Formation of contracts MCQs

1. What is the first step in the formation of a contract? a) Acceptance b) Consideration c) Offer d) Performance Answer: c) Offer 2. Which of the following is essential for an offer to be valid? a) It must be a general statement b) It must be communicated to the offeree c) It must be made under duress d) It must be accepted in writing Answer: b) It must be communicated to the offeree 3. What does “acceptance” mean in contract formation? a) The act of rejecting an offer b) The act of making a counter-offer c) The unconditional agreement to the terms of the offer d) The negotiation of terms Answer: c) The unconditional agreement to the terms of the offer 4. When does an acceptance become effective? a) When it is sent b) When it is received by the offeror c) When it is signed d) When the offeror acknowledges it Answer: b) When it is received by the offeror 5. What is “consideration” in the context of contract formation? a) The parties’ agreement to terms b) The mutual exchange of something of value c) The time frame for performance d) The legal capacity of the parties involved Answer: b) The mutual exchange of something of value 6. Which of the following is NOT a valid form of consideration? a) Money b) Services c) A promise to refrain from a legal right d) An illegal act Answer: d) An illegal act 7. What does “capacity” refer to in the context of forming a contract? a) The financial resources of the parties b) The ability to understand and agree to the contract terms c) The performance ability of the parties d) The time frame for executing the contract Answer: b) The ability to understand and agree to the contract terms 8. Which type of contract is formed when one party makes a promise in exchange for an act? a) Bilateral contract b) Unilateral contract c) Executed contract d) Express contract Answer: b) Unilateral contract 9. What is a “counter-offer”? a) An acceptance of the original offer b) A rejection of the original offer with new terms c) An agreement to the original offer d) A formal contract execution Answer: b) A rejection of the original offer with new terms 10. When is an offer typically considered to be “terminated”? a) When it is accepted b) When it is rejected or countered c) When it is communicated d) When it is executed Answer: b) When it is rejected or countered 11. What is required for a contract to be considered legally binding? a) Signature of all parties b) Written documentation c) Mutual assent and consideration d) Legal review Answer: c) Mutual assent and consideration 12. What happens if a contract is formed under duress or undue influence? a) It is automatically enforceable b) It is voidable at the option of the coerced party c) It is legally binding but subject to negotiation d) It becomes void Answer: b) It is voidable at the option of the coerced party 13. What is an “express contract”? a) A contract where terms are not clearly stated b) A contract where terms are communicated directly and clearly c) A contract formed by actions or conduct d) A contract that is not legally binding Answer: b) A contract where terms are communicated directly and clearly 14. What is an “implied contract”? a) A contract written in formal language b) A contract formed through actions or conduct c) A contract that requires a formal offer and acceptance d) A contract created by an official body Answer: b) A contract formed through actions or conduct 15. What does “performance” mean in the context of contract formation? a) The act of fulfilling the terms of the contract b) The process of negotiating contract terms c) The act of drafting the contract d) The process of signing the contract Answer: a) The act of fulfilling the terms of the contract