Cochran ACCT 2700 Business Law Final – Contracts, Offer &
Consideration Exam Guide Verified Questions with A+ Graded
Rationales Latest Updated 2026
What is the definition of a contract?
A promise or set of promises for breach of which the law provides a remedy, or the
performance of which the law recognizes as a duty.
What does the Objective Theory of Contracts state?
Contracts and their terms are determined by the actions of the parties involved, not by what
they say they meant.
What are the four essential elements of a contract?
Agreement, consideration, contractual capacity, and legality.
What is the difference between an executed contract and an executory contract?
An executed contract has been fully performed on both sides, while an executory contract has
been fully performed on either side.
What is a valid contract?
A valid contract includes an agreement, consideration, contractual capacity, and legality.
What is a void contract?
A void contract is one that is not legally enforceable.
What is a voidable contract?
A voidable contract is one that may be unenforceable due to certain circumstances.
What is the Plain Meaning Rule in contract interpretation?
The Plain Meaning Rule states that if the terms of a contract are clear, they will be interpreted
according to their plain meaning.
What is required for an offer to be valid?
The offer must demonstrate the offeror's serious intention, definiteness of terms, and be
communicated to the offeree.
What is the significance of the case Lucy v. Zehmer (1954)?
, This case illustrates that a valid contract can be enforced even if one party claims they were not
serious about the offer, as evidenced by their actions.
What is consideration in the context of contracts?
Consideration refers to the value exchanged between parties in a contract.
What does 'mutual voluntary assent' mean in contract law?
It means that both parties must agree to the terms of the contract willingly.
What is the role of the reasonable person standard in contract law?
It is used to determine how a reasonable person would interpret the actions and intentions of
the parties involved.
What are the types of contracts based on performance?
Executed contracts (fully performed) and executory contracts (not fully performed).
What does it mean for a contract to be unenforceable?
An otherwise valid contract may still be unenforceable due to certain legal defenses or
circumstances.
What is the importance of personal responsibility in contract law?
Contract law emphasizes personal responsibility and accountability, as keeping promises builds
trust.
What is the difference between an offer and an invitation to negotiate?
An offer is a definite proposal that can be accepted to form a contract, while an invitation to
negotiate is merely an expression of willingness to discuss terms.
What is meant by 'expressions of opinion' in contract law?
Expressions of opinion are not considered offers and cannot form the basis of a contract.
What is the significance of the phrase 'a person's word is their bond' in contract law?
It reflects the moral obligation to keep promises, which is a foundational principle of contract
enforcement.
What is the role of extrinsic evidence in contract interpretation?
Extrinsic evidence may be admitted by the court if the terms of a contract are unclear or
ambiguous.
Consideration Exam Guide Verified Questions with A+ Graded
Rationales Latest Updated 2026
What is the definition of a contract?
A promise or set of promises for breach of which the law provides a remedy, or the
performance of which the law recognizes as a duty.
What does the Objective Theory of Contracts state?
Contracts and their terms are determined by the actions of the parties involved, not by what
they say they meant.
What are the four essential elements of a contract?
Agreement, consideration, contractual capacity, and legality.
What is the difference between an executed contract and an executory contract?
An executed contract has been fully performed on both sides, while an executory contract has
been fully performed on either side.
What is a valid contract?
A valid contract includes an agreement, consideration, contractual capacity, and legality.
What is a void contract?
A void contract is one that is not legally enforceable.
What is a voidable contract?
A voidable contract is one that may be unenforceable due to certain circumstances.
What is the Plain Meaning Rule in contract interpretation?
The Plain Meaning Rule states that if the terms of a contract are clear, they will be interpreted
according to their plain meaning.
What is required for an offer to be valid?
The offer must demonstrate the offeror's serious intention, definiteness of terms, and be
communicated to the offeree.
What is the significance of the case Lucy v. Zehmer (1954)?
, This case illustrates that a valid contract can be enforced even if one party claims they were not
serious about the offer, as evidenced by their actions.
What is consideration in the context of contracts?
Consideration refers to the value exchanged between parties in a contract.
What does 'mutual voluntary assent' mean in contract law?
It means that both parties must agree to the terms of the contract willingly.
What is the role of the reasonable person standard in contract law?
It is used to determine how a reasonable person would interpret the actions and intentions of
the parties involved.
What are the types of contracts based on performance?
Executed contracts (fully performed) and executory contracts (not fully performed).
What does it mean for a contract to be unenforceable?
An otherwise valid contract may still be unenforceable due to certain legal defenses or
circumstances.
What is the importance of personal responsibility in contract law?
Contract law emphasizes personal responsibility and accountability, as keeping promises builds
trust.
What is the difference between an offer and an invitation to negotiate?
An offer is a definite proposal that can be accepted to form a contract, while an invitation to
negotiate is merely an expression of willingness to discuss terms.
What is meant by 'expressions of opinion' in contract law?
Expressions of opinion are not considered offers and cannot form the basis of a contract.
What is the significance of the phrase 'a person's word is their bond' in contract law?
It reflects the moral obligation to keep promises, which is a foundational principle of contract
enforcement.
What is the role of extrinsic evidence in contract interpretation?
Extrinsic evidence may be admitted by the court if the terms of a contract are unclear or
ambiguous.
