ExpertHard1 markMultiple Choice
CPA · Question 61 · Area II: Business Law
Which of the following is a requirement for a valid contract under Common Law?
Which of the following is a requirement for a valid contract under Common Law?
Answer options:
A.
The contract must be in writing.
B.
The consideration must be of equal value.
C.
There must be a meeting of the minds (mutual assent).
D.
The contract must be notarized.
How to approach this question
Elements of Contract: Offer, Acceptance (Meeting of Minds), Consideration, Capacity, Legality.
Full Answer
C.There must be a meeting of the minds (mutual assent).✓ Correct
A valid contract requires offer, acceptance (mutual assent/meeting of the minds), and consideration. Writing is only required for certain contracts (Statute of Frauds), and consideration need not be equal (peppercorn theory).
Common mistakes
Thinking all contracts must be written.
Practice the full CPA REG Practice Exam 3
72 questions · hints · full answers · grading
More questions from this exam
Q01A CPA is preparing an original tax return for a client who is claiming a refund based on a positi...HardQ02A practitioner is representing a taxpayer in an IRS examination. The taxpayer has a 25% ownership...HardQ03A tax return preparer willfully attempts to understate the tax liability on a client's return by ...HardQ04Which of the following scenarios would most likely result in the assessment of a penalty for fail...HardQ05Regarding the disciplinary authority of State Boards of Accountancy, which of the following state...Hard