Which statement about divisible contracts is correct?

• A. A contract is divisible if the duties can be broken into at least two corresponding performances and those performances are equivalent.
• B. A contract is divisible only if expressly labeled as divisible.
• C. A contract is never divisible if payment is due upon completion of the entire contract.
• D. Divisibility is determined solely by whether the contract uses a time constraint.

Answer: (A)

Divisible contracts are ones where the obligations can be split into two or more independent performances that can be carried out separately, with each performance having its own value and the possibility of separate payment. That’s why the best statement says the contract is divisible if duties can be broken into at least two corresponding performances and those performances are equivalent. When a contract can be satisfied by completing distinct parts, partial performance and partial payment are possible, reflecting a division of the bargain into separate units of consideration.

Labeling the contract as divisible isn’t required—the division can be inferred from the nature of the duties, not a label. Payment timing also doesn’t determine divisibility by itself; a contract can specify payment after overall completion and still be divisible if the duties naturally break into independent parts with corresponding value. Time constraints aren’t the sole factor either.

For example, if a contractor agrees to complete two distinct phases of work, each with its own price and can be performed and paid for separately, the contract is divisible.