Which term describes a promise that requires some action by the intended recipient to make an agreement?

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 promise that requires some action by the intended recipient to make an agreement?

Explanation:
An offer is the term described. An offer is a promise to do something in the future that is made with the understanding that the other party must take a specific action—acceptance—to form a binding contract. The offer invites the recipient to agree by performing that action, and only upon acceptance does the agreement come into existence. The other options don’t fit as well. An express contract is formed by explicit promises from both sides, rather than a single promise that waits for the recipient’s action to complete the agreement. An implied-in-fact contract arises from the parties’ conduct indicating mutual assent, not from a stated promise that requires acceptance. An implied-in-law contract (quasi-contract) is created by law to prevent unjust enrichment, not by a contractual promise inviting acceptance.

An offer is the term described. An offer is a promise to do something in the future that is made with the understanding that the other party must take a specific action—acceptance—to form a binding contract. The offer invites the recipient to agree by performing that action, and only upon acceptance does the agreement come into existence.

The other options don’t fit as well. An express contract is formed by explicit promises from both sides, rather than a single promise that waits for the recipient’s action to complete the agreement. An implied-in-fact contract arises from the parties’ conduct indicating mutual assent, not from a stated promise that requires acceptance. An implied-in-law contract (quasi-contract) is created by law to prevent unjust enrichment, not by a contractual promise inviting acceptance.

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