Contract Terms Quiz

What is 'Consideration' in a contract? Choose the correct answer:

A thoughtful gesture by one party to another.
The legal capacity to enter a contract.
Something of value exchanged between parties.
A mandatory clause in all contracts.

Which term refers to the legal ability of a party to enter into a contract? Choose the correct answer:

Capacity
Legality
Agreement
Offer

'Bilateral' and 'Unilateral' contracts differ primarily in: Choose the correct answer:

The number of parties involved.
The number of promises made.
The legality of the contract's subject matter.
The way they are executed.

If a contract is 'Executory,' it means: Choose the correct answer:

It has already been fulfilled.
It is not legally enforceable.
There are obligations yet to be performed.
It involves only one party.

What does the 'Force Majeure' clause in a contract typically relate to? Choose the correct answer:

Confidential information
Changes in law
Extraordinary events beyond control
The contract's duration

Example sentence: "Due to unforeseen circumstances, our agreement includes a __________ clause, excusing both parties from performance obligations."Choose the correct answer:

Non-Compete
Arbitration
Force Majeure
Governing Law

'Liquidated Damages' are: Choose the correct answer:

Specific tasks one party must perform under the contract.
A fixed sum agreed upon for breach of contract.
Penalties for disclosing confidential information.
Rewards for completing contract terms early.

The principle of 'Good Faith' in contract negotiation implies: Choose the correct answer:

A guarantee that the contract will be profitable.
An assurance of the contract's legality.
Honesty and fairness in dealings.
The obligation to agree to all proposed terms.

Example sentence: "The contract's __________ ensures that if some parts are invalid, the rest remain effective."Choose the correct answer:

Entire Agreement clause
Severability clause
Indemnification clause
Confidentiality clause

'Novation' in contract terms means: Choose the correct answer:

The process of changing a contract's terms.
Replacing an old contract with a new one or one party with another.
A mutual decision to terminate a contract early.
An agreement to extend a contract's duration.