Ace the 2025 Property and Casualty Challenge – Insure Your Success!

Image Description

Question: 1 / 430

Which of the following is NOT a characteristic of a valid contract?

Competent parties

Legal purpose

Mutual benefit

The correct answer to the question regarding the characteristics of a valid contract is mutual benefit. In the context of contract law, a valid contract must consist of several key elements: competent parties, legal purpose, and mutual agreement (offer and acceptance).

Competent parties refers to the necessity of all parties being of legal age and mentally capable of entering into a contract. Legal purpose means that the contract’s content must be lawful and not against public policy. Offer and acceptance indicate that there must be a clear proposal by one party and an agreement by the other, showing mutual consent to the terms.

While mutual benefit may be desirable in many contracts, it is not a structural requirement for the validity of a contract. Contracts can exist even if one party does not gain a benefit, as long as the other elements are fulfilled. Thus, mutual benefit is not necessary to establish a valid contract.

Get further explanation with Examzify DeepDiveBeta

Offer and agreement

Next Question

Report this question

Download Property and Casualty Insurance Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy