contract

Answer

Express Contract

Question 42

What type of contract involves one party making a promise that the other party accepts by performing a specific action?

Accepted Answer

Unilateral Contract

Answer

Bilateral Contract

Answer

Express Contract

Answer

Implied Contract

Question 43

Ordering food from a restaurant menu is an example of which type of contract?

Accepted Answer

Implied Contract

Answer

Unilateral Contract

Answer

Written Contract

Answer

Express Contract

Question 44

Which of the following is NOT a required element for a valid contract?

Accepted Answer

Written Form

Answer

Acceptance

Answer

Offer

Answer

Consideration

Question 45

What is the term for a contract that can be voided due to one party lacking legal capacity, such as a minor?

Accepted Answer

Voidable Contract

Answer

Unenforceable Contract

Answer

Void Contract

Answer

Valid Contract

Question 46

A contract that is illegal or against public policy is considered:

Accepted Answer

Void Contract

Answer

Voidable Contract

Answer

Unenforceable Contract

Answer

Valid Contract

Question 47

Which type of contract is formed through the actions or conduct of the parties involved, rather than explicit words?

Accepted Answer

Implied Contract

Answer

Oral Contract

Answer

Express Contract

Answer

Written Contract

Question 48

A contract where both parties exchange promises to perform certain actions is known as a:

Accepted Answer

Bilateral Contract

Answer

Unilateral Contract

Answer

Voidable Contract

Answer

Executory Contract

Question 49

Which of the following is NOT a requirement for a valid contract?

Accepted Answer

Written Form

Answer

Consideration

Answer

Acceptance

Answer

Offer

Question 50

A contract that is legally enforceable, but can be canceled by one party due to certain circumstances, is known as a:

Accepted Answer

Voidable Contract

Answer

Void Contract

Answer

Executory Contract

Answer

Unenforceable Contract

Question 51

A contract where one party makes a promise, and the other party accepts by performing a specific action, is classified as:

Accepted Answer

Unilateral Contract

Answer

Express Contract

Answer

Implied Contract

Answer

Bilateral Contract

Question 52

Which type of contract is created when the terms are clearly stated in written or spoken words?

Accepted Answer

Express Contract

Answer

Written Contract

Answer

Oral Contract

Answer

Implied Contract

Question 53

A contract that has not yet been fully performed by either party is known as:

Accepted Answer

Executory Contract

Answer

Executed Contract

Answer

Voidable Contract

Answer

Unenforceable Contract

Question 54

Which of the following is NOT an example of consideration in a contract?

Accepted Answer

A Promise to Gift

Answer

Money

Answer

Goods

Answer

Services

Question 55

A contract that is lacking one or more essential elements, making it legally invalid, is considered:

Accepted Answer

Void Contract

Answer

Executory Contract

Answer

Voidable Contract

Answer

Unenforceable Contract

Question 56

A contract that is valid but cannot be enforced due to a legal technicality, such as the statute of limitations, is classified as:

Accepted Answer

Unenforceable Contract

Answer

Executory Contract

Answer

Void Contract

Answer

Voidable Contract