Who is the party to a contract that makes a promise?

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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

Who is the party to a contract that makes a promise?

Explanation:
In a contract, the party who makes a promise is the promisor. The promisor is the one obligated to perform what was promised. The other party, who receives the promise, is the promisee and has the right to demand performance. Privity of contract is a relationship concept that explains who can sue under a contract, not a party, and breach of contract is the failure to perform the promised duty, not a party either. For example, if A promises to pay B $100 for mowing a lawn, A is the promisor and B is the promisee; if A doesn’t pay, that’s a breach.

In a contract, the party who makes a promise is the promisor. The promisor is the one obligated to perform what was promised. The other party, who receives the promise, is the promisee and has the right to demand performance. Privity of contract is a relationship concept that explains who can sue under a contract, not a party, and breach of contract is the failure to perform the promised duty, not a party either. For example, if A promises to pay B $100 for mowing a lawn, A is the promisor and B is the promisee; if A doesn’t pay, that’s a breach.

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