Maryland Home Improvement PSI Practice Exam

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Prepare for the Maryland Home Improvement Test. Study using flashcards and multiple-choice questions, each with hints and explanations. Get ready to excel on your exam!

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In contract terms, if Party A's obligation is dependent on Party B's action, the contract is best described as what type?

Unilateral contract in which only Party B has made a promise to perform.
Unilateral contract in which only Party A has made a promise to perform.
Bilateral contract which both parties are obliged to perform.
Void contract.

The correct answer is: Unilateral contract in which only Party A has made a promise to perform.

The correct choice is that the contract is best described as a unilateral contract in which only Party A has made a promise to perform. In contract law, a unilateral contract involves a situation where one party makes a promise in exchange for the act of another party. This means that the obligation of the party who made the promise (Party A) is only triggered by the performance of the other party (Party B). In this context, Party A's obligation to fulfill their promise is completely dependent on Party B taking action. If Party B does not act, then there is no obligation for Party A to perform. This characteristic of dependency on the action of Party B defines the relationship in a unilateral contract, where only one party has a binding commitment. Understanding the nature of unilateral contracts is crucial in recognizing how promises are formed and enforced, particularly in situations where one party is providing a service or crating a product in response to the actions of another, which aligns precisely with the details outlined in the question.