A contract is a legal agreement that is made by two or more
people. Usually a contract involves a promise to perform an action or
to abstain from some action. Because a promise is made as a
contract, the people (who are called parties in legal language) have
an obligation under the law to act as they said they would. Failure to
follow the terms of a contract is enough reason for a court suit. Such
legal arrangements as contracts are essential for the free enterprise
system; business cannot work, without a method of making certain
that people will deliver merchandise, perform services, or pay rent as
they had agreed to do in the contracts they signed.
( ) 1. A contract is to be signed by _____.
(A) at least two people (B) at most two people
(C) only two people (D) more than two people
( ) 2. Under what condition will a court suit result?
(A) When parties can follow the terms of a contract.
(B) When parties can not follow the terms of a contract.
(C) When parties have followed the terms of a contract.
(D) When parties try to follow the terms of a contract.
( ) 3. For which of the following are contracts NOT needed?
(A) Traders (B) House owners and buyers
(C) Street venders and consumers (D) Insurance business
( ) 4. Which of the following statements is true according to the passage?
(A) A contract is a promise. (B) A promise is a contract.
(C) An arrangement is a promise. (D) An action is an agreement.