Deck 10: Mutual Assent

Question 1

If an offer states that a reply must be received by a certain date, the contract is formed at the time the offeree sends or dispatches the acceptance.

Answer 1

False

Question 2

The common law "mirror image" rule applies to an offer and the acceptance of that offer in a contract for the sale of goods.

Answer 2

False

Question 3

An offer is effective as soon as it is dispatched.

Answer 3

False

Question 4

Ron offers to sell Pete his stamp collection. Pete gives Ron $10 to induce him to keep his offer open for a week. If Ron decides on day four of the week that he really does not want to sell to Pete, he can revoke his offer without fear of a breach of contract lawsuit being filed against him.

Question 5

A contract exists when an offer has been accepted.

Question 6

If Bill tells Sara that he will give her two days to decide if she wants to buy his car, he cannot sell it to anyone else during that time.

Question 7

Silence can never be an acceptance.

Question 8

Under the UCC, an acceptance must always be identical to an offer for a valid contract to be formed.

Question 9

George offered to paint Catherine's barn for $4,000. Catherine said she would accept the offer if George would paint the woodshed, too. At this point, they have made a valid and enforceable contract.

Question 10

On Tuesday morning John sends a letter to Arlene rejecting her offer, but later the same day John changes his mind and sends a letter of acceptance to Arlene. The letter of acceptance will be effective only if it is received by Arlene before she receives the rejection.

Question 11

In general, an acceptance is effective upon dispatch.

Question 12

A contract cannot be formed unless it is possible to determine the exact moment at which it was made.

Question 13

An advertisement is usually an offer to sell.

Question 14

If no time limit is stated, an offer will not terminate until both parties agree.

Question 15

An offer must be communicated to the offeree in order for the offer to be effective.

Question 16

If the offer specifies it MUST be accepted by telegram, a letter will not be a valid means of acceptance.

Question 17

An auctioneer is the offeror and each bid is a counteroffer until a final bid is accepted.

Question 18

If a promisor intends her promise as a joke, whether or not the promisee as a reasonable person should understand it to be such, the promise is not an offer.

Question 19

A valid offer may be in the form of an act for a promise, which is an offer to enter into an inverted unilateral contract.

Question 20

Both the Code and the Restatement provide that, unless the offer or circumstances indicate otherwise, an authorized means of accepting an offer is any reasonable means of communication.

Question 21

In order for an offer to end by lapse of time, the offeror must specify the time within which the offer is to be accepted.

Question 22

Hugh recently purchased a motorcycle for $4,000 but has had extensive problems starting the motor. In disgust at not being able to start the motorcycle, Hugh shouts to his friends, "Any of you want to buy this thing for $20?" A contract will be formed if a friend gives Hugh a twenty-dollar bill.

Question 23

An offer can be communicated by words or by conduct.

Question 24

Ricardo posts a sign in his neighborhood offering $50 for the return of his Saint Bernard. Alicia, who knows nothing of the reward, finds the dog and returns it to Ricardo. Alicia is entitled to the reward.

Question 25

The UCC and the Restatement make no provision for supplying terms omitted by the parties' contract.

Question 26

The person to whom an offer is made is an offeree.

Question 27

An offer must be in one particular form to have legal effect.

Question 28

If an offeror makes an offer to an offeree by letter and it is lost in the mail, no legally sufficient offer has been made.

Question 29

Death or insanity of either the offeror or the offeree ordinarily terminates the offer.

Question 30

In an output contract, the seller can operate a factory on a 24-hour-a-day schedule and insist that the buyer take all of the output when that buyer had operated only eight hours a day at the time the contract was made and the buyer had knowledge of the eight-hour-a-day operating schedule.

Question 31

An implied contract is not an enforceable contract.

Question 32

There is no necessity to distinguish language which constitutes an offer from that which merely solicits or invites offers.

Question 33

If Thomas seemingly offers to sell to Raquel his Toro lawnmower but he intends to offer and believes he is offering her his Murray mower, and she accepts the offer, reasonably believing it was for the Toro, no contract has been formed because there is no mutual assent.

Question 34

The Code's firm offer rule applies only to offers in writing that are made by a merchant offeror.

Question 35

On June 1, a civic club made an offer of $500 to a beer distributor to have ten kegs delivered to the city park for a July 4th fund-raising event. On June 30, the city passed a new law prohibiting consumption of alcohol in the city park. The civic club's offer is terminated on June 30.

Question 36

An agreement of a seller to supply a buyer with all of the buyer's requirements for certain goods is known as:

A) an output contract.
B) a requirements contract.
C) a firm offer.
D) promissory estoppel.

Question 37

An offer is an indefinite proposal made by one person to another.

Question 38

The law applies a subjective standard of intent in determining whether there was the requisite intent to enter into a contract.

Question 39

When a bid is made at an auction, it can be revoked if the auctioneer has not yet accepted the bid because the auctioneer has the power of acceptance.

Question 40

An auctioneer is free to withdraw the goods from sale if the sale is advertised or announced in explicit terms to be without reserve.

Question 41

Gail sent a letter of acceptance to an offer that has expired. Gail has made:

A) a contract.
B) a rejection.
C) a revocation.
D) an offer.

Question 42

Albert read Gem City's ad in the local newspaper advertising a one-quarter carat diamond ring for $89. Albert rushed to the store to buy the ring, only to be told by the salesperson that the ad was a misprint and the price should have been $289. Albert gave the salesperson $89 plus sales tax and demanded the ring. In this case:

A) the ad is a firm offer by the merchant, and the ring must be sold for $89.
B) the ad is a contract and the store must abide by terms stated in the contract.
C) the store must accept the price stated in the ad, but only if Albert has a copy of the ad with him.
D) Albert is merely making an offer to Gem City to buy the ring for $89 plus sales tax.

Question 43

Gary mails an offer to Brian on June 15. Brian receives the offer on June 16. Gary mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18 and Gary receives the acceptance on June 20. Brian receives the revocation on June 19. Was a contract formed?

A) Yes, on June 16
B) Yes, on June 18
C) Yes, on June 20
D) No, the offer was revoked before acceptance

Question 44

Elvis makes an offer to Miguel, but before Miguel can accept, the state supreme court decides a case that makes the offer illegal. The court decision:

A) automatically terminates the offer.
B) has no effect on the offer.
C) acts as a condition on the offer.
D) acts as a rejection of the offer by the offeree.

Question 45

If no time is specified for the acceptance of an offer, the offer terminates after:

A) 24 hours.
B) 48 hours.
C) two weeks.
D) a reasonable period of time.

Question 46

The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and died. Mr. Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house. She may:

A) not accept since the offer is terminated.
B) not accept because she does not have the capacity.
C) accept since the contract offer is assignable.
D) accept since the offer cannot be revoked without notice.

Question 47

Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling. Elmer:

A) has made a firm offer to Fred which cannot be revoked.
B) can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open.
C) must keep the offer open, because this is an option contract.
D) is prohibited from revoking his offer to Fred under the doctrine of promissory estoppel.

Question 48

Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy. Maxine:

A) has revoked her offer to Tom.
B) must sell Tom a video camera for $200 because she made a firm offer to him.
C) must get the camera back from Cindy if Tom accepts within two weeks.
D) Both (b) and (c) are appropriate alternatives in this case.

Question 49

Destruction of the subject matter has what effect on the offer?

A) The offer is terminated.
B) The offer is delayed until additional subject matter can be located.
C) This creates an impossibility of fact that does not terminate the offer.
D) The offer is merely delayed under the "Hardship Rule."

Question 50

An ad in a newspaper or a circular describing goods and stating prices would generally be considered a(n):

A) firm offer if made by a merchant.
B) offer if made by a merchant, but not a firm offer.
C) offer irrespective of who made the offer.
D) invitation to buyers to make an offer to buy goods.

Question 51

A is an offeree's refusal to accept an offer.

A) revocation.
B) counteroffer
C) rejection
D) statutory irrevocability

Question 52

When does acceptance of an offer to enter into a unilateral contract generally occur?

A) Upon notice of intent to accept by the offeree.
B) Upon full performance by the offeror with the intention of accepting.
C) Upon commencement of performance by the offeree.
D) Upon full performance by the offeree with the intention of accepting.

Question 53

Which of the following is correct with regard to counteroffers?

A) A counteroffer operates as a rejection of the original offer.
B) A conditional acceptance is a common type of counteroffer.
C) The receipt of a counteroffer terminates the original offer.
D) All of these are correct.

Question 54

Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde balked at the price, sending Wes a letter of rejection. That day it discovered that the print was not as highly valued as originally thought. Le Monde immediately telephoned Wes to accept his offer. Is there a contract?

A) Yes, since the acceptance was received before the rejection
B) No, because the rejection was effective upon dispatch
C) No, because the rejection terminated the offer
D) Yes, because the acceptance is always effective upon dispatch

Question 55

Lynn offers to sell his house to Dennis for $95,000. Dennis responds, "I will pay you $95,000 if you will paint the second floor." This response could best be described as:

A) an acceptance.
B) a counteroffer.
C) a rejection.
D) an invitation.

Question 56

The UCC provides that a merchant is bound to keep a written offer open for a stated period but no longer than:

A) ten days.
B) two months.
C) three months.
D) a reasonable time.

Question 57

Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided that Alice includes her word processing software. What is the status of their discussions?

A) There is a valid contract for the computer, the monitor, the printer, and the software.
B) There is no contract, because Bradley has made a counteroffer.
C) There is no contract, because the time for delivery has not been decided.
D) There is no contract, because the offer has been revoked by the offeror.

Question 58

An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n):

A) option.
B) firm offer.
C) requirements contract.
D) output contract.

Question 59

In general, which of the following will not terminate an offer?

A) The death of the offeree
B) The death of the offeror
C) An inquiry by the offeree as to size or materials
D) An acceptance that adds a material term

Question 60

Jesse makes an offer to Ike, and Ike accepts; then the state legislature passes a law that makes performance of the contract illegal. What is the effect of the new statute on the contract?

A) The contract is severed; any portions that are legal must still be performed and any portions that have been made illegal must not be performed.
B) The statute has no effect on the contract.
C) The statute acts as a condition on the contract.
D) The statute discharges the obligations of both parties under the contract.

Question 61

Marilyn read an ad in the school newspaper offering a thousand dollar swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and began swimming. She has reached lap number 460; she feels great and is sure she can make it all the way. The advertiser:

A) may revoke the offer since there has not yet been an acceptance.
B) may not revoke the offer since Marilyn has already accepted it.
C) must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps.
D) must pay Marilyn $920, because she has performed 92% of the offer.

Question 62

Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation?

A) There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one.
B) There was a contract since the acceptance was mailed prior to the time the rejection was received.
C) There was no contract because the rejection was mailed first.
D) There was no contract because the acceptance was mailed more than three days subsequent to the rejection.

Question 63

Which is an irrevocable offer?

A) A bid to construct a bridge for the city
B) An offer to buy stock in the ABC Corporation once it is formed
C) A unilateral offer to pay John $30 to mow your lawn at the point that he has completed half the job and indicates he wishes to finish
D) All of these.

Question 64

Hannah, as a joke, offers to sell her violin to Mike. Her statement would have legal effect if:

A) the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer and he accepts.
B) Hannah's intent, determined subjectively, is to enter a contract.
C) Hannah's intent, determined objectively, is not to enter a contract.
D) Mike did not, but should have realized that Hannah was not serious.

Question 65

If an offer asks for acceptance by mail and the offeree faxes his acceptance:

A) there is no contract, and the offer is revoked.
B) there is a contract if the acceptance is actually received within the time the authorized means would have arrived.
C) the acceptance is merely a counteroffer.
D) there is a contract, but only if the offeree calls the offeror and gets permission to fax the acceptance.

Question 66

Which of the following would NOT be a merchant under Article 2 of the UCC?

A) The owner of a hardware store which sells paint
B) A car mechanic who fixes used cars and sells them in his spare time
C) A person who inherits three speedboats and wants to sell them to buy a car
D) None of these are merchants.

Question 67

Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00 each. Irene sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Irene has just finished a class in contract law and insists that the store sell her five suits for $15.00. Irene threatens to sue Michelle for breach of contract. In this case:

A) Irene will win if she sues because this is a valid contract.
B) the ad in the newspaper is an offer to sell.
C) the ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Irene will not be able to successfully sue for breach of contract.
D) None of these.

Question 68

The UCC Battle of the Forms rule:

A) changes the mirror image rule.
B) may yield different results depending on whether the parties are merchants.
C) may result in formation of a contract different from the terms of the offer.
D) All of these.

Question 69

The case in which the court held that a newspaper advertisement was an offer because it contained a promise of performance in definite terms in return for a requested act was:

A) Catamount Slate Products, Inc. v. Sheldon.
B) Newman v. Schiff.
C) Lefkowitz v. Great Minneapolis Surplus Store, Inc.
D) Osprey L.L.C. v. Kelly-Moore Paint Co., Inc.

Question 70

Chad has offered to take Miles into his accounting firm as a partner upon payment of $5,000 cash. In response, Miles says, "I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership." In this case:

A) Miles has made a counteroffer; hence there is no contract.
B) Miles has rejected the terms of the original offer, but there is still a contract.
C) Chad is a merchant making a firm offer under Article 2 of the UCC. Hence there is a contract.
D) any indefinite provisions in the contract between Chad and Miles will be supplied by Article 2 of the UCC.

Question 71

Jack has been in the business of selling carpeting for 20 years. He calls Barb, who is opening another branch of her furniture stores, and offers to sell her 100 yards of carpet at $12 per square yard. Barb agrees and sends back the following letter confirming the deal: Dear Jack:
As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony "heather blue" carpeting at the price of $12 per square yard. We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date.
Very truly yours, Barb
Which of the following is true?

A) There is a contract for only 100 yards of carpeting.
B) There is a contract for 100 yards plus the additional yardage.
C) There is no contract since Barb made a counteroffer.
D) There is no contract because the additional term is too uncertain to become a contract term.

Question 72

In order to form a contract, the parties must:

A) manifest their agreement subjectively.
B) manifest their agreement objectively.
C) indicate solely through written word their intent.
D) create a formal document called a contract.

Question 73

The way parties usually show mutual assent is by:

A) an offer by words or conduct and an acceptance by words or conduct.
B) a proposal in words and an acceptance in words.
C) an act exchanged for an act.
D) an offer and a counteroffer.

Question 74

Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition?

A) Amy is an authorized IBM computer dealer.
B) Brian employs two salesmen to sell his homemade furniture.
C) Clarence has a store in which he sells used lawn mowers.
D) All of these would be merchants.

Question 75

James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100?

A) An implied in fact contract has been formed.
B) A unilateral contract has been formed.
C) This is a formal contract.
D) This is an option contract.

Question 76

Under the common law, the must be the mirror image of the .

A) contract, consideration
B) contract, offer
C) offer, acceptance
D) acceptance, offer

Question 77

Leonard offers to sell his diamond ring to Emily. If Diane overhears the offer and says, "I accept the offer":

A) Diane cannot accept the offer, because it wasn't made to her.
B) this is a valid acceptance.
C) the offer has not been communicated to the offeree.
D) this is an invitation seeking offers and not an offer.

Question 78

To be effective, notice of revocation of an offer:

A) must be communicated directly to the offeree before the offeree has accepted.
B) may be communicated indirectly to the offeree through a third person.
C) must be dispatched before the offeree accepts; when notice actually reaches the offeree is not important.
D) is not addressed in the Restatement.

Question 79

Shirley hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information, and the suspect is then arrested and convicted. In this case:

A) Shirley cannot collect the money unless the offer was specifically made to her by the station.
B) the offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Shirley has accepted.
C) because Shirley failed to notify the station of her intention to supply the information before actually doing so, she has not accepted their offer.
D) Shirley was just doing her duty as a citizen and has no right to the payment of any money.

Question 80

Which of the following would most probably be considered a valid offer?

A) "Would you like to buy this?"
B) "I'd give $50 for a cold glass of water."
C) "Special sale on DVRs today - $200 each."
D) "$100 reward for return of lost white-gold, men's wedding band inscribed with initials 'TEA' to Tony Adams, 350 Main Street, Peoria."