ExpertHard1 markMultiple Choice
CPA · Question 49 · Area II: Business Law
Which of the following is required for a valid contract to be formed?
Which of the following is required for a valid contract to be formed?
Answer options:
A.
A written document signed by both parties.
B.
Fair market value consideration.
C.
Performance by at least one party.
D.
Consideration.
How to approach this question
Elements of Contract: Offer, Acceptance, Consideration, Capacity, Legality. Writing is only needed for some.
Full Answer
D.Consideration.✓ Correct
Consideration (bargained-for exchange) is a necessary element of a valid contract. A writing is only required for contracts falling under the Statute of Frauds.
Common mistakes
Thinking all contracts must be written.
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