Deck 7: Mutual Assent: Agreement and Consideration

Question 1

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

Answer 1

True

Question 2

Mutual assent generally means that both parties are operating in good faith.

Answer 2

False

Question 3

When determining if an offer exists, the court will look to the subjective intent of the offeror.

Answer 3

False

Question 4

An advertisement in a newspaper for a sale on shoes is an invitation for the consumer to make an offer to the seller.

Question 5

Once an offer is terminated the offeree can still accept it within a reasonable amount of time.

Question 6

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

Question 7

The mirror image rule requires that the offer be accepted in a substantially similar format as the offer.

Question 8

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

Question 9

Courts routinely cancel contracts for a unilateral mistake.

Question 10

Consideration requires the parties to exchange items of equal value.

Question 11

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.

Question 12

Consideration, an element of contractformation, requires that both parties

A) Think about the terms of the contract.
B) Exchange something of legal value.
C) Enter into the agreement in good-faith.
D) Do not act against public policy.

Question 13

In order to have mutual asset, there must be

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 14

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?

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 15

Tanner texts a friend, "hey, I'll let you use my car today if you do my grocery shopping for me because I am out of time!" Tanner is

A) The assentor
B) The contractor
C) The offeree
D) The offeror

Question 16

Stahlhut Corporation's human resource department sends a letter to Nancy stating the following: "We want you to work for us as a sales representative effective July 15 at an annual salary of $45,000.00. Please sign this document and return it in the self-addressed stamped envelope." Nancy signs the document and drops it in the mail. Nancy is

A) The offeror
B) The offeree
C) The contractor
D) The buyer

Question 17

Eduardo emails Skyler "Hey, I will sell you my Business Law text for $50.00." Skyler immediately responds, "$50??!! Cool! YES!" This example illustrates what concept of contract formation?

A) Meeting of the minds
B) Promissory estoppel
C) Detrimental reliance
D) Hybrid-contract

Question 18

Courts emply the objective theory of contracts to determine

A) If the parties negotiating the contract have actual notice of the terms of the contract
B) If a reasonable person would believe the offeror's actions or words indicated that person was serious when making the offer
C) If the parties negotiating the contract are unbiased and not motivated by only self-interest
D) If the parties objectively illustrated good-faith in their negotiations

Question 19

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?

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 20

Nancy sees an advertisement on the internet which reads, "Tropical Tan interested in hiring five models to model our newest spray tan method. Please contact me regarding pay." Nancy contacts Tropical Tan to accept the job. Which of the following is true?

A) The advertisement is an offer and if Nancy accepts it, mutual assent exists.
B) The advertisement is a conditional offer that Nancy can accept if she agrees to all the terms as presented by Tropical Tan.
C) All employment offers must be in writing to be an offer and online posts do not satisfy that requirement.
D) This advertisement is simply an offer to negotiate or discuss, but not an offer.

Question 21

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

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 22

A meeting of the mind requires

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 23

Candace texts Rosa the following, "Hey Rosa, do you want to buy a car for a really great price?" Rosa immediately replies, "YES!!!!" Has there been a meeting of minds?

A) Yes because Candace made an offer and Rosa accepted it unequivocally
B) No because a sale of a car must always be in writing on paper to be an agreement
C) No because the offer is too vague
D) Yes as long as Candace offers the car for fair market value

Question 24

In e-Contracts a "click wrap" agreement is when

A) Someone agrees to accept the quality of an item that has been shrunk wrapped.
B) Someone agrees to the conditions offered by the online provider in the sale of goods.
C) The website provider posts terms and conditions and the user clicks an "I Accept" button located on the web page of the purchase.
D) The court determine that a material defect exists in the offer, but enforces it because to do otherwise would cause an unjust enrichment.

Question 25

Morgan downloads some software for a video gaming system. By completing the download she agrees to the terms in what type of agreement.

A) Shrink Wrap
B) Click Wrap
C) E-Agreement
D) Browse-Wrap

Question 26

Les orders a set of vitamins online. When it arrives the vitamins were packaged in shrink wrap. When he opens the packaging, he is accepting what type of agreement?

A) Shrink Wrap
B) Click Wrap
C) E-Agreement
D) Browse Wrap

Question 27

Click wrap agreements

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 28

Paris offers to sell her landscaping business to Steve for $100,000.00. Before Steve responds, Paris tells him that she has changed her mind. Which statement is true?

A) Once Paris makes an offer, it must stay open a reasonable time.
B) Once Paris makes the offer, it can only be rejected by Steve for the offer to terminate.
C) Paris is the master of her offer and she can cancel it any time up until Steve accepts it.
D) Paris cannot revoke the offer if Steve wants to accept it.

Question 29

Kiiko offers to sell her dog to Taiga for $250.00. Taiga immediately yells, "heck no!" Later Taiga changes his mind and calls Kiiko up to tell her that he accepts her offer. Which statement below is correct?

A) Taiga rejected the offer, and a rejection terminates an offer.
B) As long as Kiiko has not entered into an agreement with another person, Taiga can reaccept the offer.
C) If Kiiko does not specifically state to Taiga that she rejects his acceptance Taiga may accept it even though he first rejected it.
D) Taiga has unlimited times to reject and to accept an offer until Kiiko has given Taiga a formal revocation notice.

Question 30

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

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

Question 31

A revocation is effective

A) Once placed in the U.S. Postal service
B) Once the offeree constructs that notification
C) Within a reasonable amount of time
D) Once the offeree receives the revocation

Question 32

Ed writes Gwen a letter and offers her a job as a financial analyst for his construction company at a salary of $75,000.00 a year. Two days later he sends her another letter telling her that he has changed his mind. Gwen receives both of the letters and after reading the letter with the job offer, does not open the second letter, and spends a couple of days thinking about the offer and whether she should accept it. Four days later, Gwen decides to accept the offer but still has not read the second letter revoking the offer. Which statement is correct?

A) As long as Gwen has not opened the revocation letter, she has no actual notice of the revocation and may accept the original offer.
B) A revocation is only effective once the offeree has actual notice of it.
C) A revocation is effective once it is received and no actual notice is needed.
D) The revocation is not effective when mailed. It must be in person.

Question 33

Option contracts form an offer that is

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

Question 34

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?

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 35

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?

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 36

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?

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 37

According to the mailbox rule, an acceptance if effective

A) When received by the offeror
B) when dispatched by the offeree in a commercially reasonable manner.
C) One day after dispatched by offeree
D) Once received by the offeree

Question 38

Herb offers to sell Ron a cow that both parties believe is newly pregnant. A few months later they both realize that the cow is not pregnant. Can either party avoid the contract?

A) Yes because it was a mutual mistake.
B) No because it is a unilateral mistake.
C) Yes because it was a unilateral mistake.
D) No because it was a bilateral mistake.

Question 39

Gabrielle, a 19 year old college freshman, promises not to drink any alcohol while she is away at college in exchange for her parents' promise to pay for her tuition. Is there consideration?

A) Yes because Gabrielle is refraining from conduct in exchange for the value of her tuition.
B) Yes because she will rely on this promise to her detriment.
C) Maybe, but it depends on if she likes to drink alcohol and is giving up something she likes.
D) No because Gabrielle is not giving up something of legal value as she is under 21 years.

Question 40

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?

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 41

Your Business Law professor walks into a regularly scheduled class today and states that she will not teach class unless each student enrolled in the class pays her $5.00 to teach today. Does consideration exist?

A) Yes. Money has legal value and the service of teaching has legal value.
B) No. While money has legal value, the service of teaching the class is a preexisting duty.
C) No unless all the students agree to pay, some students will be getting a free service.
D) Yes. If students are willing to pay then it is consideration.

Question 42

While driving across country, Katherine and Ryan play their favorite game, "What would you do if you won the Mega-millions lottery?" Katherine states, "If I won the Mega-million I would give you $10,000,000.00." Two years later, Katherine actually wins the Mega-millions and Ryan demands his promised money. Katherine refused. What would likely be the outcome of the case?

A) Katherine's statement is an illusory promise; therefore, the court will not enforce it.
B) If Ryan relied on her promise, the court will enforce it.
C) If the court determines that a reasonable person would objectively have believed Katherine was serious when she made the statement, the court will enforce the promise.
D) If Ryan incurred debt due to the promise by Katherine, the court will enforce it.

Question 43

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

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

Question 44

All of the following are required for promissory estoppel except

A) The offeror makes a reasonable offer.
B) The offeree actually relied on the promise and suffered an injury.
C) The offeree was a minor
D) The reliance was reasonably foreseeable.

Question 45

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.

Question 46

Explain the importance of the concept of the "meeting of the minds" in contract law.

Question 47

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 4^th 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 6^th. According to the mailbox rule does a contract exist?

Question 48

Why do courts NOT evaluate the sufficiency of consideration in contracts, but rather only ensure that the parties understood the trade of two items or services of legal value?

Question 49

Professor Peters teaches accounting for Petra University. Monday morning, she comes into class, exhausted from a busy weekend and tells her students that she does not want to teach that day. She states she will only be persuaded to teach if the students pay her an additional $45.00 each. Some students do, and she asks the other to leave the classroom. After her class that day, a group of students approach her and ask her if she would be willing to use her accounting skills to look over their financial books for their new business. She agrees to do it for $100.00. While looking at their financial statements she tells the students that if they all get As on their final exam she will give them $1000.00 each if she wins the lottery that night. Evaluate each situation to determine if there is consideration. For each, explain why or why not consideration exists.