Which of the Following Is True Regarding Contract Validity

question 77

Multiple Choice

Which of the following is true regarding contract validity?

• A) A void contract is one where a party has the option to avoid his or her contractual liability.
• B) A voidable contract is one in which a party may avoid his or her obligation under the contract.
• C) A voidable contract is one that has no legal effect because one of the essential elements is missing.
• D) An executory contract is unenforceable.
• E) A unilateral contract is unenforceable.

---

Definitions:

Maximum Loan

The highest amount of money that a lender is willing to lend to a borrower, determined by factors such as creditworthiness and collateral.

Life Policy

A contract with an insurance company that pays out a sum of money either on the death of the insured person or after a set period.

Insured

For life insurance, the person whose life is being insured; for other types of insurance, the person who receives the benefit of the insurance.

Semiannual Premiums

Insurance payments made twice a year as part of an insurance policy's terms.