Deck 10: Creating a Contract: Offers

Question 1

Habib makes an offer to sell 500 television sets to Aisha.Habib is the _____.

A) offeree
B) agent
C) offeror
D) distributor

Answer 1

C
Explanation: Habib is the offeror in the above case as Habib offers to sell 500 television sets to Aisha. Aisha is the offeree. A person who has made an offer (the offeror) has given the party to whom he or she has made the offer (the offeree) the power to create a binding contract by accepting.

Question 2

When an offeror does not specifically indicate what he is willing to do and what he wants the offeree to agree to do in return,his behavior will probably be classed as an:

A) agreement.
B) offer.
C) invitation to negotiate.
D) invitation to bid.

Answer 2

C
Explanation: When an offeror does not specifically indicate what he is willing to do and what he wants the offeree to agree to do in return, his behavior will probably be classed as an "invitation to negotiate" or an "invitation to offer." This will have no legal effect.

Question 3

The main thing that courts look for in deciding whether the parties entered into a contract is a "meeting of the minds" between the parties.

Answer 3

True

Question 4

In a bidding process,the owner of the project or a general contractor who wants to farm out a portion of a large job to a subcontractor is generally held to have made an invitation to offer.

Question 5

An option contract is created when the offeree gives the offeror something of value in exchange for a promise not to revoke the offer for a stated period of time.

Question 6

The timing of prior dealings is relevant when determining a reasonable time for acceptance,if the parties have dealt with each other on a regular basis.

Question 7

If an offeree accepts the offer but complains about the terms of the offer,a rejection is implied.

Question 8

When the parties to a contract do not expressly agree on all the terms of their contract,it prevents the creation of a contract.

Question 9

The general rule is that an offeror cannot revoke an offer at any time prior to acceptance if he has promised not to revoke for a stated period of time.

Question 10

To determine whether the offeror has created a present intent to contract,courts consider:

A) how the offer was made.
B) whether the offeror has communicated it to the offeree.
C) the intent of the parties subjectively.
D) the status of the person who has made the offer.

Question 11

If the subject matter of a proposed contract is destroyed without the knowledge of either party after the making of an offer but before its acceptance,the offer cannot be terminated.

Question 12

Which of the following statements is true of definiteness of offers?

A) The more specific a proposal, the less likely the court is to call it an offer.
B) The courts have traditionally said they are contract makers, not enforcers.
C) Both the Code and the Restatement, through doctrines such as good faith and commercial reasonableness, provide ways to fill in the gaps.
D) A sales contract fails due to "indefiniteness" if the court finds that the parties intended to make a contract and that their agreement is complete enough to allow the court to reach a fair settlement of their dispute.

Question 13

An offeree who makes an inquiry about the terms of the offer has made a counteroffer and has terminated the offer by rejecting it.

Question 14

The modern trend is for courts to tolerate more open and missing terms in offers.

Question 15

Which of the following must be present for an offer to have a legal effect?

A) Invitation to offer
B) Communication of the intention
C) Invitation to negotiate
D) Definiteness

Question 16

An offer by itself does not include terms that limit its life.

Question 17

The United Nations Convention on Contracts for the International Sale of Goods (CISG)is similar to the Uniform Commercial Code (UCC)in that it considers an offer sufficiently definite if it lacks price terms.

Question 18

Consumer protection laws regulate advertisements outside of contract law.

Question 19

In deciding a contract dispute,courts look to the subjective intent of the parties.

Question 20

Courts have traditionally said they are contract makers,not enforcers.

Question 21

When parties fail to expressly agree on the terms of a sales contract,

A) the contract is automatically void.
B) the contract will fail if the court finds that the parties are acting as though they have a contract and it is impossible to point to a particular moment in time when the contract was created.
C) the contract will not be enforceable under the Uniform Commercial Code (UCC).
D) the contract will not fail if the court finds that the parties intended to make a contract and that their agreement is complete enough to allow the court to reach a fair settlement of their dispute.

Question 22

Bob,a merchant,makes an offer to Linda,another merchant,to buy 1,000 of her widgets in a signed letter containing all necessary terms of the offer.The letter states that Bob will keep the offer open for three weeks from the day the offeree receives it.One week later,Bob writes another letter to Linda attempting to revoke his offer.Linda writes a letter to Bob accepting Bob's original offer before she receives his revocation.Which of the following statements is true of this situation?

A) Linda's acceptance is effective and a contract is created.
B) Bob's revocation is effective and no contract is created.
C) Promissory estoppel prevents the formation of a contract in this situation.
D) The offer cannot be revoked since it is an option offer.

Question 23

To avoid problems from the revocation of offers for unilateral contracts,many courts hold a contract to be bilateral:

A) only as a last possible resort.
B) whenever possible.
C) in a different view taken by the Restatement.
D) on a compulsory basis.

Question 24

Gavin tells Rod that he will pay him $400 to paint his house.Rod starts to paint,intending to accept.Halfway through his paint job,Gavin tells Rod that he wants to revoke the offer.Under this scenario:

A) Gavin is not allowed to revoke because the contract is unilateral.
B) Gavin is allowed to revoke but is liable to Rod for the reasonable value of benefit received.
C) Gavin may not revoke because the contract is bilateral.
D) Gavin is allowed to revoke if he finds Rod's efforts half-hearted or ineffective.

Question 25

Kamal places an ad in the local newspaper as follows: "$500 reward for the return of my gold ring." Mira finds the ring and returns it to Kamal,but he refuses to pay her the $500.Which of the following statements is true regarding this case?

A) As the ad was merely a solicitation of offers, there was no contract until Kamal accepted Mira's offer to find the ring.
B) Mira may not recover the money because she did not contact Kamal before she began her search.
C) As Mira did not pay Kamal to keep the offer open, he is free to revoke the offer and not pay her anything.
D) Mira accepted the ad as an offer for a unilateral contract by returning the ring and hence, Kamal is bound to pay her the $500.

Question 26

Which of the following statements about shrinkwrap contracts is true?

A) The label on shrinkwrap contracts states that by removing the shrinkwrap, the buyer accepts the terms of the software seller's licensing agreement.
B) Shrinkwrap contracts are enforceable even when the terms violate contract rules such as unconscionability.
C) The practice of using shrinkwrap contracts never raises ethical problems like those involved in the use of small print, complex, or "hidden" language.
D) Critics point out that all the consumers understand the shrinkwrap contracts before accepting the terms and conditions.

Question 27

Which of the following is true about auctions?

A) Acceptance occurs when an offeror makes the highest bid.
B) Bidders are treated as offerors, making offers the seller is free to accept or reject.
C) An item cannot be withdrawn from sale prior to acceptance.
D) The seller is required to accept the final offer when the auction is advertised as being "with reserve."

Question 28

An offeree who attempts to accept after an offer has terminated is himself making a(n)_____.

A) offer
B) revocation
C) counteroffer
D) grumbling acceptance

Question 29

Ads for the sale of goods at a specified price are considered by the courts as:

A) giving everyone who sees the ad the power to bind into a contract.
B) acceptance of an offer.
C) an unfair offer.
D) invitations to negotiate.

Question 30

Advertisements for rewards,such as for the return of lost property,information,or the capture of criminals,are generally held to be:

A) invitations but not offers.
B) offers for unilateral contracts.
C) offers for bilateral contracts.
D) firm offers.

Question 31

In an agreement between two parties,if the facts indicate that a term was left out because the parties were unable to reach an agreement about it,it would probably mean that the:

A) CISG must fill in the gaps only if the price terms are left in the agreement.
B) parties intended to contract and CISG must fill in any gaps left in the agreement.
C) UCC must fill in any gaps left in the agreement.
D) intent to contract is absent, and no contract was created.

Question 32

Beck tells his mom that he is thinking of selling his vintage coupe to his neighbor,Sam,for $100.Beck's mom calls Sam and tells him about her conversation with Beck.Sam then calls Beck and tells him that he accepts his offer.Under these circumstances,_____.

A) this is a contract
B) the offer has been conditionally tendered
C) the offer has not been communicated
D) the offer violates the UCC's rule against third-party interveners in quasi contracts

Question 33

A subcontractor's bid:

A) is considered an offer.
B) is never revocable.
C) can usually be withdrawn even if the general contractor has relied on it.
D) is considered to be a part of a shrinkwrap agreement.

Question 34

Which of the following basic requirements must be met for an offer to sell goods to be a firm offer?

A) It must contain assurances that it will be revocable.
B) The offeror must be a merchant.
C) It must have been made orally.
D) The outer limit on the period of irrevocability for firm offers must be 10 months.

Question 35

If an offer does not state a time for acceptance,it is valid:

A) for a reasonable time, which depends on the circumstances of the offer.
B) for 10 days from the day the offer is made.
C) for 20 days from the day the offer is received by the offeree.
D) until the offeree accepts it.

Question 36

According to the United Nations Convention on Contracts for the International Sale of Goods (CISG),an offer:

A) must be directed to a specific person.
B) must express the quality of the goods to be valid.
C) is not valid, if it impliedly provides means of determining the quantity of the goods.
D) is sufficiently definite even if it lacks price terms.

Question 37

Under the Uniform Commercial Code (UCC),a sales contract can be created:

A) if the contract is reduced to writing.
B) in any manner sufficient to show agreement.
C) when the offeror forms subjective intent to contract.
D) when the contract contains the price terms.

Question 38

Advertisements are regulated outside of contract law by the:

A) Uniform Commercial Code (UCC).
B) Restatement.
C) Federal Trade Commission.
D) United Nations Convention on Contracts for the International Sale of Goods (CISG).

Question 39

The doctrine of promissory estoppel does NOT require a(n):

A) promise.
B) significant reliance on a promise.
C) injustice as a result of reliance.
D) consideration.

Question 40

In an option contract,_____.

A) a separate contract for the limited purpose of holding the offer open is created
B) the offeree is bound to accept the offer
C) a joint contract is created for the limited purpose of keeping the offer open
D) the offeree has purchased the right to accept within the stated period

Question 41

Brian offers to sell Jerry his house,but a hurricane destroys the house before Jerry accepts the offer.What would be the possible outcome of this offer?

A) A written statement must be produced to the court of law to terminate the offer.
B) If the offer is not revoked within a week after the incident took place, the offer is considered to be open and Jerry can claim the recovery charges.
C) Jerry must be paid the recovery charges for losing the house as he had already been offered by Brian.
D) The offer is terminated when the house is destroyed as it happened without the knowledge or fault of either of the parties.

Question 42

Stan read an advertisement in the newspaper that said that the jackpot for picking the six winners in the dog race on the last night of the season was $825,000.Stan went that night and correctly picked the winners.However,it turned out that the newspaper had made a mistake.The jackpot was $25,000,not $825,000.Therefore,the track owners refused to pay the latter amount.If this ad is treated like offers of reward,can Stan collect the $825,000?

Question 43

Which of the following would terminate an offer without notice to the offeree?

A) Enactment of a statute making the contract illegal after acceptance
B) Physical inability of the offeree to perform
C) Promissory estoppel
D) Insanity of either party

Question 44

Which of the following statements about an offer is true?

A) Any definite offer made by a merchant is called a "firm offer."
B) An offer is effective upon dispatch.
C) A grumbling acceptance is a rejection and terminates the offer.
D) The death of an offeror will terminate the offer.

Question 45

What is an offer? What are the three conditions necessary for the creation of an offer?

Question 46

How do courts deal with the situation in which an offeror tries to revoke an offer for a unilateral contract after the offeree has begun acceptance,but he has not completely accepted the offer?

Question 47

A counteroffer:

A) impliedly rejects an offer.
B) does not affect the material terms of the contract.
C) is a mirror-image of the offer.
D) is an inquiry into the terms of the offer.

Question 48

Bogdan,a painter,offers to sell his painting to Mirka for $90.Mirka responds that she needs more time to think about Bogdan's offer.Then Bogdan dies,and the value of the painting escalates.Mirka calls Bogdan's widow,Gizela,and says "I accept Bogdan's offer." Which of the following statements is true of the case?

A) There is a binding contract entitling Mirka to the painting.
B) There is a binding contract entitling Mirka to the painting if she did not know Bogdan was dead when she called Gizela.
C) There is no binding contract entitling Mirka to the painting under any circumstances.
D) There is no binding contract entitling Mirka to the painting unless she actually pays Gizela the $90.

Question 49

Explain the special problems associated with the bidding process in construction works to the general contractor,if the subcontractor is allowed to revoke the offer.

Question 50

What are the factors that influence the reasonable length of an offer?