PSI - Exams Contracts and Business Law Questions and Answers

Question 1

Which of the following contracts is typically required to be in writing to be enforceable under the Statute of Frauds?

Accepted Answer

A contract for the sale of a parcel of land.

Answer

A contract for the sale of goods valued at $300.

Answer

An employment agreement for an indefinite period.

Answer

A service contract that can be completed in six months.

Question 2

A contractor submits a bid for a construction project. The client accepts the bid and signs a formal agreement. Two weeks before the project is set to begin, the contractor announces they have taken on another, more profitable project and will not be able to perform the work as agreed. This is an example of:

Accepted Answer

Anticipatory repudiation

Answer

A minor breach

Answer

Substantial performance

Answer

A unilateral mistake

Question 3

In contract law, what is the term for the value (such as money, services, or a promise) that each party gives to the other to make an agreement legally binding?

Accepted Answer

Consideration

Answer

Offer

Answer

Acceptance

Answer

Legality

Question 4

A coffee shop posts a sign offering a free coffee to the 100th customer of the day. This is an example of what type of contract?

Accepted Answer

A unilateral contract

Answer

A bilateral contract

Answer

An implied contract

Answer

An executed contract

Question 5

A client hires a painter to paint their house blue, as specified in the contract. The painter completes the job but uses a slightly different shade of blue than what was specified, though the work is otherwise satisfactory. This failure to perform a minor contractual detail is best described as:

Accepted Answer

An immaterial or minor breach

Answer

A material breach

Answer

Fraudulent misrepresentation

Answer

Duress

Question 6

In a breach of contract lawsuit, damages that are awarded to punish the defendant for particularly egregious or malicious conduct, rather than to compensate the plaintiff for their actual losses, are known as:

Accepted Answer

Punitive damages

Answer

Compensatory damages

Answer

Liquidated damages

Answer

Nominal damages