Deck 2: Agreement

Question 1

Under modern law,the court can supply a missing contract term if a reasonable term can be implied.

Answer 1

True

Question 2

In an auction without reserve,the seller must accept the highest bid and cannot withdraw the goods from sale.

Answer 2

True

Question 3

An advertisement reading,"Our last Trailconquerer XL100 mountain bike,stock number T990234,will be sold to the first buyer with $700," would not be treated as an offer.

Answer 3

False

Question 4

An offer made in anger,where a reasonable person would not have known that it was made in anger,cannot result in a contract.

Question 5

An offer is considered communicated to the offeree so long as it has been communicated to the offeree in some way by someone.

Question 6

Objective intent refers to the actual intent of a particular person.

Question 7

To be entitled to collect on a reward offer,a person need only perform the requested act.

Question 8

An offer made in jest,where a reasonable person would conclude that it was made in jest,cannot result in a contract.

Question 9

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

Question 10

The making of an offer occurs prior to the formation of a contract.

Question 11

The communication of an offer can be made by the offeror or the offeror's agent.

Question 12

With mutual assent between the parties,there is no contract.

Question 13

The offeree has the power to create a contract by accepting the offer.

Question 14

Generally,advertisements,catalogs,price lists,etc.are not treated as offers.

Question 15

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

Question 16

Revocation refers to the offeree communicating to the offeror that the offeree does not want to accept the offer.

Question 17

Where the terms of an offer are indefinite,the court can supply a missing term if a reasonable term can be implied.

Question 18

Reward offers are offers to enter into a unilateral contract.

Question 19

The effectiveness of an offer is partially dependent upon whether or not it has been communicated to the offeree.

Question 20

A counteroffer is treated as both a revocation and a new offer.

Question 21

The objective theory of contracts is based on the premise that:

A)Even offers made in obvious jest can be the basis of a contract.
B)Every contract must have a central object to it.
C)Every contract must have consideration given by both parties.
D)Whether the intent is present is based on how a reasonable person would view the parties' actions rather than on the actual intentions of the parties.
E)The intent to be bound is determined after the parties have had a chance to perform the contract.

Question 22

A rejection is effective upon dispatch.

Question 23

Which of the following are necessary to meet the requirements of a definite offer?

A)Identification of the parties,subject matter,and quantity.
B)Consideration to be paid.
C)Time of performance.
D)A,B,and C.
E)A and B only.

Question 24

If nothing is stated about how long an offer is to remain open,it remains open until it is revoked by the offeror.

Question 25

In certain circumstances,silence can operate as acceptance.

Question 26

If an offeree rejects an offer and then attempts to accept that same offer,the offer is now construed as a new offer that the original offeror is free to accept or reject.

Question 27

If no mode of acceptance is stated in the offer,then any mode which is reasonable in the circumstances may be used.

Question 28

The basic concept that both parties to a contract should have agreed to the same terms is referred to as:

A)Bilateral agreement.
B)Mutual assent.
C)Co-agreement.
D)Common intent.

Question 29

In order to collect a reward,the person must:

A)Perform the requested act.
B)Have knowledge of the reward before performing the act.
C)Have knowledge of the reward before collecting the reward.
D)A and B only.
E)A and C only.

Question 30

Death of the offeror terminates an offer even if the offer could still be carried out by the estate of the offeror,such as the sale of property of the offeror.

Question 31

In an auction when the highest bid has been made and no higher bids are forthcoming,the highest bid is treated as an acceptance in:

A)Auctions with reserve,but not in auctions without reserve.
B)Auctions without reserve,but not in auctions with reserve.
C)In both of these kinds of auctions.
D)In neither of these kinds of auctions.

Question 32

Offers made to the public may be revoked by communicating the revocation bythe same means used to make the offer.

Question 33

Generally,an offeror can specify the manner in which he/she wants his/her offer to be accepted.

Question 34

The concept of objective intent with respect to contract law means that:

A)When forming a contract,each party must expressly state an intent to be obligated under the terms of an agreement.
B)The parties must each intend to be bound by the terms of an agreement based on each party's true intent,whether or not that intent is known by the other party.
C)The parties' intent to be bound by the terms of a contract is based on whether an outsider observing the parties' words and conduct would reasonably conclude that the parties have the needed intent.
D)So long as one party intends to be bound by the terms of an agreement,the objective intent requirement will be met.

Question 35

Revocation of an offer may be done anytime prior to acceptance by the offeror.

Question 36

In general,who can effectively accept an offer for a unilateral contract?

A)Any person who performs the action requested in the offer,which can occur either before or after learning of the offer.
B)Any person who performs the action requested in the offer,so long as the offer had been communicated to that person prior to the performance of the act.
C)Any person who promises to perform the action requested in the offer,which can occur either before of after learning of the offer.
D)Any person who promises to perform the action requested in the offer,so long as the offer had been communicated to that person prior to the making of the return promise.

Question 37

If the object of an offer becomes illegal after the offer was made,but before it is accepted,the offer remains valid because it was legal when made.

Question 38

If a contract omitted some terms,which of the following terms could be implied by the court?

A)Quantity.
B)Time for performance.
C)Price,if a reasonable price can be determined.
D)A,B,and C.
E)B and C only.

Question 39

Advertisements are usually considered to be:

A)Offers that can be accepted only by those who have seen the advertisement.
B)Invitations to deal.
C)Offers that can be accepted by anyone attempting to purchase the item whether or not that person has seen the actual advertisement.
D)Counteroffers to any previous advertisements.

Question 40

The communication of an offer can be made by:

A)The offeror only.
B)The offeror or an agent of the offeror.
C)The agent of the offeror only.
D)The offeror,the offeror's agent,or any other party who learns of an offer.

Question 41

Which of the following would terminate an offer?

A)Revocation by the offeror.
B)Rejection by the offeree.
C)Counteroffer by the offeree.
D)A,B,and C.
E)A and B only.

Question 42

What does an offeree use to simply indicate that he/she is not interested in an offer?

A)Revocation.
B)Rejection.
C)Counteroffer.
D)Promissory estoppel.
E)Option.

Question 43

An offer lapses upon the following except:

A)Counteroffer.
B)Rejection.
C)Detrimental reliance.
D)Expiration of reasonable time.
E)Death of offeror.

Question 44

Which of the following would be a valid offer?

A)Bob's brand new riding lawn mower will not start,so Bob yells,"I'd sell this thing for $10."
B)Jane is a real estate agent,and while looking at a house she says,"I think we can get $50,000 for this place."
C)Mary goes to a garage sale,sees a dresser she wants,and says,"Would you take $25 for this dresser?"
D)John tells Rhoda,"I'll give you $500 for your motorcycle."

Question 45

The mailbox rule means that:

A)Offers and acceptances must be communicated through the mail in order to be effective.
B)Offers and acceptances are effective when placed in the mail.
C)A properly dispatched acceptance is effective even if the offeror never receives it.
D)A revocation is effective when sent.

Question 46

What is the legal effect of an auction being with reserve?

A)The seller has the right to reject all of the bids.
B)Certain bidders have reserved bids of specified amounts in advance.
C)The bidders must be given an opportunity to inspect the items prior to the bidding.
D)Bidders must make a cash deposit in advance to show the financial ability to carry through with the purchase of any item for which they are the highest bidder.

Question 47

Marilyn decides to sell the diamond broach she inherited from her grandmother at an auction "with reserve." Can she withdraw the broach from sale?

A)She can withdraw the broach any time before the auction announces it has been sold.
B)She can withdraw the broach any time before it is delivered to the buyers.
C)She can withdraw the broach only if the bids are extremely low.
D)She can withdraw the broach only before the auction begins.
E)She cannot withdraw the broach once the auction has been advertised.

Question 48

The requirement that the terms of the acceptance be the same as those of the offer is the:

A)Mirror image rule.
B)Identical terms rule.
C)Counteroffer equals rejection rule.
D)Doctrine against offer modifications.
E)Promissory estoppel doctrine.

Question 49

Which of the following statements is true regarding acceptances?

A)If an offer is made to Mary in front of a group of people,any of the group may accept the offer.
B)If an auction is "without reserve," the item must be sold to the highest bidder.
C)Generally,an acceptance may contain new terms.
D)Generally,silence operates as an acceptance.

Question 50

Supervening illegality of the object of a contract occurs in which of the following circumstances?

A)The illegality existed when the offer was made.
B)The object of the contract is illegal where made,but would be legal in another location.
C)The object of the contract is illegal to be performed by the offeree,but could be legally performed by a different party.
D)The object of the contract was legal when the offer was made,but has subsequently become illegal.
E)The offeror had an honest and reasonable belief that the object of the contract was legal when the offer was made,but later learned that the offer was illegal.

Question 51

If an offeree gives a rejection to the offeror,which of the following is true at this point?

A)The offeree is still able to accept the original offer until its original expiration time.
B)The offeree has made a counteroffer.
C)The offeree cannot later enter into a contract on the terms of the rejected offer.
D)The offeree can now transfer the rejected offer to a different party who becomes the new offeree.
E)The offeree has lost the ability to accept the original offer.

Question 52

An offeror says,"If you'll agree to do my taxes this year,I'll pay you $100 after you finish." This is an offer for which kind of contract?

A)Executed.
B)Implied-in-fact.
C)Unilateral.
D)Bilateral.
E)Promissory.

Question 53

The rejection of an offer:

A)Is effective when received by the offeror,and prevents the offeree from later accepting that offer.
B)Is effective when sent to the offeror,and prevents the offeree from later accepting that offer.
C)Is effective when received by the offeror,but does not prevent the offeree from later accepting that offer.
D)Is effective when sent to the offeror,but does not prevent the offeree from later accepting that offer.

Question 54

The circumstance where an offer cannot be withdrawn under promissory estoppel is also known as:

A)Irrevocable offers.
B)The doctrine of detrimental reliance.
C)The doctrine of renewable offers.
D)The strict counteroffer rule.

Question 55

Pam offers a reward for the return of the pet snake that escaped from her purse while she was having dinner at a restaurant.Fred finds the snake and returns it to her.Which of the following is relevant in deciding whether Pam must pay the reward?

A)Whether Fred is a minor.
B)Whether Fred knew about the reward when he returned the snake.
C)Whether Fred intended to get the reward.
D)Whether the offer for the reward was in writing.

Question 56

Sally owns a very expensive fur coat that Mary would like to buy.During the course of conversation,Mary asks how much Sally would take for the coat.Sally replies,"I am not sure I want to sell the coat,but I think it is worth about $3,000." Mary says,"That is a little more than I wanted to spend." Several days later,Mary calls Sally on the telephone and says,"I'll bring over the $3,000 today." Sally refuses to sell the coat,and Mary sues.What results?

A)Mary wins;a valid contract was created.
B)Sally wins;there was never any offer for Mary to accept.
C)Sally wins;when Mary said $3,000 was too much to pay,Mary rejected the offer.
D)Sally wins;Mary did not accept the offer in a reasonable manner.
E)Sally wins;Sally's offer expired due to the passing of a reasonable time.

Question 57

Mary,the seller,and Jane contract for the sale of 500 sweaters.They agree on color and style,but not on price or time of delivery.Mary refuses to deliver the sweaters,and Jane sues.What results?

A)Mary wins;because all these terms were omitted from the agreement,the contract is not definite enough to be valid.
B)Jane wins;the courts will fill in all the above-mentioned missing terms.
C)Mary wins;the courts will fill in many missing terms,but never price.
D)Mary wins;the courts will fill in many missing terms,but never time of delivery.

Question 58

Which of the following is correct regarding a "counteroffer?"

A)It is no different from any other offer.
B)It is not really an offer,but operates as the revocation of an offer.
C)It operates as both an offer and an acceptance.
D)It is treated as both a rejection of an offer and a new offer.
E)It is treated as a new offer,but does not terminate the original offer.

Question 59

Jess says to a friend,"I'll sell you my 2-year-old Toyota Camry for $4,000." The friend says,"I'll take it," and they sign a short agreement to that effect.The friend didn't know this,but Jess intended the offer as a joke.There will be a contract if:

A)The approximate fair value of the car is $4,000.
B)A reasonable person would have concluded that Jess was serious when making the offer.
C)Jess failed to disaffirm the contract within a reasonable time after the offer was accepted.
D)The written agreement spells out all provisions of the contract.

Question 60

Which of the following will not generally automatically terminate an open offer?

A)Death of the offeror.
B)Death of the offeree.
C)Changed economic circumstances.
D)Destruction of the subject matter of the contract.
E)Supervening illegality of the object of the contract.

Question 61

Cody offered to sell certain land to Daniel for $50,000,by a letter,which was signed by Cody.The letter specified that the deal was to be closed by Nov.1,2001,and that the entire payment was to be in cash.Daniel sent a letter saying that he accepted the offer,but his letter also stated that payment was to be made one-half at closing and one-half 30 days later.As of March 2002,Cody had not responded.Discuss in detail whether there is a valid contract between Cody and Daniel.

Question 62

Kristin offers to sell land to Ian for $5,000.Ian says that $5,000 is too much,but he will pay $4,000.Kristin says no.Two days later,Ian accepts Kristin's original offer.Which of the following best describes this situation?

A)There is now a valid contract between Kristin and Ian.
B)Ian made a counteroffer,that terminated Kristin's offer.
C)Kristin may now accept Ian's counteroffer.
D)Ian made a counteroffer,but Kristin's offer may still be accepted.

Question 63

Seasonal Selections,Inc.sends a copy of its catalog to William along with a personalized computer-generated letter inviting him to purchase any two items in the catalog at the advertised price.Has Seasonal Selections made an offer?

A)Yes,the letter is an offer.
B)It is an offer only if William is already a customer.
C)The catalog and letter are an offer,because there is no room to negotiate a price.
D)Seasonal Selections has not made an offer.The catalog is a solicitation of an offer by William.
E)None of these are correct.

Question 64

Lefty's Surplus Store placed an advertisement in the newspaper offering one new bath tub,regularly priced at $500,for sale for only $10,to the first person who came to the store the next day.Judy was the first person to appear the next day and she demanded the bath tub for $10.Lefty's refused to sell to her.Judy sued.What is the likely outcome?

Question 65

On Monday,Cindy says to Ruth,"I will sell you my car for $10,000.You have until Friday to decide." As of Wednesday,Ruth has paid nothing to Cindy and has not indicated if she is interested in buying the car.At this point,which is true?

A)Cindy can revoke the offer on Wednesday.
B)Ruth must reject Cindy's offer by Friday,or else she has bought the car.
C)Cindy cannot revoke the offer on Wednesday.
D)Ruth could send $250 to Cindy,which would make the offer irrevocable.

Question 66

Should the rules of offer and acceptance be changed to reflect the increasing use of instantaneous communications such as fax machines and online commercial transactions? How does doing business in this environment differ from in the past? What changes,if any,should a business make in the terms or manner of offers and acceptances?

Question 67

Susan offered to sell her couch to Martin for $200.Martin said that $200 was too much,but that he would give her $125.Susan said no.Then,Martin said that he would pay Susan the entire $200.

A)Martin has accepted Susan's original offer.
B)Martin's statement that he would give Susan $125 was a rejection of Susan's original offer.
C)Martin's statement that he would give Susan $125 was an offer by Martin.
D)A and C only.
E)B and C only.

Question 68

What problems in connection with offer and acceptance might arise in an online auction situation? Are there any rules that could address these?

Question 69

Sam places an advertisement in the newspaper for his Dodge Viper which states,"I hate to sell it,but high insurance costs force me to sell my 1999 Dodge Viper.The first $45,000 cash takes it." Betty goes to look at the car and says to Sam,"I'll give you $42,000 for it." Sam then says,"That's not the deal." Betty says nothing and leaves.A couple of weeks later Betty notices that the ad is still in the paper,so she takes $45,000 cash over to Sam's house.He hasn't sold the car,but says to Betty,"You rejected my offer of $45,000,so I don't have to sell it to you for that.You can have it for $47,000." Is Sam obligated to sell the car to Betty for $45,000? Give all possible arguments for each party.

Question 70

Offeror says,"I'll sell you my car for $10,000." Offeree says,"I accept your offer but will pay $9,700." As a result,at this point:

A)There are two open offers.
B)This was a conditional acceptance.
C)Offeror must sell car to offeree if offeree gives offeror $10,000.
D)The only open offer is for $9,700.

Question 71

Wilbur,who has had difficulty making up his mind for most of his 29 years,was sitting around on Sunday with some of his friends.At one point,he says,"I'm going to try to sell my car,and if I get an offer close to $9,000 I'm going to take it." Andy,one of the friends,thinks to himself that this might be a good deal.The following events occur later that same week:
Monday: Wilbur arranges with the local newspaper for an advertisement to run beginning on Saturday which will say,"1999 Honda Prelude,excellent,1st $8,000 takes it.See it at 1902 Maple Street."
Thursday: Andy delivers a note to Wilbur,which Wilbur reads later on Tuesday.The note says,"I'll take your car for $9,000" and is signed by Andy.
Friday: Wilbur thinks he may have under-priced the car and calls the paper to cancel.It is too late to make changes for Saturday so the ad runs.A new ad will start Sunday that does not mention a price but he expects that the car should bring close to $10,000.
Saturday: Bob shows up with $8,000 in hand to buy the car.Wilbur refuses to sell the car to Bob.
Andy and Bob each separately sue Wilbur wanting to force him to sell the car claiming that a contract has been formed.Discuss separately each case and how it might come out,including the arguments the parties would most likely raise.

Question 72

Fred's beautiful photograph of the Washington Monument is hanging in a Washington Gallery.Jed is looking at it and Fred tells Jed he can have it for $1,000.Jed says,"No way,man! I won't pay that!" The next day,Jed reconsiders and goes to the gallery and tells Fred he'll take it for $1,000.Which is true at this point?

A)Fred can tell Jed that the price is now $1,200.
B)Jed can't force Fred to take the $1,000 because of the prior day's revocation.
C)If they can't agree,a court would set the price at $1,100.
D)Jed's acceptance of the $1,000 offer is effective only if Fred has not yet revoked his offer.

Question 73

Wildland Amusements has just received an offer to install video games in the cafeterias of local high schools and split the revenues with the school system.This promises to be a very lucrative contract,and Wildland has 30 days within which to accept the offer.Wildland purchases a number of video games to place in the schools.Within the 30 days and on the day before Wildland plans to send its written acceptance to the School Board,the local city council passes an ordinance outlawing all video games in schools.Can Wildland recover damages from the school?

Question 74

Offeror says,"I will sell you my dog for $100.You have a week to decide." Two days later she tells the offeree,"I've changed my mind.I'm keeping the dog." This last statement is:

A)An effective revocation.
B)An effective rejection.
C)Ineffective in terminating the offer.
D)A counteroffer.

Question 75

Anita offered to sell her condo to Bill.Before Bill could accept,one of the parties was killed in a car accident.The remaining party wishes to go through with the contract.Which of the following best describes this situation?

A)The death of either party terminated the offer.
B)If Anita died,Bill can still accept the offer;Anita's estate will be liable for the contract.
C)If Bill died,Bill's heirs can still accept the offer.
D)If Anita died,the offer is terminated;if Bill died,Bill's heirs can still accept the offer.

Question 76

Tom lives in Michigan in a neighborhood with many elderly persons.Tom's next door neighbor,Thelma,is a retired CPA.In early February of 2002,Tom and Thelma discussed Thelma possibly doing Tom's personal income tax return.Tom told Thelma that he would pay her $300 to do his income tax return for 2001.Thelma said she would probably be able to,but that she could not commit and would let him know.She said she was going to Arizona to look for a home because she hoped that this would be her last winter in Michigan.Tom had always liked Thelma's house and asked what she was planning to do with it.She said she would be putting it on the market as soon as she found a place she liked in Arizona.Tom then told Thelma that he might be interested in the house.Thelma said,"I'll sell you my house for $240,000.You can think about it because I won't be doing anything else about selling it until I find my new place in Arizona.A real estate agent told me it could bring $270,000,but my price is $240,000 for you." Thelma left a week later and went to Arizona,with nothing further said about the taxes or the house.In late March,Thelma sent Tom a fax that she had found a new house and restated the offer's terms and asked Tom if he wanted the house.Tom sent a return fax stating that he thought he wanted it,but he needed to check on his finances before committing.Before there were any further communications,Thelma died the next day.Two days later,not knowing that Thelma had died,Tom sent her another fax in Arizona that he wanted the house at her price of $240,000.Tom did not learn of her death until April 12.Tom then had to find someone at the last minute to prepare his income tax return at a cost of $500.Tom also notified the executor that he wanted to proceed with his contract to buy the house even though Thelma had died.The executor refused,leading Tom to sue for damages from the tax return and house sale.Discuss the issues and outcome.

Question 77

Roberta offers to sell certain land to Emily for $10,000.This offer is made by a letter,signed by Roberta and mailed on March 1,1990.The letter also stated that the offer would be kept open until July 1,1990.About two weeks later,Roberta sent Emily another letter in which she revoked her offer.On June 15,after she had received both letters,Emily wrote to Roberta accepting her offer of March 1.Discuss in detail whether there is a valid contract between Roberta and Emily.

Question 78

Under the mailbox rule there is a period of time when the offeror may be in a contract and not be aware of it.If the rule were changed such that acceptances were effective upon receipt,would this eliminate the problem of someone being in a contract without being aware of it? Is there any rule or set of rules that will eliminate the problem of one party or the other having a period of uncertainty,if all correspondence is conducted through the mail? If either the offeree or offeror must go through a period of uncertainty,which should it be? Why? What can the offeror do to avoid this uncertainty? Is the mailbox becoming more important or less important?

Question 79

Sam receives an offer that states: "I will sell you my car for $8,500,you have 10 days to accept." On Day 4,Sam tells the seller that he will give him $8,000,but the seller rejects this.Which of the following is true?

A)If Sam tells the seller within 6 days that he'll pay the $8,500,a contract is formed.
B)Sam's only alternative is to pay the asking price for the car.
C)If the seller changes his mind within 6 days,he can make Sam buy the car for $8,000.
D)There is no open offer.
E)If the seller does not want to sell his car to Sam for $8,500,he must revoke his offer.