contract law specialist Interview Questions and Answers

1. What is a contract?

   • Answer: A contract is a legally binding agreement between two or more parties that creates mutual obligations enforceable by law. Key elements include offer, acceptance, consideration, intention to create legal relations, and capacity to contract. The specifics of enforceability vary by jurisdiction.

2. Explain the difference between a void, voidable, and unenforceable contract.

   • Answer: A void contract is essentially no contract at all; it lacks a key element like legality of purpose. A voidable contract is valid until one party chooses to rescind it due to factors like misrepresentation or duress. An unenforceable contract is valid but cannot be enforced in court, typically due to a lack of proper form (e.g., not in writing when required).

3. What is consideration? Give an example.

   • Answer: Consideration is something of value exchanged between parties to a contract. It can be a promise to do something, a promise not to do something (forbearance), or the actual doing or not doing of something. Example: A promise to pay $100 (consideration) in exchange for a promise to deliver a laptop (consideration).

4. What is the Statute of Frauds?

   • Answer: The Statute of Frauds is a legal requirement that certain types of contracts must be in writing to be enforceable. This typically includes contracts involving land, contracts that cannot be performed within one year, and contracts for the sale of goods above a certain value (varies by jurisdiction).

5. Explain the difference between a unilateral and a bilateral contract.

   • Answer: A unilateral contract is where one party makes a promise in exchange for the other party's performance. (e.g., a reward for finding a lost dog). A bilateral contract is where both parties make promises to each other (e.g., a contract for the sale of goods).

6. What constitutes a breach of contract?

   • Answer: A breach of contract occurs when one party fails to perform its obligations under the contract without a lawful excuse. This can include failing to deliver goods, failing to pay, or failing to perform services as agreed.

7. What are the remedies available for a breach of contract?

   • Answer: Remedies for breach of contract can include monetary damages (compensatory, punitive, liquidated), specific performance (court order to fulfill the contract), injunction (court order to stop doing something), and restitution (returning benefits received).

8. What is the doctrine of frustration?

   • Answer: The doctrine of frustration applies when an unforeseen event makes the performance of a contract impossible or radically different from what was originally agreed upon, discharging both parties from their obligations.

9. Explain the concept of "force majeure."

   • Answer: Force majeure is a clause in a contract that excuses a party from performance due to events beyond their control, such as natural disasters, war, or pandemics. The specific events covered vary depending on the contract's wording.

10. What is a misrepresentation in contract law?

    • Answer: A misrepresentation is a false statement of fact that induces a party to enter into a contract. If it's fraudulent or negligent, it can make the contract voidable.

11. What is the difference between a condition and a warranty in a contract?

    • Answer: A condition is a fundamental term of the contract; a breach allows the innocent party to terminate the contract and claim damages. A warranty is a less important term; a breach only allows the innocent party to claim damages, not terminate the contract.

12. Explain the concept of privity of contract.

    • Answer: Privity of contract means that only parties to a contract can sue or be sued on it. Third parties generally lack standing to enforce the contract's terms.

13. What is an exclusion clause?

    • Answer: An exclusion clause (or limitation clause) is a contractual term that seeks to limit or exclude a party's liability for breach of contract or negligence.

14. How are exclusion clauses interpreted by courts?

    • Answer: Courts interpret exclusion clauses strictly, against the party seeking to rely on them, particularly if they are ambiguous or unfair. The Contra Proferentem rule applies.

15. What is undue influence in contract law?

    • Answer: Undue influence occurs when one party uses their position of power or trust to improperly influence another party into entering a contract. This can render the contract voidable.

16. What is duress in contract law?

    • Answer: Duress involves coercion or threats that force a party into a contract against their will. This can be physical threats, economic duress, or other forms of pressure.

17. What is unconscionability?

    • Answer: Unconscionability refers to a contract that is so unfair or one-sided that it shocks the conscience of the court. It can render the contract unenforceable.

18. What is a liquidated damages clause?

    • Answer: A liquidated damages clause specifies a predetermined amount of damages payable in the event of a breach of contract. It must be a genuine pre-estimate of potential losses, not a penalty.

19. What is specific performance?

    • Answer: Specific performance is a court order requiring a party to fulfill its contractual obligations, rather than simply paying damages. It's usually granted only when monetary damages are inadequate.

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