Required Elements Of A Valid Contract Practice Test

Paula signs a contract to purchase office furniture after being told by the seller, “Sign now or I will report you to the IRS for tax fraud,” even though the seller has no basis for the accusation. Paula signs to avoid the threatened report. Which factor would invalidate the contract?

A contractor tells a homeowner: “I’ll renovate your kitchen for $30,000.” The homeowner replies: “I accept,” but privately intends not to pay and plans to dispute later. The contractor begins work relying on the homeowner’s acceptance. Based on the scenario, is a valid contract formed?