Question 1

An offer is terminated upon rejection by the offeree unless:

Accepted Answer

A) the period of time for which the offeror agreed to keep the offer open has not yet expired. 
B) the offeror renews the offer. 
C) the offeree revokes the rejection. 
D) the offeree makes a counteroffer. 
A) the period of time for which the offeror agreed to keep the offer open has not yet expired. 
B) the offeror renews the offer. 
C) the offeree revokes the rejection. 
D) the offeree makes a counteroffer. B

Question 2

Bart owned 100 shares of a stock that was actively traded on a national stock exchange.Bart wanted to sell the shares but felt that his profit would be seriously diminished by selling through a broker and paying the customary brokerage commission.Bart offered the 100 shares to any of a group of six people in a conversation at a party.The offered price was $72.50 per share,the price at which the shares had closed that day.No one really responded to the offer at that time.Ten days later when the shares were trading at $76.25,Marie,one of the offerees at the party,appeared at Bart's office saying that she accepted the offer.Bart claimed the offer no longer was available.Evaluate the legal outcome of this dispute.

Accepted Answer

When an offer is made and the offeror does not indicate how long it is to remain open,the offer expires within a reasonable period of time.In the case of an actively-traded stock,a reasonable amount of time would be relatively short.Further,Bart's offer was not a firm offer,nor did Bart extend a right of first refusal to the six (6)people at the party,so Bart had the right to sell the stock to another investor before Marie came forward to accept his offer.

Question 3

Contract terms may not be implied from conduct.

Accepted Answer

A) True 
 B)False  False

Question 4

Generally,advertisements,catalog prices,and circulars are offers that can be accepted.

Accepted Answer

A) True 
 B)False

Question 5

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 6

An offer is effective only if it is communicated by the offeror in person.

Accepted Answer

A) True 
 B)False

Question 7

A properly mailed acceptance takes effect when mailed,even if it never is received by the offeror.

Accepted Answer

A) True 
 B)False

Question 8

To make an offer,the offeror must appear to intend to create a binding obligation.

Accepted Answer

A) True 
 B)False

Question 9

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 10

An agreement cannot be enforced if it does not set forth every contractual detail.

Accepted Answer

A) True 
 B)False

Question 11

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 12

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.

Question 13

An otherwise vague contract may be clarified by references in the contract to other documents or agreements.

Accepted Answer

A) True 
 B)False

Question 14

The fact that there has been a series of contracts between the parties and that one party's offer has always been accepted before by the other does not create any legal obligation to continue to accept subsequent offers.

Accepted Answer

A) True 
 B)False

Question 15

A customer requested a price from a carpenter on a teak cabinet to be built according to the buyer's specifications.Because teak wood is difficult to obtain,the customer agreed to pay the cost of the wood plus $175 and the carpenter agreed to build it.Which of the following is correct?

Accepted Answer

A) Although the price is somewhat unclear,the parties have entered into a contract. 
B) This is an agreement to agree,and is not binding. 
C) This agreement fails for indefiniteness. 
D) The carpenter is bound by the agreement,but not the customer. 
A) Although the price is somewhat unclear,the parties have entered into a contract. 
B) This is an agreement to agree,and is not binding. 
C) This agreement fails for indefiniteness. 
D) The carpenter is bound by the agreement,but not the customer.

Question 16

A "best efforts" clause is always deemed too indefinite to be enforceable.

Accepted Answer

A) True 
 B)False

Question 17

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 accept

Question 18

A revocation of an offer is ordinarily effective only when it is communicated to the offeree.

Accepted Answer

A) True 
 B)False

Question 19

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 20

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.

Exam 13: Formation of Contracts: Offer and Acceptance

An offer is terminated upon rejection by the offeree unless:

Contract terms may not be implied from conduct.

Generally,advertisements,catalog prices,and circulars are offers that can be accepted.

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:

An offer is effective only if it is communicated by the offeror in person.

A properly mailed acceptance takes effect when mailed,even if it never is received by the offeror.

To make an offer,the offeror must appear to intend to create a binding obligation.

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

An agreement cannot be enforced if it does not set forth every contractual detail.

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

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

An otherwise vague contract may be clarified by references in the contract to other documents or agreements.

The fact that there has been a series of contracts between the parties and that one party's offer has always been accepted before by the other does not create any legal obligation to continue to accept subsequent offers.

A customer requested a price from a carpenter on a teak cabinet to be built according to the buyer's specifications.Because teak wood is difficult to obtain,the customer agreed to pay the cost of the wood plus $175 and the carpenter agreed to build it.Which of the following is correct?

A "best efforts" clause is always deemed too indefinite to be enforceable.

A revocation of an offer is ordinarily effective only when it is communicated to the offeree.

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

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

Nature and Classes of Contracts: Contracting on the Internet

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Instruments, parties, and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor-Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Bankruptcy

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

Filters