Chapter 12

Alpha Enterprises sent an offer to Omega Enterprises. The offer read as follows: AVAILABLE FOR IMMEDIATE SHIPMENT: 600 WIRELESS NOKIA PHONES - MODEL HCG5321 (THE PHONE FROM "CHARLIE'S ANGELS"). PRICE IS $10 EACH. 30 DAYS, SAME AS CASH. ALL WARRANTIES IN EFFECT. THIS OFFER EXPIRES ON TUESDAY, MARCH 15, 2004. Omega sent the following letter in response on March 14, 2002, via overnight delivery: HAPPY TO ACCEPT YOUR OFFER ON THE NOKIA PHONES. SHIP IMMEDIATELY. There was a major snowstorm that hit the east coast on March 14, 2004, and Omega's letter did not arrive at Alpha's headquarters until March 18, 2004. Alpha had sold the phones to another company. Omega demanded the 600 phones for $10 each claiming that it had accepted the offer in time. a. Omega is correct; it had valid and timely acceptance and had a contract. b. Omega is incorrect; the acceptance must arrive for it to be effective. c. Omega is incorrect; the offeree assumes the risk of the delivery means chosen. d. Omega is correct, but any damages must be recovered from the overnight shipping company. e. none of the above

A

An ad in a newspaper reads: "AVAILABLE TODAY ONLY. FRIENDLY'S APPLIANCES. CLEARANCE SALE FOR ALL FLOOR ITEMS. 75% OFF RETAIL PRICES." Joan Ludwig arrived at Friendly's about one hour after it opened and there were no appliances left. The issues in the situation are governed by: a. The Uniform Commercial Code b. UETA c. common law d. restatement of contracts e. none of the above

A

Jerry Montray is negotiating with Pamela Barnes for the purchase of her mountain bike. The following conversation has taken place: Jerry: "I will buy your mountain bike for $375.00." Pamela: "I will sell it to you." Jerry: "Good. The tire pump is included." Which of the following statements is true? a. Jerry and Pamela have a contract for the bike at $375.00. b. Jerry and Pamela do not have a contract for the bike at $375.00. c. Jerry and Pamela have a contract for the bike at $375.00 with the tire pump. d. none of the above

A

The following series of events occurred between Bull's Meat Market and The Butcher: May 1 - The Butcher faxes Bull's and offers to buy 200 lbs. of T-bone steak at $3.29 per lb. May 2 - Bull's faxes back: "Price is okay. Payment prior to delivery." Bull's and The Butcher: a. have a contract on May 2 with the payment term. b. have a contract on May 2 without the payment term. c. do not have a contract. d. none of the above

A

The language "I offer to sell you my 1974 White Ford Torino" is: a. a valid offer. b. not a valid offer because it lacks a definite price. c. not a valid offer because there are no terms for payment. d. not a valid offer because it is oral.

A

Under the old UCC and between merchants, additional terms in acceptance: a. are part of the contract unless they are material. b. are part of the contract unless the offer was limited. c. result in rejection of the original offer. d. none of the above

A

Which celebrity endorser had contractual problems because of photographs of apparent drug use? a. Michael Phelps b. Michael Vick c. Tiger Woods d. Paula Abdul

A

Which of the following contract subject matters must be evidenced by a writing to be enforceable under the statute of frauds? a. a contract for the sale of an easement for $75 b. a contract for the sale of a computer monitor for $220 c. a contract for consulting for 6 months @ $10,000 per month plus expenses d. All of the above must be in writing.

A

Which of the following contracts must be in writing to be enforceable? a. A contract for the sale of an easement for $250. b. A contract for the sale of a bike for $175. c. A six-month marketing consulting contract. d. All of the above must be in writing to be enforceable.

A

Which of the following contracts would not be governed by the UCC? a. a contract for dentures b. a contract for the purchase of an Arabian horse c. a contract for the purchase of an oil painting for $550 d. a contract for the purchase of an ATR jet e. All of the above are governed by the UCC.

A

"Point and click" refers to: a. the right of the FBI to search web sites. b. the formation of contracts via the Internet. c. the registration of domain names under ICANN. d. pornographic web sites. e. none of the above

B

Andy: "This is to confirm our telephone conversation of earlier today. 200 lbs. of T-bone at $2.89 per pound." Barb: "Yes, but that's 100 pounds at $2.99." Andy: "Too late, we already reached agreement by phone." Barb: "Too bad, it wasn't in writing." Which of the following statements is true? a. Barb is incorrect. The phone conversation was a contract. b. Barb is correct. The agreement must be in writing to be enforceable. c. Andy can enforce the agreement with the parol evidence rule. d. none of the above

B

Day 1 - School teacher sends superintendent letter of resignation. Day 4 - Superintendent mails letter accepting resignation. Day 5 - School teacher hand delivers letter withdrawing resignation. Day 6 - Teacher receives superintendent's letter. a. The above negotiations are governed by the UCC. b. The resignation was accepted and the withdrawal is too late. c. both a and b d. The resignation offer was revoked.

B

Jane Linden is negotiating with James Paul to buy his 1987 Toyota MR5. The following excerpts from letters have occurred so far: Jane: "I would be interested in purchasing your MR5." James: "I am thinking of selling my MR5." Jane: "I am considering selling my diamond tennis bracelet to buy your MR5." Which of the following statements is true? a. James and Jane have a contract to sell the MR5. b. James and Jane do not have a contract to sell the MR5.

B

Jane: "I'll pay you $50 if you will clean my windows." Al: "I'll do it for $75." Jane: "$65 and it's a deal." Al: "No way." Jane: "Too late. We have a contract." Which of the following statements is true? a. Jane is correct, there is a contract. b. There is no contract. c. There is a contract to clean the windows for $65. d. There is a contract to clean the windows for $75.

B

Melanie: "I'll buy that armoire for $775." Judith: "It's not for sale." Melanie: "How about $875?" Judith: "I don't know. It's been in my family for 130 years." Melanie: "How about $1000?" Judith: "I'll think about it." a. There is an option contract. b. There is no contract. c. There is a reliance case. d. There is a quasi contract.

B

The mailbox rule applies to: a. all acceptances. b. acceptances communicated through the offer's stipulated means. c. acceptances under UCC only. d. revocations and acceptances. e. none of the above

B

To be valid, a UCC merchant's firm offer: a. must be supported by consideration. b. must be evidenced by a record. c. must be signed by both parties. d. all of the above

B

Which is not a requirement for a merchant's confirmation memorandum? a. evidenced by a record b. signed by both parties c. underlying oral agreement d. none of the above

B

Which of the following contracts would not have to be in writing under the old UCC? a. a contract for the sale of an easement for $450 b. a contract for consulting services for $10,000 over the next 90 days c. a three-year advertising contract d. a contract for the sale of furniture for $700 e. All of the above must be in writing.

B

Which of the following is not required for a valid UCC offer? a. quantity b. payment terms c. subject matter d. both b and c e. a, b, and c

B

With respect to the fact pattern in #31: a. Friendly's has breached a contract and owes damages to Joan. b. There is no breach of contract. c. Joan has no rights of recovery because the contract was required to be in writing. d. There was no contract, but Joan can recover on the basis of quasi contract. e. none of the above

B

With respect to the facts in number 31, the newspaper ad: a. is an offer. b. is not an offer. c. is a merchant's firm offer. d. cannot be revoked. e. none of the above

B

Abe and Gabriel entered into a contract for Abe to furnish landscaping services for Gabriel's office complex. The contract provides the fee will be $75 per month. At the time Gabriel signs the agreement, the two discuss the fact that the services required in the winter will be less and the fee will be reduced to $50 per month. Abe adds as Gabriel is signing, "I just forgot to put that sliding scale in this contract. Don't worry - I'll take care of it because we understand each other." Gabriel: a. will be permitted to introduce evidence about the winter fee reduction. b. will only need to pay $50 during the winter months. c. will pay $75 per month every month because of parol evidence. d. none of the above

C

Ann Frazer has just purchased a new Maserati. Ann will be borrowing the money from her bank. Ann signed the contract at 8:00 PM at the dealership and her bank will not be open until 10:00 AM the following day. Ann: a. has a contract regardless of whether her bank approves her loan. b. has made a conditional acceptance and has no contract. c. will be excused from her contract if the bank does not approve her loan. d. none of the above

C

Buyer on fax: "Will take house for $587,500 if front lawn is fixed." Seller on fax in response: "Price is $589,000 and no front lawn." Buyer on fax in response: "$588,000 plus the front lawn." Seller on fax in response: $589,000 plus the front lawn." a. There is a contract for the sale of the house at $588,000 plus the lawn. b. There is a contract for the sale of the house at $589,000 plus the lawn. c. There is no contract. d. none of the above

C

John Freeden is negotiating with Bill Murray to buy Bill's mountain bicycle. The following conversation has taken place: John: "I will buy your mountain bike for $325.00." Bill: "I couldn't sell it for less than $375.00." John: "I'll take it for $375.00." Which of the following statements is true? a. Bill and John have a contract for the sale of the bike at $375.00. b. Bill and John have a contract for the sale of the bike at $325.00. c. Bill and John do not have a contract. d. none of the above

C

John: "I will sell you my laptop computer for $330." Mary: "Will you include the carrying case"? John: "Sold." a. There is a contract for the sale of the computer with the carrying case. b. There is a contract for the sale of the computer but the carrying case is not included. c. There is no contract for the sale of the laptop computer. d. There is a contract but it is unenforceable because it must be in writing. e. none of the above

C

Julia Pitt runs a boutique that specializes in luggage and travel items. Julia contacts Tumi luggage about carrying its line of messenger satchels. The Tumi representative tells Julia that Tumi would be happy to sell her 100 Tumi Black Messenger bags for $318 each. Julia is happy with the price and asks Tumi to send the bags. The Tumi representative then faxes a confirmation of the shipment of the 100 bags at $318 each. Julia receives the fax. When the bags arrive, Julia contacts Tumi and says there is a business downturn and that she does not want the bags and that there was no contract anyway. a. Julia is correct; the contract requires some type of authentication from Julia to be enforceable. b. Julia is correct; the contract required more than a fax to have a sufficient record. c. Julia is incorrect; she and Tumi have a valid and enforceable contract. d. both a and b

C

Under both UCC and common law, a counteroffer: a. must be accepted by the original offeror. b. is effective upon mailing or dispatch. c. is also a rejection. d. none of the above

C

Walt's Pool World's fax to Pat's Pumps: "I'll take 10 4 hp pool pumps @ $175 each." Pat's Pumps' return fax: "Ok. Will deliver tomorrow AM." Pat and Walt: a. do not have a contract because the faxes will not satisfy the statute of frauds. b. do not have a contract because of the mirror image rule. c. had a contract when Pat's fax was sent. d. had a contract when Pat's fax was received.

C

Which of the following contract subject matters would not be covered under the UCC? a. a contract for the sale of a mobile home from the manufacturer b. a contract for the sale of a mobile home from a previous owner c. a contract for the sale of a mobile home plus its lot d. All of the above are under the UCC.

C

Which of the following eliminates the effect of the mailbox rule? a. The UCC eliminates the mailbox rule. b. Common law eliminates the mailbox rule. c. An offer that includes, "Acceptance is effective upon receipt only." d. Any attempt to eliminate the mailbox rule is void. e. none of the above

C

Which of these is an example of a bank's commitment to pay? a. Bill of lading b. Fee arbitration agreement c. Letter of credit d. A warrant

C

Day 1: A wires an offer to B Day 2: B receives the offer Day 3: B phones an acceptance A states, "Too late. I changed my mind." Which of the following statements is true? a. A and B do not have a contract b. A and B have a contract under common law only c. A and B have a contract d. none of the above

D

Day 1: Mike sends Tina a letter offer to sell his fish tank to her for $125. Day 2: Tina faxes Mike an acceptance. Day 2: Mike receives Tina's fax. Day 3: Mike calls Tina to revoke his offer. Mike and Tina: a. do not have a contract since Tina used the wrong means of acceptance. b. do not have a contract because Mike revoked his offer before Tina accepted properly. c. have a contract as of the receipt of the fax. d. have a contract as of when the fax was sent.

D

E-Sign: a. applies only to interstate transactions. b. must still be adopted by the states to be effective. c. does not apply to contracts for the sale of goods. d. applies in all 50 states. e. none of the above

D

The Uniform Electronic Transaction Act (UETA): a. has been adopted in all 50 states. b. has been declared unconstitutional. c. is the same as E-sign. d. none of the above

D

The following exchange took place in a series of e-mails between Mitchell Raines and Leslie Carroll: Mitchell: I am looking at the Trek bike advertised on your website for $650.00. Would you take $600.00? Leslie: I would take $600 if there were no delivery required. Mitchell: Well, I have to have it delivered because you are two states away. Leslie: Well, then if there has to be delivery, I could do it for $630.00. Mitchell: Is that cash? Leslie: Yes. a. Mitchell and Leslie have a contract for the sale and purchase of the bike for $630.00 with delivery. b. Mitchell and Leslie have a contract for the sale and purchase of the bike for $630.00 without delivery. c. Mitchell and Leslie have an offer on the table of $600 with no delivery. d. Mitchell and Leslie do not have a contract.

D

Under the old UCC and between nonmerchants, additional terms in acceptance: a. constitute a counteroffer. b. are part of the contract. c. result in rejection or the original offer. d. none of the above

D

Which of the following is not a risk associated with international contracting? a. Currency exchange rates b. Transportation costs c. Fee collection d. None of the above

D

Which of the following is/are governed by the UCC? a. a contract for the sale of water b. a contract for the sale of extracted oil c. a contract for the sale of barges d. All of the above are governed by the UCC.

D

Which of these can be a valid contract agreement under ESIGN? a. A fax b. A PDF file c. An online click or check on an "I accept" button d. All of the above

D

Which of the following is effective upon mailing or dispatch? a. offers b. rejections c. counteroffers d. revocation e. none of the above

E

"Drive my car to Albuquerque, and I'll pay you $500," is not a valid offer.

F

"I'll take it, but you must deliver," is a valid acceptance.

F

"I'll take the bike for $75, but first I have to sell my fish tank," is an example of a valid acceptance.

F

"I'm thinking of selling my CD player," is an example of offer language.

F

"Point and click" is not sufficient for acceptance under UETA.

F

"This offer is limited to these terms," means that between merchants only immaterial terms added in the acceptance will be part of the contract.

F

A contract for rebinding 500 books at a cost of $1.50/book is governed by the UCC.

F

A contract for termite extermination at a home would be governed by the UCC.

F

A contract for the sale of a $12.2 million Lear jet would be governed by common law because a document of title is involved.

F

A contract for the sale of potatoes is not governed by the UCC.

F

A contract must be in a formal writing to satisfy the statute of frauds.

F

A contract to solicit subscribers through pop-up Internet ads is considered a good under the UCC because it is a list of names.

F

A merchant's firm offer requires consideration to be valid.

F

A three-year warranty on an oven need be evidenced by a record to be enforceable.

F

An acceptance by a merchant in response to an offer by a merchant cannot contain any additional terms or it will be treated as a counteroffer under the UCC.

F

An acceptance of a stipulated means offer by a different means is effective upon receipt.

F

An executory contract is one that is fully performed.

F

An offer is effectively communicated upon mailing or dispatch.

F

Contracts for services are governed by the UCC.

F

Contracts for the sale of real property are governed by the Uniform Commercial Code.

F

Digital signatures are used frequently.

F

E-Sign is a federal law that requires written signatures for electronic contracts to be valid.

F

E-Sign requires that there be faxes or written verification of electronic contracts.

F

Implied contracts are unenforceable.

F

Morality clauses in contracts are both illegal and unethical.

F

Parol evidence is always admissible for challenging contract terms.

F

The Restatement of Contracts is another name for the UCC.

F

The UCC has no timing rules for acceptance.

F

The UCC rules on additional terms in acceptance are the same for merchants and nonmerchants.

F

The above book contract must be in writing to be valid.

F

The parol evidence rule does not apply in UCC contracts.

F

The parties' previous course of dealing will have little impact as courts interpret their contract.

F

UETA does not apply when there is an applicable statute of frauds.

F

Under the UCC, offers need price, subject matter, and quantity to be definite enough.

F

"Would you be interested in selling your Prius for $21,000?", is not an offer.

T

A UCC offer is valid with the subject matter stated even though no price is given.

T

A contract for the sale of a car for $700, under the old UCC, must be in writing to be enforceable.

T

A record, such as an e-mail or fax, now satisfies the writing requirement under both the UCC and common law.

T

Commercial signature security has been displaced by national security concerns and the need for government access to electronic communications.

T

Common law does not dictate amounts required for consideration.

T

Contracts for the sale of land must be in writing to be enforceable.

T

Options require consideration to be valid.

T

Point-and-click is a valid means of forming a contract if the parties had adequate knowledge of the terms and conditions of the agreement in advance.

T

Quasi contracts are implied-in-law contracts.

T

Revocation can be valid any time prior to acceptance.

T

The CISG follows the mirror image rule in formation.

T

The UCC Battle of the Forms provision allows additional terms in an acceptance without invalidating the acceptance.

T

The new UCC accepts e-mail communications as sufficient for a writing.

T

The new UCC accepts website communications as sufficient for a writing.

T

The new UCC rule for additional terms in acceptance is "terms later".

T

UETA has not yet been adopted in all of the states.

T

Under ESIGN, clicking on a tab that reads "I accept" is a valid acceptance to an offer.

T

Under common law, a counteroffer is also a rejection.

T

Under the CISG, acceptance is effective only upon receipt.

T

Under the UCC, an acceptance followed by additional terms is a counteroffer and a rejection.

T

Under the revised and new UCC, a contract for the sale of a car for $700 need not have a record of the contract to be enforceable.

T