Question 1

A firm offer is an offer that states that it is to be irrevocable, or irrevocable for a stated period of time.

Accepted Answer

A firm offer is an offer that cannot be revoked, or can only be revoked within a specified period of time.

Question 2

An option is itself a contract to refrain from revoking an offer.

Accepted Answer

An option contract gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date. By purchasing an option, the holder pays a premium for the right to exercise the option, but is not obligated to do so. Similarly, by granting an option, the seller receives a premium in exchange for agreeing to refrain from revoking the offer. Therefore, an option itself is a contract to refrain from revoking an offer.

Question 3

A revocation of an offer is ordinarily effective after the offer has been accepted.

Accepted Answer

Once an offer has been accepted, a contract has been formed between the parties. Therefore, a revocation of the offer would not be effective after acceptance.

Question 4

An offer is effective only if it is communicated by the offeror in person.

Accepted Answer

An offer may be communicated in person, in writing, or even through actions or conduct. As long as the offer is communicated clearly and the offeree understands the terms, the offer is deemed effective.

Question 5

If an offer is indefinite or vague or if an essential provision is lacking, no contract arises from an attempt to accept it.

Accepted Answer

This statement is a correct description of the requirement for a legally binding contract. If the terms of an offer are unclear or incomplete, there is no mutual assent between the parties, which is necessary to form a contract.

Question 6

Frank is drunk and while laughing hysterically says to Hal "I'll sell you my truck for a buck". Frank has made a valid offer.

Accepted Answer

For an offer to be valid, it must be made seriously and with the intention to be bound by it. Frank's statement, made while drunk and laughing hysterically, does not demonstrate a serious intention to enter into a contract.

Question 7

A "best efforts" clause is always deemed too indefinite to be enforceable.

Accepted Answer

A "best efforts" clause is not always deemed too indefinite to be enforceable. The enforceability of such a clause depends on the specific language used and the context in which it is used.

Question 8

A requirements contract is too vague to be a legally-enforceable agreement.

Accepted Answer

A requirements contract is a type of contract in which a buyer agrees to purchase all of its needed goods or services from a single supplier. It is a legally enforceable agreement as long as the terms are clear and specific, such as the quantity, price, and delivery timeframe of the goods or services. If the terms are too vague, the contract may be unenforceable. However, this does not mean that all requirements contracts are too vague to be legally enforceable.

Question 9

An otherwise vague contract may be clarified by references in the contract to other documents or agreements.

Accepted Answer

Yes, references to other documents or agreements can provide additional details and context to clarify the terms of the contract.

Question 10

Generally, advertisements, catalog prices, and circulars are offers that can be accepted.

Accepted Answer

Advertisements, catalog prices, and circulars are generally considered invitations to offer or negotiate, not offers themselves, meaning they invite customers to make an offer to buy, which the seller can then accept or reject.

Question 11

Contract terms may not be implied from the parties' conduct.

Accepted Answer

Contract terms may be implied from the parties' conduct in certain circumstances, such as industry customs, course of dealings, or previous conduct between the parties.

Question 12

To make an offer, the offeror must appear to intend to create a binding obligation.

Accepted Answer

To have a valid offer, the offeror must show an intention to create a binding obligation. This means that the offeror is willing to be legally obligated if the other party accepts their offer. Without this intention, the offer will not be considered valid.

Question 13

Advertisements that call for an act may be deemed to be a unilateral contract.

Accepted Answer

Advertisements that call for an act, such as offering a reward for finding a lost pet, can be considered a unilateral contract as the act of finding the pet is the acceptance of the offer.

Question 14

Offers, acceptances of offers, and revocations of offers are all effective when mailed in a properly-addressed envelope bearing the proper amount of postage.

Accepted Answer

Offers and revocations of offers are generally not effective until received by the offeree, while acceptances are often effective upon dispatch if the mailbox rule applies, which varies by jurisdiction and specific circumstances.

Question 15

When it is claimed that a contract is too indefinite to be enforced, a court will do its best to find the intent of the parties and thereby reach the conclusion that the contract is not too indefinite.

Accepted Answer

A court will make an effort to understand the intent of the parties involved in a contract that is claimed to be too indefinite to enforce. The court will try to find a reasonable interpretation of the contract and enforce it accordingly, rather than simply dismissing it.

Question 16

An output contract is too vague to be a legally-enforceable agreement.

Accepted Answer

An output contract, where a seller agrees to sell all of its production to a single buyer, can be legally enforceable if it contains clear terms regarding quantities, prices, and delivery schedules, making it sufficiently definite for enforcement.

Question 17

An option contract is a binding promise to keep an offer open for a stated period of time or until a specified date.

Accepted Answer

An option contract is indeed a binding promise to keep an offer open for a stated period of time or until a specified date.

Question 18

An offer gives the offeror the power to bind the offeree by contract.

Accepted Answer

The answer of An offer gives the offeror the power...

Question 19

Contractual intention is determined by objective standards.

Accepted Answer

Contractual intention is determined by what a reasonable person would believe based on the words and actions of the parties involved in the contract. This objective standard is used to determine whether the parties intended to create a legally binding agreement.

Question 20

If an offer is indefinite or vague, no contract arises from an attempt to accept it.

Accepted Answer

An indefinite or vague offer lacks the specificity required for a contract to be formed through an attempt to accept it.

Quiz 12: Formation of Contracts: Offer and Acceptance