Bus Law Ch. 10
To be effective, an offer must: a. be sufficiently definite and certain. b. be communicated to the offeree. c. manifest an intent to enter into a contract. d. All of the above.
All of the above.
Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition? a. Arthur is an authorized IBM computer dealer. b. Brian employs two salesmen to sell his homemade furniture. c. Clarence has a store in which he sells used lawn mowers. d. All of the above.
All of the above.
James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100? a. An implied in fact contract has been formed. b. A unilateral contract has been formed. c. This created a formal contract. d. This created an option contract.
This created an option contract.
When does acceptance of an offer to enter into a unilateral contract generally occur? a. Upon notice of intent to accept by the offeree. b. Upon full performance by the offeror. c. Upon commencement of performance by the offeree. d. Upon full performance by the offeree.
Upon full performance by the offeree.
Tim mails an offer to Brian on June 15. Brian receives the offer on June 16. Tim mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18. Brian receives the revocation on June 19. Tim receives the letter of acceptance on June 20. Was a contract formed? a. Yes, on June 16. b. Yes, on June 18. c. Yes, on June 20. d. No, the offer was revoked before acceptance.
Yes, on June 18.
Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract? a. Yes, since the acceptance was received before the rejection. b. No, because the rejection was effective upon dispatch. c. No, because the rejection terminated the offer. d. Yes, because the acceptance is always effective upon dispatch.
Yes, since the acceptance was received before the rejection.
An ad in a newspaper or a circular describing goods and stating prices would generally be considered: a. a firm offer if made by a merchant. b. an offer if made by a merchant, but not a firm offer. c. an offer irrespective of who made the offer. d. an invitation to buyers to make an offer to buy goods.
an invitation to buyers to make an offer to buy goods.
The way parties usually show mutual assent is by: a. an offer by words or conduct and an acceptance by words or conduct. b. a proposal in words and an acceptance in words. c. an act exchanged for an act. d. an offer and a counteroffer.
an offer by words or conduct and an acceptance by words or conduct.
A contract that binds the offeror to keep an offer open for a specified period of time is known as: a. a offer with reserve. b. an option. c. promissory estoppel. d. a unilateral contract.
an option
An offer need not take any particular form to have legal validity. To be effective, however, it must: a. be spoken directly to the offeree. b. always contain the price of the product or service offered. c. always contain the place of delivery. d. be communicated to the offeree.
be communicated to the offeree.
Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling. Elmer: a. has made a firm offer to Fred which cannot be revoked. b. can revoke his offer at any time before Fred accepts it, because there is no consideration to keep it open. c. must keep the offer open, because this is an option contract. d. is promissorily estopped from revoking his offer to Fred.
can revoke his offer at any time before Fred accepts it, because there is no consideration to keep it open
An offer that is made by a merchant under the UCC and is irrevocable even though no consideration is given to keep it open is known as a(n): a. option. b. firm offer. c. requirements contract. d. output contract.
firm offer.
If Anna Laura, in return for the payment of $200 to her by Catherine, gives Catherine an option to buy Jesse, a prime Arabian mare, at any time within the next 14 days at a price of $50,000, Anna Laura's offer to Catherine is: a. a revocable option contract. b. an irrevocable output contract. c. irrevocable for the 14 days covered by the option. d. a requirements contract.
irrevocable for the 14 days covered by the option.
Under the Code, an offer for the purchase or sale of goods: a. must not leave open particulars of performance to be specified by one of the parties. b. may have missing terms supplied by inference. c. may leave quantity and quality terms open to be supplied later. d. need not provide a basis for remedies for breach, since remedies will be provided by the courts if needed.
may have missing terms supplied by inference
The definition of commercial reasonableness as used in contract law includes: a. the business judgment of expert business managers. b. that the practices customary in the type of transaction involved be used as a standard. c. the requirements to develop creative and innovative solutions never before used in a particular industry. d. None of the above.
that the practices customary in the type of transaction involved be used as a standard.
In the Catamount Slate Products, Inc. v. Sheldon case, the court found that: a. the moment of contract formation is to be determined by the intent of the parties, which is a question of law. b. the intent of the parties to be bound to a contract is determined by an objective standard of what a reasonable person would have believed based on the words and conduct of the parties. c. the intent of the parties to be bound to a contract is determined by a subjective standard of what the parties actually believed. d. an oral agreement reached at mediation cannot constitute a binding, enforceable settlement agreement.
the intent of the parties to be bound to a contract is determined by an objective standard of what a reasonable person would have believed based on the words and conduct of the parties.
Don offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer." a. Diane cannot accept the offer, because it wasn't made to her. b. This is a valid acceptance. c. The offer has not been communicated to the offeree. d. This is an invitation seeking offers and not an offer.
Diane cannot accept the offer, because it wasn't made to her.
A __________ is the refusal to accept an offer. a. revocation b. counteroffer c. rejection d. statutory irrevocability
rejection
The UCC battle of the forms rule: a. changes the mirror image rule. b. may yield different results depending on whether the parties are merchants. c. may result in formation of a contract quite different from the terms of the offer. d. All of the above.
All of the above
If there is no time specified for the acceptance of an offer, when does the offer terminate? a. After 24 hours. b. After 48 hours. c. After two weeks. d. After a reasonable period of time.
After a reasonable period of time.
Albert read ElectroCorp's ad in the local newspaper advertising a flat-screen TV for $89. Albert rushed to the store to buy the TV only to be told by the salesperson that the ad was a misprint and the price should have been $389. Albert gave the salesperson $89 plus sales tax and demanded the TV. a. The ad is a firm offer by the merchant and the TV must be sold for $89. b. The ad is a contract and the store must abide by terms stated in the contract. c. The store must accept the price stated in the ad, but only if Albert has a copy of the ad with him. d. Albert is merely making an offer to ElectroCorp to buy the TV for $89 plus sales tax.
Albert is merely making an offer to ElectroCorp to buy the TV for $89 plus sales tax.
Bart sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Speedy Mail-to-You Express, Inc., but due to their error, the letter is not sent out by the company until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective? a. At 10 a.m. on Tuesday. b. At 11 a.m. on Tuesday. c. At 8 a.m. on Wednesday. d. At the time Bart receives the letter.
At 11 a.m. on Tuesday.
Material terms in a contract include all but which of the following? a. The parties. b. Shipping method. c. Quality. d. Time of performance.
Shipping method
Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy. a. Maxine has revoked her offer to Tom. b. Maxine's offer is a firm offer and she must sell Tom a video camera for $200. c. Maxine must get the camera back from Cindy if Tom accepts within two weeks. d. An option contract was created, so Maxine is liable to Tom if she sells the camera to someone else within the two-week period.
Maxine has revoked her offer to Tom.
Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Alice sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Alice has just finished a class in contract law and insists that the store sell her five suits for $15.00. Alice threatens to sue Michelle for breach of contract. a. This is a valid contract, and Alice will win if she sues. b. The ad in the newspaper is an offer to sell, Alice accepted the offer, and there is an enforceable contract. c. The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Alice will not be able to successfully sue for breach of contract. d. None of the above.
The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Alice will not be able to successfully sue for breach of contract
Elvis makes an offer to Fred, but before Fred can accept, the state supreme court decides a case that makes Elvis's offer illegal. What is the effect of the court's decision on the offer? a. The court's decision automatically terminates the offer. b. The court's decision has no effect on the offer. c. The court's decision acts as a condition on the offer. d. The court's decision acts as a rejection of the offer by the offeree.
The court's decision automatically terminates the offer.
Charlene hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information and the suspect is then arrested and convicted. a. Charlene cannot collect the money unless the offer was specifically made to her by the station. b. The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Charlene has accepted. c. Because Charlene failed to notify the station of her intention to supply the information before actually doing so, she has not accepted their offer. d. Charlene was just doing her duty as a citizen and has no right to the payment of any money.
The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Charlene has accepted.
Destruction of the subject matter has what effect on the offer? a. The offer is terminated. b. The offer is delayed until additional subject matter can be located. c. This creates an impossibility of fact that does not terminate the offer. d. The offer is merely delayed under the "Hardship Rule."
The offer is terminated.
Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 yards of carpet at $20 per yard. Bob agrees and sends back the following letter confirming the deal: "Dear Jack: As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony "heather blue" carpeting at the rate of $20 per yard. We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date. Very truly yours, Bob" Which of the following is true? a. There is a contract for only 100 yards of carpeting. b. There is a contract for 100 yards PLUS the additional yardage. c. There is no contract since Bob made a counteroffer. d. There is no contract because the additional term is too uncertain to become a contract term.
There is a contract for only 100 yards of carpeting.
Action Play Equipment ordered 200 feet of chain, 400 clasps, and 50 swing seats from Brace Company for $1,600 to be delivered within three weeks of the order. Brace sent back an acceptance form which stated payment was due within thirty days of delivery or a finance charge of 2 percent per month would be added to the balance. What is the status of the interaction between Action and Brace? a. There is a valid contract under the UCC, and the additional payment terms become part of the contract unless Action objects within a reasonable period of time. b. There is a valid contract for the goods, but the payment terms will not become part of the contract. c. There is no contract, because Brace has made a counteroffer by adding payment terms. d. There is no contract, because the method of transportation has not been decided.
There is a valid contract under the UCC, and the additional payment terms become part of the contract unless Action objects within a reasonable period of time.
Lyle offers to sell his house to Dennis for $75,000. Dennis responds, "I will pay you $75,000 for the house if you first paint the second floor." This response could best be described as: a. an acceptance. b. a counteroffer. c. a rejection. d. an invitation.
a counteroffer.
In the Osprey L.L.C. v. Kelly-Moore Paint Co., Inc. case, the Supreme Court of Oklahoma held that: a. the lease was ambiguous. b. the plain language of the lease required that it be renewed by delivering notice either personally or by mail, and Kelly-Moore had done neither. c. a faxed delivery of the written notice to renew the commercial lease was sufficient to exercise the renewal option of the lease. d. a lease is a specialized contract, and therefore the usual rules for the interpretation of contractual writings do not necessarily apply.
a faxed delivery of the written notice to renew the commercial lease was sufficient to exercise the renewal option of the lease.
An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as: a. an output contract. b. a requirements contract. c. a firm offer. d. promissory estoppel.
a requirements contract.
Under the common law, the __________ must be the mirror image of the __________. a. acceptance; offer b. offer; acceptance c. contract; offer d. contract; consideration
acceptance; offer
The mirror image rule applies to: a. an offer. b. a rejection. c. an acceptance. d. a revocation.
an acceptance.
Marilyn read an ad in the school newspaper offering a $1,000 swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and began swimming. She has reached lap number 460; she feels great and is sure she can make it all the way. The advertiser: a. may revoke the offer since there has not yet been an acceptance. b. may not revoke the offer since Marilyn has already accepted it. c. must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps. d. must pay Marilyn $920, because she has performed 92 percent of the offer.
must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps.
The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and died. Mr. Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house. She may: a. not accept, since the offer is terminated. b. not accept, because she does not have the capacity. c. accept, since the contract offer is assignable. d. accept, since the offer cannot be revoked without notice.
not accept, since the offer is terminated
The UCC provides that a merchant is bound to keep a written offer open for the stated period, but no longer than: a. ten days. b. two months. c. three months. d. a reasonable time.
three months