Question 1

A valid acceptance of an offer must be in writing to be enforceable.

Accepted Answer

A) True 
 B)False  False

Question 2

Courts routinely cancel contracts for a unilateral mistake.

Accepted Answer

A) True 
 B)False  False

Question 3

Mutual assent (sometimes referred to as a meeting of the minds) is one of the essential elements required to form a legally enforceable contract.

Accepted Answer

A) True 
 B)False  True

Question 4

In Lucy v. Zehmer, the court ruled that under the objective theory of contracts

Accepted Answer

A)  Since both Lucy and Zehmer were drinking alcohol the reasonable person would not believe Zehmer was serious. 
B)  Lucy and Zehmer's conduct and language would be viewed by a reasonable person as a serious intent to contract. 
C)  Since the writing was on the back of a receipt the reasonable person would not view the Zehmer was serious. 
D)  Since both parties signed the document, there was a contract. 
A)  Since both Lucy and Zehmer were drinking alcohol the reasonable person would not believe Zehmer was serious. 
B)  Lucy and Zehmer's conduct and language would be viewed by a reasonable person as a serious intent to contract. 
C)  Since the writing was on the back of a receipt the reasonable person would not view the Zehmer was serious. 
D)  Since both parties signed the document, there was a contract.

Question 5

Karen offers to sing five songs at Meyer's wedding for $500.00. Meyer responds that he will pay her $500.00, but he needs her to sing six songs. Meyer's actions constitute

Accepted Answer

A)  An acceptance 
B)  A counter offer 
C)  A substantial acceptance 
D)  A substantial counter offer 
A)  An acceptance 
B)  A counter offer 
C)  A substantial acceptance 
D)  A substantial counter offer

Question 6

Chris, the owner of Bloom's Aglow, offers to contract with Lisa for her upcoming wedding bouquet and decoration needs. Chris specifically states in the offer that he will only use the Western Prairie Fringed Orchids in all arrangements. While contemplating the offer, the federal government passes a law that classifies the Western Prairie Fringed Orchids as a near extinct flower and makes it illegal to use, to sell or to kill it. Does this affect the offer between Chris and Lisa?

Accepted Answer

A)  No because the offer was made before the law changed, Lisa has the option to accept and create a contract as is. 
B)  No since the law would affect people for previous conduct, it is an ex post facto which is unconstitutional and therefore unenforceable. 
C)  Yes because the change in law constitutes a supervening illegality and therefore, the offer is revoked. 
D)  Yes because forcing someone to commit a crime to avoid a breach of contract is collusion and unenforceable. 
A)  No because the offer was made before the law changed, Lisa has the option to accept and create a contract as is. 
B)  No since the law would affect people for previous conduct, it is an ex post facto which is unconstitutional and therefore unenforceable. 
C)  Yes because the change in law constitutes a supervening illegality and therefore, the offer is revoked. 
D)  Yes because forcing someone to commit a crime to avoid a breach of contract is collusion and unenforceable.

Question 7

Under the theory of promissory estoppel, courts can enforce a promised donation to a charitable organization if the promisor expected the organization to rely on the donation and the organization did, in fact, reasonably rely on that promise.

Accepted Answer

A) True 
 B)False

Question 8

In 1971 Poorwa offered to sell her new Ford Mustang to Tom for $2000.00. Tom asked to think about her offer and get back to Poorwa. 40 years later, Tom realizes Poorwa still has the Mustang that is now worth $121,000.00. He calls up Poorwa and says that he has finally had time to think about it and he now accepts Poorwa's offer from 1971 to buy the Mustang at $2000.00. Which statement below is correct?

Accepted Answer

A)  Since the facts do not indicate that Poorwa ever formally revoked the offer, it remained open and Tom's acceptance created mutual assent. 
B)  Since Poorwa allowed Tom to think about it, the offer remained open until Tom notified her of his decision. 
C)  The offer terminated after a reasonable amount of time had lapsed. 
D)  All offers under the Uniform Commercial Code automatically terminate after 10 years. 
A)  Since the facts do not indicate that Poorwa ever formally revoked the offer, it remained open and Tom's acceptance created mutual assent. 
B)  Since Poorwa allowed Tom to think about it, the offer remained open until Tom notified her of his decision. 
C)  The offer terminated after a reasonable amount of time had lapsed. 
D)  All offers under the Uniform Commercial Code automatically terminate after 10 years.

Question 9

Etta sent a letter to Ethan offering to hire him as an accountant in her firm on May1. Ethan receives the letter on May 3 and he immediately mails back a letter that very same day. May 4th Etta decides she no longer needs to hire Ethan and mails him a letter revoking her offer of May 1. Ethan receives the revocation letter from Etta on May 6th. According to the mailbox rule does a contract exist?

Accepted Answer

Yes there is a contract. According to th

Question 10

In order to have mutual asset, there must be

Accepted Answer

A)  An offer and an acceptance that is the precise mirror image of the offer 
B)  An offer and good-faith acceptance 
C)  An equitable offer and an acceptance 
D)  An offer and a benefit to both parties 
A)  An offer and an acceptance that is the precise mirror image of the offer 
B)  An offer and good-faith acceptance 
C)  An equitable offer and an acceptance 
D)  An offer and a benefit to both parties

Question 11

In the landmark case, Lucy v. Zehmer, the court discussed the objective theory of contracts when two parties at a bar were drinking alcohol and after some negotiation executed a written contract wherein Lucy would purchase Zehmer's farm. When Lucy attempted to enforce the contract and purchase the farm, Zehmer stated that he was only joking and never intended to sell the farm. Discuss how the contract employed the objective theory of contracts to determine the outcome of this case.

Accepted Answer

The objective theory of contracts looks

Question 12

Gigi, as a kind gesture, offers to let her friend, Bonnie, stay at her house for free instead of paying the high rent she is currently paying. Bonnie loads up her moving truck and terminates her current lease. When Bonnie shows up to Gigi's house with a full moving truck, Gigi decides she no longer wants her to stay at her house and turns her away. Does Bonnie have any legal recourse?

Accepted Answer

A)  If Bonnie can show that she reasonably relied on Gigi's promise to her detriment, Bonnie may have legal recourse under under the concept of detrimental reliance. 
B)  No, because Gigi offered Bonnie a gift as both parties did not exchange something of legal value. 
C)  Yes, once a person makes an offer, they have to have the actual intent to follow through in good faith. 
D)  No because this would constitute an unjust enrichment to Bonnie if she did. 
A)  If Bonnie can show that she reasonably relied on Gigi's promise to her detriment, Bonnie may have legal recourse under under the concept of detrimental reliance. 
B)  No, because Gigi offered Bonnie a gift as both parties did not exchange something of legal value. 
C)  Yes, once a person makes an offer, they have to have the actual intent to follow through in good faith. 
D)  No because this would constitute an unjust enrichment to Bonnie if she did.

Question 13

Click wrap agreements

Accepted Answer

A)  Are generally enforceable 
B)  Not enforced because the courts acknowledge that no one ever reads them 
C)  Enforceable if they are not too restrictive. 
D)  Not enforceable if one of the parties did not read the agreement 
A)  Are generally enforceable 
B)  Not enforced because the courts acknowledge that no one ever reads them 
C)  Enforceable if they are not too restrictive. 
D)  Not enforceable if one of the parties did not read the agreement

Question 14

A meeting of the mind requires

Accepted Answer

A)  a true understanding, and acceptance, of the terms of the offer. 
B)  both parties to make a fair offer. 
C)  both parties to compromise in reaching a final agreement. 
D)  the court to determine that both parties entered into a wise agreement. 
A)  a true understanding, and acceptance, of the terms of the offer. 
B)  both parties to make a fair offer. 
C)  both parties to compromise in reaching a final agreement. 
D)  the court to determine that both parties entered into a wise agreement.

Question 15

Dawn offers Tom $1000.00 to create a social media marketing campaign for her new shoe business. In the letter that she sends to Tom with this offer, she states, "if you accept this job, please sign this form and return it to me in the self-addressed stamped envelope by Friday." Tom immediately texts Dawn, "Hi Dawn! I happily will do your marketing." Has Tom accepted the offer?

Accepted Answer

A)  Yes because Dawn has actual notice. 
B)  Yes because a person can accept an offer in any manner not prohibited by law. 
C)  No because if the offer specifies a method of acceptance, that is the only effective method to accept. 
D)  No because a text does not meet the standard of best-business practices. 
A)  Yes because Dawn has actual notice. 
B)  Yes because a person can accept an offer in any manner not prohibited by law. 
C)  No because if the offer specifies a method of acceptance, that is the only effective method to accept. 
D)  No because a text does not meet the standard of best-business practices.

Question 16

A promise made in return for a detriment previously made by the promisee is a

Accepted Answer

A)  Illusory promise 
B)  Promissory estoppel 
C)  Detrimental promise 
D)  Past consideration 
A)  Illusory promise 
B)  Promissory estoppel 
C)  Detrimental promise 
D)  Past consideration

Question 17

John tells Jami he would sell her his grandmother's wedding ring for $100.00. Jami accepts and they exchange the ring and the money. Two days later, John tells Jami that he was only joking and now wants the ring back and he will give her the money back. According to the objective theory of contracts, which statement below is correct?

Accepted Answer

A)  Since John stated that he was only joking, there was no offer. 
B)  Since the facts do not indicate if Jami asked if John was serious there was no offer. 
C)  Even if John was joking, the court will not consider John's personal belief but will determine if a reasonable person would believe John's language and conduct indicated he was serious in his intent to contract. 
D)  The court will ask Jami what she believed to determine if she thought John was serious in making the offer. 
A)  Since John stated that he was only joking, there was no offer. 
B)  Since the facts do not indicate if Jami asked if John was serious there was no offer. 
C)  Even if John was joking, the court will not consider John's personal belief but will determine if a reasonable person would believe John's language and conduct indicated he was serious in his intent to contract. 
D)  The court will ask Jami what she believed to determine if she thought John was serious in making the offer.

Question 18

An option contract, supported by consideration, creates an irrevocable offer for the term of the option.

Accepted Answer

A) True 
 B)False

Question 19

Hannah shops at a high-end doggy boutique and purchases a designer dog collar for $3500.00. As soon as she got home, she put it on her dog who wore it for a couple of days. After a few days, she realized that she could not afford the collar and did not really like it. She attempted to return it to the store and they refused. Hannah filed suit against the store stating that they charged way too much for their products and made an unfair and unreasonable profit. What would most likely be the outcome of the case?

Accepted Answer

A)  The court would determine no consideration existed because the profit was unreasonable. 
B)  The court would protect Hannah's interests and determine that no consideration existed because a reasonable person would not pay such a price for dog collar. 
C)  The court will rule that as long as Hannah understood her actions there was consideration as two things of legal value were exchanged. 
D)  The court will rule that since the dog wore the collar there was consideration. 
A)  The court would determine no consideration existed because the profit was unreasonable. 
B)  The court would protect Hannah's interests and determine that no consideration existed because a reasonable person would not pay such a price for dog collar. 
C)  The court will rule that as long as Hannah understood her actions there was consideration as two things of legal value were exchanged. 
D)  The court will rule that since the dog wore the collar there was consideration.

Question 20

Option contracts form an offer that is

Accepted Answer

A)  Illegal 
B)  Irrevocable 
C)  Multi-faceted 
D)  Vague 
A)  Illegal 
B)  Irrevocable 
C)  Multi-faceted 
D)  Vague

Exam 7: Mutual Assent: Agreement and Consideration

A valid acceptance of an offer must be in writing to be enforceable.

Courts routinely cancel contracts for a unilateral mistake.

Mutual assent (sometimes referred to as a meeting of the minds) is one of the essential elements required to form a legally enforceable contract.

In Lucy v. Zehmer, the court ruled that under the objective theory of contracts

Karen offers to sing five songs at Meyer's wedding for $500.00. Meyer responds that he will pay her $500.00, but he needs her to sing six songs. Meyer's actions constitute

Under the theory of promissory estoppel, courts can enforce a promised donation to a charitable organization if the promisor expected the organization to rely on the donation and the organization did, in fact, reasonably rely on that promise.

In order to have mutual asset, there must be

Click wrap agreements

A meeting of the mind requires

A promise made in return for a detriment previously made by the promisee is a

An option contract, supported by consideration, creates an irrevocable offer for the term of the option.

Option contracts form an offer that is

Legal Foundations and Thinking Strategically

Business, Societal, and Ethical Contexts of Law

Business and the Constitution

The American Judicial System, Jurisdiction, and Venue

Resolving Disputes: Litigation and Alternative Dispute Resolution

Contracts: Overview, Definition, Categories, and Source of Law

Capacity and Legality

Enforceability

Performance

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Contracts for the Sale of Goods: Overview of Article 2

Sales Contracts: Agreement, Consideration, and the Statute of Frauds

Title, Allocation of Risk, and Insurable Interest

Performance and Cure in Sales Contracts

Breach and Remedies in a Sales Transaction

UCC Article 2A: Lease Contracts

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Definition, Creation, and Categories of Negotiable Instruments

Negotiation, Endorsements, and Holder in Due Course

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Alternatives for Insolvent Borrowers

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