Question 1

An invitation to make an offer or an actual offer is referred to as a(n)________.

Accepted Answer

A)  sale 
B)  reward 
C)  advertisement 
D)  bid 
A)  sale 
B)  reward 
C)  advertisement 
D)  bid

Question 2

Gift promises lack consideration.

Accepted Answer

A) True 
 B)False

Question 3

George made an offer to Jacob to sell his house for $1 million.The offer was received by Jacob on the 1st of May,and he stipulated that he had 13 days to accept.But Jacob could not arrange the money,and on 16th May,he made a counteroffer to George to buy the house for $850,000.Which of the following is true about the original offer made by George to Jacob?

Accepted Answer

A)  It is terminated by the counteroffer. 
B)  It is still valid as the house has not been sold. 
C)  It is invalid due to lapse of the stated time. 
D)  It is invalid due to incompetency of the offeree. 
A)  It is terminated by the counteroffer. 
B)  It is still valid as the house has not been sold. 
C)  It is invalid due to lapse of the stated time. 
D)  It is invalid due to incompetency of the offeree.

Question 4

In an output contract,the seller agrees to sell all of its production to a single buyer.

Accepted Answer

A) True 
 B)False

Question 5

Unless otherwise stated,an offer made face-to-face or during a telephone call usually expires ________.

Accepted Answer

A)  after a few weeks 
B)  when the conversation ends 
C)  after a few years 
D)  when one of the parties makes a counteroffer 
A)  after a few weeks 
B)  when the conversation ends 
C)  after a few years 
D)  when one of the parties makes a counteroffer

Question 6

An offer is terminated on the grounds of "lapse of time" if ________.

Accepted Answer

A)  the offeror dies before the offeree has accepted the offer 
B)  the offer is not communicated to the offeree 
C)  the offeror has communicated to the offeree a set time which is not mentioned in the offer 
D)  the offer is not accepted within a stated time period 
A)  the offeror dies before the offeree has accepted the offer 
B)  the offer is not communicated to the offeree 
C)  the offeror has communicated to the offeree a set time which is not mentioned in the offer 
D)  the offer is not accepted within a stated time period

Question 7

An agreement whereby the parties agree to accept something different in satisfaction of the original contract is called a satisfaction.

Accepted Answer

A) True 
 B)False

Question 8

A(n)________ is a voluntary exchange of promises between two or more legally competent persons to do,or refrain from doing,an act.

Accepted Answer

A)  offer 
B)  advertisement 
C)  agreement 
D)  proposal 
A)  offer 
B)  advertisement 
C)  agreement 
D)  proposal

Question 9

________ is a promise to refrain from doing an unlawful act and therefore is a promise that will not support a contract.

Accepted Answer

A)  Preexisting duty 
B)  Illusory promise 
C)  Illegal consideration 
D)  Gift promise 
A)  Preexisting duty 
B)  Illusory promise 
C)  Illegal consideration 
D)  Gift promise

Question 10

A term in a contract that can reasonably be supplied by the courts is referred to as an ________.

Accepted Answer

A)  intent term 
B)  unconditional term 
C)  objective term 
D)  implied term 
A)  intent term 
B)  unconditional term 
C)  objective term 
D)  implied term

Question 11

A contract is said to have legal value if ________.

Accepted Answer

A)  both the promisor and the promisee receive a legal benefit 
B)  the promisor suffers a legal detriment 
C)  the promisee suffers a legal detriment 
D)  the promisee receives a legal benefit 
A)  both the promisor and the promisee receive a legal benefit 
B)  the promisor suffers a legal detriment 
C)  the promisee suffers a legal detriment 
D)  the promisee receives a legal benefit

Question 12

If a hurricane destroys a mansion that has been listed for sale,the offer is automatically terminated due to ________.

Accepted Answer

A)  supervening illegality 
B)  death or incompetency of the offeror 
C)  destruction of the subject matter 
D)  lapse of time 
A)  supervening illegality 
B)  death or incompetency of the offeror 
C)  destruction of the subject matter 
D)  lapse of time

Question 13

What is the key difference between an agreement and a contract?

Accepted Answer

A)  A contract is always enforceable in the court of law, while an acceptance may or may not be. 
B)  A contract can only be between two individuals, while an acceptance can have two or more people involved. 
C)  A contract requires mutual assent from all parties, while an acceptance only requires a majority approval. 
D)  A contract need not be legally binding, while an agreement must be legally binding. 
A)  A contract is always enforceable in the court of law, while an acceptance may or may not be. 
B)  A contract can only be between two individuals, while an acceptance can have two or more people involved. 
C)  A contract requires mutual assent from all parties, while an acceptance only requires a majority approval. 
D)  A contract need not be legally binding, while an agreement must be legally binding.

Question 14

The mailbox rule is a rule which states that for an acceptance to exist,the offeree must accept the terms as stated in the offer.

Accepted Answer

A) True 
 B)False

Question 15

A counteroffer is effective when it is ________.

Accepted Answer

A)  dispatched by the offeree 
B)  dispatched by the offeror 
C)  received by the offeree 
D)  received by the offeror 
A)  dispatched by the offeree 
B)  dispatched by the offeror 
C)  received by the offeree 
D)  received by the offeror

Question 16

Mary buys a lottery ticket and promises to buy her friend Sharon a new pair of shoes if she checks the lottery results while Mary is away.Sharon agrees to do so provided she has the time for it.If Sharon fails to check the results and Mary wins the lottery,which of the following would be true for the contract between Mary and Sharon?

Accepted Answer

A)  Mary can claim for breach of contract against Sharon. 
B)  Sharon can claim for breach of contract against Mary. 
C)  Neither Mary nor Sharon can claim breach of contract. 
D)  Mary's promise is supported by consideration. 
A)  Mary can claim for breach of contract against Sharon. 
B)  Sharon can claim for breach of contract against Mary. 
C)  Neither Mary nor Sharon can claim breach of contract. 
D)  Mary's promise is supported by consideration.

Question 17

________ is a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts.

Accepted Answer

A)  Acceptance 
B)  Revocation 
C)  Proposal 
D)  Counteroffer 
A)  Acceptance 
B)  Revocation 
C)  Proposal 
D)  Counteroffer

Question 18

All the states in the United States are consistent in applying the mailbox rule to email acceptances.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true for an auction without reserve?

Accepted Answer

A)  The bidder is considered the offeror. 
B)  The seller need not accept the highest bid. 
C)  The goods on sale cannot be withdrawn. 
D)  The auctioneer is not allowed to set a minimum bid. 
A)  The bidder is considered the offeror. 
B)  The seller need not accept the highest bid. 
C)  The goods on sale cannot be withdrawn. 
D)  The auctioneer is not allowed to set a minimum bid.

Question 20

A stipulation in an offer that says the acceptance must be by a specified means of communication is known as an express authorization.

Accepted Answer

A) True 
 B)False

Exam 10: Agreement and Consideration

An invitation to make an offer or an actual offer is referred to as a(n)________.

Gift promises lack consideration.

In an output contract,the seller agrees to sell all of its production to a single buyer.

Unless otherwise stated,an offer made face-to-face or during a telephone call usually expires ________.

An offer is terminated on the grounds of "lapse of time" if ________.

An agreement whereby the parties agree to accept something different in satisfaction of the original contract is called a satisfaction.

A(n)________ is a voluntary exchange of promises between two or more legally competent persons to do,or refrain from doing,an act.

________ is a promise to refrain from doing an unlawful act and therefore is a promise that will not support a contract.

A term in a contract that can reasonably be supplied by the courts is referred to as an ________.

A contract is said to have legal value if ________.

If a hurricane destroys a mansion that has been listed for sale,the offer is automatically terminated due to ________.

What is the key difference between an agreement and a contract?

The mailbox rule is a rule which states that for an acceptance to exist,the offeree must accept the terms as stated in the offer.

A counteroffer is effective when it is ________.

________ is a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts.

All the states in the United States are consistent in applying the mailbox rule to email acceptances.

Which of the following is true for an auction without reserve?

A stipulation in an offer that says the acceptance must be by a specified means of communication is known as an express authorization.

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