Deck 5: Formation of a Contract: Offer and Acceptance

Question 1

Joe find a dog wandering in his yard and he let it into the house. A day later he sees an advert on a tree stating that the owner of the dog will pay $100 to anyone who finds and returns the dog to the local SPCA office. Joe takes the dog to the local SPCS office. Which of the following is true?

A) The kind of advert that is placed on the tree cannot give rise to a contract.
B) Joe will be entitled to the reward because his performance of the obligation, in response to the offer, is all that is needed in a unilateral contract.
C) The advert on the tree is an invitation to do business and cannot give rise to a contract.
D) When Joe takes the dog to the SPCA, he makes the offer and if the SPCA accepts the offer, they are obliged to pay him.
E) Joe did not communicate his acceptance of the offer to Mary and so no contract arose.

Answer 1

B

Question 2

Jack is speaking to Michael and Michael a happens to mention that he will be painting is home soon. Jack, who is in some financial difficulty decides to paint Michael's home in the hope that Michael will pay for the service. One weekend, when Michael is away, Jack paints the whole house. He believes that he is entitled to approximately $1,500. When Michael returns, Jack approaches him and asks for $1,500. Which of the following is true?

A) Jack's conduct is an invitation to do business that has not been accepted by Michael and so Michael is not obliged to pay him.
B) Jack, by painting the home, makes an offer that Michael is free to accept or reject.
C) When Michael mentions the need to paint his home to Jack, he indirectly makes an offer that Jack accepts by painting the home.
D) Michael has benefited from the painted home and so he is obliged to pay for it.
E) Michael is not obliged to pay for the work done because he was never made any offer.

Answer 2

E

Question 3

An offer may be revoked before it is accepted. To be valid, a revocation must

A) be subject to a condition.
B) be exclusive.
C) be communicated to the offeree before acceptance.
D) be loud and clear.
E) be promised.

Answer 3

C

Question 4

Mary goes into a store in which she sees a "sale" sign. While she is looking round, she notices that a sign which says, 50% off has been placed against a pair of knee high boots. She takes the pair of boots to the cashier. The cashier refuses to sell the boot at the 50% discount. Which of the following is true?

A) The cashier is in breach of contract.
B) The store is in breach of contract.
C) The conduct of the store amounts to false advertizing and Mary will be entitled to the 50% discount.
D) Mary is entitled to a 50% discount because that boots were advertized as being sold at a discount of 50%.
E) Mary is not entitled to a 50% discount because the sign was not an offer.

Question 5

When an offeree receives an offer and then varies some of its terms, the offeree

A) has revoked the offer and modified his acceptance.
B) has modified his acceptance of the offer.
C) has accepted the counteroffer.
D) has rejected the offer.
E) has accepted the offer.

Question 6

Revocation takes effect:

A) when sent
B) when the offeror becomes bankrupt
C) when received
D) when an offeror contracts with someone other than the offeree
E) none of the above

Question 7

Jack tells Mike, "I'd like to buy your boat for $100,000". Mike, in response, says, "that's too cheap. I'll sell you my boat for $150,000." Mike's statement is a _ _ and a .

A) refusal; rejection
B) rejection; new offer
C) refusal; new offer
D) rejection; counter- offer
E) rejection; valid offer

Question 8

When an offer is not accepted, it will

A) end.
B) terminate.
C) lapse.
D) be void.
E) no longer be an offer.

Question 9

An acceptance of an offer must be

A) positive.
B) by conduct only.
C) made slowly.
D) in writing only.
E) loud and clear.

Question 10

All contracts generally begin with a/an

A) moral obligation.
B) statement.
C) acceptance.
D) question.
E) promise.

Question 11

Joe sees a dog wandering around his yard. He lets the dog in. Later he learns that the dog belongs to Mary, a woman who lives a kilometre away. Joe returns the dog to her the next day. A few days later as Joe is riding his bike, he sees an old advert in which Mary offers to pay $100 to any person who will find and return her dog. Joe realizes that he should have claimed the reward at the time that he returned the dog to Mary and he decides to go to Mary's place. Which of the following is true?

A) Joe will not be entitled to the reward because Mary made no offer.
B) Mary's advert is an invitation to do business and cannot give rise to a contract.
C) Joe will not be entitled to the reward because he did not see the offer of the reward until he had returned the dog and so he did not act in response to the offer of Mary.
D) Joe will be entitled to the reward because he found the dog and returned it.
E) Joe will be entitled to the reward because Mary made an offer and his act of finding and returning the dog is an acceptance.

Question 12

An offer is

A) a gesture made by one party to another to make a donation.
B) a gift.
C) a tentative promise made by one party, subject to a condition or containing a request to the other party.
D) a donation.
E) an agreement to give something to another party.

Question 13

An offer is made by an _ _ to an _.

A) offeror; invitee
B) inviter; invitee
C) offeror; offeree
D) initiator; offeree
E) initiator; receiver

Question 14

Michael is doing his groceries when he sees a price tag that indicates that a large bag of potatoes is priced at $1:00. He goes to the cashier and when the bag is scanned he is told it is priced as $3:99. Michael

A) can sue the shop for false advertizing.
B) can do nothing because the store revoked the offer it made to sell the bag of potatoes for $1:00.
C) will have to pay the scanned price, because the price tag was only an invitation to treat and not an offer.
D) can demand that the bag of potatoes be sold to him for $1:00.
E) can sue the store for breach of contract because he accepted the offer of the store and so a contract arose.

Question 15

Which of the following is true? An invitation to do business

A) is a kind of offer.
B) is an offer.
C) is a commitment to enter into a contract upon acceptance.
D) is not an offer.
E) is a legally binding promise.

Question 16

When communication between parties is by fax, the place where a contract is formed is:

A) where the offeree resides
B) where the offeror resides
C) where the offeree receives the offer
D) where the subject matter is located
E) where the offeror receives the acceptance

Question 17

Where is a contract said to be formed?

A) at the place where the parties do business
B) at the place where the acceptance is dropped into a mail box
C) at the place when the acceptance becomes effective
D) at the place where the offer is made
E) at the place where the offer is revoked

Question 18

Jill tells Jack that she will pay $1,000 for his pail of water. He accepts this kind of agreement is

A) a collateral contract.
B) a multilateral contract.
C) a bilateral contract.
D) a unilateral contract.
E) a standing offer.

Question 19

Which of the following is true about offers?

A) Where the parties are separated by distance, an offeree may accept only in the way specified by the offeror.
B) An invitation is an offer.
C) An offer cannot lapse.
D) An offer is not rejected when the offeree makes a counter- offer.
E) An offer cannot be revoked once it is made.

Question 20

A standing offer is

A) one that can be revoked even after acceptance.
B) an offer that is made and withdrawn before it is accepted.
C) one that is said to stand because it is fixed and cannot be changed.
D) one that may be accepted from time to time as needed.
E) one that cannot be revoked after acceptance without the consent of the offeree.

Question 21

Jack sends a letter to Mary in response to Mary's offer to sell. Jack accepts the offer without qualification. Mary's position is that of

A) instigator.
B) an offeree.
C) a guarantor.
D) an offeror.
E) a counter offer position.

Question 22

An acceptance must always be communicated to the offeror for a valid contract to arise.

Question 23

Goods displayed on shelves in a store constitute an offer.

Question 24

An invitation to do business is a comittement to enter into a contract upon acceptance.

Question 25

When parties are at a distance from each other, an offeree may accept an offer

A) when the offeror tells offeree to do so.
B) only by e- mail.
C) only in the way proposed by the offeror.
D) at any time.
E) by mailing its notification of acceptance.

Question 26

Mary places an notice in a local variety store. The notice is as follows: "I shall pay $1,000 for the return of my dog, Mundo." Jim sees the notice. Jim finds the dog and returns it to her. Which of the following is true?

A) The notice is an invitation to treat and could not give rise to a contract.
B) Mary makes a counteroffer.
C) Mary is obliged to pay Jim because by finding the dog, he accepted the contract and no notification was needed.
D) Mary can refuse to pay Jim because Jim did not communicate his acceptance of the offer to Mary, and an acceptance must be communicated to the offeree.
E) When Jim finds the dog, he makes the offer and it is up to Mary to determine whether she wishes to accept the offer. Mary is thus entitled to reject the offer.

Question 27

An offer will lapse only if the offeree has had a reasonable time to accept.

Question 28

Margaret finds a stray cat and takes it in. The following day she is speaking to some friends and learns that Kelly, a woman who lives some distance away, has lost a cat. She goes around to the home of Kelly, leaves the cat in the yard and leaves a note for Kelly. The next day she gets a voice mail message from Kelly thanking her. A few days later Margaret sees a notice in which Kelly offers to pay $500 to anyone who returns her cat. Margaret who needs some cash returns to Kelly's home and demands the $500 reward. Which of the following is true?

A) Kelly's notice is an invitation to treat.
B) Margaret did no know of the offer before she returned the cat. So she could not have been accepting the offer when she returned the cat. No contract arose. There is thus no obligation on Kelly to pay the $500.
C) By returning the cat, Margaret performed the contract and so has to be paid. Margaret's performance gives rise to a unilateral contract.
D) Because Margaret did not demand the $500 when she returned the cat, she cannot go back and request it. The offer has lapsed.
E) Kelly and Margaret have a bilateral contract.

Question 29

An offer comes to an end when it lapses.

Question 30

An invitation to do business is not an offer.

Question 31

An advert can never be an offer.

Question 32

Silence can be a sufficient method of acceptance .

A) when the offeree forgot to communicate its acceptance
B) when the contract is a unilateral contract
C) when the contract is a bilateral contract
D) when the offeror leaves the jurisdiction after making the offer
E) if the parties to a contract have habitually used method to communicate assent

Question 33

What is a negative option?

Question 34

What is an offer?

Question 35

A standing offer is an offer that is made by a travelling salesperson.

Question 36

Explain how the rule concerning withdrawal of an offer by post, differs from that concerning the time of acceptance by post.

Question 37

We study business contract law

A) in order to understand legislation that pertains to business.
B) in order to understand and bargain for contractual obligations.
C) in order to know when a binding contract is entered into.
D) in order to resolve commercial disputes.
E) in order to know consequences of breaking one's obligation.

Question 38

All promises give rise to contracts.

Question 39

An offer must be communicated to the offeree.

Question 40

An offer cannot be terminated by

A) a rejection of the offer.
B) revocation of the offer.
C) sale to another party.
D) lapse.
E) a counteroffer.

Question 41

Not all offers must be communicated to the offeror for a valid contract to arise. Explain.

Question 42

What is a counteroffer? What effect does a counteroffer have on an offer?

Question 43

Why should you not make an agreement to sell your car to a purchaser "for a fair price"?

Question 44

What is the legal effect of a counteroffer?

Question 45

Explain how a bilateral contract differs from a unilateral contract.

Question 46

Explain the difference between an invitation to do business and an offer.

Question 47

All contracts begin with a promise, but not all promises become contracts. Explain.

Question 48

What is a unilateral contract?