Which of the following statements is true about contracts?
A. Parties to an informal contract can use any words they choose to express their contract.
B. A contract under seal is disclosed only to the offeror of the contract.
C. A letter of credit is an informal contract.
D. A void contract is the same as a voidable contract.
Answ:D
. A void contract is the same as a voidable contract.
To determine which of the statements is true about contracts, we need to evaluate each statement individually:
A. Parties to an informal contract can use any words they choose to express their contract.
This statement is true. Informal contracts, also known as simple contracts, do not have specific requirements for their formation. Parties are free to express their agreement using any words, as long as there is a clear offer, acceptance, and consideration.
B. A contract under seal is disclosed only to the offeror of the contract.
This statement is false. A contract under seal, also known as a formal contract or a contract by deed, is a type of contract that requires a seal or special formalities to be valid. It is typically disclosed to all parties involved in the contract, not just the offeror.
C. A letter of credit is an informal contract.
This statement is false. A letter of credit is a type of financial instrument commonly used in international trade. It is a formal contract between the buyer, seller, and a bank, where the bank guarantees payment to the seller when certain conditions specified in the letter of credit are met. Therefore, a letter of credit is a formal contract, not an informal one.
D. A void contract is the same as a voidable contract.
This statement is false. A void contract and a voidable contract are two different concepts in contract law. A void contract is an agreement that is considered invalid and unenforceable from the beginning, usually because the subject matter of the contract is illegal or against public policy. A voidable contract, on the other hand, is a valid contract that can be either affirmed or avoided by one or both parties due to some legal defect, such as lack of capacity or undue influence.
Therefore, based on the explanations provided, the correct statement is D. A void contract is not the same as a voidable contract.