CONTRACT LAW EXAM 2026 ACTUAL QUESTIONS AND
100% VERIFIED ANSWERS PLUS RATIONALES.
1. Which of the following is NOT an essential element of a valid contract?
A. Offer
B. Acceptance
C. Social intention
D. Consideration
Correct Answer: C
Rationale: A valid contract requires offer, acceptance, consideration, and intention to
create legal relations—not social intention. Social agreements typically lack legal
enforceability.
2. An offer is best defined as:
A. A statement of future intention
B. A willingness to negotiate
C. A definite promise to be bound on acceptance
D. A mere invitation to treat
Correct Answer: C
Rationale: An offer is a clear expression of willingness to be bound upon acceptance.
Options A, B, and D lack the required definiteness.
3. Which of the following is an example of an invitation to treat?
A. A signed contract
B. Goods displayed in a shop window
C. A formal job offer
D. A reward advertisement
Correct Answer: B
Rationale: Display of goods is an invitation to treat, inviting customers to make
offers. Reward ads may constitute unilateral offers.
4. Acceptance must be:
A. Conditional
B. Silent
C. Unqualified and absolute
D. Implied by law only
Correct Answer: C
Rationale: Acceptance must mirror the offer exactly (mirror rule). Conditional
acceptance amounts to a counteroffer.
,5. The postal rule applies when:
A. Acceptance is sent by email
B. Acceptance is posted
C. Offer is made verbally
D. Revocation is communicated
Correct Answer: B
Rationale: Under the postal rule, acceptance is effective upon posting, not upon
receipt.
6. Consideration must be:
A. Adequate but not sufficient
B. Sufficient but not necessarily adequate
C. Both adequate and sufficient
D. Neither adequate nor sufficient
Correct Answer: B
Rationale: Consideration must have some legal value (sufficient), but courts do not
assess its adequacy.
7. Past consideration is:
A. Always valid
B. Valid in all jurisdictions
C. Not valid consideration
D. Equivalent to future consideration
Correct Answer: C
Rationale: Consideration must be present or future; past acts generally do not
qualify.
8. Which doctrine prevents a party from going back on a promise without consideration?
A. Frustration
B. Estoppel
C. Mistake
D. Duress
Correct Answer: B
Rationale: Promissory estoppel prevents a party from reneging on a promise relied
upon by another.
9. A contract made under duress is:
A. Void
B. Voidable
C. Illegal
D. Valid
Correct Answer: B
, Rationale: Contracts formed under duress are voidable at the option of the aggrieved
party.
10. Misrepresentation renders a contract:
A. Void automatically
B. Voidable
C. Illegal
D. Enforceable
Correct Answer: B
Rationale: Misrepresentation allows the innocent party to rescind the contract.
11. A unilateral contract involves:
A. Two promises
B. One promise in exchange for an act
C. No consideration
D. Only written agreements
Correct Answer: B
Rationale: One party promises something in return for performance by the other.
12. The capacity to contract excludes:
A. Adults
B. Minors
C. Corporations
D. Government entities
Correct Answer: B
Rationale: Minors generally lack full capacity to contract.
13. A mistake as to the identity of a contracting party may render a contract:
A. Valid
B. Void
C. Voidable
D. Illegal
Correct Answer: B
Rationale: Fundamental mistakes can make a contract void due to lack of consensus.
14. An agreement without consideration is:
A. Always valid
B. Always void
C. Void unless exceptions apply
D. Illegal
, Correct Answer: C
Rationale: Consideration is essential unless exceptions like deeds apply.
15. Which remedy aims to restore parties to their original position?
A. Damages
B. Specific performance
C. Rescission
D. Injunction
Correct Answer: C
Rationale: Rescission cancels the contract and restores parties to pre-contract status.
16. Specific performance is:
A. Monetary compensation
B. An equitable remedy
C. A criminal penalty
D. Always granted
Correct Answer: B
Rationale: It is an equitable remedy requiring actual performance, granted at court
discretion.
17. A counteroffer has the effect of:
A. Accepting the original offer
B. Rejecting the original offer
C. Suspending the offer
D. Confirming the offer
Correct Answer: B
Rationale: A counteroffer destroys the original offer.
18. Intention to create legal relations is presumed in:
A. Social agreements
B. Domestic arrangements
C. Commercial agreements
D. Informal promises
Correct Answer: C
Rationale: Commercial agreements are presumed legally binding.
19. Which of the following is a valid form of acceptance?
A. Silence
B. Counteroffer
C. Express communication
100% VERIFIED ANSWERS PLUS RATIONALES.
1. Which of the following is NOT an essential element of a valid contract?
A. Offer
B. Acceptance
C. Social intention
D. Consideration
Correct Answer: C
Rationale: A valid contract requires offer, acceptance, consideration, and intention to
create legal relations—not social intention. Social agreements typically lack legal
enforceability.
2. An offer is best defined as:
A. A statement of future intention
B. A willingness to negotiate
C. A definite promise to be bound on acceptance
D. A mere invitation to treat
Correct Answer: C
Rationale: An offer is a clear expression of willingness to be bound upon acceptance.
Options A, B, and D lack the required definiteness.
3. Which of the following is an example of an invitation to treat?
A. A signed contract
B. Goods displayed in a shop window
C. A formal job offer
D. A reward advertisement
Correct Answer: B
Rationale: Display of goods is an invitation to treat, inviting customers to make
offers. Reward ads may constitute unilateral offers.
4. Acceptance must be:
A. Conditional
B. Silent
C. Unqualified and absolute
D. Implied by law only
Correct Answer: C
Rationale: Acceptance must mirror the offer exactly (mirror rule). Conditional
acceptance amounts to a counteroffer.
,5. The postal rule applies when:
A. Acceptance is sent by email
B. Acceptance is posted
C. Offer is made verbally
D. Revocation is communicated
Correct Answer: B
Rationale: Under the postal rule, acceptance is effective upon posting, not upon
receipt.
6. Consideration must be:
A. Adequate but not sufficient
B. Sufficient but not necessarily adequate
C. Both adequate and sufficient
D. Neither adequate nor sufficient
Correct Answer: B
Rationale: Consideration must have some legal value (sufficient), but courts do not
assess its adequacy.
7. Past consideration is:
A. Always valid
B. Valid in all jurisdictions
C. Not valid consideration
D. Equivalent to future consideration
Correct Answer: C
Rationale: Consideration must be present or future; past acts generally do not
qualify.
8. Which doctrine prevents a party from going back on a promise without consideration?
A. Frustration
B. Estoppel
C. Mistake
D. Duress
Correct Answer: B
Rationale: Promissory estoppel prevents a party from reneging on a promise relied
upon by another.
9. A contract made under duress is:
A. Void
B. Voidable
C. Illegal
D. Valid
Correct Answer: B
, Rationale: Contracts formed under duress are voidable at the option of the aggrieved
party.
10. Misrepresentation renders a contract:
A. Void automatically
B. Voidable
C. Illegal
D. Enforceable
Correct Answer: B
Rationale: Misrepresentation allows the innocent party to rescind the contract.
11. A unilateral contract involves:
A. Two promises
B. One promise in exchange for an act
C. No consideration
D. Only written agreements
Correct Answer: B
Rationale: One party promises something in return for performance by the other.
12. The capacity to contract excludes:
A. Adults
B. Minors
C. Corporations
D. Government entities
Correct Answer: B
Rationale: Minors generally lack full capacity to contract.
13. A mistake as to the identity of a contracting party may render a contract:
A. Valid
B. Void
C. Voidable
D. Illegal
Correct Answer: B
Rationale: Fundamental mistakes can make a contract void due to lack of consensus.
14. An agreement without consideration is:
A. Always valid
B. Always void
C. Void unless exceptions apply
D. Illegal
, Correct Answer: C
Rationale: Consideration is essential unless exceptions like deeds apply.
15. Which remedy aims to restore parties to their original position?
A. Damages
B. Specific performance
C. Rescission
D. Injunction
Correct Answer: C
Rationale: Rescission cancels the contract and restores parties to pre-contract status.
16. Specific performance is:
A. Monetary compensation
B. An equitable remedy
C. A criminal penalty
D. Always granted
Correct Answer: B
Rationale: It is an equitable remedy requiring actual performance, granted at court
discretion.
17. A counteroffer has the effect of:
A. Accepting the original offer
B. Rejecting the original offer
C. Suspending the offer
D. Confirming the offer
Correct Answer: B
Rationale: A counteroffer destroys the original offer.
18. Intention to create legal relations is presumed in:
A. Social agreements
B. Domestic arrangements
C. Commercial agreements
D. Informal promises
Correct Answer: C
Rationale: Commercial agreements are presumed legally binding.
19. Which of the following is a valid form of acceptance?
A. Silence
B. Counteroffer
C. Express communication
