Question 1

If an offeree accepts an offer before it is effectively revoked:

Accepted Answer

A)  a void contract is formed. 
B)  a voidable contract is formed. 
C)  an unenforceable contract is formed. 
D)  a valid contract is formed. 
A)  a void contract is formed. 
B)  a voidable contract is formed. 
C)  an unenforceable contract is formed. 
D)  a valid contract is formed.

Question 2

If an offer is indefinite or vague or if an essential provision is lacking, no contract arises from an attempt to accept it.

Accepted Answer

A) True 
 B)False

Question 3

If an offer does not state how long it shall remain open, it remains open for ten days.

Accepted Answer

A) True 
 B)False

Question 4

If no termination date is specified for an offer, the offer will remain open:

Accepted Answer

A)  for one year. 
B)  for six months. 
C)  for a reasonable period of time. 
D)  until someone accepts the offer. 
A)  for one year. 
B)  for six months. 
C)  for a reasonable period of time. 
D)  until someone accepts the offer.

Question 5

A counteroffer is a(n):

Accepted Answer

A)  acceptance of the original offer. 
B)  rejection of the original offer. 
C)  acceptance of the original offer and an invitation to further negotiate. 
D)  a revocation of the original offer. 
A)  acceptance of the original offer. 
B)  rejection of the original offer. 
C)  acceptance of the original offer and an invitation to further negotiate. 
D)  a revocation of the original offer.

Question 6

An acceptance must be absolute and unconditional.

Accepted Answer

A) True 
 B)False

Question 7

A party to an existing contract can modify the agreement without the other party's actual acceptance or approval.

Accepted Answer

A) True 
 B)False

Question 8

When it is claimed that a contract is too indefinite to be enforced, a court will do its best to find the intent of the parties and thereby reach the conclusion that the contract is not too indefinite.

Accepted Answer

A) True 
 B)False

Question 9

At an auction sale, each bid is:

Accepted Answer

A)  a counteroffer to the auctioneer's offer of the merchandise. 
B)  an acceptance of the auctioneer's offer. 
C)  an invitation to negotiate. 
D)  an offer. 
A)  a counteroffer to the auctioneer's offer of the merchandise. 
B)  an acceptance of the auctioneer's offer. 
C)  an invitation to negotiate. 
D)  an offer.

Question 10

A firm offer is an offer that states that it is to be irrevocable, or irrevocable for a stated period of time.

Accepted Answer

A) True 
 B)False

Question 11

In an auction __________, the auctioneer takes bids as agent for the seller with the understanding that no contract is formed until the seller accepts the transaction.

Accepted Answer

A)  without reserve 
B)  with reserve 
C)  without preserve 
D)  with preserve 
A)  without reserve 
B)  with reserve 
C)  without preserve 
D)  with preserve

Question 12

Offers, acceptances of offers, and revocations of offers are all effective when mailed in a properly-addressed envelope bearing the proper amount of postage.

Accepted Answer

A) True 
 B)False

Question 13

A revocation of an offer is ordinarily effective after the offer has been accepted.

Accepted Answer

A) True 
 B)False

Question 14

A(n) __________ contract is a contract to buy all requirements of the buyer from the seller.

Accepted Answer

A)  output 
B)  essentials 
C)  necessaries 
D)  requirements 
A)  output 
B)  essentials 
C)  necessaries 
D)  requirements

Question 15

At an auction sale, a statement made by the auctioneer to draw forth bids constitutes an offer.

Accepted Answer

A) True 
 B)False

Question 16

A customer went into a store and saw a beautiful leather jacket bearing a price tag of $29. The customer handed the cashier a $50 bill and said, "I accept. We have a deal." The cashier then noticed the price tag and told the customer an error had been made and that the price was $229. In this case:

Accepted Answer

A)  the customer validly accepted the store's offer. 
B)  the price tag was a firm offer. 
C)  no contract was formed because the customer's offer was refused. 
D)  the customer is the offeree. 
A)  the customer validly accepted the store's offer. 
B)  the price tag was a firm offer. 
C)  no contract was formed because the customer's offer was refused. 
D)  the customer is the offeree.

Question 17

Arthur made a bid at an auction by calling out the amount of $250. The auctioneer acknowledged Arthur's bid. There were no higher bids, and before the fall of the auctioneer's hammer, Arthur announced that he was withdrawing the bid. The auctioneer said that it was too late for Arthur to withdraw his bid, because the bid had already been acknowledged. What is the result?

Accepted Answer

A)  Arthur's bid is an ordinary offer that can be revoked. 
B)  Arthur's bid is firm and cannot be withdrawn. 
C)  Since the auctioneer had in fact acknowledged Arthur's bid, the bid became an option exercisable at the election of the seller. 
D)  Since the auctioneer had in fact acknowledged Arthur's bid, a contract had been formed by way of offer and acceptance; accordingly, Arthur's subsequent attempt to withdraw his bid was ineffective. 
A)  Arthur's bid is an ordinary offer that can be revoked. 
B)  Arthur's bid is firm and cannot be withdrawn. 
C)  Since the auctioneer had in fact acknowledged Arthur's bid, the bid became an option exercisable at the election of the seller. 
D)  Since the auctioneer had in fact acknowledged Arthur's bid, a contract had been formed by way of offer and acceptance; accordingly, Arthur's subsequent attempt to withdraw his bid was ineffective.

Question 18

Mary offered to sell Mike several pieces of rare Chinese art at a very good price because they were duplicates in her own collection. Mike could not accept the offer at that time, but he did give Mary $500 in return for her promise to keep her offer open for three (3) weeks. Mike returned with the agreed-upon balance two weeks later to find that Mary already had sold the pieces she had offered to sell to him. Mary explained that she had been able to get a better price from another buyer. She offered to return Mike's $500 and insisted that this was all she was obligated to do. Is Mary right?

Accepted Answer

Mary is incorrect. By offering and accep

Question 19

If no time is stated for the duration of an offer, it continues indefinitely if the offer relates to durable goods or land.

Accepted Answer

A) True 
 B)False

Question 20

Under the Uniform Commercial Code (UCC), a firm offer applies to:

Accepted Answer

A)  a written, signed offer by a merchant to buy or sell goods. 
B)  an unwritten but definite offer to buy or sell goods. 
C)  a written, signed offer by anyone to buy or sell goods. 
D)  an unlimited, stipulated period of time. 
A)  a written, signed offer by a merchant to buy or sell goods. 
B)  an unwritten but definite offer to buy or sell goods. 
C)  a written, signed offer by anyone to buy or sell goods. 
D)  an unlimited, stipulated period of time.

Exam 12: Formation of Contracts: Offer and Acceptance

If an offeree accepts an offer before it is effectively revoked:

If an offer is indefinite or vague or if an essential provision is lacking, no contract arises from an attempt to accept it.

If an offer does not state how long it shall remain open, it remains open for ten days.

If no termination date is specified for an offer, the offer will remain open:

A counteroffer is a(n):

An acceptance must be absolute and unconditional.

A party to an existing contract can modify the agreement without the other party's actual acceptance or approval.

When it is claimed that a contract is too indefinite to be enforced, a court will do its best to find the intent of the parties and thereby reach the conclusion that the contract is not too indefinite.

At an auction sale, each bid is:

A firm offer is an offer that states that it is to be irrevocable, or irrevocable for a stated period of time.

In an auction __________, the auctioneer takes bids as agent for the seller with the understanding that no contract is formed until the seller accepts the transaction.

Offers, acceptances of offers, and revocations of offers are all effective when mailed in a properly-addressed envelope bearing the proper amount of postage.

A revocation of an offer is ordinarily effective after the offer has been accepted.

A(n) __________ contract is a contract to buy all requirements of the buyer from the seller.

At an auction sale, a statement made by the auctioneer to draw forth bids constitutes an offer.

A customer went into a store and saw a beautiful leather jacket bearing a price tag of $29. The customer handed the cashier a $50 bill and said, "I accept. We have a deal." The cashier then noticed the price tag and told the customer an error had been made and that the price was $229. In this case:

If no time is stated for the duration of an offer, it continues indefinitely if the offer relates to durable goods or land.

Under the Uniform Commercial Code (UCC), a firm offer applies to:

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