LGS 200 Exam 3 UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Parties to a Contract - CORRECT ANSWER Individuals or entities entering into a
legally binding agreement.
Elements of a Valid Contract - CORRECT ANSWER Offer, acceptance, consideration,
mutual assent, capacity, and legal purpose.
Consideration - CORRECT ANSWER Something of legal value exchanged between
parties.
Bargained-for Exchange - CORRECT ANSWER Each party must give something of
value and receive something in return.
Capacity - CORRECT ANSWER The legal ability to enter into a contract.
Who does not have Capacity - CORRECT ANSWER Minors, mentally incompetent
people, and intoxicated individuals.
Express Contracts - CORRECT ANSWER Contracts where the terms are clearly stated
orally or in writing.
Implied in Fact Contract - CORRECT ANSWER A contract formed by the conduct or
actions of the parties.
Implied in Law (Quasi) Contract - CORRECT ANSWER A contract formed by the
conduct of actions of the parties.
Formations of Contracts - CORRECT ANSWER Occurs when a valid offer is accepted
with consideration and mutual assent.
, Valid Offer - CORRECT ANSWER A clear statement of willingness to enter into a
contract with definite terms.
Termination of Offers - CORRECT ANSWER Occurs when an offer can no longer be
accepted.
Termination by Operation of Law - CORRECT ANSWER Death, destruction of subject
matter, illegality, or lapse of time.
Objective Test - CORRECT ANSWER Determines intent based on how a reasonable
person would interpret actions or words.
Illusory Promises - CORRECT ANSWER Promises that do not actually bind the
promisor to perform anything.
Unilateral Offers - CORRECT ANSWER Promises made in exchange for the
performance of an act.
Acceptance of an Offer - CORRECT ANSWER Agreement by the offeree to the exact
terms of the offer.
Counteroffers - CORRECT ANSWER Rejection of the original offer combined with a
new offer.
Revocation - CORRECT ANSWER Withdrawal of an offer by the offeror before
acceptance.
Rejection of an Offer - CORRECT ANSWER Mutual cancellation of a contract by the
parties.
QUESTIONS AND CORRECT ANSWERS
Parties to a Contract - CORRECT ANSWER Individuals or entities entering into a
legally binding agreement.
Elements of a Valid Contract - CORRECT ANSWER Offer, acceptance, consideration,
mutual assent, capacity, and legal purpose.
Consideration - CORRECT ANSWER Something of legal value exchanged between
parties.
Bargained-for Exchange - CORRECT ANSWER Each party must give something of
value and receive something in return.
Capacity - CORRECT ANSWER The legal ability to enter into a contract.
Who does not have Capacity - CORRECT ANSWER Minors, mentally incompetent
people, and intoxicated individuals.
Express Contracts - CORRECT ANSWER Contracts where the terms are clearly stated
orally or in writing.
Implied in Fact Contract - CORRECT ANSWER A contract formed by the conduct or
actions of the parties.
Implied in Law (Quasi) Contract - CORRECT ANSWER A contract formed by the
conduct of actions of the parties.
Formations of Contracts - CORRECT ANSWER Occurs when a valid offer is accepted
with consideration and mutual assent.
, Valid Offer - CORRECT ANSWER A clear statement of willingness to enter into a
contract with definite terms.
Termination of Offers - CORRECT ANSWER Occurs when an offer can no longer be
accepted.
Termination by Operation of Law - CORRECT ANSWER Death, destruction of subject
matter, illegality, or lapse of time.
Objective Test - CORRECT ANSWER Determines intent based on how a reasonable
person would interpret actions or words.
Illusory Promises - CORRECT ANSWER Promises that do not actually bind the
promisor to perform anything.
Unilateral Offers - CORRECT ANSWER Promises made in exchange for the
performance of an act.
Acceptance of an Offer - CORRECT ANSWER Agreement by the offeree to the exact
terms of the offer.
Counteroffers - CORRECT ANSWER Rejection of the original offer combined with a
new offer.
Revocation - CORRECT ANSWER Withdrawal of an offer by the offeror before
acceptance.
Rejection of an Offer - CORRECT ANSWER Mutual cancellation of a contract by the
parties.
