Deck 7: Agreement: Offer and Acceptance

Question 1

An offer may be stated in words or implied from the actions of the offeror.

Answer 1

True

Question 2

An offer may be revoked even if it has been accepted.

Answer 2

False

Question 3

A bid made at an auction is an acceptance of an offer made by the auctioneer.

Answer 3

False

Question 4

Another name for a "meeting of the minds" is

A) mutual assent.
B) lapse of time.
C) a request for further information.
D) an invitation to make an offer.

Question 5

The offeror has the right to withdraw an offer at any time before it is accepted.

Question 6

A contract will be enforced even if the terms are not clear and definite.

Question 7

A counteroffer ends the original offer and replaces it with a new offer.

Question 8

An offeror may revoke an offer at any time, even if the offeree gives the offeror consideration to hold the offer open.

Question 9

An offer ends by rejection when the offeree refuses the offer made by the offeror.

Question 10

An offer is ended by rejection when the offeror withdraws an offer.

Question 11

If the offeror does not insist on a specific means of communicating the acceptance, an offer made by telegram and accepted by mail is binding when the acceptance is mailed.

Question 12

The statement "I would like to sell my computer for $750" is a valid offer.

Question 13

Silence can never indicate acceptance of an offer.

Question 14

Anyone who knows of an offer can accept it.

Question 15

Of the following, the one that is not a method of terminating an ordinary offer is

A) rejection.
B) counteroffer.
C) death of the offeror after acceptance by the offeree.
D) lapse of time.

Question 16

In the daily newspaper, Webber Motor Company advertised a new convertible at a special reduced price. When Luhr tried to purchase one at the advertised price, Webber's salesperson stated that they had only one of that model and that it had already been sold. Luhr insisted that Webber Motor Company must sell him one at the reduced price, as he was accepting their newspaper offer. Is Luhr correct?

A) Yes; an advertisement in a newspaper is a communicated offer to all customers who wish to accept the offer.
B) Yes; all advertisements are general offers that result in binding agreements when accepted by customers.
C) No; newspaper advertisements are only invitations to customers to make an offer.
D) No; advertisements are offers, but they do not have to be accepted by the advertiser once the product is sold out.

Question 17

The offeror has the right to specify how an acceptance of an offer must be made.

Question 18

For an acceptance to be effective,

A) it must be in writing.
B) it must be communicated to the offeror.
C) the offeree must make a down payment.
D) none of these.

Question 19

Tydings Auto Center advertised in the local newspaper that all stock was reduced 40 percent below regular price. This advertisement legally constituted a(n)

A) valid offer.
B) voidable offer.
C) invitation to make an offer.
D) binding contract.

Question 20

An offeree who makes a counteroffer becomes the offeror.

Question 21

Farnsworth mailed Jessie a letter stating that he is willing to sell her an antique desk for $2,500 but does not stipulate the mode of acceptance. Jessie wishes to accept this offer. Which of the following modes will result in a valid acceptance?

A) A telegram
B) Fax machine
C) Letter
D) All of these

Question 22

"I won't pay $500, but I will pay $300." This offer to pay $300 instead of $500 is an example of a(n) ____________________.

Question 23

If nothing definite is stated about the time limit of an offer, it continues

A) for a reasonable time, depending upon the circumstances.
B) up to 25 days.
C) until the offeree accepts or rejects the offer.
D) until the offeror accepts or rejects the offer.

Question 24

Bixby offered a reward of $50 in the local newspaper for the return of his lost college ring. Harris, not knowing of the published reward, found and returned the ring. Harris could not legally claim the reward because

A) the offer was not definite.
B) the offer was not communicated to him.
C) the offer was not intended to be an enforceable obligation.
D) an offer of a reward is not binding.

Question 25

Able mailed Conover an offer that stated in part, "You must accept by sending me a certified letter which must be received by me on or before February 1^st." Conover may accept by

A) sending a telegram of acceptance to reach Able by February 1^st.
B) making a phone call to Able on February 1^st.
C) mailing his acceptance on February 1^st.
D) sending Able a certified letter mailed in time to reach Able by February 1^st.

Question 26

"I am not at all interested in your offer" is an example of a(n) ____________________.

Question 27

A state legislature passed a law making the sale of fireworks illegal. At the time, Johnson Company had made an offer to sell fireworks to a large city in the state for its July 4^th celebration. The effect of this law on Johnson Company's offer is

A) to automatically terminate the offer.
B) to act as a rejection of the offer by the offeree.
C) nonexistent.
D) to allow Johnson Company to sue for breach of contract.

Question 28

An offer is revoked when the

A) withdrawal is sent to the post office.
B) withdrawal is communicated and received by the offeree.
C) offeree dies after acceptance of the offer.
D) offeror dies after acceptance of the offer.

Question 29

If the language used is specific, an advertisement can constitute a(n) ____________________.

Question 30

Terry made an offer by letter to Swire. Unless otherwise specified by Terry, Swire's acceptance of this offer would become effective when his letter of acceptance was

A) written and signed by Swire.
B) properly mailed by Swire.
C) received by Terry.
D) acknowledged by Terry.

Question 31

If a person's response to an offer changes the terms of that offer, this response is known as

A) a revocation.
B) an option.
C) a counteroffer.
D) an illegal response.

Question 32

Prior to an offer being made by one party, the parties may talk back and forth. This procedure is called ____________________.

Question 33

Brown offered to sell Wilson an air conditioner for $300. When Wilson said he needed time to think about the offer, Brown said that he would keep the offer open for five days. Which of the following statements is correct?

A) Brown may not withdraw the offer until the end of the fifth day.
B) Brown may withdraw the offer at any time before acceptance is made.
C) Brown's agreement to keep the offer open created an option to purchase the air conditioner.
D) Brown may not withdraw his offer without Wilson's consent.

Question 34

In a bilateral contract, acceptance takes place when

A) the offeree promises to perform the act requested by the offeror.
B) the offeror promises to perform the act requested by the offeree.
C) the offeror has partially performed.
D) there has been full performance by the offeree.

Question 35

An advertisement in a newspaper or a display in a store window is considered to be a(n) ____________________.

Question 36

Written acceptance of an offer generally takes effect when it is

A) received by the offeror.
B) properly sent.
C) prepared by the offeree.
D) none of these.

Question 37

A counteroffer

A) has no legal effect.
B) is a valid acceptance.
C) does not reverse the relationship of the parties.
D) is a rejection of the original offer.

Question 38

Of the following, the one that does not terminate an offer is

A) a counteroffer.
B) acceptance.
C) the serious illness of the offeror.
D) impossibility.

Question 39

In a unilateral contract, acceptance is effective when the

A) offeree communicates the acceptance to the offeror.
B) offeree performs the act requested.
C) offeror performs the act requested.
D) offeree promises to perform the act requested.

Question 40

The term that best describes an agreement whereby the offeree gives something of value to the offeror to keep an offer open is

A) release.
B) compromise.
C) option.
D) tender.

Question 41

If the offeror sells the subject of the offer to another person, the offer is ended by ____________________.

Question 42

While searching the Internet, you visited the website of MAD COMICS and read an ad that stated, "Our monthly issues of MAD COMICS are available online at a one-year subscription rate of $5 per issue. To subscribe, enter your e-mail address in the space below and click on 'SUBSCRIBE.' By subscribing you agree to the terms of the subscriber's agreement. To read this agreement, click on 'AGREEMENT.'" You enter your e-mail address, but do not click on 'AGREEMENT' to read the terms. Have you entered into a legally enforceable contract to pay for the MAD COMICS one-year subscription?

Question 43

When the offeree silently accepts benefits, knowing that they are not made as a gift, a(n) ____________________ acceptance arises.

Question 44

The ____________________ rule states that the offeree must match, term by term, what was requested in the offer.

Question 45

If no time period for acceptance is stated in an offer, the offer ends at the end of a(n) ____________________.

Question 46

A(n) ____________________ is a contract in which the offeror agrees to hold an offer open for a set time in return for consideration paid by the offeree.

Question 47

Dixon said to Lynn, "I'll sell you my Korden camera for $75." Lynn said, "No, I already have one." Costello then said, "I'll buy it at that price." Could Costello legally accept Dixon's offer? Why or why not?

Question 48

In a newspaper ad, Ryerson offered a $100 reward for the return of her diamond bracelet. Early found the bracelet, read the ad, returned the bracelet to Ryerson, and claimed the reward. Does a contract exist between Ryerson and Early? Explain.

Question 49

Magin offered to sell Richards some secondhand college textbooks for $75. Richards wasn't sure he wanted the books. Magin then agreed to keep the offer open for five days if Richards would give him $5. Can Magin legally withdraw this offer before the five days are up?

Question 50

What effect does death have on a contract that has already been formed?