Question 1

A promisor is a party who has the right to performance according to the terms of a contract.

Accepted Answer

A) True 
 B)False

Question 2

On June 10,A delivered to B a written offer to sell his (A's)property to B for $6000.00.The offer stated that it would be open for acceptance until 9 a.m.on June 12.On June 11,B heard that A was agreeing to sell or had sold his property to C.On the evening of June 11,B delivered an acceptance of A's offer to the place where A was staying and on the following morning personally delivered his acceptance to A,who declined the acceptance stating,"You are too late." In this situation

Accepted Answer

A) A's offer must remain open until 9 a.m.on June 12th. 
B) B's acceptance of A's offer is a valid acceptance. 
C) because B did not give A the money,there is no acceptance. 
D) B's failure to accept A's offer immediately constitutes a rejection of A's offer. 
E) having heard that A had sold or was selling the property to C,B knows A's offer has been revoked. 
A) A's offer must remain open until 9 a.m.on June 12th. 
B) B's acceptance of A's offer is a valid acceptance. 
C) because B did not give A the money,there is no acceptance. 
D) B's failure to accept A's offer immediately constitutes a rejection of A's offer. 
E) having heard that A had sold or was selling the property to C,B knows A's offer has been revoked.

Question 3

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 4

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

Accepted Answer

A contract is a legally binding promise.

Question 5

What is the legal effect of a counter-offer?

Accepted Answer

An offer is a tentative promise made by

Question 6

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 ________.

Accepted Answer

A) refusal; new offer 
B) rejection; new offer 
C) refusal; rejection 
D) rejection; counter-offer 
E) rejection; valid offer 
A) refusal; new offer 
B) rejection; new offer 
C) refusal; rejection 
D) rejection; counter-offer 
E) rejection; valid offer

Question 7

We study business contract law in order to

Accepted Answer

A) know the consequences of breaking one's obligation. 
B) understand and bargain for contractual obligations. 
C) resolve commercial disputes. 
D) understand legislation that pertains to business. 
E) know when a binding contract is entered into. 
A) know the consequences of breaking one's obligation. 
B) understand and bargain for contractual obligations. 
C) resolve commercial disputes. 
D) understand legislation that pertains to business. 
E) know when a binding contract is entered into.

Question 8

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

Accepted Answer

Newspaper advertisements are invitations

Question 9

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 10

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 11

Explain how a bilateral contract differs from a unilateral contract.

Accepted Answer

In a bilateral contract,both parties tra

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

What is a unilateral contract?

Accepted Answer

A unilateral contract is one in which on

Question 15

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 16

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?

Accepted Answer

A) Jack,by painting the home,makes an offer that Michael is free to accept or reject. 
B) When Michael mentions the need to paint his home to Jack,he indirectly makes an offer that Jack accepts by painting the home. 
C) Michael has benefited from the painted home and so he is obliged to pay for it. 
D) Michael is not obliged to pay for the work done because he was never made any offer. 
E) Jack's conduct is an invitation to do business that has not been accepted by Michael and so Michael is not obliged to pay him. 
A) Jack,by painting the home,makes an offer that Michael is free to accept or reject. 
B) When Michael mentions the need to paint his home to Jack,he indirectly makes an offer that Jack accepts by painting the home. 
C) Michael has benefited from the painted home and so he is obliged to pay for it. 
D) Michael is not obliged to pay for the work done because he was never made any offer. 
E) Jack's conduct is an invitation to do business that has not been accepted by Michael and so Michael is not obliged to pay him.

Question 17

When an offeror invites acceptance by mail,it is possible for the offeror to state in the offer that the offer will only become a contract once acceptance is actually received by the offeror.That is,the postal rule does not apply even though an invitation to acceptance by mail was given.

Accepted Answer

A) True 
 B)False

Question 18

Explain the theory behind lapse as a way of preventing the formation of a contract.

Accepted Answer

The common law requires that the making

Question 19

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 20

A contract to keep an offer open for a specified time in return for a sum of money is referred to as an option.

Accepted Answer

A) True 
 B)False

Exam 6: Formation of a Contract: Offer and Acceptance

A promisor is a party who has the right to performance according to the terms of a contract.

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

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

What is the legal effect of a counter-offer?

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 ________.

We study business contract law in order to

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

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

Explain how a bilateral contract differs from a unilateral contract.

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

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

What is a unilateral contract?

When an offer is NOT accepted,it will

When an offeror invites acceptance by mail,it is possible for the offeror to state in the offer that the offer will only become a contract once acceptance is actually received by the offeror.That is,the postal rule does not apply even though an invitation to acceptance by mail was given.

Explain the theory behind lapse as a way of preventing the formation of a contract.

An offer is made by an ________ to an ________.

A contract to keep an offer open for a specified time in return for a sum of money is referred to as an option.

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

Filters

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 .

An offer is made by an to an .