Contract Basics, Offer & Acceptance

Which statement best defines a contract in business law?

• A voluntary promise without legal consequences

• A legally enforceable agreement between two or more parties

• Any written document signed by two people

• A negotiation that has not yet been finalized

Under the mirror image rule for acceptance, which choice is correct?

• Acceptance may change terms as long as the parties intend to contract

• Acceptance must exactly match the offer's terms to create a contract

• Silence always counts as acceptance after 24 hours

• A counteroffer and acceptance can occur at the same time

An offer is revoked by the offeror before acceptance. What is the legal effect?

• The original offer remains open until its stated expiration

• The offer terminates and cannot be accepted

• The offeree has 48 hours to accept despite revocation

• Revocation converts the offer into a unilateral contract

Which statement best defines consideration in contract law?

• Something of value exchanged between parties to a contract

• The court’s evaluation of whether a contract is fair

• A promise made without any obligation

• A past benefit given before the contract was formed

Which is the best example of valid consideration?

• A promise to give a gift for no return

• Payment of $100 in exchange for mowing a lawn

• A moral obligation to help a friend move

• A duty one is already legally required to perform

Which example is not valid consideration?

• Delivering goods after receiving payment

• A promise based solely on past favors

• Mutual exchange of promises to perform

• Providing services at the time of agreement

What does the term past consideration refer to?

• A performance completed before the promise was made

• A future promise to pay for services

• A promise made at the same time as performance

• A mutual exchange of promises

Why is past consideration generally not enforceable?

• Courts dislike contracts

• It lacks a current bargained-for exchange

• It is too difficult to value money

• It always violates public policy

What does adequacy of consideration most directly address?

• Whether the amount exchanged is fair, not merely present

• Whether the parties are related

• Whether the contract is written

• Whether the contract was performed promptly

Which statement best describes illusory consideration?

• A promise that appears to bind a party but actually leaves complete discretion

• A promise to pay a fair price

• A promise supported by a signed writing

• A promise performed immediately