Question 1

When communication between parties is by fax,the place where a contract is formed is

Accepted Answer

A) where the offeror resides. 
B) where the offeree receives the offer. 
C) where the subject matter is located. 
D) where the offeror receives the acceptance. 
E) where the offeree resides. 
A) where the offeror resides. 
B) where the offeree receives the offer. 
C) where the subject matter is located. 
D) where the offeror receives the acceptance. 
E) where the offeree resides. D

Question 2

Joe sees a dog wandering around his yard.He lets the dog in.Later he learns that the dog belongs to Mary,a woman who lives a kilometre away.Joe returns the dog to her the next day.A few days later as Joe is riding his bike,he sees an old advert in which Mary offers to pay $100 to any person who will find and return her dog.Joe realizes that he should have claimed the reward at the time that he returned the dog to Mary,and he decides to go to Mary's place.Which of the following is true?

Accepted Answer

A) Joe will be entitled to the reward because he found the dog and returned it. 
B) Joe will not be entitled to the reward because Mary made no offer. 
C) Joe will not be entitled to the reward because he did not see the offer of the reward until he had returned the dog and so he did not act in response to the offer of Mary. 
D) Mary's advert is an invitation to do business and cannot give rise to a contract. 
E) Joe will be entitled to the reward because Mary made an offer and his act of finding and returning the dog is an acceptance. 
A) Joe will be entitled to the reward because he found the dog and returned it. 
B) Joe will not be entitled to the reward because Mary made no offer. 
C) Joe will not be entitled to the reward because he did not see the offer of the reward until he had returned the dog and so he did not act in response to the offer of Mary. 
D) Mary's advert is an invitation to do business and cannot give rise to a contract. 
E) Joe will be entitled to the reward because Mary made an offer and his act of finding and returning the dog is an acceptance. C

Question 3

Explain why a newspaper advertisement by a merchandising company is not a binding and enforceable contract.

Accepted Answer

Newspaper advertisements are invitations to do business.They are a device used to attract new customers and to start negotiations toward a contract.A customer may make an offer which the merchant can either refuse or accept,or the merchant may make an offer as soon as the customer shows interest.Newspaper advertisements are also invitations to the public to visit the merchant's place of business with a view to buying.This is because a business is not expected to sell the goods to everyone who reads its advertisements,only those who,having read an advertisement,either contact the merchant so as to begin negotiations towards a contract or actually go to the merchant for the same purpose.

Question 4

When an offer is not accepted,it will

Accepted Answer

A) lapse. 
B) no longer be an offer. 
C) terminate. 
D) end. 
E) be void. 
A) lapse. 
B) no longer be an offer. 
C) terminate. 
D) end. 
E) be void.

Question 5

Within a standard form contract there always exists the ability to bargain the terms of the contract.

Accepted Answer

A) True 
 B)False

Question 6

On January 1,A offers to sell his property to B for $175 000.00 and gives B an option to purchase the property until July 1.The option reads: "The said option shall be exercisable by notice in writing to the seller at any time within 6 months from the date of the option." B mails his acceptance to A on February 12,but the letter never reaches A.In this situation,

Accepted Answer

A) B's acceptance by mail is not in accordance with the option and there is no contract between A and B. 
B) since the option states that it is exercisable by notice in writing to the seller,mailing the acceptance is deemed to be notice to the seller. 
C) since the option states that it is exercisable by notice in writing to the seller,and since the acceptance never came to the seller,B's acceptance by mail is not acceptance at all. 
D) B's acceptance of the option by mail is a proper acceptance,creating a contract between A and B. 
E) none of the above 
A) B's acceptance by mail is not in accordance with the option and there is no contract between A and B. 
B) since the option states that it is exercisable by notice in writing to the seller,mailing the acceptance is deemed to be notice to the seller. 
C) since the option states that it is exercisable by notice in writing to the seller,and since the acceptance never came to the seller,B's acceptance by mail is not acceptance at all. 
D) B's acceptance of the option by mail is a proper acceptance,creating a contract between A and B. 
E) none of the above

Question 7

All contracts begin with a promise,but not all promises become contracts.Explain.

Accepted Answer

A contract is a legally binding promise.

Question 8

A standing offer is

Accepted Answer

A) one that may be accepted from time to time as needed. 
B) one that can be revoked even after acceptance. 
C) an offer that is made and withdrawn before it is accepted. 
D) one that is said to stand because it is fixed and cannot be changed. 
E) one that cannot be revoked after acceptance without the consent of the offeree. 
A) one that may be accepted from time to time as needed. 
B) one that can be revoked even after acceptance. 
C) an offer that is made and withdrawn before it is accepted. 
D) one that is said to stand because it is fixed and cannot be changed. 
E) one that cannot be revoked after acceptance without the consent of the offeree.

Question 9

What is the legal effect of a counter-offer?

Accepted Answer

An offer is a tentative promise made by

Question 10

Explain how the rule concerning withdrawal of an offer by post differs from that concerning the time of acceptance by post.

Accepted Answer

When the post is used to accept an offer

Question 11

When an offer is proposed to an interested party,the mode of acceptance does not matter even if a preferred method of communication is stipulated within the offer.

Accepted Answer

A) True 
 B)False

Question 12

A offers to sell his car to B for $6000.00.However,B replies,"I will not buy it at that price," and walks away,never to be heard from again.In this situation,B's reply constitutes

Accepted Answer

A) a lapse of A's offer. 
B) a rejection of A's offer. 
C) a revocation of A's offer. 
D) a counter-offer. 
E) none of the above 
A) a lapse of A's offer. 
B) a rejection of A's offer. 
C) a revocation of A's offer. 
D) a counter-offer. 
E) none of the above

Question 13

An acceptance must always be communicated to the offeror for a valid contract to arise.

Accepted Answer

A) True 
 B)False

Question 14

An offer is made by an ________ to an ________.

Accepted Answer

A) inviter; invitee 
B) offeror; offeree 
C) initiator; offeree 
D) initiator; receiver 
E) offeror; invitee 
A) inviter; invitee 
B) offeror; offeree 
C) initiator; offeree 
D) initiator; receiver 
E) offeror; invitee

Question 15

What is a counter-offer? What effect does a counter-offer have on an offer?

Accepted Answer

A counter-offer is made when an offeree

Question 16

An acceptance of an offer must be

Accepted Answer

A) made slowly. 
B) loud and clear. 
C) by conduct only. 
D) positive. 
E) in writing only. 
A) made slowly. 
B) loud and clear. 
C) by conduct only. 
D) positive. 
E) in writing only.

Question 17

Like acceptance,revocation of an offer by mail is valid and binding once the letter of revocation is placed in the mailbox.

Accepted Answer

A) True 
 B)False

Question 18

What is a unilateral contract?

Accepted Answer

A unilateral contract is one in which on

Question 19

Margaret finds a stray cat and takes it in.The following day she is speaking to some friends and learns that Kelly,a woman who lives some distance away,has lost a cat.She goes around to the home of Kelly,leaves the cat in the yard and leaves a note for Kelly.The next day she gets a voice mail message from Kelly thanking her.A few days later Margaret sees a notice in which Kelly offers to pay $500 to anyone who returns her cat.Margaret,who needs some cash,returns to Kelly's home and demands the $500 reward.Which of the following is true?

Accepted Answer

A) Kelly's notice is an invitation to treat. 
B) Because Margaret did not demand the $500 when she returned the cat,she cannot go back and request it.The offer has lapsed. 
C) By returning the cat,Margaret performed the contract and so has to be paid.Margaret's performance gives rise to a unilateral contract. 
D) Kelly and Margaret have a bilateral contract. 
E) Margaret did not know of the offer before she returned the cat.So she could not have been accepting the offer when she returned the cat.No contract arose.There is thus no obligation on Kelly to pay the $500. 
A) Kelly's notice is an invitation to treat. 
B) Because Margaret did not demand the $500 when she returned the cat,she cannot go back and request it.The offer has lapsed. 
C) By returning the cat,Margaret performed the contract and so has to be paid.Margaret's performance gives rise to a unilateral contract. 
D) Kelly and Margaret have a bilateral contract. 
E) Margaret did not know of the offer before she returned the cat.So she could not have been accepting the offer when she returned the cat.No contract arose.There is thus no obligation on Kelly to pay the $500.

Question 20

Joe finds a dog wandering in his yard and he lets it into the house.A day later he sees an advert on a tree stating that the owner of the dog will pay $100 to anyone who finds and returns the dog to the local SPCA office.Joe takes the dog to the local SPCA office.Which of the following is true?

Accepted Answer

A) Joe did not communicate his acceptance of the offer to the SPCA and so no contract arose. 
B) The kind of advert that is placed on the tree cannot give rise to a contract. 
C) When Joe takes the dog to the SPCA,he makes the offer and if the SPCA accepts the offer,they are obliged to pay him. 
D) The advert on the tree is an invitation to do business and cannot give rise to a contract. 
E) Joe will be entitled to the reward because his performance of the obligation in response to the offer is all that is needed in a unilateral contract. 
A) Joe did not communicate his acceptance of the offer to the SPCA and so no contract arose. 
B) The kind of advert that is placed on the tree cannot give rise to a contract. 
C) When Joe takes the dog to the SPCA,he makes the offer and if the SPCA accepts the offer,they are obliged to pay him. 
D) The advert on the tree is an invitation to do business and cannot give rise to a contract. 
E) Joe will be entitled to the reward because his performance of the obligation in response to the offer is all that is needed in a unilateral contract.

Exam 5: Formation of a Contract: Offer and Acceptance

When communication between parties is by fax,the place where a contract is formed is

Explain why a newspaper advertisement by a merchandising company is not a binding and enforceable contract.

When an offer is not accepted,it will

Within a standard form contract there always exists the ability to bargain the terms of the contract.

All contracts begin with a promise,but not all promises become contracts.Explain.

A standing offer is

What is the legal effect of a counter-offer?

Explain how the rule concerning withdrawal of an offer by post differs from that concerning the time of acceptance by post.

When an offer is proposed to an interested party,the mode of acceptance does not matter even if a preferred method of communication is stipulated within the offer.

A offers to sell his car to B for $6000.00.However,B replies,"I will not buy it at that price," and walks away,never to be heard from again.In this situation,B's reply constitutes

An acceptance must always be communicated to the offeror for a valid contract to arise.

An offer is made by an ________ to an ________.

What is a counter-offer? What effect does a counter-offer have on an offer?

An acceptance of an offer must be

Like acceptance,revocation of an offer by mail is valid and binding once the letter of revocation is placed in the mailbox.

What is a unilateral contract?

Joe finds a dog wandering in his yard and he lets it into the house.A day later he sees an advert on a tree stating that the owner of the dog will pay $100 to anyone who finds and returns the dog to the local SPCA office.Joe takes the dog to the local SPCA office.Which of the following is true?

Law, society, and Business

The Machinery of Justice

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

The Requirement of Writing

The Interpretation of Contracts

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Sale of Goods

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

Government Regulation of Business

International Business Transactions

Electronic Commerce

Privacy

Breach of Contract and Its Remedies

Filters

An offer is made by an to an .