FINAL MILESTONE SOPHIA BUSINESS LAW
EXAM PREP QUESTIONS AND ANSWERS 2026
PRACTICE SOLUTION STUDY GUIDE GRADED
A+
◉ Which of the following does not demonstrate a party's lack of
contractual capacity? Answer: One of the parties refuses to accept
the offer. (13)
◉ If you have an infected appendix and the surgeon removes your
appendix without prior negotiation of payment or even any mention
of payment, a(n) ________blank promise for payment of services
rendered exists. Answer: implied (13)
◉ A quasi-contract is sometimes called an implied-in-law contract.
The goal of a quasi-contract is to: Answer: prevent one party from
being unjustly enriched at the expense of another. (13)
◉ Which of the following contracts falls under Article 2 of the
Uniform Commercial Code (UCC)? Answer: Contract for the sale of a
good (13)
◉ A(n) ________blank contract arises not from words, but from the
conduct of the parties. Answer: implied (13)
,◉ A(n) ________blank contract is defined as a promise by one party
made in exchange for a promise by the other party. Answer: bilateral
(13)
◉ The terms of a(n) ________blank contract are all clearly set forth in
either written or spoken words. Answer: express (13)
◉ The ________blank states that we base the existence of a contract on
the parties' outward manifestations of intent, and we base its
interpretation on how a reasonable person would interpret it.
Answer: objective theory of contracts (13)
◉ A(n) ________blank contract represents a situation where the
offeror seeks performance from the offeree to form the contract.
Answer: unilateral (13)
◉ Bilateral and unilateral contracts are best described by which of
the following statements? Answer: Unilateral contracts call for
actions, not promises, whereas bilateral contracts involve promises
in exchange for promises. (13)
◉ An agreement is based upon: Answer: offer and an acceptance.
(13)
,◉ A(n) ________blank contract is, in effect, not a contract at all
because its object is illegal, or it has a defect so serious that the
agreement is not a contract at all. Answer: void (13)
◉ Common law, one of the two most important sources of contract
law, is derived from: Answer: judicial decisions. (13)
◉ The ________blank rule states that if a writing, or a term in
question, appears to be ________blank on its face, we must determine
its meaning from just "the four corners" of the document, without
resorting to outside evidence, and give the words their ordinary
meaning. Answer: plain meaning; unambiguous (13)
◉ A key feature of a voidable contract is that: Answer: if one party
chooses to terminate the agreement, both parties must return
anything they had already exchanged under the agreement. (13)
◉ Which of the following is not required for the parties to have an
enforceable contract? Answer: The three essential elements are
present: agreement, consideration, legality. (13)
◉ Sources of contract law include: Answer: common law and the
Uniform Commercial Code. (13)
, ◉ Which of the following conditions must be present for an offer to
have a legal effect? Answer: Definite and certain terms (14)
◉ How is an offeror's intent to be bound by an agreement
demonstrated? Answer: The courts determine an offeror's intent
based upon how a reasonable person would interpret the offeror's
words and actions. (14)
◉ If nothing is stated to the contrary in the terms of an auction, the
auction is presumed to be ________blank, which means that the seller
is merely expressing intent to receive offers. Answer: with reserve
(14)
◉ A revocation is effective ________blank. Answer: when the offeree
receives it (14)
◉ George is planning to buy Karl's car for $10,000. He gives Karl
$1,000 to keep the offer open for 30 days. Karl will deduct the
$1,000 from the price of the car if George purchases the car within
the 30 days. If George does not buy the car during that time, Karl will
keep the $1,000 and may then offer the car to someone else. Which
of the following contracts does this scenario best illustrate? Answer:
Option contract (14)
◉ Julio agrees to buy Sophia's computer for $1,000. However, Sophia
tells Julio that she will only sell the computer to him if he pays
EXAM PREP QUESTIONS AND ANSWERS 2026
PRACTICE SOLUTION STUDY GUIDE GRADED
A+
◉ Which of the following does not demonstrate a party's lack of
contractual capacity? Answer: One of the parties refuses to accept
the offer. (13)
◉ If you have an infected appendix and the surgeon removes your
appendix without prior negotiation of payment or even any mention
of payment, a(n) ________blank promise for payment of services
rendered exists. Answer: implied (13)
◉ A quasi-contract is sometimes called an implied-in-law contract.
The goal of a quasi-contract is to: Answer: prevent one party from
being unjustly enriched at the expense of another. (13)
◉ Which of the following contracts falls under Article 2 of the
Uniform Commercial Code (UCC)? Answer: Contract for the sale of a
good (13)
◉ A(n) ________blank contract arises not from words, but from the
conduct of the parties. Answer: implied (13)
,◉ A(n) ________blank contract is defined as a promise by one party
made in exchange for a promise by the other party. Answer: bilateral
(13)
◉ The terms of a(n) ________blank contract are all clearly set forth in
either written or spoken words. Answer: express (13)
◉ The ________blank states that we base the existence of a contract on
the parties' outward manifestations of intent, and we base its
interpretation on how a reasonable person would interpret it.
Answer: objective theory of contracts (13)
◉ A(n) ________blank contract represents a situation where the
offeror seeks performance from the offeree to form the contract.
Answer: unilateral (13)
◉ Bilateral and unilateral contracts are best described by which of
the following statements? Answer: Unilateral contracts call for
actions, not promises, whereas bilateral contracts involve promises
in exchange for promises. (13)
◉ An agreement is based upon: Answer: offer and an acceptance.
(13)
,◉ A(n) ________blank contract is, in effect, not a contract at all
because its object is illegal, or it has a defect so serious that the
agreement is not a contract at all. Answer: void (13)
◉ Common law, one of the two most important sources of contract
law, is derived from: Answer: judicial decisions. (13)
◉ The ________blank rule states that if a writing, or a term in
question, appears to be ________blank on its face, we must determine
its meaning from just "the four corners" of the document, without
resorting to outside evidence, and give the words their ordinary
meaning. Answer: plain meaning; unambiguous (13)
◉ A key feature of a voidable contract is that: Answer: if one party
chooses to terminate the agreement, both parties must return
anything they had already exchanged under the agreement. (13)
◉ Which of the following is not required for the parties to have an
enforceable contract? Answer: The three essential elements are
present: agreement, consideration, legality. (13)
◉ Sources of contract law include: Answer: common law and the
Uniform Commercial Code. (13)
, ◉ Which of the following conditions must be present for an offer to
have a legal effect? Answer: Definite and certain terms (14)
◉ How is an offeror's intent to be bound by an agreement
demonstrated? Answer: The courts determine an offeror's intent
based upon how a reasonable person would interpret the offeror's
words and actions. (14)
◉ If nothing is stated to the contrary in the terms of an auction, the
auction is presumed to be ________blank, which means that the seller
is merely expressing intent to receive offers. Answer: with reserve
(14)
◉ A revocation is effective ________blank. Answer: when the offeree
receives it (14)
◉ George is planning to buy Karl's car for $10,000. He gives Karl
$1,000 to keep the offer open for 30 days. Karl will deduct the
$1,000 from the price of the car if George purchases the car within
the 30 days. If George does not buy the car during that time, Karl will
keep the $1,000 and may then offer the car to someone else. Which
of the following contracts does this scenario best illustrate? Answer:
Option contract (14)
◉ Julio agrees to buy Sophia's computer for $1,000. However, Sophia
tells Julio that she will only sell the computer to him if he pays
