Practice Quiz

CLEP Business Law

Category - Contracts

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Under common law, what would a court do if the parties to a contract omitted a term that is essential to the meaning of the contract?
  1. The court will do its best to fairly interpret the contract without the missing term.
  2. The court will order that an arbiter determine the term.
  3. The court will force the parties to negotiate the term.
  4. The court will void the contract.
  5. The court will supply a term which is reasonable.
Explanation
Answer: E. Under common law, if the parties to a contract omitted a term that is essential to the meaning of the contract, the court will supply a term which is reasonable. In determining a reasonable term, the court will use the commonly accepted term based on the subject matter of the contract or the dealings of the parties involved. The court will seek to avoid using a term that would add unreasonableness to the contract.
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