Question 1

What are the four essential elements required to form a legally enforceable contract?

Accepted Answer

Offer, acceptance, consideration, and legal capacity (competent parties). Without all four elements, a contract is not legally enforceable.

Question 2

What is 'consideration' in the context of a construction contract?

Accepted Answer

Consideration is something of value exchanged by both parties, such as the owner's promise to pay money in exchange for the contractor's promise to perform work.

Question 3

What is a 'unilateral contract' in construction?

Accepted Answer

A unilateral contract is one where only one party makes a promise, such as an owner promising to pay a bonus if the contractor finishes early; acceptance occurs through performance.

Question 4

What does the Statute of Frauds require regarding construction contracts?

Accepted Answer

The Statute of Frauds requires that contracts that cannot be performed within one year must be in writing and signed to be enforceable.

Question 5

What is the difference between a void contract and a voidable contract?

Accepted Answer

A void contract has no legal effect from the start (e.g., for an illegal purpose), while a voidable contract is valid but can be cancelled by one party (e.g., signed under duress).

Contracts & Law: General Contractor License Exam

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