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Types of Contracts

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Questions and Answers

In what circumstances can a contract be voidable?

When the contract lacks essential elements
When one party lacks free consent (correct)
When all parties freely consent
When it is enforceable by law

What is the main characteristic of a valid contract?

It is induced by coercion or fraud
It lacks essential elements
All parties fulfill their contractual obligations (correct)
It is not enforceable by law

What causes a contract to become void?

Enforceability by law
Fulfillment of contractual obligations
Change in events or circumstances (correct)
Presence of free consent

What happens to rights under a void contract?

No rights accrue under a void contract (A) Signup and view all the answers

When does a voidable contract cease to be binding on one party?

When the affected party avoids the contract within a reasonable time (A) Signup and view all the answers

Which element is absent in a voidable contract?

Free consent (B) Signup and view all the answers

What is a voidable contract?

A contract that is enforceable by law at the option of one or more parties, but not at the option of others (B) Signup and view all the answers

What rights does a voidable contract give to the aggrieved party?

Rights to claim damages and rescind the contract (C) Signup and view all the answers

Define a valid contract.

A contract that is enforceable by law and meets all legal requirements (B) Signup and view all the answers

What happens if a voidable contract is disputed and set aside?

It becomes a valid contract (A) Signup and view all the answers

How does an executory contract differ from an executed contract?

An executed contract is one that has been fully performed, while an executory contract is one that is yet to be performed (C) Signup and view all the answers

What distinguishes a unilateral contract from a bilateral contract?

The type of obligations in the contract (A) Signup and view all the answers

What is the main difference between an agreement and a contract?

An agreement lacks enforceability by law, while a contract is enforceable. (A) Signup and view all the answers

Why does a void contract differ from a valid contract?

A void contract ceases to be enforceable at law, unlike a valid contract. (B) Signup and view all the answers

What is the legal status of a void contract?

It lacks any legal effect and is deemed a nullity. (C) Signup and view all the answers

Why is consideration required in a valid contract?

To make the agreement legally binding. (B) Signup and view all the answers

What happens to a valid contract that lacks consideration?

It remains valid but unenforceable. (A) Signup and view all the answers