Anderson's Business Law and the Legal Environment 20th Edition by David Twomey,Marianne Jennings

Exercise 10

On May 2, Lace Corp., an appliance wholesaler, offered to sell appliances worth $3,000 to Parco, Inc., a household appliances retailer. The offer was signed by Lace's president and provided that it would not be withdrawn before June 1. It also included the shipping terms: "F.O.B.-Parco's warehouse." On May 29, Parco mailed an acceptance of Lace's offer. Lace received the acceptance June 2. Which of the following is correct if Lace sent Parco a telegram revoking its offer and Parco received the telegram on May 25?
a. A contract was formed on May 2
b. Lace's revocation effectively terminated its offer on May 25.
c. Lace's revocation was ineffective because the offer could not be revoked before June 1.
d. No contract was formed because Lace received Parco's acceptance after June 1.