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12 multiple-choice questions and 26 flashcards on Contracts, about 3% of the CPA REG bank. Every one carries a written rationale.
Contracts is one of 6 chapters in CoStudy's CPA — Taxation & Regulation (REG) [Core] bank, and it holds 12 of the bank's 420 multiple-choice questions — roughly 3% of the total. That proportion is not arbitrary: chapters follow the certifying body's published exam outline, and the number of questions in each is set by that domain's published weight, so the share of your practice time this chapter takes matches the share of the real exam it accounts for.
Studying by chapter is worth doing once you have a diagnostic score. A single overall percentage tells you whether you are close; it does not tell you which domain is dragging. Working a weak chapter in isolation, and re-testing it in isolation, is the fastest way to move a score that has stalled — and it is why the mock exams in CoStudy report by domain rather than as one number.
3 questions drawn from this chapter, with the full rationale shown — the controlling principle behind the right answer, and why each wrong option tempts and fails.
Under contract law, the 'mailbox rule' provides that an acceptance is effective:
Answer: D — Upon proper dispatch by authorized means
A) That is the receipt rule, which applies to revocations, not acceptances. B) The offer can override but does not need to specify medium. C) Confirmation is not required for effectiveness. D) Correct — mailbox rule makes acceptance effective on dispatch.
Under UCC Article 2, the implied warranty of merchantability applies:
Answer: B — Automatically whenever the seller is a merchant who deals in goods of that kind
A) Merchantability is implied by law, not dependent on an express written promise. B) Correct — §2-314 implies merchantability automatically when the seller is a merchant with respect to goods of that kind. C) The warranty requires a merchant-seller, so private non-merchant sales do not carry it automatically. D) No buyer request or writing is needed; it arises by operation of law.
UCC Article 2 governs contracts for:
Answer: A — Sales of goods (tangible movable property)
A) Correct — UCC Article 2 governs sales of tangible, movable goods. B) Services are governed by common law, not UCC. C) Real estate is common-law territory. D) Employment agreements fall under common law.
4 cards from the 26 in this chapter.
Express vs implied warranty?
Express: explicit promises. Implied: by law (merchantability, fitness).
Implied warranty of merchantability (§2-314)?
Arises automatically whenever the seller is a merchant dealing in goods of that kind — no express promise required.
Insurance law — insurable interest requirement?
A person must stand to suffer an economic loss from the destruction of the insured property (or, for life insurance, have a legally recognized relationship with the insured) at the time of loss (property) or policy inception (life), or the policy is unenforceable as a wagering contract.
UCC Article 3 — fraud in the execution vs fraud in the inducement?
Fraud in the execution (the signer is deceived about the very nature of the document) is a real defense good against an HDC; fraud in the inducement (the signer knows it is a negotiable instrument but is deceived about the underlying transaction) is a personal defense, cut off against an HDC.
These are a sample. The full Contracts chapter runs 38 items with per-chapter progress tracking, on the web and in the iOS app.