Deck 10: Agreement

Question 1

A(n) ________ is a voluntary exchange of promises between two or more legally competent persons to do, or refrain from doing, an act.

A) offer
B) advertisement
C) agreement
D) proposal

Answer 1

C

Question 2

The offeree must objectively intend to be bound by the offer for the offer to be effective.

Answer 2

False

Question 3

Which of the following would be considered an offer to form a unilateral contract?

A) an advertisement
B) an auction without reserve
C) a reward offer
D) an auction with reserve

Answer 3

C

Question 4

What is the key difference between an agreement and a contract?

A) A contract is always enforceable in the court of law, while an acceptance may or may not be.
B) A contract can only be between two individuals, while an acceptance can have two or more people involved.
C) A contract requires mutual assent from all parties, while an acceptance needs only to be accepted by a majority of people involved.
D) A contract need not be legally binding, while an agreement must be legally binding.

Question 5

Give an account of the express terms that are parts of an offer.

Question 6

An agreement is created when the offeree receives the offer.

Question 7

Identification of the parties of a contract would be an express term.

Question 8

Without mutual assent, there is no contract.

Question 9

A term in a contract that can reasonably be supplied by the courts is referred to as a(n) ________.

A) intent term
B) unconditional term
C) objective term
D) implied term

Question 10

Identification of the subject matter and quantity would be an implied term.

Question 11

Which one of the following would constitute a reward?

A) a person buying a car after seeing an ad about it
B) a person returning a lost item after seeing an ad about it
C) a seller accepting a bid for an item
D) a seller making an invitation for offers

Question 12

Which of the following statements is true of an offer that was not communicated?

A) The offer stays valid for 30 days from the date of creation.
B) The offer cannot be accepted by the offeree if not communicated.
C) The offeree can claim an offer that was not communicated.
D) The offer is considered to be an implied term.

Question 13

Which of the following is true for legally claiming a reward?

A) A promise of completing the requested act is sufficient for a claimant to claim the reward.
B) Knowledge of the reward before completing the requested act is necessary to claim the reward.
C) The claimant can claim the reward even if he or she came to know of the reward subsequent to completing the act.
D) The offeror cannot withdraw the reward once the offer has been placed in the public domain.

Question 14

Implied terms in a contract can be supplied by the courts.

Question 15

A contract requires an offer and an acceptance.

Question 16

Section 24 of the Restatement (Second) of Contracts defines a(n) ________ as the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.

A) order
B) offer
C) advertisement
D) revocation

Question 17

An offer is not effective until it is actually received by the offeree.

Question 18

An invitation to make an offer for the sale of goods is a(n) ________.

A) proposal
B) reward
C) advertisement
D) bid

Question 19

The offer must be communicated to the offeree for the offer to be effective.

Question 20

The Restatement (Second) of Contracts states that the terms of the offer should be "reasonably certain." Accordingly, courts can supply some missing terms. What terms might be supplied? What terms cannot usually be implied?

Question 21

Which of the following statements is true of a counteroffer?

A) An offeree that makes the counteroffer is still considered the offeree.
B) A counteroffer terminates the existing offer.
C) A counteroffer can only be made by the offeror.
D) A counteroffer need not be communicated to the offeror.

Question 22

Which of the following is true for an auction with reserve?

A) The seller retains the right to refuse the highest bidder.
B) Invitations to make an offer are not allowed.
C) Goods cannot be withdrawn from sale after the offer has been made.
D) A bid once made cannot be withdrawn and is legally binding.

Question 23

Which of the following is true for an auction without reserve?

A) The bidder is considered the offeror.
B) The seller need not accept the highest bid.
C) The goods on sale cannot be withdrawn.
D) The auctioneer is not allowed to set a minimum bid.

Question 24

Which of the following statements is true of a revocation?

A) It can be made by the offeree.
B) It needs to be received by the offeree to be effective.
C) It can be done even after acceptance of the offer.
D) It can be applied to an option contract.

Question 25

In an auction with reserve, the bidder is the offeror.

Question 26

Explain the difference between an auction with reserve and an auction without reserve. If not specified, which is the default form of auction?

Question 27

A(n) ________ is a withdrawal of an offer by the offeror that terminates the offer.

A) rejection
B) advertisement
C) revocation
D) counteroffer

Question 28

Luke offered to sell his farm to Kent at $75,000, an offer which Kent declined. A week later, Luke offered to sell the farm for $65,000, stating it was the final offer that would be valid for one month only. Two days later, Kent offered to pay $60,000 for the farm. Luke received Kent's offer a week later and he declined it. After ten days, Kent agreed to buy the farm for $65,000, but Luke refused to sell the farm. Kent decided to sue Luke for a breach of contract. The judge ruled in favor of Luke. Which one of the following is the reason for the ruling in Luke's favor?

A) Luke's original offer of $75,000 is still valid, even though rejected.
B) Kent's counteroffer of $60,000 had rendered the offer for $65,000 invalid.
C) Kent's acceptance was past the set time period in the offer.
D) Kent acted in an incompetent manner toward the offer.

Question 29

Unless otherwise expressly stated, an auction is considered an auction with reserve.

Question 30

An agreement that an offeror will not sell his property for a specified period subsequent to the offeree paying consideration to the offeror is referred to as a(n) ________.

A) unequivocal acceptance
B) contract of adhesion
C) option contract
D) firm offer

Question 31

A reward is a form of bilateral contract.

Question 32

In which of the following types of offers does the seller offer the goods for sale?

A) a revocation
B) a reward
C) an auction with reserve
D) an auction without reserve

Question 33

After losing her watch, Jennifer had put up a reward offer in the local newspaper for anyone who could find and return her watch. However, after two weeks she decides to buy a new watch and not pay the reward anymore. Betty, who found the watch and saw the reward offer, returns the watch to Jennifer after 20 days. Which of the following would be true about Betty receiving or not receiving the reward?

A) Betty will not receive the reward as Jennifer had already revoked it.
B) Betty will not receive the reward as Jennifer had stopped publishing the reward offer.
C) Betty cannot claim the reward because she had not performed all the requested acts.
D) Betty can claim the reward because Jennifer had not published a notice of revocation.

Question 34

In an auction with reserve, the bidder can withdraw his or her bid after an acceptance has been indicated from the offeror.

Question 35

A response by an offeree that contains terms and conditions different from or in addition to those of the offer is called a(n) ________.

A) rejection
B) counteroffer
C) revocation
D) acceptance

Question 36

In an auction without reserve, the seller is the offeree.

Question 37

Advertisements are considered to be invitations to make an offer.

Question 38

In an auction with reserve, the seller retains the right to refuse the highest bidder.

Question 39

In an auction without reserve, the seller is obliged to sell the goods to the highest bidder.

Question 40

Which of the following is true of an option contract?

A) If the offeree chooses not to buy the property, then money paid in consideration must be returned.
B) If money is paid as consideration, then that is not applied to the sale price.
C) Death or incompetency of either party terminates an option contract.
D) The offer cannot be revoked during the option period.

Question 41

If no time is stated in an offer, then the offer stays valid indefinitely.

Question 42

George made an offer to Jacob to sell his house for $1 million. The offer was received by Jacob on May 1, 2014, and he stipulated that he had 13 days to accept it. But Jacob could not arrange the money, and on May 16, 2014 he made a counteroffer to buy the house for $850,000. Which of the following is true of the original offer made by George to Jacob?

A) It is terminated by the counteroffer.
B) It is still valid as the house has not been sold.
C) It is invalid due to lapse of the stated time.
D) It is invalid due to incompetency of the offeree.

Question 43

An offer is terminated on the grounds of "supervening illegality" when ________.

A) the set period in the offer has expired
B) the subject matter in the offer has been destroyed
C) a statute or court decision deems an object of the offer unlawful
D) the offeror or offeree passes away prior to the offer being accepted

Question 44

If the object of an offer is made illegal prior to the acceptance of the offer, then the offer terminates.

Question 45

An option contract is terminated upon the death of the offeror.

Question 46

How can an offeror revoke an offer?

Question 47

An offeror can revoke his or her offer even after an agreement or acceptance has been reached.

Question 48

Peter plans to sell his two houses, numbered Lot 1 and Lot 2, at $800,000 each. David, who was interested in buying Lot 2, could not make up his mind on the final offer and asks Peter to give him a week to decide. Peter accepts, but David takes two weeks to decide the counteroffer. Before he could give David a reply to his counteroffer, Peter is killed in a fire that burned down Lot 1. Which of the following would be true in this case?

A) The offer is terminated due to lapse of time.
B) The offer is terminated due to destruction of the subject matter.
C) The offer is terminated due to death of the offeror.
D) David can still buy the house for Peter's original offer.

Question 49

A counteroffer is a rejection of the original offer.

Question 50

Ron uses his status message on his Facebook account to invite his friends to buy his desktop computer. His friend Carl is interested and calls Ron to express his interest. Ron tells him that he is selling the computer for $400. Carl offers to pay $350 and Ron accepts the offer. Carl's response to Ron's offer to sell for $400 is considered as a(n) ________.

A) mirror image rule acceptance
B) rejection
C) unequivocal acceptance
D) counteroffer

Question 51

An offer terminates upon the expiration of a stated time in the offer.

Question 52

An offer is terminated on the grounds of "lapse of time" if ________.

A) the offeror dies before the offeree has accepted the offer
B) the offer is not communicated to the offeree
C) the offeror has communicated to the offeree a set time which is not mentioned in the offer
D) the offer is not accepted within a stated time period

Question 53

Techstate, a hardware manufacturer in the United States, has an existing contract with a client based in the Republic of Karthasia, which is going through a domestic political crisis. The resulting upheaval in that country has led to some of the shipments to the client being destroyed by warring factions. As a sanction against the country, the United States government places an embargo on all exports to that country by U.S. firms. What will be the state of the contract between Techstate and the client in Karthasia after the embargo?

A) It will be terminated due to destruction of subject matter.
B) It will be terminated due to incompetency of the offeror.
C) It will be terminated due to lapse of time.
D) It will be terminated due to supervening illegality.

Question 54

In the above question, Ron's response, agreeing to sell the computer to Carl, is considered as a(n) ________.

A) mirror image rule acceptance
B) rejection
C) counteroffer
D) equivocal response

Question 55

An offer is terminated if the subject matter of the offer is destroyed.

Question 56

A rejection of an offer is not effective until it is actually received by the offeror.

Question 57

A(n) ________ is a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts.

A) acceptance
B) revocation
C) proposal
D) counteroffer

Question 58

If a fire destroys an office building that has been listed for sale, the offer is automatically terminated due to ________.

A) supervening illegality
B) death or incompetency of the offeror
C) destruction of the subject matter
D) lapse of time

Question 59

Give an account of termination of offer due to lapse of time.

Question 60

During a counteroffer, the previous offeror remains the offeror.

Question 61

An offer that is made to two or more persons jointly must be accepted jointly.

Question 62

________ is a stipulation in an offer that says the acceptance must be by a specified means of communication.

A) An option contract
B) The mirror image rule
C) Implied authorization
D) Express authorization

Question 63

The mirror image rule states that ________.

A) the offeree's counteroffer should match the value of the offeror's offer
B) the offeree is allowed to modify the terms of the offer
C) the offeror can modify the terms of the offer even after the offeree has accepted them
D) the offeree must accept the terms as stated in the offer

Question 64

Quentin is a member of the Album of the Month Club and receives a new music CD every month without fail. The Club usually gives its members a time period within which they can reject the selection and stop shipment of the CD, failing which the CD will be shipped. Last month, Quentin received a CD from Album of the Month Club, a copy of which a friend had already gifted him. As he was away, Quentin had not found time to reject the selection and had to buy the CD. What kind of an offer-acceptance model does Album of the Month Club have?

A) mirror image rule acceptance
B) silence as acceptance
C) acceptance-upon-dispatch
D) unequivocal acceptance

Question 65

Explain the importance of "time of acceptance" of contracts.

Question 66

To meet the mirror image rule, the offeree must accept the terms of the offer without modification.

Question 67

If an offeree dispatches a rejection before an acceptance, then the rejection will not be applicable.

Question 68

Which of the following is a difference between acceptance and revocation?

A) Revocation is valid only if the offeree receives it, while an offeree's acceptance is valid when dispatched.
B) Revocation can be done by the offeror or offeree, while an acceptance can only be done by the offeree.
C) An acceptance must be received by the offeror to be valid, while a revocation need not be received by the offeree.
D) A revocation can be made after acceptance, while an acceptance cannot be made after revocation.

Question 69

The legal power to accept an offer belongs to the ________.

A) offeror
B) offeree
C) agent
D) seller

Question 70

An unequivocal acceptance must not contain conditions or exceptions.

Question 71

The term ________ refers to a mode of acceptance that is indicated from what is customary in similar transactions, usage of trade, or prior dealings between the parties.

A) express authorization
B) implied authorization
C) option contract
D) unequivocal acceptance

Question 72

Explain implied and express authorizations.

Question 73

Only the offeree has the legal power to accept an offer and create a contract.

Question 74

A contract is created upon an equivocal response to an offer from the offeree.

Question 75

Under the mailbox rule, an acceptance is only effective when it is received.

Question 76

Bilateral contracts are accepted only upon the offeree's performance of the required act.

Question 77

Mandy decided to sell her iPad and made an offer for $250 to her friend Shelly. Shelly told Mandy she was willing to buy the iPad, but she would be glad if Shelly could lower her asking price. Mandy lowered the price to $210 and Shelly bought it. Which of the following would describe Shelly's response to Mandy for her first offer?

A) counteroffer
B) rejection
C) equivocal response
D) grumbling acceptance

Question 78

The ________ states that an acceptance is effective when it is dispatched, even if it is lost in transmission.

A) rule of silence as acceptance
B) mirror image rule
C) mailbox rule
D) mutual assent rule

Question 79

An offer cannot stipulate that acceptance must be by a specified means of communication.

Question 80

Which of the following contradicts the mirror image rule?

A) silence as acceptance
B) option contract
C) counteroffer
D) acceptance-upon-dispatch