Exam 6: Formation of a Contract: Offer and Acceptance

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,

An offer is made by an ________ to an ________.

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

John and Edward are negotiating the sale and purchase of one of John's very expensive paintings.In the course of the negotiations,John says,"I'll sell it to you for $20 000.00,to which Edward replies,"That is a little too much for me;I'll give you $14 500.00." John thinks about this for a moment and says,"No,but I'll take $17 500.00.Edward says,"That is still too much;I'll buy it for $15 500.00.John looks at the painting and replies,"You know it is worth more than that.Why don't you give me $16 500.00 and we'll call it a day." Edward responds with,"I only have $16 000.00 so that is all I will pay for it," to which John replies,"Done." In this case,

Jack is speaking to Michael and Michael happens to mention that he will be painting his home soon.Jack,who is in some financial difficulty,decides to paint Michael's home in the hope that Michael will pay for the service.One weekend,when Michael is away,Jack paints the whole house.He believes that he is entitled to approximately $1500.When Michael returns,Jack approaches him and asks for $1500.Which of the following is true?

Use the fact situation in Q3 to answer the related question that follows: In the above fact situation,acceptance occurs

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?

Explain how a bilateral contract differs from a unilateral contract.

Which of the following is true? An invitation to do business

Explain the difference between an invitation to do business and an offer.

Use the fact situation in Q3 to answer the related question that follows: In the above fact situation,an offer occurs

An invitation to do business is a commitment to enter into a contract upon acceptance.

A counter-offer by its very nature contains a rejection of the offer.Explain.

What is a unilateral contract?

We study business contract law in order to

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?

What is a negative option?

Revocation takes effect

When the offeror specifically states in the contract that acceptance can be given by performing an act,direct verbal communication of acceptance is not needed to make the contract binding.

Jack tells Mike,"I'd like to buy your boat for $100 000." Mike,in response,says,"That's too cheap.I'll sell you my boat for $150 000." Mike's statement is a ________ and a ________.