Question 1

Why should you not make an agreement to sell your car to a purchaser "for a fair price"?

Accepted Answer

Although the courts have a policy of mak

Question 2

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

Accepted Answer

A contract is a legally binding promise.

Question 3

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 4

Explain how an Internet contract is formed.

Accepted Answer

Businesses selling online use standard f

Question 5

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 6

An offer may be revoked before it is accepted.To be valid,a revocation must be

Accepted Answer

A) promised. 
B) communicated to the offeree before acceptance. 
C) subject to a condition. 
D) loud and clear. 
E) exclusive. 
A) promised. 
B) communicated to the offeree before acceptance. 
C) subject to a condition. 
D) loud and clear. 
E) exclusive.

Question 7

An offer will lapse only if the offeree has had a reasonable time to accept.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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.

Question 10

Silence can be a sufficient method of acceptance

Accepted Answer

A) when the contract is a bilateral contract. 
B) if the parties to a contract have habitually used this method to communicate assent. 
C) when the offeror leaves the jurisdiction after making the offer. 
D) when the contract is a unilateral contract. 
E) when the offeree forgot to communicate its acceptance. 
A) when the contract is a bilateral contract. 
B) if the parties to a contract have habitually used this method to communicate assent. 
C) when the offeror leaves the jurisdiction after making the offer. 
D) when the contract is a unilateral contract. 
E) when the offeree forgot to communicate its acceptance.

Question 11

Goods displayed on shelves in a store constitute an offer.

Accepted Answer

A) True 
 B)False

Question 12

An offer is

Accepted Answer

A) a gift. 
B) an agreement to give something to another party. 
C) a donation. 
D) a tentative promise made by one party,subject to a condition or containing a request to the other party. 
E) a gesture made by one party to another to make a donation. 
A) a gift. 
B) an agreement to give something to another party. 
C) a donation. 
D) a tentative promise made by one party,subject to a condition or containing a request to the other party. 
E) a gesture made by one party to another to make a donation.

Question 13

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 14

A offers in writing to sell his truck to B for $8000.00.The offer goes on to state that acceptance must be hand-delivered in writing to A.However,B decides to send A a fax in which he accepts A's offer.In this case,

Accepted Answer

A) A must sell his truck to B. 
B) as far as B is concerned,the only important part of A's offer is B's acceptance in any form. 
C) the failure of B to accept the offer by fax causes A's offer to lapse. 
D) B's fax is a proper acceptance of A's offer. 
E) B's fax is not a proper acceptance of A's offer. 
A) A must sell his truck to B. 
B) as far as B is concerned,the only important part of A's offer is B's acceptance in any form. 
C) the failure of B to accept the offer by fax causes A's offer to lapse. 
D) B's fax is a proper acceptance of A's offer. 
E) B's fax is not a proper acceptance of A's offer.

Question 15

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 16

On June 1 George goes to Harry's fruit store,and while he is there,Harry offers to sell George 100 bushels of grapes that have just been delivered to his store for $20.00 per bushel.Harry also tells George that he should not wait too long to accept Harry's offer,because the best time to sell grapes is within three to four days of delivery.George simply says,"Let me think about it and I'll get back to you before the end of the day." However,George does not return that day;instead,he comes back seven days later to tell Harry that he accepts the offer.Harry replies,"You're much too late,I sold the grapes to Mr.Smith on June 5." In this situation

Accepted Answer

A) George's statement "Let me think about it and I'll get back to you before the end of the day" is a counter-offer. 
B) Harry's offer has lapsed given the perishable nature of the grapes. 
C) Harry was wrong in selling the grapes to Mr.Smith. 
D) Harry must keep his offer open until George accepts it. 
E) Harry's offer has been withdrawn. 
A) George's statement "Let me think about it and I'll get back to you before the end of the day" is a counter-offer. 
B) Harry's offer has lapsed given the perishable nature of the grapes. 
C) Harry was wrong in selling the grapes to Mr.Smith. 
D) Harry must keep his offer open until George accepts it. 
E) Harry's offer has been withdrawn.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

Newspaper advertisements are invitations

Question 19

An offer must be communicated to the offeree.

Accepted Answer

A) True 
 B)False

Question 20

Mary goes into a store in which she sees a SALE sign.While she is looking round,she notices that a sign that says 50 percent off has been placed against a pair of knee-high boots.She takes the pair of boots to the cashier.The cashier refuses to sell the boot at the 50 percent discount.Which of the following is true?

Accepted Answer

A) The cashier is in breach of contract. 
B) Mary is not entitled to a 50 percent discount because the sign was not an offer. 
C) The conduct of the store amounts to false advertising and Mary will be entitled to the 50 percent discount. 
D) Mary is entitled to a 50 percent discount because that boots were advertized as being sold at a discount of 50 percent. 
E) The store is in breach of contract. 
A) The cashier is in breach of contract. 
B) Mary is not entitled to a 50 percent discount because the sign was not an offer. 
C) The conduct of the store amounts to false advertising and Mary will be entitled to the 50 percent discount. 
D) Mary is entitled to a 50 percent discount because that boots were advertized as being sold at a discount of 50 percent. 
E) The store is in breach of contract.

Exam 6: Formation of a Contract: Offer and Acceptance

Why should you not make an agreement to sell your car to a purchaser "for a fair price"?

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

When an offer is not accepted,it will

Explain how an Internet contract is formed.

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

An offer may be revoked before it is accepted.To be valid,a revocation must be

An offer will lapse only if the offeree has had a reasonable time to accept.

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

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

Silence can be a sufficient method of acceptance

Goods displayed on shelves in a store constitute an offer.

An offer is

A offers in writing to sell his truck to B for $8000.00.The offer goes on to state that acceptance must be hand-delivered in writing to A.However,B decides to send A a fax in which he accepts A's offer.In this case,

An acceptance of an offer must be

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

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

An offer must be communicated to the offeree.

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

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

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

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

International Business Transactions

Electronic Commerce

Privacy

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