Master Contract Law: Agreement - Free Practice Quizzes

Question 1

In contract law, what is the primary difference between a unilateral and a bilateral waiver?

Accepted Answer

Unilateral waivers are made by one party, while bilateral waivers require agreement from both parties.

Answer

Bilateral waivers always modify contracts, while unilateral waivers can modify or end them.

Answer

Unilateral waivers need consideration, while bilateral waivers do not.

Answer

Bilateral waivers are legally binding, while unilateral waivers are not.

Question 2

What legal outcome may arise if a party fails to meet their contractual obligation due to an unforeseen event?

Accepted Answer

Contract termination

Answer

Immediate contract violation

Answer

Obligation waiver

Answer

No legal repercussions

Question 3

Novation refers to:

Accepted Answer

The replacement of an existing contract with a new one, which discharges the former contract.

Answer

The discharge of a contract by mutual agreement, without the need for a new contract.

Answer

The modification of an existing contract, with the consent of all parties.

Answer

The termination of a contract by performance, which fulfills all obligations.

Question 4

Which of the following statements about waiver is accurate?

Accepted Answer

It is a legally binding relinquishment of a right without consideration.

Answer

It can only be implied, not expressed.

Answer

It applies solely to contractual rights.

Answer

It requires proof of detrimental reliance by the party asserting the waiver.

Question 5

In the context of rescission for misrepresentation, which of the following is NOT an available remedy?

Accepted Answer

Specific performance

Answer

Restitution

Answer

Damages

Answer

Recission

Question 6

The doctrine of frustration of purpose:

Accepted Answer

Applies when an unforeseen event makes the purpose of the contract impossible to fulfill.

Answer

Requires a complete failure of consideration.

Answer

Is only applicable to contracts for the sale of goods.

Answer

Is a defense available in all cases of breach of contract.

Question 7

Which of the following is NOT an essential element of novation?

Accepted Answer

The exchange of consideration

Answer

The creation of a new contract

Answer

The discharge of an existing contract

Answer

The consent of all parties involved

Question 8

Which of the following is NOT a remedy for breach of contract?

Accepted Answer

Quantum meruit

Answer

Rescission

Answer

Damages

Answer

Specific performance

Question 9

What is the primary effect of novation on an existing contract?

Accepted Answer

It substitutes the old contract with a new one, extinguishing the obligations under the old contract.

Answer

It discharges the old contract, releasing the parties from their obligations.

Answer

It modifies the terms of the old contract, creating a new agreement between the parties.

Answer

It has no effect on the old contract, which remains in force.

Question 10

Which of the following is NOT recognized as a type of frustration of contract?

Accepted Answer

Breach of contract by one party

Answer

Subsequent illegality

Answer

Impossibility of performance

Answer

Unforeseen change in circumstances

Question 11

What is the unique characteristic of a voidable contract?

Accepted Answer

It is initially valid but can be rescinded by the innocent party due to specific legal grounds.

Answer

It is valid and binding on both parties from its inception.

Answer

It is void from the outset and has no legal effect.

Answer

It is enforceable only if the party who has the right to avoid it chooses to affirm it.

Question 12

What is the primary purpose of the parol evidence rule?

Accepted Answer

To prevent the introduction of extrinsic evidence that contradicts or varies the terms of a written contract.

Answer

To ensure that all agreements between the parties are in writing to avoid misunderstandings.

Answer

To limit the amount of evidence that can be presented in court to streamline the litigation process.

Answer

To encourage parties to negotiate and document their agreements carefully.

Question 13

Which of the following is NOT a ground for rescission of a contract?

Accepted Answer

Mistake of law

Answer

Fraud

Answer

Unconscionability

Answer

Duress

Question 14

When is a novation operative?

Accepted Answer

Upon agreement of the parties and provision of consideration

Answer

Upon the formation of a new contract that replaces the existing one

Answer

Only with the consent of all parties to the original contract

Answer

Upon the occurrence of a material breach of the original contract

Question 15

What is the main distinction between rescission and termination of a contract?

Accepted Answer

Rescission sets aside the contract from its inception, while termination ends it from a future date

Answer

Termination sets aside the contract from its inception, while rescission ends it from a future date

Answer

Rescission only applies to written contracts, while termination can apply to both written and oral contracts

Answer

Termination requires the consent of both parties, while rescission can be unilateral

Question 16

What is the primary aim of the principle of restitutio in integrum in rescission?

Accepted Answer

To restore the parties to their pre-contractual positions

Answer

To punish the party who breached the contract

Answer

To provide compensation for losses suffered

Answer

To prevent further breaches of contract

Question 17

A novation is a new contract that:

Accepted Answer

Replaces and extinguishes an existing contract

Answer

Is additional to an existing contract

Answer

Modifies the terms of an existing contract

Answer

Terminates an existing contract without replacing it

Question 18

A novation can only be made:

Accepted Answer

With the consent of all parties to the original contract

Answer

By a court order

Answer

By the original parties to the contract

Question 19

A novation is a valid contract if it:

Accepted Answer

Is supported by consideration

Answer

Benefits all parties

Answer

Is witnessed by an independent third party

Answer

Is in writing

Question 20

A contract can be discharged by rescission when:

Accepted Answer

Both parties agree to terminate the contract and restore each other to their pre-contractual positions.

Answer

One party breaches the contract and the other party seeks to end it.

Question 21

Which of the following is NOT a key element of novation?

Accepted Answer

The original contract is automatically terminated upon novation.

Answer

A new contract is created.

Answer

The original parties agree to replace the existing contract with a new one.

Question 22

A waiver in contract law is best described as:

Accepted Answer

A voluntary relinquishment of a known right under a contract.

Answer

A court order requiring one party to perform their contractual obligations.

Answer

A legal remedy for breach of contract.

Question 23

In a contract for the sale of goods, the buyer discovers a defect and wishes to rescind the contract. Which of the following is NOT a requirement for successful rescission?

Accepted Answer

The buyer must have relied on a misrepresentation made by the seller.

Answer

The buyer must act promptly to rescind the contract upon discovery of the defect.

Answer

The defect must be substantial and affect the value of the goods.

Question 24

A construction company agrees to build a house for a client. Due to unforeseen delays, the client agrees to substitute a different builder. This scenario best exemplifies:

Accepted Answer

Novation.

Answer

Waiver.

Answer

Rescission.

Question 25

A landlord agrees to waive a late rent payment from a tenant on one occasion. This action is likely to:

Accepted Answer

Create a precedent for future rent payments, potentially binding the landlord to waive late payments in the future.

Answer

Automatically terminate the lease agreement.

Question 26

Which of the following is a valid ground for rescission based on misrepresentation?

Accepted Answer

The misrepresentation was material to the contract and induced the other party to enter into it.

Answer

The misrepresentation was an honest mistake and not intended to deceive.

Answer

The misrepresentation was made by a third party who was not involved in the contract.

Question 27

A party's attempt to unilaterally terminate a contract due to the other party's minor breach is likely to be:

Accepted Answer

Unsuccessful, as a minor breach generally does not justify rescission.

Answer

Dependent on the specific terms of the contract.

Answer

Successful, as the party is entitled to terminate for any breach.

Question 28

A novation agreement typically involves:

Accepted Answer

All parties to the original contract.

Answer

Only the parties who are being replaced.

Answer

The court that originally approved the original contract.

Answer

Only the parties who are taking over the obligations.

Question 29

Which of the following scenarios BEST illustrates a waiver in contract law?

Accepted Answer

A homeowner agrees to overlook a contractor's late completion of a project due to unforeseen circumstances.

Answer

A tenant breaks a lease agreement and moves out early.