Exam 8: Offer, Acceptance, and Mutual Assent

A unilateral mistake offers each party the right to rescind the contract.

The first rule of contract interpretation, under the ____________, tells judges that their primary objective in the interpretation of a written contract is to uncover the goals that the parties had when they entered into the contract in the first place.

A lease option permits a party to lease real property while at the same time holding an option to purchase that property.

Leo offers to sell his ranch to Iris for $500,000, but before Iris accepts, Leo dies. Leo's heirs have no obligation to honor the contract.

Foster Aircraft Co. has agreed with the U.S. government to rapidly produce a new fighter aircraft in exchange for specified production expenses and a 10% profit. This is a current market price contract.

A condition subsequent is one in which the parties agree that the contract will be terminated when a prescribed event occurs or does not occur.

On May 1^st, Alpha Oil Company sends an electronic offer via the "cloud" to Zeno Refining Co. as follows: "Offer to sell 10,000 barrels of crude oil at $85 per barrel, will hold the offer open until July 1^st." On July 2^nd Zeno responds with an acceptance to Alpha. But by the time of Zeno's response, the market price of crude oil has risen to $98 per barrel. Alpha says no contract, and Zeno threatens to sue. What result?

In the case of an open offer, there must be serious intent, clear and reasonably definite terms, and communication to the offeree.

Highflight Foundation offers $1 million to the makers of the first private spacecraft to fly to the moon and back. Spaceview, Inc. succeeds in producing the first private spacecraft to fly to the moon and back, but Highflight refuses to pay. This is a ____________ contract and Highlight is ____________.

Harvey and Myra Church were interested in buying land from Sam and Barb Houston. When the Churches asked about the appraised value of the property, the Houstons said that the appraisals ranged from $185,000 to $198,000. Without looking at any appraisals, the Churches agreed to buy the property for $185,000. After the contract was signed, the Houstons provided an appraisal listing the value as $155,000. When the Churches refused to go through with the deal, the Houstons sued to recover the difference between $185,000 and the lower price for which the house was later sold. The Churches counterclaimed the contract should be rescinded based on their mistaken assumption about the value of the house. The Churches best argument for rescission would be based on:

According to the E-SIGN Act:

____________ occurs when one party does not say something about certain facts that he is under an obligation to reveal.

Most of the time, an advertisement is specific enough to constitute an offer.

Matrix Corporation, a computer manufacturer, agrees to purchase from Chipmaster, Inc. all the computer chips that Chipmaster can produce during the next 12 months, at cost plus a twelve-percent markup. Matrix later does not purchase any computer chips during the 12 months year. Can Chipmaster enforce the agreement made with it?