Exam 6: The Elements of a Contract: Consensus and Consideration

Harry saw Joe in his classic Buick at a local drive-in restaurant and told Joe that he'd like to buy the car. He offered him $15,000. Joe said he had to think about it and that he'd let Harry know. Two days later, Joe decided that he needed the money and couldn't afford to keep the car. He wrote Harry a letter accepting his offer and mailed it that afternoon. The next day, Harry phoned and told Joe he'd changed his mind and that he needed the money for something else. Joe told him about the letter, and in fact Harry received the letter that day after his phone conversation with Joe. Joe insisted on going through with the deal. Explain the legal liability of the parties.

"A good example of an offer is goods placed on the shelves in a self-service merchandising situation, so long as they are clearly marked in price." Explain the accuracy of that statement.

What would be the result if a police officer arrived at the scene of crime in progress and demanded money from the victim to arrest the offender?

Jones was a caterer and Smith was a florist. Jones won a contract to provide a banquet for a convention of florists. He wanted to decorate the hall with flowers. He sent a letter to Smith describing what he wanted and asked for a price quote. Smith responded by a letter dated January 5, offering to supply the flowers for $5000. Jones received the letter on January 10 and responded on the same date saying his price was too high and that he would pay $4500. While that letter was in the mail but before it had been received by Smith, Jones learned that the convention was on artificial flowers and the organizers wanted no real flowers on display. On January 13, Jones quickly sent another letter telling Smith to ignore the letter of January 10 and that he wouldn't need any flowers at this time. This letter of the 13th was received on the 18th. Smith had received the letter of January 10 on January 15 and sent his letter of acceptance on the same day, and he had placed orders to his suppliers for the flowers. The letter of acceptance was received by Jones on January 20. Which of the following is true?

A term making a contract conditional on future events is known as ________.

The postbox rule applies when which of the following means of communication is used?

Once a person has promised to hold an offer open for a specified period of time, he cannot change his mind.

An invitation to treat is an offer published in the newspaper.

Which of the following is correct with respect to consideration?

With respect to the online contracts, which of the following statements is true?

"For a contract to be binding, both parties must have a clear understanding of all the terms of that agreement." Discuss the accuracy of that statement.

An ad in the morning paper read: "Brand new Spartan 6s smartphone $349. No payment until January. We make your first payment." This is an example of which of the following?

Which of the following is true with respect to the application of contract law to the Internet?

A person is required to honour a gratuitous promise if made under seal.

What is an interim agreement?

Traditional contract rules only apply to written contracts but not Internet transactions.

If an agreement is one-sided, and only one of the parties is getting something from the deal, it is called a gratuitous promise and the courts will not enforce it.

The courts will use quantum meruit to determine what should be paid when a person providing services is not allowed to finish by a breaching party.

If a person agrees to sell someone a brand new Cadillac for $100, this becomes a valid, binding contract.

Explain the postbox rule and discuss its relevancy in the modern business world.