1.Which of the following is one of the essential elements required for a contract to be enforceable?
- A.The agreement must be in writing and notarized
- B.Consideration, meaning something of value is exchanged between the parties
- C.Both parties must be members of a professional association
- D.The contract must be registered with the court
Reveal answer & explanationHide answer
Correct answer: B. Consideration, meaning something of value is exchanged between the parties
The essential elements of an enforceable contract are: an offer made and accepted, mutual intent to contract, consideration (something of value exchanged), capacity, and a lawful purpose. A contract need not be written, notarized, or registered to be enforceable.
2.Under the doctrine of quantum meruit, when work has been requested and performed but no price was agreed upon, the courts will:
- A.Award nothing because there was no enforceable contract
- B.Award an amount equal to what the work is reasonably worth
- C.Require the work to be redone at the worker's expense
- D.Award only the cost of materials, never the labour
Reveal answer & explanationHide answer
Correct answer: B. Award an amount equal to what the work is reasonably worth
Quantum meruit means 'as much as is reasonably deserved'. Where services were requested and performed without a payment agreement, the court awards an amount based on the reasonable value of the time spent and materials supplied.
3.Under the rule of contra proferentem, an ambiguous term in a contract will be interpreted:
- A.In favour of the party that drafted the term
- B.Against the party that drafted the term
- C.By striking the entire contract as void
- D.According to whichever meaning costs less money
Reveal answer & explanationHide answer
Correct answer: B. Against the party that drafted the term
Contra proferentem provides that an ambiguous contract term is interpreted against the party that drafted it. This encourages clear drafting and protects the party who did not write the wording.
4.Which of the following grounds may make a contract voidable because one party untruly stated a fact to induce the other to enter the contract?
- A.Frustration
- B.Misrepresentation
- C.Consideration
- D.Acceptance
Reveal answer & explanationHide answer
Correct answer: B. Misrepresentation
Misrepresentation is an untrue statement made by one party to induce the other into the contract, and it can be innocent, negligent, or fraudulent. Frustration involves unforeseen events making performance impossible; consideration and acceptance are required elements of a valid contract.
5.A clause that sets out a pre-estimate of the damages likely to result from non-performance, agreed to in advance and written into the contract, is called:
- A.A penalty clause
- B.A liquidated damages clause
- C.A bonus clause
- D.An indemnity clause
Reveal answer & explanationHide answer
Correct answer: B. A liquidated damages clause
Liquidated damages are pre-estimates of loss written into the contract, and they are generally enforceable. A penalty clause is a punishment for breach and is often NOT enforced by courts. A bonus clause rewards good performance, and an indemnity shifts a financial loss.
6.Under the parol evidence rule, when the written contract language is clear and complete, extrinsic (outside) evidence is:
- A.Admissible to add to, vary, or contradict the written terms
- B.Not admissible to add to, vary, or contradict the written terms
- C.Admissible only if one party is a licensed professional
- D.Required before the contract can be enforced
Reveal answer & explanationHide answer
Correct answer: B. Not admissible to add to, vary, or contradict the written terms
The parol evidence rule prohibits using outside evidence to add to, vary, or contradict the terms of a clear written contract. The parties are assumed to have summarized their agreement into the single document, and other terms should not be enforced without a formal amendment.
7.Which is NOT an essential element of an enforceable contract?
- A.Offer and acceptance
- B.Consideration
- C.Notarization by a lawyer
- D.Lawful purpose
Reveal answer & explanationHide answer
Correct answer: C. Notarization by a lawyer
The five essential elements are: offer/acceptance, mutual intent, consideration, capacity, and lawful purpose. Notarization is not required.
8.The Parol Evidence Rule states that:
- A.Oral agreements always override written contracts
- B.Evidence contradicting written contract terms is generally inadmissible
- C.All contracts must include a parole clause
- D.Verbal testimony is more reliable than documents
Reveal answer & explanationHide answer
Correct answer: B. Evidence contradicting written contract terms is generally inadmissible
The Parol Evidence Rule prohibits evidence that contradicts or adds to the written contract terms.
9.Contra proferentem means:
- A.Ambiguous contract terms are interpreted against the drafter
- B.Both parties share responsibility for unclear terms
- C.The court rewrites ambiguous terms
- D.Unclear terms are simply removed from the contract
Reveal answer & explanationHide answer
Correct answer: A. Ambiguous contract terms are interpreted against the drafter
A contract term that is ambiguous will be interpreted against the party that drafted that provision.
10.Quantum meruit means:
- A.As much as is reasonably deserved
- B.The total contract value
- C.The minimum payment allowed by law
- D.Double the original quote
Reveal answer & explanationHide answer
Correct answer: A. As much as is reasonably deserved
Quantum meruit means "as much as is reasonably deserved" for time spent and materials supplied.
11.A contract signed under duress is:
- A.Automatically valid
- B.Voidable by the party who was coerced
- C.Only valid if witnessed
- D.Permanently void
Reveal answer & explanationHide answer
Correct answer: B. Voidable by the party who was coerced
A contract entered under duress (threatened or actual violence/imprisonment) is voidable by the coerced party.
12.An exclusion clause in a contract:
- A.Adds additional obligations to both parties
- B.Aims to exclude damages to the innocent party for specified events
- C.Is always unenforceable
- D.Only applies to government contracts
Reveal answer & explanationHide answer
Correct answer: B. Aims to exclude damages to the innocent party for specified events
An exclusion clause aims to exclude the damages to the innocent party upon the occurrence of specified events.
13.A "force majeure" clause excuses performance when:
- A.Either party decides to cancel the contract
- B.Extraordinary events beyond the parties' control make performance impossible
- C.The contract becomes unprofitable for one party
- D.The work takes longer than originally estimated
Reveal answer & explanationHide answer
Correct answer: B. Extraordinary events beyond the parties' control make performance impossible
Force majeure excuses performance when extraordinary, unforeseeable events beyond the control of the parties (natural disasters, wars, pandemics) make performance impossible.
14."Privity of contract" means:
- A.All parties to a contract must be present when it is signed
- B.Only parties to a contract can enforce it or be bound by it
- C.Contracts must be kept private and confidential
- D.Only written contracts are enforceable
Reveal answer & explanationHide answer
Correct answer: B. Only parties to a contract can enforce it or be bound by it
Privity of contract is the principle that only parties to a contract can enforce its terms or be bound by its obligations. Third-party beneficiaries generally cannot sue on the contract.
15.A "voidable" contract is one that:
- A.Has no legal effect from the beginning
- B.Is valid until one party chooses to set it aside
- C.Cannot be enforced by either party
- D.Must be approved by a court to be valid
Reveal answer & explanationHide answer
Correct answer: B. Is valid until one party chooses to set it aside
A voidable contract is valid and enforceable until the aggrieved party chooses to set it aside. Contracts entered under duress, misrepresentation, or undue influence are voidable.
16.The doctrine of "frustration" applies when:
- A.One party is frustrated with the other party's performance
- B.An unforeseen event makes performance impossible or radically different
- C.The contract price increases beyond the budget
- D.One party fails to perform on time
Reveal answer & explanationHide answer
Correct answer: B. An unforeseen event makes performance impossible or radically different
Frustration occurs when an unforeseen event, not caused by either party, makes performance impossible or radically different from what was contemplated. The contract is automatically discharged.
17."Substantial performance" allows a party to:
- A.Complete only half the work and receive full payment
- B.Receive the contract price minus the cost to complete or correct remaining work
- C.Abandon the contract at any time without penalty
- D.Renegotiate the contract price after completion
Reveal answer & explanationHide answer
Correct answer: B. Receive the contract price minus the cost to complete or correct remaining work
If a party has substantially performed their obligations in good faith, they are entitled to the contract price minus the cost to complete or correct the remaining deficiencies.
18.An "anticipatory breach" occurs when:
- A.A party breaches the contract and then apologizes
- B.A party indicates before performance is due that they will not fulfil obligations
- C.Both parties agree to cancel the contract
- D.A breach occurs after the contract expires
Reveal answer & explanationHide answer
Correct answer: B. A party indicates before performance is due that they will not fulfil obligations
Anticipatory breach occurs when a party indicates in advance that they will not perform their contractual obligations. The innocent party may sue immediately without waiting for the performance date.
19.The difference between a "condition" and a "warranty" in a contract is:
- A.A condition is oral; a warranty is written
- B.A condition is fundamental, breach allows termination; a warranty is minor, breach allows only damages
- C.A warranty is more important than a condition
- D.There is no legal difference between them
Reveal answer & explanationHide answer
Correct answer: B. A condition is fundamental, breach allows termination; a warranty is minor, breach allows only damages
A condition is a fundamental term whose breach entitles the innocent party to terminate and claim damages. A warranty is minor; its breach only entitles the innocent party to damages.
20.In contract law, what is meant by the term "novation"?
- A.The process of filing a lawsuit
- B.The substitution of a new contract or party for an existing one
- C.A type of payment method
- D.The addition of an amendment to a contract
Reveal answer & explanationHide answer
Correct answer: B. The substitution of a new contract or party for an existing one
Novation substitutes a new contract for an existing one, or replaces one party with a new party. All original parties must consent, and the old obligation is extinguished.
21."Consequential damages" are:
- A.Damages that flow directly from the breach
- B.Indirect damages resulting from special circumstances known to both parties
- C.Punitive damages imposed by the court
- D.Damages limited to the contract price
Reveal answer & explanationHide answer
Correct answer: B. Indirect damages resulting from special circumstances known to both parties
Consequential damages are indirect losses (such as lost profits or business interruption) that result from special circumstances known to both parties, not flowing directly from the breach itself.
22.An "entire agreement" clause in a contract:
- A.Requires all terms to be completed before any payment is made
- B.States the written contract represents the complete agreement, superseding prior negotiations
- C.Prevents any amendments to the contract
- D.Guarantees both parties will complete all obligations
Reveal answer & explanationHide answer
Correct answer: B. States the written contract represents the complete agreement, superseding prior negotiations
An entire agreement clause states that the written document is the full agreement between the parties and supersedes all prior negotiations, representations, and agreements.
23.An engineer should respond to a scope change request by:
- A.Performing the extra work immediately to maintain client relations
- B.Documenting the change, assessing impacts, and obtaining written authorization
- C.Refusing all changes to the original scope
- D.Billing for the extra work without prior authorization
Reveal answer & explanationHide answer
Correct answer: B. Documenting the change, assessing impacts, and obtaining written authorization
The engineer should document the change, assess schedule and cost impacts, obtain written authorization before proceeding, and formalize it through a change order.
24."Unjust enrichment" allows a court to:
- A.Impose criminal penalties for breach of contract
- B.Award compensation to prevent one party from unfairly benefiting at another's expense
- C.Void a contract that is too profitable for one party
- D.Require both parties to donate profits to charity
Reveal answer & explanationHide answer
Correct answer: B. Award compensation to prevent one party from unfairly benefiting at another's expense
Unjust enrichment prevents a party from benefiting unfairly at another's expense. If services are provided without a formal contract, the court may award reasonable compensation.
Study smarter, not just more
Every NPPE question is free here. Create a free account to track which topics you have mastered, get timed mock exams, spaced-repetition flashcards, and Watson, your AI study companion that explains every answer and drills your weakest areas.
Create your free accountNo credit card required. Cancel anytime.
squared.engineering is an independent study aid and is not affiliated with Engineers Canada or any provincial engineering regulator. These practice questions are for study purposes and are not actual exam questions.