Future Business Leaders of America (FBLA) Business Law Practice Exam

What is the term for agreeing to a contract that could have been avoided?

1. Ratification

2. Rejection

3. Revocation

4. Reimbursement

The correct answer is: Ratification

The term for agreeing to a contract that could have been avoided is ratification. Ratification occurs when a party who has the option to void a contract instead decides to affirm it and is bound by its terms. This typically happens when a party recognizes that they have the ability to decline the terms of the contract due to certain circumstances—such as lack of capacity (like minors entering into contracts) or duress—but later endorses or accepts the contract. Understanding this concept is crucial in contract law because it highlights the importance of intention and consent in agreements. When a party ratifies a contract, they effectively waive their right to contest it on the grounds that originally allowed them to avoid it. This often involves clear actions or communications that confirm acceptance of the contract after having had the opportunity to void it. The other options do not relate to this concept of affirming a contract after an opportunity to void it. Rejection refers to explicitly declining to accept the terms, revocation involves withdrawing an offer or agreement, and reimbursement pertains to compensation for expenses or payments made rather than the status of contract acceptance.