Which term describes a contract that contains two or more promises, each of which can be enforced separately?

Study for the Chartered Property Casualty Underwriter 530 Exam with flashcards and multiple choice questions. Each question has hints and explanations to enhance your understanding and prepare you thoroughly.

Multiple Choice

Which term describes a contract that contains two or more promises, each of which can be enforced separately?

Explanation:
A severable (divisible) contract is one that contains two or more promises that can be enforced separately. Each promise stands on its own as an enforceable obligation, so you can pursue remedies for a breach of one part without automatically invalidating the rest of the contract. For example, if a contract requires both delivery of goods and installation, these are separate promises; if delivery fails, the buyer can sue for breach of that part while the installation obligation remains intact or can be pursued separately. This fits better than the other terms because a bilateral contract involves mutual promises between parties, but doesn’t by itself imply that each promise is enforceable separately. A unilateral contract centers on one promise in exchange for performance. An executed contract means all promises have been performed.

A severable (divisible) contract is one that contains two or more promises that can be enforced separately. Each promise stands on its own as an enforceable obligation, so you can pursue remedies for a breach of one part without automatically invalidating the rest of the contract. For example, if a contract requires both delivery of goods and installation, these are separate promises; if delivery fails, the buyer can sue for breach of that part while the installation obligation remains intact or can be pursued separately.

This fits better than the other terms because a bilateral contract involves mutual promises between parties, but doesn’t by itself imply that each promise is enforceable separately. A unilateral contract centers on one promise in exchange for performance. An executed contract means all promises have been performed.

Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy