Question 1

Chad has offered to take Miles into his accounting firm as a partner upon payment of $5,000 cash.In response,Miles says,"I'll give you $3,000 cash now and I will pay you the remainder in two months after I see whether things are working out as a partnership." In this case:

Accepted Answer

Miles has made a counteroffer by changing the terms of the original offer (payment structure), which means the original offer is rejected, and no contract is formed unless Chad accepts this new offer.

Question 2

Which of the following would NOT be a merchant under Article 2 of the UCC?

Accepted Answer

While A and B are clearly engaged in the business of selling goods, C is not a regular seller of speedboats and is not acting in the ordinary course of business. Therefore, C would not be considered a merchant under Article 2 of the UCC. D is not the best choice because A and B are both merchants under the UCC.

Question 3

Marilyn read an ad in the school newspaper offering a thousand dollar swimming scholarship to anyone who could swim 500 laps in the school pool.Marilyn called the advertiser and began swimming.She has reached lap number 460;she feels great and is sure she can make it all the way.The advertiser:

Accepted Answer

Once Marilyn has begun her attempt to swim the 500 laps, the advertiser must permit her the opportunity to finish or pay damages if he interferes. Marilyn has already accepted the offer by beginning her attempt, so the advertiser cannot revoke it. However, Marilyn has not yet completed the entire offer, so the advertiser is not required to pay her any portion of the scholarship yet.

Question 4

Under the common law,the ____ must be the mirror image of the ____.

Accepted Answer

Under common law, the acceptance must be the mirror image of the offer, meaning it must exactly match the terms of the offer without any modifications.

Question 5

Jack has been in the business of selling carpeting for 20 years.He calls Barb,who is opening another branch of her furniture stores,and offers to sell her 100 yards of carpet at $12 per square yard.Barb agrees and sends back the following letter confirming the deal: Dear Jack:
As we discussed on the phone January 3,we accept your offer of 100 yards of Saxony "heather blue" carpeting at the price of $12 per square yard.We also reserve the right to purchase any additional yardage we need to carpet our other showroom facilities at the same rate for one year from that date.
Very truly yours,
Barb
Which of the following is true?

Accepted Answer

CBarb's letter introduces a new term regarding the right to purchase additional yardage at the same rate for one year, which was not part of the original offer. This constitutes a counteroffer rather than an acceptance of the original terms. Therefore, there is no contract for the 100 yards or the additional yardage based on the original offer.

Question 6

Michelle's Boutique places an ad in the Sunday paper for beautiful,top-of-the-line designer suits for $3.00 each.Irene sees the ad in the paper and goes to the store to stock up on business suits for her new job.Michelle apologizes for the misprint.Irene has just finished a class in contract law and insists that the store sell her five suits for $15.00.Irene threatens to sue Michelle for breach of contract.In this case:

Accepted Answer

The ad in the newspaper is not a valid offer, but a solicitation seeking offers. Therefore, Irene cannot successfully sue for breach of contract. The store can apologize for the mistake and refuse to sell the suits at the advertised price.

Question 7

Which of the following would most probably be considered a valid offer?

Accepted Answer

Option D is the most valid offer as it specifically outlines the details of the offer, including the reward, what is lost, and where to return it to. Options A and C are not specific enough, and option B is not a serious offer.

Question 8

Assume an offeree mails a rejection to the offeror on November 1.This rejection arrives at the offeror's place of business on November 5.In the meantime,on November 4,the offeree sends the offeror an acceptance that arrives November 6.Which of the following statements correctly describes the situation?

Accepted Answer

The first communication received by the offeror determines the outcome. Since the rejection was received before the acceptance, it is the effective communication, negating the possibility of a contract.

Question 9

If an offer asks for acceptance by mail and the offeree faxes his acceptance:

Accepted Answer

The general rule is that if an offer specifies a certain means of acceptance (such as mail) then that is the only way that acceptance is valid. However, if the offeree sends acceptance through an unauthorized means (such as fax), but the acceptance is actually received within the time that the authorized means would have arrived, then there is a valid contract. Therefore, option (B) is the correct answer.

Question 10

In order to form a contract,the parties must:

Accepted Answer

For a contract to be formed, the parties must manifest their agreement objectively, meaning that their actions and words must convey an intention to enter into a legally binding agreement. Subjective agreement, or a mere intention to enter into a contract, is not enough to form a contract. A written document is not always necessary to form a contract, although it is often recommended to reduce disputes and ensure clarity. A contract can be formed through verbal, implied, or even electronic means.

Question 11

Which is an irrevocable offer?

Accepted Answer

All the options provided are examples of irrevocable offers. A) is irrevocable because it likely involves a formal bidding process with legal implications that prevent withdrawal. B) is irrevocable because it is contingent upon a future event (the formation of the corporation) which, once occurred, binds the offeror. C) becomes irrevocable when John starts performing the task, as it is a unilateral contract that cannot be revoked once performance has begun.

Question 12

Hannah,as a joke,offers to sell her violin to Mike.Her statement would have legal effect if:

Accepted Answer

The key factor in determining if there is a legally binding agreement is whether or not there was a meeting of the minds between the parties involved. In this situation, if Hannah's joke was so successful that Mike believed she was offering to sell her violin and he accepted, then there would be a meeting of the minds and a legally binding agreement could be formed.

Question 13

To be effective,notice of revocation of an offer:

Accepted Answer

The answer of To be effective,notice of revocation of an...

Question 14

Leonard offers to sell his diamond ring to Emily.If Diane overhears the offer and says,"I accept the offer":

Accepted Answer

The offer was made specifically to Emily, and Diane cannot accept it on her behalf without Emily's consent. Therefore, Diane's acceptance would not be valid.

Question 15

The way parties usually show mutual assent is by:

Accepted Answer

Mutual assent, or the meeting of the minds, is typically shown through an offer by words or conduct and acceptance by words or conduct. This can include a verbal or written offer, as well as actions that demonstrate an intent to enter into a contract, such as payment or delivery of goods.

Question 16

Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition?

Accepted Answer

All three individuals are engaged in the sale of goods and have a regular business practice of doing so, which meets the definition of a merchant under the UCC.

Question 17

James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege.Jennifer pays James $100.Which statement describes the payment of $100?

Accepted Answer

Jennifer's payment of $100 constitutes an option contract, where James has given Jennifer the option to purchase the land in one month for $8,000. Jennifer has paid for the privilege of having the option to purchase the land within that time frame.

Question 18

The UCC Battle of the Forms rule:

Accepted Answer

The UCC Battle of the Forms rule changes the mirror image rule and may yield different results depending on whether the parties are merchants. It may also result in formation of a contract different from the terms of the offer.

Question 19

The case in which the court held that a newspaper advertisement was an offer because it contained a promise of performance in definite terms in return for a requested act was:

Accepted Answer

Lefkowitz v. Great Minneapolis Surplus Store, Inc. established the principle that an advertisement could be construed as an offer if it was clear, definite, and left nothing open for negotiation. In this case, the court found that the defendant's advertisement for a fur coat was an offer that had been accepted by the plaintiff, who had complied with all of the terms of the offer.

Question 20

Shirley hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist.She supplies the requested information,and the suspect is then arrested and convicted.In this case:

Accepted Answer

The offer by the television station was a clear offer to the general public to enter into a unilateral contract, in which anyone could supply information leading to the arrest and conviction of the local rapist in exchange for the offered reward. By supplying the requested information and leading to the suspect's arrest and conviction, Shirley has accepted this offer and is entitled to the reward. The fact that she did not notify the station of her intention to supply the information beforehand does not affect her right to the reward.

Quiz 10: Mutual Assent