Deck 3: Formation of Contracts

Question 1

All contracts must be in writing to be enforceable.

Answer 1

False

Question 2

Only the essential terms of a contract must be set out in the offer.

Answer 2

True

Question 3

In the Pharmaceutical Society case,it was decided that goods displayed on the shelf in a self-service merchandising situation were an invitation to treat,rather than an offer.Discuss.

Answer 3

This question gives students the opportunity to deal with the subject of offer and acceptance,including invitation to treat in the bargaining process.In fact,it is very difficult to determine at what point an invitation ends and an offer starts.It can be argued that the Pharmaceutical Society case goes too far,that the judge's reasoning was flawed,and that these goods should have been an offer,not an invitation.In any case,students should distinguish between an invitation and an offer,clearly indicating that an invitation is simply a method of encouraging the prospective customer to enter the bargaining process,bestowing no rights on the parties.The offer,on the other hand,is the first stage of the process bestowing on the offeree a legal power he or she didn't have before-that is,the right to accept and create a binding contract.Students should indicate that they know what difference it makes if the goods on the shelf are an invitation or an offer.This essay question is less difficult,but it does give students an opportunity to demonstrate that they understand the essential elements of the bargaining process.

Question 4

An invitation to treat is an offer published in the newspaper.

Question 5

An ad in the morning paper reads: "Brand new 2012 Ford Escorts $16 499.No payment until January 2012.We make your first payment." This is an example of which of the following?

A)invitation to treat
B)gratuitous promise
C)offer
D)unilateral contract
E)bilateral contract

Question 6

Which of the following is an ingredient necessary to form a contract?

A)exemption clauses
B)fairness
C)privity
D)capacity
E)assignment

Question 7

Contracts may be in writing,under seal,verbal,or even implied.

Question 8

Distinguish between an offer and an invitation.

Question 9

List the five ingredients necessary to form a contract.

Question 10

What must be present in an offer before it qualifies as such?

Question 11

Four days ago,Pete was reading the newspaper and saw the following: "Best offer in town! Zenith XX Laser Printer - $1000!" When he went to the store this afternoon and said he wanted one,the employees replied that they didn't have any left,nor could they get any.On these facts,which of the following is true?

A)Pete could sue for breach of an option contract.
B)The offer by the store had lapsed before Pete tried to accept it.
C)The wording in the newspaper was merely an invitation to the public to do business,and no contract was formed.
D)The store had revoked the offer before Pete tried to accept it.
E)Pete could sue the store for breach of contract because he was accepting the offer in the newspaper.

Question 12

A contract is a single promise,made by one person to another,enforceable in court.

Question 13

Which of the following would best satisfy the requirements for a good legal offer?

A)"I'll drive you to Seattle on Saturday."
B)On a flyer (placed on your windshield):"We have the best offer in town! A mint 1956 Chevrolet for $20 000."
C)"I'll give you $1 for your new green bike."
D)"I'll pay you at least $300 for your horse,Blackie,and even more if the horse is lucky."
E)"The purchaser will pay $10 for one of the seller's laser printers,the exact model to be determined at a later date."

Question 14

All of the essential terms of a contract except for consideration must be clearly specified.

Question 15

Why is an understanding of contract law important for a business person?

Question 16

Which of the following is an offer as opposed to an "invitation to treat"?

A)A notice in the catalogue from the gift shop of the Edmonton Aquarium: "15% off the price of all jewellery until January."
B)A notice in the Toronto Star: "I will pay $100 to whomever finds and returns my lost female calico cat who answers to the name Marx."
C)The display of goods on the shelves of Safeway.
D)A sweater displayed in the window of a shop with the price tag attached and showing.
E)An ad in a real estate paper: "Best offer in Vancouver! 3-bedroom home in Kitsilano for only $350 000!"

Question 17

All commercial contracts must be evidenced by writing to be enforceable.

Question 18

Joel has an old lawnmower that is constantly breaking down.He decides to purchase a new one.He goes to the local hardware store.He finds a new model that he saw advertised in the newspaper.He pushes the lawnmower up to the cashier.She scans the price tag and tells him what he must pay.Joe hands the money to the cashier.In this fact situation an offer comes into existence when

A)the cashier scans the price tag and tells Joel how much the mower costs.
B)Joel hands the money to the cashier.
C)Joel sees the price in the newspaper.
D)Joel sees the price of the mower in the store.
E)Joel takes the mower from the display area and heads to the front counter.

Question 19

Discuss the requirement of consensus in the formation of contract.In your answer,consider the role of offer and acceptance,and also look at the degree of understanding required between the parties.

Question 20

"For a contract to be binding,both parties must have a clear understanding of all terms of that agreement." Discuss the accuracy of this statement.

Question 21

Jones was a caterer; Smith was a florist.Jones won a contract to provide a banquet for a convention of florists.He wanted to decorate the hall with flowers.He sent a letter to Smith describing what he wanted and asking for a price quote.Smith responded in a letter dated January 5,offering to supply the flowers for $5000.Jones received the letter on January 10 and responded on the same date,saying the price was too high and that he would pay $4500.While that letter was in the mail,but before it had been received by Smith,Jones learned that the convention was on artificial flowers and the organizers wanted no real flowers on display.On January 13,Jones quickly sent another letter telling Smith to ignore the letter of January 10 and that he wouldn't need any flowers at this time.This letter of the January 13 was received on January 18.Smith had received the letter of January 10 on January 15 and sent a letter of acceptance on the same day,and had placed orders with his suppliers for the flowers.The letter of acceptance was received by Jones on January 20.Is there a contract between Jones and Smith? Explain.

Question 22

Franz bought two front-row tickets to a sold-out concert.Unfortunately,a week before the concert,he found out he had to go on a business trip and would miss the concert.He offered his co-worker,Joe,the tickets for 80% of the full price,offer to remain open until 10:00 p.m.on December 15.Indicate to Joe which of the following is true with regard to the law of offer and acceptance.

A)If Franz sells to someone else,it is too late for Joe to accept the original offer.
B)A letter of acceptance is always effective when it is dropped in the mailbox.
C)If Joe makes a counter-offer of 50% of the full price,and Franz rejects the counter-offer,Joe can still accept the original offer.
D)Franz could revoke the offer at any time before acceptance,even before 10:00 p.m.on December 15.
E)To create a contract,an offer must be in writing.

Question 23

If the mail is a reasonable means for accepting an offer,is a contract formed when the offeror drops a letter of revocation in the mailbox at the very same instant that the offeree drops a letter of acceptance in the mailbox? Explain.

Question 24

Only the person or group to whom an offer is made can accept it.

Question 25

Joe made an offer to sell his car to Harry,promising to keep the offer open for a week.However,he changed his mind,sold the car to someone else,and phoned Harry to inform him that he was withdrawing the offer because he had sold the car to someone else.Harry was angry and said that he wanted the car and was going to hold Joe to his promise to hold the offer open for a week.He sued for breach of contract.Will he win? Explain.

Question 26

Harry saw Joe in his classic Buick at a local drive-in restaurant,and told Joe that he'd like to buy the car.He offered Joe $1500.Joe said he had to think about it and that he'd let Harry know.Two days later,Joe decided that he needed the money and couldn't afford to keep the car.He wrote Harry a letter accepting the offer and mailed it that afternoon.The next day,Harry phoned Joe,saying that he'd changed his mind and that he needed the money for something else.Joe told Harry about the letter,and in fact Harry received the letter later that day.Joe insisted on going through with the deal.Explain the legal liability of the parties.

Question 27

If an offer is made by mail and an acceptance by mail is requested,when does a letter revoking the previous offer actually take effect?

A)at the time it is posted
B)at any time before a letter of acceptance is received by the offeror
C)at the time it is received,if before acceptance
D)Never.A revocation must be done in person.
E)at any time before actual performance of the contract has begun

Question 28

The owner of a new building wanted four maple trees,each six metres tall,planted on the north side of the building.Lloyd Landscaper submitted his offer of four six-metre maples planted for $800.The owner said he would pay $600 for that.Lloyd said that for $600 he would supply four smaller,five-metre trees.The owner said,"$600 for five-metre trees plus a Christmas tree for my kids." Lloyd was disgusted and said,"Forget it.I don't need this job." As he was leaving,the owner said,"All right,I'll accept your offer of $600 for the five-metre maples planted." Lloyd kept on walking.Which of the following is true?

A)There is no contract because Lloyd's last offer had been rejected by a counter-offer.
B)There is no contract because Lloyd's last offer was revoked.
C)There is no contract because there is a presumption in law in these circumstances that the parties did not intend to create a legal relationship.
D)There is no contract because Lloyd's last offer had lapsed after a reasonable time.
E)There is a contract because at one point in the conversation Lloyd was willing to sell and the owner was willing to buy four trees.

Question 29

Even though a person promises to hold an offer open for a specified period of time,the offeror can revoke that offer before that time if he or she feels like it.

Question 30

Harry saw Joe in his classic Buick at a local drive-in restaurant and talked about wanting to buy the car.Joe offered to sell it to him for $1500.Harry said he needed some time to think about it and that he would send Joe a letter.The next day,Joe changed his mind and mailed Harry a letter of revocation.The day after that,before Harry had received the letter of revocation,he sent a letter of acceptance to Joe.The next day,the two letters arrived at their respective destinations,Joe receiving Harry's letter of acceptance just after Harry received Joe's letter of revocation.Explain the legal liabilities of the parties.

Question 31

Which one of the following will cause an offer to end?

A)the purchase of an option to hold the offer open for a designated period of time
B)the expiration of a reasonable time if the offeror did not specify that the offer would end at a definite time or upon the happening of a specific event
C)the arrival of 4:00 p.m.,if the offeror specified that the offer would end at 5:00 p.m.
D)the sale of the object of the offer to someone other than the original offeree
E)the communication of a revocation to the offeree after acceptance

Question 32

If an offeror makes an offer that states "This offer to be open until noon tomorrow," which of the following ends the offer?

A)an inquiry by the offeree
B)the insanity of the offeree
C)revocation of the offer by the offeror before the time specified (i.e.,before "noon tomorrow")
D)a counter-offer by the offeror
E)the selling of the item to someone else before noon tomorrow

Question 33

Sarah wanted an antique lamp for the bedroom.While in a second-hand shop,she saw a lamp that she really wanted marked $100.She offered the owner $75 for it.He said,"I'll take $95." She answered,"$80!" He said,"Lady,you're pushing me a bit,aren't you? I'll take $90,that's it." She said "Okay,I'll pay $90 if you throw in this old 'Vote-for-Trudeau' button." He said,"Forget it,lady,my shop is closed," and asked her to leave.She said,"Okay,I accept your offer of $95." He made no response.If she sues for breach of contract,which of the following is true?

A)There is no contract because the owner's offer to sell the lamp for $95 was rejected by counter-offer,and Sarah's offer to buy it for $95 wasn't accepted.
B)There is a contract because at one time the owner offered to sell the lamp for $95 and Sarah accepted it.
C)There is a contract because the owner wanted to sell the lamp for $95 and Sarah was willing to pay that much.
D)There is no contract because the owner's offer to sell for $95 lapsed after a reasonable time.
E)There is no contract because the owner's offers to sell the lamp for $95 and $90 were revoked and he didn't accept Sarah's offers.

Question 34

Mary bought a new Macintosh computer and advertised her old computer system for sale for $1500.Mr.Jones offered to pay $1000.Mary said no,that she wanted $1500.Mr.Jones offered $1250.Mary rejected that offer and said she wanted $1500,but then said,"I withdraw my offer,I've decided to give it to a school and apply for the tax benefit." Mr.Jones said,"All right,I'll accept your offer of $1500." Which of the following is true?

A)There is a contract and Mr.Jones has to pay a reasonable price for Mary's old computer.
B)There is a contract,because once a seller makes an offer she cannot change her mind; she is bound to receive an acceptance.
C)There is no contract because Mary revoked the offer before Mr.Jones attempted to accept it.
D)There is a contract because at some point in time Mary was willing to sell and Mr.Jones was willing to buy the computer system for $1500.
E)There is no contract because the last offer had lapsed.

Question 35

A letter of revocation takes effect when received by the offeree.

Question 36

Sylvia had contracted with Produce Palace to sell it her entire crop of elephant garlic (100 kilograms)and her entire crop of tomatoes (100 kilograms).On the day for delivery,Produce Palace took the garlic but not the tomatoes.In an effort to mitigate her loss,Sylvia called the owner of Val's Veggies and offered her the tomatoes at a reduced price with the words,"Let me know quickly; they are ripe and must be moved out today." That afternoon,Val sent Sylvia a letter accepting the offer.On these facts,which is the most likely outcome?

A)There is no contract between Sylvia and Val because the offer had probably lapsed before the acceptance was received by Sylvia.
B)There is a contract between Sylvia and Val the moment Val drops the letter of acceptance in the postbox.
C)There is a contract between Sylvia and Val on the day the letter of acceptance is received by Sylvia.
D)If the post-box rule does not apply,there would be a contract as soon as Val mails the letter unless Sylvia had sold the tomatoes to someone else.
E)There is no contract between Sylvia and Val because Sylvia had revoked the offer.

Question 37

Joe drove his car to a shopping mall and parked it there to attend a movie.The place where he parked was designated as a one-hour parking space on a sign at the entrance where Joe drove in.There were many similar signs around the shopping mall stating that people were parking their cars at their own risk.But this particular sign said that the time limit for parking there was one hour,and as a term of the contract anyone parking over this one-hour limit would have to pay a fee of $60.When Joe got out of the movie,he found a ticket on his car (a demand for payment of the $60).He refused to pay and was sued.What would be Joe's defence in these circumstances?

Question 38

Once a person has promised to hold an offer open for a specified period of time,she cannot change her mind.

Question 39

Joe offered to sell Harry his car and agreed to hold the offer open for one week,expiring Saturday at noon.The following Sunday,Harry phoned Joe to tell him that he had decided to accept the offer and purchase Joe's car.Joe said at that time that he had decided to keep the car and was just about to phone Harry to revoke the offer.Harry said,"Too bad," and demanded performance of the contract.Explain the legal responsibilities of the parties.

Question 40

A revocation of an offer is effective only when it has been communicated to the offeree.

Question 41

Which of the following is true with regard to contract law?

A)An option is a contract in which one person is buying a period of time within which he may accept the offer contained within the option.
B)A newspaper notice offering to pay a reward for the return of lost kittens is an invitation to treat.
C)A revocation is effective only when sent.
D)An important criterion for determining the place of the contract is the place where the offer is mailed.
E)A counter-offer does not end an offer.

Question 42

The City issued a request for bids for the construction of an events centre with the closing stated as June 15 at 4:00 p.m of the current year.The tender stated that no changes could be allowed to bids after submission.XYZ Construction submitted its bid a week in advance of the closing date.However,on June 12,XYZ Construction advised the City that it needed to increase the price of the events centre project in its bid,as it had discovered a major calculation error in its bid submission.The City refused to allow a change to XYZ's bid.After the specified close date,the City awarded the construction contract to XYZ Construction,as it was the lowest bidder.XYZ Construction refused to perform the work.This caused the City to award the contract to the company with the second-lowest bid,thus increasing the City's cost for the project.The City sued XYZ Construction.What is the legal position of the parties?

A)XYZ will win,as it advised the City in advance of the closing date that it needed to revise its bid.
B)XYZ will win,as it had only bid on the construction job but had not signed a construction contract to build the events centre.
C)XYZ will win,as bidders are not obligated to accept a contract based solely on the fact that they have bid on it.
D)The City will win because the lowest bidder is always selected and obligated to perform.
E)The City will win,as XYZ was bound by a subsidiary agreement when it submitted its bid.

Question 43

Ann was offered a job that would pay $20 000,that would provide for 18 days of vacation after one year of employment,and that would begin one week after her graduation.She wrote back that she would accept the job,but that she would not begin until three weeks after graduation and needed at least 21 days of vacation after the first year of work.On these facts,which of the following is true?

A)There is no contract because an acceptance must be unconditional,and Ann's counter-offer has not been accepted.
B)There is a contract as soon as Ann drops her letter in the mailbox.
C)If Ann had not responded,there would have been a contract because silence is the standard form of acceptance.
D)Ann is still free to reconsider and take the original offer even after the prospective employer receives her letter.
E)Since Ann accepted the offer,there is a contract.

Question 44

Explain why standard phrases are used by lawyers to create legal documents.

Question 45

Jed,who lives on Cape Breton Island,needed money for a trip to France.He decided to sell his electric guitar.On Monday,October 29,he called the owner of a music store in Halifax and offered to sell his Fender Stratocaster guitar for $400,the offer to be open until Friday at noon,November 2.Jed told the store owner to send a letter of acceptance since Jed would be away for a few days.The store owner examined his inventory and mailed a letter of acceptance on Thursday,November 1.When Jed returned home on Saturday,November 3,the letter had not yet arrived,so that afternoon he sold the guitar to a music teacher in his town.The store owner in Halifax sued for breach of contract.Which of the following is true?

A)Sending a letter by mail was not a reasonable method of acceptance.
B)The acceptance was effective before the offer lapsed,so there was a contract between Jed and the store owner.
C)The offer lapsed before the store owner accepted.
D)The offer was revoked before the store owner accepted.
E)The letter of acceptance was effective when it was received,and by then Jed had sold the guitar,so there was no contract.

Question 46

An offer will end when the subject matter of the offer is sold to someone else.

Question 47

Explain typical rules associated with the tendering process.

Question 48

Explain what is meant by a tendering process and discuss the tender agreement.

Question 49

When you pay for an option,this prevents a person from revoking an offer before the expiration of the specified time.

Question 50

Last week,Chris offered to sell her printer to a classmate for $200.Her offer included these exact words: "This offer to be open until noon,February 20." She now has second thoughts and thinks she should give or sell it to her brother,who has gone back to school.She wants to end the offer.Which of the following would not end the offer?

A)Chris's death before acceptance
B)the sale of the printer to her brother before acceptance
C)revocation of the offer by Chris before acceptance
D)expiration of the offer at noon on February 20 if there has been no acceptance
E)a counter-offer by an offeree

Question 51

A company put a job out to tender.The tendering process requires the company to follow certain rules typically associated with this process.Which of the following is most likely not a requirement in a tendering process?

A)The company must disclose all relevant information affecting the project.
B)The company must accept only bids that comply with the terms of the tender.
C)The company must accept the lowest bid price.
D)The company must not accept bids after the specified closing date.
E)The company must treat all parties equally and in good faith.

Question 52

Carlos visited Vancouver last summer and instead of going back to Ontario he stayed and enrolled at Simon Fraser University.He needed money but didn't need things left in Ontario,including his car.In mid-December,he wrote a friend and offered to sell the car for $4000 and told him to send him a letter with his answer.His friend received the letter on January 2,checked his financial situation,and sent a letter of acceptance on January 3.Meanwhile Carlos,short of cash and not having heard from his friend,sold the car to Mr.Reno on December 31.Carlos received his friend's letter on January 8.On these facts,which of the following is true?

A)In order for there to be a binding contract,there must be an offer and receipt of the letter.
B)All methods of acceptance are effective upon receipt by the offeror.
C)The letter of acceptance was effective when it was received,and by then Carlos had sold the car,so there was no contract.
D)The acceptance was effective before it was received,so there was a contract between Carlos and his friend.
E)Sending an acceptance by mail was not a reasonable method of acceptance in this situation.

Question 53

Jon was developing a computer program for use by owners of track clubs to aid them in keeping records of the members,their runs,times,injuries,etc.Eager to finish the program,Jon,in Edmonton,called his friend Sam,in Calgary,and offered him $2000 to help: five hours per working day,five days per week,for five weeks.Sam said that he would have to think about it.Jon told Sam that he was eager to get going,but that he would hold the offer open until Friday,February 6,at noon.Which of the following is true? (Read each separately.)

A)If Jon revokes his offer before Friday at noon,Sam could sue him for breach of contract because Jon had promised to hold the offer open.
B)If the court held that acceptance by mail was reasonable in the circumstances and if Sam accepts by mail,the place of contract is Edmonton.
C)If Jon goes ahead and hires Betsy from Edmonton at noon on February 3,it would be too late for Sam to accept.
D)If Sam wants to ensure that the offer will remain open until noon on February 6,he should give Jon some consideration (that is,purchase an option agreement).
E)If Sam accepts by phone within the time specified in the offer,the place of contract would be Calgary.

Question 54

Which of the following is true with regard to the offer and acceptance necessary to form a contract?

A)An ad in the newspaper that reads "Best offer in town! A new 2012 Honda Civic for only $15 999!" is considered an offer.
B)If a seller offers to sell for $100 and the buyer makes a counter-offer of $90 that is rejected by the seller,the buyer can accept the original offer of $100 and bind the seller in contract.
C)A purchased option that states "This offer to be open until noon tomorrow" prohibits the offeror from revoking the offer before that time.
D)A person can accept an offer after it has lapsed.
E)Where the acceptance is effective is not an important factor in determining the place of contract.

Question 55

Joe offered to sell Harry his car for $500,but Harry said he needed some time to think about it.A couple of days later,Harry phoned Joe to say that he'd give Joe $450 for the car.Joe refused to take this.Then Harry said,"All right,I'll accept your offer for $500." Joe said that he'd changed his mind and refused to go through with the deal.Harry sued.Explain Joe's legal liability.

Question 56

Martin offered to buy a property for $200 000,"offer to remain open until 5:00 p.m.on Thursday,January 21." Which one of the following situations will not cause the offer to end?

A)a counter-offer from the offeree
B)death of the offeror
C)insanity of the offeror before the offer is accepted
D)Martin sells the property to another party before the expiration of the period stipulated and before hearing from the offeree
E)the offeree has not accepted and the stipulated time has expired

Question 57

The City issued a request for bids for the construction of an events centre; the terms stated that the closing would be June 30 at 4:00 p.m.of the current year.At 4:15 p.m.on June 30,a representative of Joe's Construction arrived at the City offices to submit a bid.There was discussion about the fact that the stated deadline had passed,but the person from Joe's Construction said that the submission was being made on June 30 while the City offices were still open,and the only reason there had been a delay was a problem locating the company managers who needed to sign the bid.Which of the following statements is true?

A)If Joe's Construction's bid is the most competitive bid,the City will be obligated to accept it and award the contact to Joe's Construction.
B)The City must still consider the bid from Joe's Construction as it is required to treat all parties equally and in good faith.
C)If Joe's Construction has worked for the City previously and this is the first time there has been a problem with a late submission,the City should consider the bid in good faith.
D)The bid from Joe's Construction cannot be considered,as it does not comply with the terms of the tender.
E)The City should confirm that there was a problem getting the signatures and,if so,consider the bid from Joe's Construction as having been submitted on time.

Question 58

Joe offered to sell Harry his car for a specific price,and Harry indicated that he needed some time to think about it.Two days later,Joe sold the car to a third party.That afternoon,Harry phoned Joe and told him that he had decided to accept the offer and that he'd buy the car.Joe told Harry that it was too late; he had sold the car to someone else.Harry said that it had been offered to him first,and he insisted that Joe go through with the contract.Explain the legal liability of the parties.

Question 59

Which one of the following will not end an offer?

A)The offeror communicates a revocation of the offer.
B)The offer is said to be open for three weeks and the three weeks expire.
C)The offeror sells the goods being offered to someone else.
D)The offeror dies.
E)The offeree makes a counter-offer.

Question 60

Roberts has the chance to buy three adjacent city lots zoned as "duplex." The most profitable return would be the building of four townhouses across the three lots,but that would necessitate getting permission from the city,and that procedure takes time.If Roberts buys a 60-day option from the seller of the properties for $400,which of the following is true?

A)By buying the option,Roberts has bought a period of time during which she must accept the land offer.
B)If Roberts does not exercise the option during the option period,she can later force the seller to sell that property to her at that price.
C)If Roberts does not exercise the option,she will get her $400 back because she didn't get what she was bargaining for.
D)The seller is bound by contract neither to sell the property to any other party nor to revoke the offer within the option period.
E)The offer for the properties will expire before the end of the designated 60-day period if another person offers a higher price.

Question 61

Sam had been a friend of Joe for a considerable period of time and had often accompanied him as he sailed his classic yacht.Sam had often communicated to Joe how much he would like to have the boat.On Friday night,a friend told Sam that Joe had suffered some business reverses and was going to have to get rid of the yacht.Sam immediately wrote Joe a letter offering to purchase the yacht for $25 000.Unknown to Sam,Joe had written Sam a similar letter offering to sell the yacht for $25 000.These two letters passed in the mail.Joe received Sam's letter at about noon on Saturday,and Sam received Joe's letter at about 2:30 p.m.on Saturday.Are these people bound in contract? Explain.

Question 62

The post-box rule applies when which of the following means of communication is used?

A)mail
B)electronic mail
C)fax
D)messenger
E)telephone

Question 63

An acceptance of an offer applies when and where it is received except when it is communicated by telephone.

Question 64

For the post-box rule to apply,the offer must be made by mail.

Question 65

Joe offered to sell Harry his car for $500.Harry responded by saying,"I accept,provided you install a new radio in that car." Explain the legal relationship between the two parties.

Question 66

For standard types of contracts (e.g.,insurance),lawyers are likely to use a standard form contract.

Question 67

Which of the following is correct with respect to the operation of the post-box rule?

A)If the post-box rule applies,the acceptance is effective at the point of mailing.
B)For the post-box rule to apply,the offer must be made by mail.
C)For the post-box rule to apply,the offeror must make that clear when the offer is made.
D)If the post-box rule applies,the only way for an acceptance to be effective is to send it by mail.
E)If the post-box rule applies,an acceptance must be communicated and heard by the offeree before it is effective.

Question 68

Explain the post-box rule and discuss its relevancy in the modern business world.

Question 69

Jones is a caterer; Smith is a florist.Jones won a contract to provide a banquet for a convention of florists.He wanted to decorate the hall with flowers.He sent a letter to Smith describing what he wanted and asked for a price quote.Smith responded in a letter dated January 5,offering to supply the flowers for $5000.Jones received the letter on January 10 and responded on the same date,saying Smith's price was too high and that he would pay $4500.While that letter was in the mail,but before it had been received by Smith,Jones learned that the convention was on artificial flowers and the organizers wanted no real flowers on display.On January 13,Jones quickly sent another letter telling Smith to ignore the letter of January 10 and that he wouldn't need any flowers at this time.This letter of January 13 was received on January 18.Smith had received the letter of January 10 on January 15 and had sent his letter of acceptance on the same day,and had placed orders with his suppliers for the flowers.The letter of acceptance was received by Jones on January 20.Which of the following is true?

A)If the post-box rule does apply,there is a binding contract.
B)If the post-box rule applies,there is no contract because the letter of revocation was mailed before the letter of acceptance.
C)If the post-box rule does not apply,there is a binding contract.
D)Jones's offer in the letter of January 10 lapsed before acceptance.
E)The post-box rule is irrelevant; there is no contract simply because Jones cannot use the fresh flowers.

Question 70

An ad in the newspaper providing for a reward for return of a lost dog is an example of an invitation to treat.

Question 71

Explain the nature of the post-box rule.

Question 72

Mary received a non-solicited selection of compact discs in the mail,with a letter informing her that she was now a member of the CD of the Month Club.It also said that if she didn't want these CDs,she could simply send them back; otherwise,she would be billed $10 for each CD at the end of the month.She put the CDs away,and did not respond.The club continued to send her CDs each month until she had received 100 of them over a period of 10 months.The club then sent her a letter demanding payment; otherwise,it would take legal action.Explain Mary's legal obligation in these circumstances.

Question 73

One of the requirements in a contract is that there must be an exchange of consideration between the parties.Explain what is meant by consideration.

Question 74

Generally,acceptance must be communicated to the offeror to be effective unless there has been a history of similar relations between the parties.

Question 75

Which of the following is an example of a unilateral contract?

A)Sam orders a meal in a restaurant.
B)Joe agrees to paint Sam's house for $500.
C)C returns a lost dog and claims the $50 reward.
D)Joe promises to give Harry his old boat when he gets his new one.
E)Joe pays $50 for groceries at a grocery store.

Question 76

When the post-box rule applies,the place of mailing of the acceptance may determine the place of the contract.

Question 77

Which of the following is true with regard to contract law?

A)An exchange of promises is not adequate consideration to form a contract.
B)A contract for a $50 000 boat must be evidenced in writing to be a valid contract.
C)To form a contract,there must be an offer that is accepted unconditionally.
D)The parties to a contract can always go to court and have the court declare a contract void if the consideration is not adequate (i.e.,fair).
E)A contract is void if it is required to be evidenced in writing under the Statute of Frauds,and is not.

Question 78

Sam placed an announcement in the newspaper as follows: "$200 reward for the return of two lost Siamese kittens." Joe read the ad,found the kittens,and returned them.This is an example of which of the following?

A)bilateral contract
B)invitation to treat
C)offer
D)gratuitous promise
E)unilateral contract

Question 79

The post-box rule makes it clear that,when people choose to communicate by mail,they take the risk of delay or loss,and the acceptance as a result will be binding only when or if received.

Question 80

Which of the following is correct with respect to the post-box rule?

A)Because of modern advances in communication,the post-box rule no longer applies.
B)The post-box rule applies to emails as well as to the mail.
C)The post-box rule applies only when response by mail is appropriate.
D)The post-box rule applies to communications via fax,postal service,and telegrams.
E)When acceptance is mailed,it is effective when and where it is received.