Exam 8: Contract Formation

A party who makes a unilateral mistake can void the contract.

A(n) _____ is an agreement containing mutual promises.

Implied-in-law contracts are also known as _____.

Valid consideration can include any promise to do something one has no obligation to do, refrain from doing something one has the right to do, or in the case of a unilateral contract, a performance when there is no obligation to do so. This is called as a(n) _____.

The deposited acceptance rule is also known as the _____ rule.

A voidable contract is an agreement when one party has the right to withdraw from the promise made without incurring any legal liability.

The mirror image rule is the same under common law rules and the UCC.

Steve, 17, intentionally misrepresents his age while buying a TV set from Rainbow Electronics. His father discovers this and forces Steve to return the television set and get back the money. Steve visits Rainbow Electronics and disaffirms the contract to buy the television set. Analyze the case.

A unilateral contract is an agreement with only one promise, and only one party is committed to perform.

According to the mirror image rule, _____.

Canary offers in writing to sell her ranch to Erik for $150,000. A week later, when Erik is about to mail his acceptance, Canary dies in an auto accident. Canary's heir informs Erik that she is no longer interested in selling the ranch. Erik decides to move to court, stating that the offer cannot be revoked since he had already accepted the offer and was about to mail it. Analyze the case and discuss what the court is likely to rule?

Kaylie and Josh visit Alice Jewels to buy a diamond engagement ring. The jeweler presents them a zircon ring and intentionally calls it a diamond. Kaylie loves the ring and Josh buys it, happy about gifting Kaylie a diamond ring. However, they later discover it is a zircon. Analyze on what grounds Josh can sue the jeweler.

Ana offers Corey her vacuum cleaner for $300. Corey rejects the offer so Ana promises to sell the vacuum cleaner to Abey. But, a day later, Corey decides to buy the vacuum cleaner and informs Ana of his acceptance. Ana must sell the vacuum cleaner to Corey.

Tony's Carpets wants to charge $9.80 a yard for installing a carpet for Serenity Bookstore, but accidentally states $8.90 a yard in the bid. Serenity Bookstore accepts Tony's bid. Tony's Carpets made a _______ mistake.

Hans is notified that her mortgage with Omer Bank has been transferred to Grate Loan Co. However, Hans made his mortgage payments in full one day before receiving the notice. Omer Bank, however, argues that at the time of the assignment, Hans had not made the mortgage payment, and hence has to make payments to Grate Loan Co. Which of the following is true of this situation?

An option offer is open for a certain time period, and is supported by the offeree's consideration.

Sam goes to a supermarket and fills his cart with food items, pushing it up to a checkout line. Discuss the type of contract Sam and the supermarket have.

Ray Contractors have agreed to build Yen's house for $25,000 in two years. However, six months after the work began, Ray Contractors demand an additional $5,000 from Yen to complete the work. Yen agrees, but when the work was completed, Yen pays Ray Contractors only $20,000. Ray decides to sue Yen. Analyze the case.

The ultimate purpose of a contract is the creation of an agreement that courts will order parties to perform or to pay consequences for the failure of performance. When courts uphold the validity of such promises, the resulting agreement is a(n) "_____ contract."

To be enforceable, a contract must contain a written promise.