1. Generally, a contract begins with a promise. Does the promise constitute a binding contract, though, there may moral obligation to keep all promises seriously?

A. True B. False

2. Generally, an offer is communicated by the offeror in form of writing or orally. Does the conduct of holding up ones hand for taxi, raising a finger at an auction, and the gestures of floor traders at a stock exchange constitutes an offer?

A. True B. False

3. Normally, an offeree cannot accept an offer until after learning of an offer. In an event where a person finds a lost article and return it to the owner, and later that person learned that there was reward has been offered for its return. Does the finder entitle to the reward?

A. True B. False

4. When an offer has lapsed, the offeree can no longer accept it even if he is unaware that it has lapsed?

A. True B. False

5. Below are ways where an offer has lapsed, except? Please select below that does not apply.

A. When the offeree fails to accept within a time specified in the offer.

B. When the offeree fails to accept within a reasonable time, if the offer has not specified any time limit.

C. When either of the parties dies and becomes insane prior to acceptance.

D. One of the parties to the contract becomes incapacitated, however, in the Will & Testament, the appointed Executor will act on her behalf.

6. Which of the following are determined to be illegal contract because it is against public policy?

A. Contracts to commit a crime or tort.

B. Contracts involving immoral acts.

C. Contracts that are bets and wagers.

D. All the above.

7. According to the law of contract, there are several ways for an offer to end before acceptance. Please select below that does not apply.

A. End of a specified time and expiration of a reasonable time.

B. Death or insanity of offeror and revocation of offer.

C. Rejection and counteroffer by the Offeree.

D. A contract of which one party is a minor.

8. There are ways in which a contract may be discharged meaning to cancel the obligation of a contract. Please select below that does not apply.

A. Discharge by illegal contract.

B. Discharge by tendering performance of the contract.

C. Discharge by agreement in which both parties agreed.

D. Discharge by the operation of the law in which the debtor is discharge from liabilities.

9. John, a sales representative from Electric Supply Co, demonstrated a new high-speed auto-analyzer to Jill, the owner of Speedy Car Repair Shop. Though the devise is good and useful, but the price is too high at $7,500.00. Jill made a bargain at $5,000.00, but John said the price cannot be reduced and got back the machine. Two weeks later, the auto-analyzer arrived with a letter from John that the price was reduced to $6,000.00, with the permission of his manager. They just want to break into the market. The letter further said that if we did not hear from you in ten days, we shall assume that you have accepted the offer and we will expect a payment of our invoice, enclosed. Jill allows to sit the machine idle for more than 10 days.

Does the offer constitute a binding contract? A. True. B. False.

On the contrary, if Jill takes the risk of using machine for experiment purposes. Is there a binding contract? A. True. B. False.

10. The essence of a contract is the meeting of minds of the contracting parties. To qualify as a valid contract, an agreement must meet certain basic requirements and they are: consensus, consideration, capacity, legality, and intention. Please select that does not apply with respect to capacity to enter into a contract.

A. Tax professional

B. A lawyer

C. A taxpayer under bankruptcy.

D. A minor