AIC 301 Chapter 1: Understanding the Basics of Contracts
Questions With Complete Solutions
Accord and satisfaction Correct Answers An agreement
(accord) to substitute performance other than that required in a
contract and the carrying out of that agreement (satisfaction).
Anticipatory breach Correct Answers A party's unequivocal
indication before contract performance is due that he or she will
not perform when performance is due.
Assignee Correct Answers The individual or entity to whom
property, rights, or interests have been transferred.
Assignment Correct Answers The transfer of rights or property.
Assignor Correct Answers The party to a contract who makes
an assignment.
Bad faith Correct Answers An insurer's intentional or reckless
act (extreme or outrageous in nature) or denial of coverage
without proper cause, often causing emotional distress and
resulting in extracontractual and/or punitive damages.
Bilateral contract Correct Answers A contract in which each
party promises a performance.
Bilateral mistake Correct Answers A perception by both parties
to a contract that does not agree with the facts.
, Breach of contract Correct Answers The failure, without legal
excuse, to fulfill a contractual promise.
Compensatory damages Correct Answers A payment awarded
by a court to reimburse a victim for actual harm.
Condition concurrent Correct Answers An event that must
occur at the same time as another condition in a contract.
Condition precedent Correct Answers An event that must occur
before a duty of performance arises in a contract.
Condition subsequent Correct Answers An event that, if it
occurs, discharges a duty of performance in a contract.
Consequential damages Correct Answers A payment awarded
by a court to indemnify an injured party for losses that result
indirectly from a wrong such as a breach of contract or a tort.
Contract Correct Answers A legally enforceable agreement
between two or more parties.
Creditor beneficiary Correct Answers A third-party beneficiary
owed a debt that is to be satisfied by performance of a contract.
Discharge Correct Answers The act of ending a contract,
agreement, or obligation.
Donee beneficiary Correct Answers A third-party beneficiary
who receives the benefit of a contract's performance as a gift
from the promisee, with the intent of the contracting parties.
Questions With Complete Solutions
Accord and satisfaction Correct Answers An agreement
(accord) to substitute performance other than that required in a
contract and the carrying out of that agreement (satisfaction).
Anticipatory breach Correct Answers A party's unequivocal
indication before contract performance is due that he or she will
not perform when performance is due.
Assignee Correct Answers The individual or entity to whom
property, rights, or interests have been transferred.
Assignment Correct Answers The transfer of rights or property.
Assignor Correct Answers The party to a contract who makes
an assignment.
Bad faith Correct Answers An insurer's intentional or reckless
act (extreme or outrageous in nature) or denial of coverage
without proper cause, often causing emotional distress and
resulting in extracontractual and/or punitive damages.
Bilateral contract Correct Answers A contract in which each
party promises a performance.
Bilateral mistake Correct Answers A perception by both parties
to a contract that does not agree with the facts.
, Breach of contract Correct Answers The failure, without legal
excuse, to fulfill a contractual promise.
Compensatory damages Correct Answers A payment awarded
by a court to reimburse a victim for actual harm.
Condition concurrent Correct Answers An event that must
occur at the same time as another condition in a contract.
Condition precedent Correct Answers An event that must occur
before a duty of performance arises in a contract.
Condition subsequent Correct Answers An event that, if it
occurs, discharges a duty of performance in a contract.
Consequential damages Correct Answers A payment awarded
by a court to indemnify an injured party for losses that result
indirectly from a wrong such as a breach of contract or a tort.
Contract Correct Answers A legally enforceable agreement
between two or more parties.
Creditor beneficiary Correct Answers A third-party beneficiary
owed a debt that is to be satisfied by performance of a contract.
Discharge Correct Answers The act of ending a contract,
agreement, or obligation.
Donee beneficiary Correct Answers A third-party beneficiary
who receives the benefit of a contract's performance as a gift
from the promisee, with the intent of the contracting parties.
