1. A contract

a. can never be implied from the actions of the parties

b. must contain consideration

c .cannot be terminated

d. none of these

2. A contract should include

a. the names of the parties

b. the consideration given by each party

c. the date

d. all of these

3. To create a legally binding contract, both parties to the agreement must be

a. able to read and write

b. able to speak and understand English

c. financially responsible people

d. of sound mind

4. Four essential elements are necessary to create a valid contract. Which of the following is not one of those elements?

a. Something of value must be given by each party

b.The offeror and offeree must reach agreement

c. The parties must be competent

d. The agreement must be in writing

5.Johnson entered into a contract to sell his computer to Madison for $950. Johnson then changed his mind and refused to deliver the computer to Madison as agreed. Johnsons failure to deliver the computer is considered to be

a. an acceptance

b. a breach of contract

c. a quasi agreement

d. a performed contract

6. Another name for a meeting of the minds is

a. mutual assent

b. lapse of time

c. a request for further information

d. an invitation to make an offer

7. For an acceptance to be effective

a. it must be in writing

b. it must be communicated to the offeror

c. the offeree must make a down payment

d. none of these

8. Tydings Auto Center advertised in the local newspaper that all stock was reduced by 40 percent below regular price. This advertisement legally constituted a(n)

a. valid offer

b. voidable offer

c. invitation to make an offer

d. binding contract

9. Courts may question the adequacy of consideration

a. if a contract is executed

b. when legal detriment is involved

c. if different quantities of the same type of item are exchanged

d. in the case of forbearance

10. Martin sold his used car to Nixon for $2,000. Later Martin discovered that the car was worth $3,000. Martin then claimed that Nixon owed him an additional $1,000. If Martin attempted to take legal action to collect the additional $1,000., he would be entitled to

a. $1,000 plus legal fees

b. $1,000 only

c. $3,000 minus $1,000

d. nothing