PACO 501 EXAM 3 ACTUAL TEST PAPER 2026
QUESTIONS WITH ANSWERS GRADED A+
◉ Executory Contract. Answer: A contract that has not been fully
performed on one side
◉ Executed Contract. Answer: A contract that has been fully
performed by both parties
◉ Offeree. Answer: Party to whom an offer was made
◉ Offeror. Answer: Party making an offer
◉ Promise
(Is it a contract by itself?). Answer: A promise is not legally
enforceable in court unless it forms a contract
◉ Promisor. Answer: Party making a promise
◉ Promisee. Answer: Party to whom a promise was made
◉ Elements needed to prove a contract existed. Answer: - Offer
,- Acceptance
- Contractual Capacity
- Legality
◉ Merchant (Defined by the Uniform Commercial Code). Answer: A
person who deals in the goods contracted for or holds himself out as
having special knowledge or skill regarding the contracted goods
◉ Sources of Contracts. Answer: Sources include Common law, State
Statutory law, and the UCC.
◉ What types of contracts does the UCC apply to?. Answer: Applies
to contracts made for merchants and goods
◉ Requirements for an Implied Contract. Answer: - Plaintiff
furnished a service or good
- Defendant knew or should have known Plaintiff wanted to contract
- Defendant had a chance to say "no" to the services
◉ Bilateral Contract. Answer: A promise is given in return for
another promise as part of a contract. Offeror makes a promise and
offeree accepts by making a return promise
,◉ Unilateral Contract. Answer: Offer can be accepted by acting
without the need for a return promise
*Can be revoked before the party starts the act
◉ Void Contract. Answer: A contract that is not valid and is no
contract at all.
◉ Voidable Contract. Answer: A contract that may be voidable at the
option of one of the parties
◉ Unenforceable Contract. Answer: Contracts that cannot be
enforced in court
◉ Quasi Contract. Answer: A legal fiction imposed by courts to
prevent unjust enrichment
◉ Carlyle v. Carbolic Smoke Ball Co.. Answer: - Carbolic Smoke Ball
Company offers an award of 100 pounds to anyone who used their
product three times a week and still obtained influenza.
- Plaintiff used the smoke ball three times a week and still obtained
influenza.
- Company claims their advertisement was not an offer.
- Court disagrees and states this was an offer for a unilateral
contract. Plaintiff accepted offer by using the smoke ball as directed.
, ◉ Lucy v. Zehmer. Answer: -Lucy and Zehmer were drinking. Lucy
wants to buy land from Zehmer. Zehmer agrees to sell the land to
Lucy and writes down the "contract" on a piece of paper/napkin.
- Zehmer then claims it was a "joke"
- Court says Zehmer and Lucy formed a legally enforceable contract
Objective intent the standard not "subjective"
◉ Valid Offer requirements. Answer: Must
- Be made with serious objective intent
- Be communicated to the offeree
- Be made with enough specific terms to hold the offeror liable
◉ Objective Standard. Answer: When determining the intent of the
offeror, use what?
◉ Types of Non-Offers. Answer: - Expression of opinion
+ "I would like to"
- Statements of intention
+ "I plan"
- Solicitation of bids
+ "How much would you charge?"
QUESTIONS WITH ANSWERS GRADED A+
◉ Executory Contract. Answer: A contract that has not been fully
performed on one side
◉ Executed Contract. Answer: A contract that has been fully
performed by both parties
◉ Offeree. Answer: Party to whom an offer was made
◉ Offeror. Answer: Party making an offer
◉ Promise
(Is it a contract by itself?). Answer: A promise is not legally
enforceable in court unless it forms a contract
◉ Promisor. Answer: Party making a promise
◉ Promisee. Answer: Party to whom a promise was made
◉ Elements needed to prove a contract existed. Answer: - Offer
,- Acceptance
- Contractual Capacity
- Legality
◉ Merchant (Defined by the Uniform Commercial Code). Answer: A
person who deals in the goods contracted for or holds himself out as
having special knowledge or skill regarding the contracted goods
◉ Sources of Contracts. Answer: Sources include Common law, State
Statutory law, and the UCC.
◉ What types of contracts does the UCC apply to?. Answer: Applies
to contracts made for merchants and goods
◉ Requirements for an Implied Contract. Answer: - Plaintiff
furnished a service or good
- Defendant knew or should have known Plaintiff wanted to contract
- Defendant had a chance to say "no" to the services
◉ Bilateral Contract. Answer: A promise is given in return for
another promise as part of a contract. Offeror makes a promise and
offeree accepts by making a return promise
,◉ Unilateral Contract. Answer: Offer can be accepted by acting
without the need for a return promise
*Can be revoked before the party starts the act
◉ Void Contract. Answer: A contract that is not valid and is no
contract at all.
◉ Voidable Contract. Answer: A contract that may be voidable at the
option of one of the parties
◉ Unenforceable Contract. Answer: Contracts that cannot be
enforced in court
◉ Quasi Contract. Answer: A legal fiction imposed by courts to
prevent unjust enrichment
◉ Carlyle v. Carbolic Smoke Ball Co.. Answer: - Carbolic Smoke Ball
Company offers an award of 100 pounds to anyone who used their
product three times a week and still obtained influenza.
- Plaintiff used the smoke ball three times a week and still obtained
influenza.
- Company claims their advertisement was not an offer.
- Court disagrees and states this was an offer for a unilateral
contract. Plaintiff accepted offer by using the smoke ball as directed.
, ◉ Lucy v. Zehmer. Answer: -Lucy and Zehmer were drinking. Lucy
wants to buy land from Zehmer. Zehmer agrees to sell the land to
Lucy and writes down the "contract" on a piece of paper/napkin.
- Zehmer then claims it was a "joke"
- Court says Zehmer and Lucy formed a legally enforceable contract
Objective intent the standard not "subjective"
◉ Valid Offer requirements. Answer: Must
- Be made with serious objective intent
- Be communicated to the offeree
- Be made with enough specific terms to hold the offeror liable
◉ Objective Standard. Answer: When determining the intent of the
offeror, use what?
◉ Types of Non-Offers. Answer: - Expression of opinion
+ "I would like to"
- Statements of intention
+ "I plan"
- Solicitation of bids
+ "How much would you charge?"
