Contracts and Business Law Flashcards
7 cards from real PSI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Contracts and Business Law flashcards as text
Which of the following contracts falls within the Statute of Frauds and must be in writing to be enforceable?
Answer: A contract for the sale of real property
Contracts for the sale of real property are within the Statute of Frauds and must be evidenced by a writing signed by the party to be charged.
What is 'anticipatory repudiation' in contract law?
Answer: Clearly communicating an intent not to perform before performance is due
Anticipatory repudiation occurs when a party clearly and unequivocally indicates before the due date that it will not perform its contractual obligations.
Under agency law, which of the following best describes 'apparent authority'?
Answer: Authority a third party reasonably believes the agent has based on the principal's conduct
Apparent authority arises when the principal's words or conduct lead a third party to reasonably believe the agent has authority to act on the principal's behalf.
A homeowner hires a plumber who negligently floods the house. Which doctrine would make the hiring company liable if the plumber is its employee, but not if the plumber is an independent contractor?
Answer: Respondeat superior
Respondeat superior makes employers vicariously liable for torts committed by employees within the scope of their employment, but generally does not apply to independent contractors.
What is the primary remedy for breach of contract?
Answer: Compensatory damages to put the non-breaching party in the position they would have been in had the contract been performed
The primary remedy for breach of contract is compensatory damages, designed to give the non-breaching party the benefit of the bargain they expected.
Which of the following is NOT a required element for a valid contract?
Answer: Written documentation
A valid contract requires offer, acceptance, and consideration (plus capacity and legality), but most contracts do not need to be in writing to be enforceable.
What is 'accord and satisfaction'?
Answer: An agreement to accept a different performance in satisfaction of an existing obligation
An accord is an agreement to accept a substituted performance; satisfaction occurs when that performance is completed, discharging the original obligation.