Question 1

Where is a contract said to be formed?

Accepted Answer

A) at the place where the offer is made 
B) at the place where the acceptance is dropped into a mailbox 
C) at the place where the offer is revoked 
D) at the place where the parties do business 
E) at the place when the acceptance becomes effective 
A) at the place where the offer is made 
B) at the place where the acceptance is dropped into a mailbox 
C) at the place where the offer is revoked 
D) at the place where the parties do business 
E) at the place when the acceptance becomes effective

Question 2

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 3

Revocation takes effect

Accepted Answer

A) when an offeror contracts with someone other than the offeree. 
B) when sent. 
C) when the offeror becomes bankrupt. 
D) when received. 
E) none of the above 
A) when an offeror contracts with someone other than the offeree. 
B) when sent. 
C) when the offeror becomes bankrupt. 
D) when received. 
E) none of the above

Question 4

An offer must be communicated to the offeree.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

When a counter-offer is made,it is the s

Question 6

On October 1,Allan mailed an offer to Bob to sell to Bob 1000 boxes of tin plates at a fixed price.The offer was received by Bob on October 11,and Bob immediately accepted the offer by telegram on October 11 and confirmed by letter on October 15.On October 8,Allan mailed a revocation of his offer,which was received by Bob on October 20.In this situation

Accepted Answer

A) Allan's revocation is really a counter-offer. 
B) Allan has no right to try to revoke his offer. 
C) Allan's revocation comes too late and there is a contract between Allan and Bob. 
D) Allan's revocation of his offer is proper and effective to prevent a contract between Allan and Bob. 
E) none of the above 
A) Allan's revocation is really a counter-offer. 
B) Allan has no right to try to revoke his offer. 
C) Allan's revocation comes too late and there is a contract between Allan and Bob. 
D) Allan's revocation of his offer is proper and effective to prevent a contract between Allan and Bob. 
E) none of the above

Question 7

What is a negative option?

Accepted Answer

A negative option is a provisi

Question 8

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.

Question 9

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 10

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 11

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 12

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 13

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

Accepted Answer

A) is a legally binding promise. 
B) is a commitment to enter into a contract upon acceptance. 
C) is a kind of offer. 
D) is not an offer. 
E) is an offer. 
A) is a legally binding promise. 
B) is a commitment to enter into a contract upon acceptance. 
C) is a kind of offer. 
D) is not an offer. 
E) is an offer.

Question 14

Bilateral contracts are usually made up of two stages-promises by both parties to perform and later,performance or fulfillment of the promises.When one of the parties to a bilateral contract does NOT receive the performance as promised

Accepted Answer

A) a cause of action is recognized at law giving the promisee the right to sue for tort damages. 
B) a cause of action is recognized at law giving the promisee the right to sue for damages for breach of contract. 
C) no cause of action is recognized at law until the promisee satisfies the court that the damages have been mitigated. 
D) no cause of action is recognized at law until all possible criminal proceedings are disposed of. 
E) no action can be brought against any party for simply failing to fulfill its contractual promises. 
A) a cause of action is recognized at law giving the promisee the right to sue for tort damages. 
B) a cause of action is recognized at law giving the promisee the right to sue for damages for breach of contract. 
C) no cause of action is recognized at law until the promisee satisfies the court that the damages have been mitigated. 
D) no cause of action is recognized at law until all possible criminal proceedings are disposed of. 
E) no action can be brought against any party for simply failing to fulfill its contractual promises.

Question 15

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

Accepted Answer

A) the contract is for $16 500.00. 
B) the contract is for $17 500.00. 
C) the contract is for $14 500.00. 
D) there is no contract at all. 
E) the contract is for $16 000.00. 
A) the contract is for $16 500.00. 
B) the contract is for $17 500.00. 
C) the contract is for $14 500.00. 
D) there is no contract at all. 
E) the contract is for $16 000.00.

Question 16

Explain how an Internet contract is formed.

Accepted Answer

Businesses selling online use standard f

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

Exam 6: Formation of a Contract: Offer and Acceptance

Where is a contract said to be formed?

An offer is

Revocation takes effect

An offer must be communicated to the offeree.

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

What is a negative option?

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?

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

Silence can be a sufficient method of acceptance

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

Bilateral contracts are usually made up of two stages-promises by both parties to perform and later,performance or fulfillment of the promises.When one of the parties to a bilateral contract does NOT receive the performance as promised

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.

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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