ACCT 324: Smartbook Chapter 14

What conditions would legally cause an offer to be immediately terminated? (Check all that apply.) Breach of offer by offeror Death of the 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

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: _______. acceptance rejection revocation counter offer

rejection

If 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:______. returning the dog intending to return the dog promising to return the dog looking for the lost dog

returning the dog

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

silence

Under the mailbox rule, acceptance is valid: _______. when it is received by the offeror when the offeror acknowledges receipt of the acceptance 10 days after it is mailed by the offeree when it is mailed by the offeree

when it is mailed by the offeree

Identify a scenario where the parties have agreed that the silence will be considered acceptance. 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 country club membership that has to be reevaluated every year before renewal. A person has a library subscription that is renewed automatically unless he or she explicitly asks to stop the subscription. 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.

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

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

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 performing the required acts of the contract By giving the offeror a return promise as consideration By suing the offeror for breach of contract in civil court 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

An offeror may try to avoid being bound to a contract by later claiming she was only joking when she made the offer. Which of the following is an accurate statement regarding the willingness of a court to consider such evidence? Courts are receptive to such evidence if it relates to a contract for the sale of goods transaction. Courts always are interested in hidden intent in contract interpretations. Courts are receptive to such evidence if it relates to a contract for the sale of real estate. Courts are generally not interested in such evidence of hidden intent. Courts are receptive to such evidence if it relates to a contract for the provision of services.

Courts are generally not interested in such evidence of hidden intent.

n offeror may try to avoid being bound to a contract by later claiming she was only joking when she made the offer. Which of the following is an accurate statement regarding the willingness of a court to consider such evidence? Courts are generally not interested in such evidence of hidden intent. Courts are receptive to such evidence if it relates to a contract for the provision of services. Courts are receptive to such evidence if it relates to a contract for the sale of real estate. Courts always are interested in hidden intent in contract interpretations. Courts are receptive to such evidence if it relates to a contract for the sale of goods transaction.

Courts are generally not interested in such evidence of hidden intent.

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

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

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

Detrimental reliance on the offer

In 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 Silence on the behalf of the offeree Telephone communication

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? Conditional Bilateral Implied-in-fact Express

Implied-in-fact

Under what circumstances will an offeror not be able to rescind a unilateral contract offer? If the offer is in writing Where the offeree has expressed that he or she will lose money if the contract is not executed 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

The creation of a valid contractual offer requires what elements? Intent of the offeror for an agreement, definite terms and offer communicated to offeree Intent of the offeror for an agreement, consideration over $500 and the offer is in writing Offeror must have the offer put under seal. Offeror must have proposal that will create profit, terms of the offer must be definite and the offer must be communicated to the offeree

Intent of the offeror for an agreement, definite terms and offer communicated to offeree

What form of intent must an offeror have in creating a contractual offer? Intent negotiate the offer prior to agreement. Intent to profit by the agreement Intent to have the agreement concluded in 24 hours Intent to be bound by the offeree's acceptance

Intent to be bound by the offeree's acceptance

If a contractual offer becomes illegal, what is status of the offer? It is immediately terminated. It is valid since the offer was made prior to the illegality. It becomes an option contract, allowing for both sides to obtain a waiver. The contract is valid until a court has an opportunity to review status of the contract and deem it void.

It is immediately terminated.

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

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? It will cause the offer to be terminated. 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. Death will have no impact on the contractual offer, since it has already been communicated to the offeree. 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.

It will cause the offer to be terminated.

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

Material

Under common law, what types of terms must be included in a valid contractual offer? Terms that are written only Material terms, all major items necessary for mutual consent that are clearly laid out Terms that will be left unresolved for future negotiation 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

What is the standard that courts use to interpret contracts? Multi-theory standard Objective standard Thought processes standard. Subjective standard

Objective standard

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

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

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

Offeror

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

Offeror

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

Offeror

What are the names of the parties that form a contract? (Check all that apply.) Beneficiary Offeror Incorporater Offeree

Offeror Offeree

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

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? Bilateral contract Option contract Martial contract Unilateral contract

Option contract

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

Parties involved Price of goods

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

Revocation by the offeror Counteroffer by the offeree

Once an offeree rejects an option contact (a contract open for a predetermined period of time), what happens? Nothing 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.

The contract is immediately terminated.

How would a court likely respond to an offeror's attempt to avoid contract liability by claiming she was merely joking when she made an offer to the offeree? (Assume the offeree accepted the offer based on the reasonable belief that the offer was legitimate.) The court would enforce the contract, since courts are not usually interested in an offeror's hidden intent. Applying fundamental notions of equity, the court would refuse to enforce the contract due to the offeror's lack of subjective intent. The court would only consider the intent of the offeror's hidden intent. Applying well-established principles of common law, the court would refuse to enforce the contract due to the offeror's lack of subjective intent.

The court would enforce the contract, since courts are not usually interested in an offeror's hidden intent.

Under common law, what are the necessary elements of a valid contractual acceptance? (Check all that apply.) The intent by the offeree to be bound by acceptance of contract. The acceptance will have the definite and certain terms of the offer. The agreement is in the same language as the offer. The agreement will be profitable for the offeree.

The intent by the offeree to be bound by acceptance of contract. The acceptance will have the definite and certain terms of the offer.

If the subject matter of a contractual offer is destroyed, then what is the status of the offer? The offeror is liable for a breach of contract for allowing the destruction. The offer is immediately terminated. The offer is converted to an option contract to allow parties to find substitute consideration. There is no change. All parties must continue with their contractual obligations.

The offer is immediately terminated.

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

The offer terminates immediately.

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. The offer is open for a period of 30 days. The offer will expire after a reasonable period of time. Never. Without a stated period the offer remains open for the offeree to accept, unless the offeror withdraws the offer.

The offer will expire after a reasonable period of time.

A valid contractual offer must be communicated to what party? (Check all that apply.) The secretary of state's office in order to have the contract registered The offeree The district court to ensure a valid record in case of a future dispute The agent of the offeree who is acting on behalf of the offeree

The offeree The agent of the offeree who is acting on behalf of the offeree

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

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

In the context of contractual offers, which of the following statements is true of unilateral offers? 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 cannot revoke the offer until the offeree has had a chance to respond to the offer.

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

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

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

Under the common law mirror-image rule, when is a counter offer formed? When the offeree changes their mind about the offer When the offeree's acceptance does not include all of the terms of the offeror's 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

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

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

When is it reasonable to assume that the offeree's silence constitutes acceptance? When the offer is bilateral When the previous course of dealings between the parties have established such a pattern of behavior 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

Which of the following is an element for the creation of a valid contractual offer in common law? You need the intent to be bound by an acceptance of the offeree. The offer must be profitable to the offeror. The offer must be approved by a court. The offer must be in writing.

You need the intent to be bound by an acceptance of the offeree.

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 due to the revocation being sent first. a contract only exists if it was an option contract. no contract exists, but there is now a counteroffer from the offeree.

a valid contract has been formed.

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: _______. unconscionable illegal void acceptable

acceptable

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 silence is interpreted as acceptance acceptance must be sent via certified mail

any reasonable means of acceptance is valid

In a(n) ______ contract, the offeror makes a promise in return for a promise from the offeree. (Check the BEST answer) executory bilateral unilateral formal

bilateral

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

certain in its terms definite in its terms

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) _______. valid acceptance under the offeree's terms which creates an enforceable contract counter offer valid acceptance under the offeror's terms which creates an enforceable contract valid acceptance, but the terms must be interpreted by the courts

counter offer

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 _____. counteroffer termination revocation rejection

counteroffer

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

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

In case of the death of the offeror, the offer terminates ______. immediately as soon as the offeree becomes aware of the offeror's death when it expires in accordance with the option contract within 48 hours of the death of the offeree

immediately

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

implied-in-fact

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: _______. an agreement, even though Carol did not accept in the manner and time specified in the offer a binding revocation under the mirror-image rule a binding counter-offer under the mirror-image rule no agreement, because 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

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

no contract

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

offeree; offeror

The name of the party initiating an offer for a contract is the: _______. incorporater offeree offeror contractee

offeror

Promissory estoppel is the contractual concept that: _______. that one party can cancel the offer because for any reason 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

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

As a general rule, a revocation of an offer is effective when ______. the offeree decides to make a counteroffer the offeror decides to revoke the offer the offeror sends the information to the offeree that the offer has been revoked the offeree receives it

the offeree receives it

In an option contract, the offeree gives consideration to the offeror: _______. to have an offer that is promised to produce a profit for the offeree to give the courts the option to cancel the contract to have an offer that cannot be revoked by the offeror for a period of time to name a third party beneficiary who will have rights under the contract

to have an offer that cannot be revoked by the offeror for a period of time

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

when offeree receives the revocation

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

when received by the offeree