Deck 10: Mutual Assent

Question 1

A contract is invalid if all of the terms are not clearly stated.

Answer 1

False

Question 2

An auctioneer is the offeror and a contract is formed when a bid is made.

Answer 2

False

Question 3

Silence can never be an acceptance.

Answer 3

False

Question 4

If Todd seemingly offers to sell to Ashton his wood gun cabinet but intended to and believes he is offering his wood china cabinet, and Ashton accepts the offer, reasonably believing it is for the gun cabinet, a contract is formed for the sale of the gun cabinet.

Question 5

An output contract is an agreement of a buyer to purchase a seller's entire output for a stated period.

Question 6

If an offer states that a reply must be received by a certain date, receipt is presumed in those situations when acceptance is mailed.

Question 7

Both the Code and the Restatement provide that an authorized means of accepting an offer is any reasonable means of communication.

Question 8

Pedro receives an unordered three-CD set in the mail accompanied by the statement, "This CD set can be purchased for the special price of $19.95.If the CDs are not returned within two weeks they will be deemed accepted and the payment is due within 30 days of receipt of the CDs." Pedro is under no obligation to either return the CDs or to pay for them; he may use them or give or throw them away.

Question 9

Ron offers to sell Pete his stamp collection.Pete gives Ron $10 to induce Pete into keeping 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 10

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

Question 11

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

Question 12

Contract law generally places more importance on the intent of the parties to form a contract than on the inclusion of certain terms in the contract.

Question 13

An acceptance is generally effective upon dispatch.

Question 14

If no time is stated, an offer will terminate automatically after a reasonable period of time.

Question 15

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

Question 16

A contractual agreement always involves either a promise exchanged for a promise or a promise exchanged for a completed act or forbearance to act.

Question 17

If Megan intends to offer and believes she is offering for sale to Alexis her RL1500 space heater and Alexis reasonably believes Megan is offering her RL1900 heater and accepts on that belief, a contract has not been formed because there was no agreement as to the subject matter.

Question 18

Martha puts an ad in her company's newsletter saying she would pay $5,000 for a first-issue Grace Kelly stamp to the first person who accepted her offer.Martha decides she would rather go on a European vacation and changes her mind about investing in the stamp.Martha posts a sign at the executive water fountain saying the offer is no longer valid.A foreman from a branch plant takes a flight to the Chicago main office to see Martha and accept her offer.Martha does not owe him any money to pay for a breach of contract.

Question 19

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 20

George offered to paint Catherine's barn for $3,000.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 21

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

Question 22

Dakota's question to Austin, "Will you buy my computer for $800?" is an offer to Austin.

Question 23

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

Question 24

An offer may be made to the general public.

Question 25

Ricardo posts a sign in the 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 26

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

Question 27

Under FTC regulations and state legislation, a seller may not advertise goods at one price and then raise the price once demand has been stimulated.

Question 28

An acceptance that contains terms different from or additional to those in the offer receives the same treatment under the common law and under the UCC.

Question 29

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

Question 30

An offer can only be communicated by words; conduct cannot constitute an offer.

Question 31

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

Question 32

A counteroffer operates as a rejection of the original offer.

Question 33

A defective acceptance does not create a contract, but does constitute a new offer.

Question 34

An offer must use particular wording to have legal effect.

Question 35

In the case of Lefkowitz v.Great Minneapolis Surplus Store, Inc., the court decided that the store's advertisement was not a valid offer to enter into a contract but was merely an invitation to make an offer.

Question 36

Hugh recently purchased a motorcycle for $3,000 but has had extensive problems starting the motor.In disgust at not being able to start the motor, 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 37

Unless an auction is advertised or announced to be without reserve, when a bid is made at an auction, it can be withdrawn if the auctioneer has not yet accepted the bid, because the auctioneer has the power of acceptance.

Question 38

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

Question 39

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 only of the eight-hours-a-day operating schedule.

Question 40

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

Question 41

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 42

In the Osprey L.L.C.v.Kelly-Moore Paint Co.,Inc.case, the Supreme Court of Oklahoma held that:

A) the lease was ambiguous.
B) the plain language of the lease required that it be renewed by delivering notice either personally or by mail, and Kelly-Moore had done neither.
C) a faxed delivery of the written notice to renew the commercial lease was sufficient to exercise the renewal option of the lease.
D) a lease is a specialized contract, and therefore the usual rules for the interpretation of contractual writings do not necessarily apply.

Question 43

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 44

Nadira mails an offer to Cade on March 15.Cade receives the offer on March 16.Nadira mails a revocation of the offer on March 17.Cade mails a letter of acceptance on March 18.Cade receives the revocation on March 19.Nadira receives the letter of acceptance on March 20.Was a contract formed?

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

Question 45

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 46

Elvis makes an offer to Fred, but before Fred can accept, the state supreme court decides a case that makes Elvis's offer illegal.The court's 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 47

Will makes an offer to Ike, but before Ike can accept, the state legislature passes a law that makes Will's offer illegal.The new statute:

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 48

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.In this case, Elmer:

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

Question 49

To be effective, an offer must:

A) be sufficiently definite and certain.
B) be communicated to the offeree.
C) manifest an intent to enter into a contract.
D) All of these.
E) None of these.

Question 50

Alexio read SmartHome's ad in the local newspaper advertising a home communications system for $489.Alexio rushed to the store to buy the system only to be told by the salesperson that the ad was a misprint and the price should have been $849.Alexio gave the salesperson $489 plus sales tax and demanded the system.

A) The ad is a firm offer by the merchant, and the communication system must be sold for $489.
B) Alexio can successfully sue SmartHome for the difference if he buys the system for $849.
C) The store must accept the price stated in the ad, but only if Alexio has a copy of the ad with him.
D) Alexio is merely making an offer to SmartHome  to buy the communication system for $489 plus sales tax.

Question 51

Action Play Equipment ordered 200 feet of chain, 400 clasps, and 50 swing seats from Brace Company for $1,600 to be delivered within three weeks of the order.Brace sent back an acceptance form which stated payment was due within 30 days of delivery or a finance charge of 2% per month would be added to the balance.What is the status of the interaction between Action and Brace?

A) There is a valid contract under the UCC, and the additional payment terms become part of the contract unless Action objects within a reasonable period of time.
B) There is a valid contract for the goods, but the payment terms will not become part of the contract.
C) There is no contract, because Brace has made a counteroffer by adding payment terms.
D) There is no contract, because the method of transportation has not been decided.

Question 52

If there is no time specified for the acceptance of an offer, when does the offer terminate?

A) After 48 hours from receipt of the offer.
B) After two weeks from dispatch of the offer.
C) After 30 days from receipt of the offer.
D) After a reasonable period of time, which depends on the circumstances.

Question 53

The definition of commercial reasonableness as used in contract law includes:

A) the business judgment of expert business managers.
B) that the practices customary in the type of transaction involved be used as a standard.
C) the requirements to develop creative and innovative solutions never before used in a particular industry.
D) None of these.

Question 54

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

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

Question 55

Robinson Wiring Co.submits a written offer for Turner Construction's use as part of its bid as a general contractor for an office complex.Robinson knows Turner is relying on Robinson's bid.Robinson:

A) can revoke its offer at any time until it is notified that Turner's bid has been accepted.
B) cannot, under the doctrine of promissory estoppel, revoke its bid even prior to acceptance.
C) cannot revoke its offer since it is a "firm offer."
D) can revoke its offer for a reasonable time under the doctrine of "commercial reasonableness."

Question 56

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.In this case:

A) Maxine has revoked her offer to Tom.
B) Maxine's offer is a firm offer and she must sell Tom a video camera for $200.
C) Maxine must get the camera back from Cindy if Tom accepts within two weeks.
D) an option contract was created, so Maxine is liable to Tom if she sells the camera to someone else within the two-week period.

Question 57

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.
C) Upon commencement of performance by the offeree.
D) Upon full performance by the offeree.

Question 58

It is a fundamental policy that if the parties do not provide definite enough terms in their contracts, the courts will complete the contract in the court's best judgment.

Question 59

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

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

Question 60

The UCC provides missing contract terms in which of the following instances?

A) The contract fails to specify the price.
B) The contract fails to specify the place of delivery.
C) Both failure to specify the price and failure to specify the place of deliver.
D) The UCC cannot provide missing contract terms; only the parties can provide terms.

Question 61

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

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

Question 62

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) Two of these are true.

Question 63

If Anna Laura, in return for the payment of $200 to her by Catherine, gives Catherine an option to buy Achraji, a prime Arabian mare, at any time within the next 14 days at a price of $50,000, Anna Laura's offer to Catherine is:

A) a revocable option contract.
B) an irrevocable output contract.
C) irrevocable for the 14 days covered by the option.
D) a requirements contract.

Question 64

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) Sherrod v. Kidd.
C) Lefkowitz v. Great Minneapolis Surplus Store, Inc .
D) Giannetti v. Cornillie.

Question 65

Jeb submits a bid to construct a student union building for the local community college.He realizes after submitting the final bid that he forgot to include the cost of the window casings for the entire building.He may:

A) revoke his bid at any time.
B) not revoke his bid due to the statutory irrevocability of the bid.
C) reject the offer of the college to build the student union when the college chooses his bid because it is the lowest.
D) refuse, based on the windfall theory, to put in the window casings even if they were part of the bid specifications put out by the college.

Question 66

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 67

Serafina's Boutique places an ad in the Sunday paper for finely tailored, top-of-the-line designer suits for $10.00, which is a misprint.Alice sees the ad in the paper and goes to the store to stock up on business suits for her new job.Serafina apologizes for the misprint.Alice has just finished a class in contract law and insists that the store sell her five suits for $50.Alice threatens to sue Serafina for breach of contract.

A) This is a valid contract based on commercial reasonableness.
B) The ad in the newspaper is an offer to sell, Alice accepted the offer, and there is an enforceable contract.
C) The ad in the newspaper is a solicitation seeking offers, but is not an offer to sell; therefore, Alice will not be able to successfully sue for breach of contract.
D) Serafina must sell Alice a suit for $10, but is only obligated to sell her one suit, not five.

Question 68

Carlissa hears about a reward being offered by the local sheriff's office 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) Carlissa cannot collect the money unless the offer was specifically made to her by the sheriff's office .
B) the offer by the sheriff's office was an offer made to the general public to enter into a unilateral contract, which offer Carlissa has accepted.
C) because Carlissa failed to notify the sheriff's office of her intention to supply the information before actually doing so, she has not accepted their offer.
D) Carlissa was just doing her duty as a citizen and has no right to the payment of any money.

Question 69

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.
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 70

Jack has been in the business of selling carpeting for 20 years.He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 square yards of carpet at $20 per square yard.Bob 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 square yards of Saxony "heather blue" carpeting at the rate of $20 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,
Bob
Which of the following is true?

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

Question 71

Which is not a revocable 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 after he has completed half the job and indicates he wishes to finish.
D) None of these are revocable offers.

Question 72

Marilyn read an ad in the school newspaper offering a $1,000 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 73

A __________ is the refusal to accept an offer.

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

Question 74

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 75

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

A) Arthur 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.
E) None of these would be merchants.

Question 76

Arnold has offered to take Bob into his accounting firm as a partner upon payment of $5,000 cash.In response, Bob 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."

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

Question 77

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

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

Question 78

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

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

Question 79

Brooks 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 Brooks $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 created a formal contract.
D) This created an option contract.

Question 80

A conditional acceptance:

A) generally accepts the original offer, but provides a way to later avoid contractual obligations.
B) is a common type of counteroffer.
C) operates as a rejection and not a new offer.
D) cannot exist because an acceptance is, by definition, an act that manifests the offeree's willingness to enter into a contract on the terms of the offer.