ACCT 324- Chapter 14

In a bilateral contract, the offeror is expecting what action from the offeree? Payment in cash Expected performance by the offeree as required under the contract A return promise No action

A return promise

The means by which the offeree can communicate a valid acceptance to the offeror may be: _______. (Check all that apply.) determined by the provisions of the UCC, especially if the parties have expressly stipulated the means of acceptance in their contract expressly stated in the offer implied from the facts and circumstances surrounding the communication of the offer to the offeree determined by the secretary of state of the jurisdiction in which the parties contract

expressly stated in the offer implied from the facts and circumstances surrounding the communication of the offer to the offeree

In this case, a(n) _______ contract is created when the offeree is silent but receives a legal benefit. implied-in-fact quasi-in-fact revocable express

implied-in-fact

Identify a scenario where the parties have agreed that the silence will be considered acceptance. A person has a country club membership that has to be reevaluated every year before renewal. A person receives unsolicited product samples from a local store in the mail and decides to keep them. A person has a library subscription that is renewed automatically unless he or she explicitly asks to stop the subscription. The offeree makes an offer that states that if the response is not received within a certain duration, acceptance will be construed.

A person has a library subscription that is renewed automatically unless he or she explicitly asks to stop the subscription.

What conditions would legally cause an offer to be immediately terminated? (Check all that apply.) Offer becomes unprofitable to offeror Death of the offeror Offeror loses legal capacity to be in a contract Breach of offer by offeror

Death of the offeror Offeror loses legal capacity to be in a contract

What are the elements of a contractual offer? (Check all that apply.) Intent by the offeror to be bound by the agreement Offer must be communicated to the offeree Offer must contain definite terms Offer must be in writing

Intent by the offeror to be bound by the agreement Offer must be communicated to the offeree Offer must contain definite terms

______ terms allow a court to determine damages if one of the parties breaches the contract. Definite Material Formal Functional

Material

What conditions would legally cause an offer to be immediately terminated? (Check all that apply.) Breach of offer by offeror Offeror loses legal capacity to be in a contract Offer becomes unprofitable to offeror Death of the offeror

Offeror loses legal capacity to be in a contract Death of the offeror

What are some things that could be material terms in a valid contract? (Check all that apply.) Price of goods Parties involved The details of void contracts that were previously signed Information on length of time businesses have been in operation

Price of goods Parties involved

As a general rule, what effect does silence have in formation of contracts? Silence means that the offeree fully accepts all the offeror's terms. Silence is only acceptance if witnessed by a third party. Silence cannot be used to form a contract. Silence means the offeree accepts the contract, but agrees to work on details of contract later.

Silence cannot be used to form a contract.

nce an offeree rejects an option contact (a contract open for a predetermined period of time), what happens? With an option contract, following a rejection, there is a 72 hour cooling off period before the contract is terminated. The contract will be valid until the open period ends and the offeree can change his or her mind. The contract is immediately terminated. Nothing happens.

The contract is immediately terminated.

If there is no stated period when the offeree must accept or reject an offer, when will the offer expire? Due to the rules against perpetuities, the contract will remain open for twenty years then must be renewed. Never. Without a stated period the offer remains open for the offeree to accept, unless the offeror withdraws the offer. The offer is open for a period of 30 days. The offer will expire after a reasonable period of time.

The offer will expire after a reasonable period of time.

Under the common law mirror-image rule, when is a counter offer formed? When the offeree's acceptance does not include all of the terms of the offeror's offer When the offeree changes their mind about the offer When the offeree accepts the offer, but files a protest with the Secretary of State When the offeree remains silent and does not communicate an acceptance

When the offeree's acceptance does not include all of the terms of the offeror's offer

A valid offer under common law requires which of the following elements? (Check all that apply.) You need the intent to be bound by an acceptance. The offer must be in writing. The offer must be profitable for the offeror. There must be definite and certain terms. The offer must be properly communicated to the offeree.

You need the intent to be bound by an acceptance. There must be definite and certain terms. The offer must be properly communicated to the offeree.

If the offer merely authorizes certain modes of acceptance, but does not condition acceptance on the use of those modes, use of an unauthorized means of acceptance is: _______. void unconscionable illegal acceptable

acceptable

Under the common law mirror-image rule, if an offer and acceptance do not have the exact terms in the contract, then the acceptance is treated as a(n) _______. counter offer valid acceptance under the offeree's terms which creates an enforceable contract valid acceptance, but the terms must be interpreted by the courts valid acceptance under the offeror's terms which creates an enforceable contract

counter offer

Under common law, a valid contractual offer will be:_______. delivered with an uncertain deadline definite in its terms certain in its terms delivered with a fixed deadline

definite in its terms certain in its terms

The ______ rule states that an acceptance is valid when mailed and a revocation is only effective when received. best practice common law mailbox mirror-image

mailbox

If an acceptance is sent to the wrong address and never arrives at the correct address, then there is: ______. no contract a correct dispatch a valid offer no offeree

no contract

Promissory estoppel is the contractual concept that: _______. one party can exit an offer if the contract becomes unreasonably unprofitable one party reasonably relied on another's promise and due to that reliance, the court won't allow the revocation of the offer now one party can shop around and find better offers if there wasn't sufficient consideration in the original offer that one party can cancel the offer because for any reason

one party reasonably relied on another's promise and due to that reliance, the court won't allow the revocation of the offer now

f an offer is for a unilateral contract, the offeree can accept only by providing the requested performance. Suppose Bill offered to pay $500 to anyone who returned his lost dog to him. Mary could accept by:______. promising to return the dog returning the dog intending to return the dog looking for the lost dog

returning the dog

In the context of a contractual offer, silence by the offeree can be interpreted as acceptance when ______. the two parties have a long-standing relationship where a fresh contract is signed for every new transaction free products or services have been provided to the offeree the two parties have a long-standing relationship where rejection is immediately communicated by the offeree the offer is being communicated through agents

the two parties have a long-standing relationship where rejection is immediately communicated by the offeree

As a general rule, a revocation is effective: _______. when the offeror decides to cancel the offer when offeree receives the revocation 24 hours after the offeror notifies the offeree only after agreement by the offeree

when offeree receives the revocation

nder the mailbox rule, a revocation is effective: _______. one week after the offeror mails the revocation when received by the offeree when the offeree acknowledges receipt of the revocation when the offeror puts the revocation in the mail

when received by the offeree

If the offer does not make it clear how the offeree should respond, in what way can the offeree respond under the contract? (Check all that apply) By suing the offeror for breach of contract in civil court By giving the offeror a return promise as consideration By unilaterally submitting the case to binding arbitration By performing the required acts of the contract

By giving the offeror a return promise as consideration By performing the required acts of the contract

Which party to a contract can revoke an offer at any time? Offeree Local magistrate Offeror Beneficiary

Offeror

Who has the power to decide by what means an offer can validly be accepted? Offeror Secretary of State Offeree Federal Contract Commission

Offeror

Suppose Jeremy offers a job to Carol but states in the offer, "I must receive your acceptance by email before 5:00PM September 5" Carol puts her signed acceptance in the mail September 3rd but the acceptance does not arrive until September 7th. Jeremy and Carol have: _______. a binding counter-offer under the mirror-image rule an agreement, even though Carol did not accept in the manner and time specified in the offer no agreement, because Carol did not accept in the manner and time specified in the offer a binding revocation under the mirror-image rule

no agreement, because Carol did not accept in the manner and time specified in the offer

A counteroffer is made from the ______ to the ______. offeror; agent offeror; offeree offeree; court offeree; offeror

offeree; offeror

Suppose Joseph calls Justin and says, "Justin, I've found someone else to do my woodwork for the winter, and I won't be needing you." A day later Joseph changes his mind and calls Justin and wants to hire him based on the previously discussed terms. This is a valid: _______. rejection revocation counter offer acceptance

rejection

In the context of contractual offers, if an offeree changes his or her mind after dispatching a rejection by certified mail, what can the offeree do to ensure that the contract is formed? Disregard the current offer and make a counteroffer to the offeree. Communicate acceptance by another mode of communication before rejection reaches the offeror. Dispatch an acceptance via certified mail. Wait for the offeror to renew the offer.

Communicate acceptance by another mode of communication before rejection reaches the offeror.

Promissory estoppel requires what form of contractual mindset? That all parties are of the same mindset and no party has been harmed That parties wish to turn over rights in a contract to a 3rd party agent Detrimental reliance on the offer That the contract has to be profitable to be enforceable

Detrimental reliance on the offer

n the absence of a description in the offer of what form of communication must be used to form a valid acceptance, what methods of communication are generally accepted as reasonable? (Check all that apply.) Email communication In person communication Telephone communication Silence on the behalf of the offeree

Email communication In person communication Telephone communication

What type of contract is formed when the offeree receives the benefits of offered services with a reasonable opportunity to reject them and knows that some form of compensation is expected, yet remains silent? Implied-in-fact Conditional Express Bilateral

Implied-in-fact

What type of contract is formed when the offeree receives the benefits of offered services with a reasonable opportunity to reject them and knows that some form of compensation is expected, yet remains silent? Implied-in-fact Express Conditional Bilateral

Implied-in-fact

Under what circumstances will an offeror not be able to rescind a unilateral contract offer? Where the offeree has expressed that he or she will lose money if the contract is not executed If the offer is in writing In instances where the offeree has already started to perform under the contract If the contract is registered with the secretary of state's office

In instances where the offeree has already started to perform under the contract

In the context of contractual offers, which of the following statements best describes express authorization? It refers to the mode of communication that the offeree chooses to communicate acceptance. It refers to an implied-in-fact contract. It indicates that silence will be construed as acceptance. It is the specific mode of communication of acceptance that is stated in the offer.

It is the specific mode of communication of acceptance that is stated in the offer.

Death of an offeror will have what effect on a contractual offer? The offeree will have 10 days to accept the offer after the offeror has died and the heirs of the offeror will be bound to contract. Death will have no impact on the contractual offer, since it has already been communicated to the offeree. The offeree will have 30 days to accept the offer after the offeror has died and the heirs of the offeror will be bound to contract. It will cause the offer to be terminated.

It will cause the offer to be terminated.

Under common law, what types of terms must be included in a valid contractual offer? Terms that will be left unresolved for future negotiation Terms that are written only Material terms, all major items necessary for mutual consent that are clearly laid out Open terms that the contract leaves vague for parties to see conditions later

Material terms, all major items necessary for mutual consent that are clearly laid out

Which party to a contract is said to be the "master of their offer"? Beneficiary Courts Offeror Offeree

Offeror

Who can accept a valid offer that will create a binding contract? Only the offeree or his or her agent The secretary of state in the state of the offeror District court judge in the state of the offeree Any person that knows about the offer.

Only the offeree or his or her agent

What type of contract allows the offeree a fixed amount of time to consider an offer without the offeror being able to revoke the contract during that fixed period of time? Unilateral contract Option contract Martial contract Bilateral contract

Option contract

What are methods by which termination of a contractual offer can occur? (Check all that apply.) Revocation by the offeror Counteroffer by the offeree Offeror refuses to spend the money that offeree gives as part of acceptance and consideration Offeror can send notice to the secretary of state's office

Revocation by the offeror Counteroffer by the offeree

If an offer states that it is good for thirty days, what happens in thirty days if the offeree has not responded? Under common law, an additional thirty days would be given to the offeree. The offer terminates immediately. The offer is void because an offer can only be open for a period of 20 days. The offer is voidable, and valid until the offeror publicly indicates that the offer is rescinded.

The offer terminates immediately.

Which of the following is not a basic common-law requirement for a valid acceptance? The offeree's communication of the acceptance to the offeror The offeree's manifestation of intent to be bound by the acceptance and the resulting contract The offeree's written acceptance, dispatched by certified mail, to the offeror The offeree's agreement to the definite and certain terms of the offer

The offeree's written acceptance, dispatched by certified mail, to the offeror

n the context of contractual offers, which of the following statements is true of unilateral offers? The offeror cannot revoke the offer until the offeree has had a chance to respond to the offer. The offeror can rescind it at any time. Silence from the offeree can be construed as acceptance. The offeror must give the offeree a reasonable time to complete it if the offeree has begun performing.

The offeror must give the offeree a reasonable time to complete it if the offeree has begun performing.

When is it reasonable to assume that the offeree's silence constitutes acceptance? When the offer is bilateral When the offer is unilateral When an offer is made and the offeree does not respond within the time in accordance with the option contract When the previous course of dealings between the parties have established such a pattern of behavior

When the previous course of dealings between the parties have established such a pattern of behavior

In the event that a revocation of the offer is sent, but the offeree communicates acceptance to the offer before the revocation is received, a valid contract has been formed. no contract exists, but there is now a counteroffer from the offeree. a contract only exists if it was an option contract. no contract exists due to the revocation being sent first.

a valid contract has been formed.

Parties to a contract can agree before hand that the silence is a form of ______. mirror-image rule unauthorized acceptance revocability acceptance

acceptance

According to the Restatements of Contracts, if no mode of communication is specified in the offer, then ______. any reasonable means of acceptance is valid the mailbox rule applies acceptance must be sent via certified mail silence is interpreted as acceptance

any reasonable means of acceptance is valid

Justin informs Joseph that he will not be able to accept the contract for doing woodwork for the winter at Joseph's farm because of prior commitments. A day later, Justin calls up Joseph and tells him the original terms of the contract is acceptable to him and he can take up the offer. However Joseph tells Justin he would indeed like Justin to do the work however her will pay on $15/hour rather than $18/hour mentioned in the original contract. This proposal made by Joseph illustrates a _____. termination rejection counteroffer revocation

counteroffer

As a general rule, ______ cannot be used to form a contract. a promise the performance of an act silence spoken words

silence

Assume that an offer merely authorizes certain modes of acceptance, but does not condition acceptance on the use of those modes. In such a situation, if the offeree uses an unauthorized means of acceptance: _______. it is deemed as a counteroffer for the offeror to decide to accept or reject the acceptance creates a valid contract upon receipt by the offeror there is no valid contract, since the offeree used an unauthorized means of communication there is a voidable contract, and the offeror can decide if the contract is valid

the acceptance creates a valid contract upon receipt by the offeror

If no means of communicating an acceptance is specified, what means will be accepted? Any reasonable means including telephone, mail, fax, email and in person communication. Only written means of communication are allowed. If no means of communication is listed, then the offer is not valid and no contract can be formed. Only in-person communication will be accepted for an acceptance.

Any reasonable means including telephone, mail, fax, email and in person communication.

In general, what are the ways an offeree can manifest intent to enter into a contract? (Check all that apply.) By having a general conversation about a proposed offer By giving the offeror a return promise (e.g., promise to pay contract value) By performance of the requested actions under the offer and contract By contacting the secretary of state's office to indicate that the requested offer is accepted

By giving the offeror a return promise (e.g., promise to pay contract value) By performance of the requested actions under the offer and contract