Question 1

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

Accepted Answer

The correct answer is D because the termination of an offer, when no specific time is set, depends on what is considered a reasonable period of time. This can vary based on the type of offer, the means of communication, the industry practices, and other relevant circumstances.

Question 2

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

Accepted Answer

The UCC specifies that a merchant's firm offer remains open for the time stated or, if no time is stated, for a reasonable time, but in no event may such period exceed three months.

Question 3

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

Accepted Answer

A requirements contract is an agreement where a seller agrees to supply all the goods that a buyer requires during a specified period, and the buyer agrees to purchase all such goods exclusively from the seller. The seller is obligated to supply, and the buyer is obligated to order and pay for, the goods in accordance with the terms of the contract. This type of contract provides the buyer with a reliable source of supply and the seller with a guaranteed market.

Question 4

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

Accepted Answer

The Uniform Commercial Code (UCC) is designed to fill in gaps in commercial contracts when certain terms, such as the price or the place of delivery, are not specified by the parties. This helps in facilitating commerce by providing default provisions that apply in the absence of explicit agreement by the parties involved.

Question 5

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.

Accepted Answer

Courts generally do not create or complete contracts for the parties; instead, they interpret and enforce the terms that the parties have expressly agreed upon. If a contract lacks definite terms, it may be deemed unenforceable due to vagueness or indefiniteness.

Question 6

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

Accepted Answer

The new statute that makes Joyce's offer illegal automatically terminates the offer, as the offer cannot legally be accepted or fulfilled once the law is in effect.

Question 7

Which of the following is not a requirement for an offer to be effective?

Accepted Answer

An offer does not need to be in writing with a signature to be effective. Offers can be made orally or even implied by conduct, depending on the context of the agreement. The key elements for an effective offer include communication to the offeree, intent to enter into a contract, and sufficient definiteness and certainty.

Question 8

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:

Accepted Answer

The state supreme court's decision that makes the offer illegal automatically terminates the offer, as an offer cannot legally be accepted if it involves an illegal act.

Question 9

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:

Accepted Answer

Elmer can revoke his offer at any time before Fred accepts it because there is no consideration given by Fred to keep the offer open. An offer in a contract can generally be revoked by the offeror unless there is consideration for keeping the offer open (such as in an option contract) or other specific legal conditions apply, none of which are indicated in the scenario provided.

Question 10

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

Accepted Answer

In a unilateral contract, acceptance occurs when the offeree completes the requested act or performance.

Question 11

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?

Accepted Answer

A contract was formed on March 18 when Cade mailed the letter of acceptance. According to the mailbox rule, an acceptance becomes effective when it is dispatched, not when it is received by the offeror. Since Cade mailed his acceptance on March 18, before receiving the revocation on March 19, the acceptance is valid and a contract was formed on March 18.

Question 12

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:

Accepted Answer

COffers generally terminate upon the death of the offeror or offeree before acceptance, making specific personal contracts non-assignable in this context. However, certain contract offers can be assignable, allowing another party to accept the contract on behalf of the deceased's estate or interests if the contract does not require specific personal performance.

Question 13

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.

Accepted Answer

Advertisements are generally considered invitations to negotiate rather than firm offers, so when Alexio offers the advertised price, he is making an offer to buy at that price, not accepting a firm offer from SmartHome.

Question 14

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:

Accepted Answer

Under the doctrine of promissory estoppel, if Robinson Wiring Co. knows that Turner Construction is relying on its bid to formulate a contract bid for a larger project, Robinson cannot revoke its offer. This is because Turner has reasonably relied on Robinson's promise, potentially incurring a detriment if the offer is revoked.

Question 15

Adrianne offered to sell her smartphone to Tom for $400 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Adrianne had sold the phone to Cindy. In this case:

Accepted Answer

Adrianne has revoked her offer to Tom by selling the phone to Cindy before Tom could accept the offer, indicating that the offer is no longer valid.

Question 16

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

Accepted Answer

Commercial reasonableness in contract law typically refers to the use of practices that are customary in the type of transaction involved, serving as a standard for what is considered reasonable.

Question 17

Watson knows Jackson is interested in buying his house, so he offers to sell the house to Jackson for $195,000. Jackson responds, "I will pay you $195,000 for the house if you first replace the roof." Jackson's response would best be described as:

Accepted Answer

Jackson's response is a counteroffer because he is proposing a new term (replacing the roof) to the original offer, which effectively rejects the original offer and proposes a new one.

Question 18

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

Accepted Answer

Advertisements in newspapers or circulars are generally considered invitations to buyers to make an offer to buy goods, rather than offers themselves. This is because they are usually not specific enough to constitute an offer and are intended to solicit offers from potential buyers.

Question 19

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?

Accepted Answer

Under the Uniform Commercial Code (UCC), which governs sales of goods, a contract is formed when there is an offer and acceptance, even if the acceptance includes additional or different terms. In this case, the acceptance form from Brace with the additional payment terms does not prevent a contract from being formed. Instead, these terms become part of the contract unless the offeror, Action Play Equipment, objects within a reasonable time.

Question 20

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?

Accepted Answer

The answer of Wes, who is an art collector, offered...

Quiz 10: Mutual Assent