Question 1

John says to Kris, "I would like to sell you my sports memorabilia collec?tion." This is not an offer because it
A) does not describe the subject matter specifically.
B) does not include a price term.
C) only expresses an opinion.
D) only invites Kris to negotiate.

Accepted Answer

The answer of John says to Kris, "I would like...

Question 2

An officer of International Sales Corporation makes overtures to a repre?sentative of Global Distribution, Inc., regarding a business deal. Under the objective theory of contracts, the officer's words and conduct are held to mean whatever
A) the officer subjectively intended them to mean.
B) a reasonable person in the officer's position would think they meant.
C) a reasonable person in the representative's position would think they meant.
D) the representative subjectively thought they meant.

Accepted Answer

Under the objective theory of contracts, the meaning of the officer's words and conduct is determined by what a reasonable person in the representative's position would think they meant.

Question 3

Elin decides to try to sell her collection of celebrity memorabilia in an auction "with reserve." If Elin changes her mind, she can withdraw her collection
A) only before the auctioneer announces that the items are sold.
B) only before the auctioneer delivers the items to the buyers.
C) under no circumstances.
D) within thirty days after the auction.

Accepted Answer

With a reserve auction, the seller (Elin) sets a minimum price, called the reserve price, for each item. If the bidding does not meet or exceed the reserve price, Elin has the option to withdraw the collection before the auctioneer announces that the items are sold. Once the auctioneer announces that the items have been sold, the sale is final, and Elin cannot withdraw the collection. Therefore, option A is the best choice.

Question 4

Local Delivery Service, Inc., offers to deliver computers to Micro Store's customers for a certain price. Local's intent to extend a serious offer to Micro is determined by reference to Local's
A) assumptions.
B) beliefs.
C) intentions.
D) words and conduct.

Accepted Answer

Local's intent to extend a serious offer to Micro can be determined by their words and conduct, such as a written offer or a verbal agreement, rather than assumptions or beliefs.

Question 5

Yvon asks Zack, "Do you want to buy one of my fishing rods?" This is
A) a valid offer.
B) not a valid offer because the terms are not definite.
C) not a valid offer because Yvon did not state an intent.
D) not a valid offer because Zack did not respond.

Accepted Answer

The answer of Yvon asks Zack, "Do you want to...

Question 6

May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick's Pre-owned Autos, hands May $10. This is
A) a valid acceptance because May is seriously frustrated.
B) a valid acceptance because Nick is a car dealer.
C) not a valid acceptance because May does not seriously intend to sell.
D) not a valid acceptance because Nick is a car dealer.

Accepted Answer

May's statement about selling the car for $10 was most likely made out of frustration and not a serious offer to sell the car at that price. Therefore, it cannot be considered a valid acceptance. Nick's profession as a car dealer is irrelevant in this scenario.

Question 7

Brick Products, Inc., files a suit against City Trucking Service for breach of contract, based on what Brick claims was City's offer. For a court to de?termine if a contract has been breached, under the common law, the offer must include terms that are
A) exactly precise.
B) reasonably definite.
C) unequivocally approximate.
D) vague or uncertain.

Accepted Answer

Under the common law, an offer must include reasonably definite terms for a contract to be formed. A vague or uncertain offer cannot form the basis of a contract. While the terms do not have to be exactly precise, they should be specific enough for both parties to understand the requirements of the agreement.

Question 8

Eve tells Frank that she would like to buy his Great Goodies store. Frank declines, but later decides to sell and sends to Eve, and others, a flyer describing the de?tails. Eve responds with a letter of "acceptance." Eve and Frank have
A) a contract.
B) no contract, because Frank sent the letter to more than one party.
C) no contract, because Frank was only inviting bids.
D) no contract, because the letter was an invitation to negotiate.

Accepted Answer

The answer of Eve tells Frank that she would like...

Question 9

Jill tells Ken, who has no knowledge of literary comedy, that she will tutor him in the subject for $50. As an offer, this is
A) effective.
B) not effective, because comedy is not a serious subject.
C) not effective, because Jill's tutoring will be subjective.
D) not effective, because Ken has no knowledge of the subject.

Accepted Answer

The offer of tutoring for $50 is effective, regardless of the subject matter. The fact that Ken has no previous knowledge of literary comedy does not impact the effectiveness of the offer.

Question 10

Royal Properties, Inc., mails a flyer to hundreds of firms, advertising a building for sale. Standard Manufacturing Company responds by saying, "We accept your offer." Between Royal and Standard, there is
A) a contract for the sale of the building.
B) a contract to consider the offer before any others.
C) a contract to negotiate a sale of the building.
D) no contract.

Accepted Answer

The flyer from Royal Properties, Inc. was an invitation to make an offer and not a contractual offer. Standard Manufacturing Company's response of "We accept your offer" was not a valid acceptance as there was no offer made by Royal Properties, Inc. A valid contract requires a clear offer and a clear acceptance of that offer. Therefore, as there was no valid offer and acceptance in this scenario, there is no contract between Royal Properties, Inc. and Standard Manufacturing Company.

Question 11

Geof owns two cars. He offers to sell the Honda for $20,000 to Ilsa, who says, "I'll pay no more than $15,000." Geof offers to sell the Jeep for $20,000 to Kiki, but before Kiki responds, Geof says, "Forget it. I changed my mind." Geof's offer was terminated by
A) Geof and Ilsa.
B) Geof only.
C) Ilsa only.
D) neither Geof nor Ilsa.

Accepted Answer

Geof's offer to Ilsa was terminated by Ilsa when she counter-offered $15,000, which is a rejection of the original offer. Geof's offer to Kiki was terminated by Geof himself when he withdrew the offer before Kiki could respond.

Question 12

Craig decides to sell his Double-D Ranch in an auction "without reserve." If Craig changes his mind at the auction, he can withdraw his property
A) only before the auctioneer announces that the ranch is sold.
B) only before the auctioneer delivers the deed to the buyer.
C) under no circumstances.
D) within thirty days after the auction.

Accepted Answer

"Without reserve" means that the property will be sold to the highest bidder regardless of the final price. Therefore, Craig cannot withdraw his property once the auction starts, under no circumstances.

Question 13

Consumer Sales, Inc. (CSI), sends its catalogue to Dean and includes a "person?alized" letter inviting him to buy any item in the catalogue at the advertised price. This is
A) an offer because of the "person?alized" letter.
B) an offer because there is no room for price negotiation.
C) an offer only if Dean previously bought items from CSI.
D) not an offer.

Accepted Answer

The catalogue and personalized letter are merely invitations to make an offer, not an offer in and of itself. Dean can choose whether or not to make an offer to buy an item at the advertised price, but CSI is not obligated to sell the item to Dean until he has made an offer and it has been accepted. Therefore, there is no offer being made.

Question 14

Bob offers to sell Carol his computer but conditions the sale on Carol ac?cepting the offer by May 1. Bob may revoke the offer
A) before Carol accepts the offer.
B) before May 1, whether or not Carol has accepted the offer.
C) only after Carol accepts the offer.
D) only after May 1.

Accepted Answer

Bob may revoke the offer before Carol accepts it, as an offer is not legally binding until it has been accepted.

Question 15

Beth goes to Dr. Carl for surgery. Carl says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carl is
A) liable.
B) not liable, because surgery is not a proper sub?ject for a contract.
C) not liable, because the statement was an opinion.
D) not liable, but Beth is excused from paying Carl.

Accepted Answer

Dr. Carl's statement about healing time is likely considered an opinion or estimate rather than a guaranteed outcome, which means it does not constitute a breach of contract.

Question 16

Quick Transport, Inc., offers to sell a truckload of palettes to Rapid Delivery Company. Before accepting the offer, Rapid learns that the palettes have been sold to Speedy Trucking Corporation. Quick is
A) liable to Rapid for breach of contract.
B) liable to Speedy for breach of contract.
C) not liable, because the sale revoked the offer to Rapid.
D) not liable, if Quick offers substitute goods to Rapid.

Accepted Answer

Once Quick sold the palettes to Speedy, the offer to Rapid was revoked and Quick is not liable to Rapid for breach of contract.

Question 17

Alan, a representative of Beta Services, Inc., makes an offer to Carol, the owner of Delta Products, Inc. The offer is effective even if
A) Alan does not communicate it to Carol.
B) Alan secretly does not intend to be bound by the offer.
C) Carol is not capable of accepting the offer.
D) the terms of the offer are not reasonably definite.

Accepted Answer

An offer is effective even if the offeror secretly does not intend to be bound by it, as long as the offer is communicated and appears genuine to the offeree.

Question 18

Dona and Eden sign a lease that includes a clause permitting Dona to ex?tend the lease at an amount of rent to be agreed on at the time of the ex?ten?sion. The clause is
A) enforceable, because it is part of a lease.
B) enforceable, if the parties intend the clause to be binding.
C) not enforceable, because it does not include a price term.
D) not enforceable, because it is not in the right form.

Accepted Answer

A clause that permits a tenant to extend a lease at an amount of rent to be agreed on at the time of the extension is enforceable if the parties intend the clause to be binding. As long the parties agree to the extension and any related terms, the clause is considered valid.

Question 19

Elmo advertises a reward for the return of his lost dog. Floyd, who does not know of the reward, finds and returns the dog. Floyd cannot recover the re?ward because he
A) did not confer a benefit on Elmo by returning the dog.
B) did not know of the reward when he found and returned the dog.
C) does not need the money.
D) returned the dog.

Accepted Answer

Floyd did not know of the reward when he found and returned the dog, so he did not return the dog with the expectation of receiving a reward. Therefore, he cannot recover the reward.

Question 20

Nate tells Opal, "I might sell the skis that I bought last fall since I haven't used them and the skiing season is almost over." This is
A) an acceptance of an offer.
B) an invitation to accept an offer.
C) an offer.
D) a statement of future intent.

Accepted Answer

Nate is not making an offer or accepting one. He is expressing a future intention to sell the skis.

Quiz 11: Agreement

John says to Kris, "I would like to sell you my sports memorabilia collec?tion." This is not an offer because it

An officer of International Sales Corporation makes overtures to a repre?sentative of Global Distribution, Inc., regarding a business deal. Under the objective theory of contracts, the officer's words and conduct are held to mean whatever

Elin decides to try to sell her collection of celebrity memorabilia in an auction "with reserve." If Elin changes her mind, she can withdraw her collection

Local Delivery Service, Inc., offers to deliver computers to Micro Store's customers for a certain price. Local's intent to extend a serious offer to Micro is determined by reference to Local's

Yvon asks Zack, "Do you want to buy one of my fishing rods?" This is

May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick's Pre-owned Autos, hands May $10. This is

Brick Products, Inc., files a suit against City Trucking Service for breach of contract, based on what Brick claims was City's offer. For a court to de?termine if a contract has been breached, under the common law, the offer must include terms that are

Eve tells Frank that she would like to buy his Great Goodies store. Frank declines, but later decides to sell and sends to Eve, and others, a flyer describing the de?tails. Eve responds with a letter of "acceptance." Eve and Frank have

Jill tells Ken, who has no knowledge of literary comedy, that she will tutor him in the subject for $50. As an offer, this is

Royal Properties, Inc., mails a flyer to hundreds of firms, advertising a building for sale. Standard Manufacturing Company responds by saying, "We accept your offer." Between Royal and Standard, there is

Geof owns two cars. He offers to sell the Honda for $20,000 to Ilsa, who says, "I'll pay no more than $15,000." Geof offers to sell the Jeep for $20,000 to Kiki, but before Kiki responds, Geof says, "Forget it. I changed my mind." Geof's offer was terminated by

Craig decides to sell his Double-D Ranch in an auction "without reserve." If Craig changes his mind at the auction, he can withdraw his property

Consumer Sales, Inc. (CSI) , sends its catalogue to Dean and includes a "person?alized" letter inviting him to buy any item in the catalogue at the advertised price. This is

Bob offers to sell Carol his computer but conditions the sale on Carol ac?cepting the offer by May 1. Bob may revoke the offer

Beth goes to Dr. Carl for surgery. Carl says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carl is

Quick Transport, Inc., offers to sell a truckload of palettes to Rapid Delivery Company. Before accepting the offer, Rapid learns that the palettes have been sold to Speedy Trucking Corporation. Quick is

Alan, a representative of Beta Services, Inc., makes an offer to Carol, the owner of Delta Products, Inc. The offer is effective even if

Dona and Eden sign a lease that includes a clause permitting Dona to ex?tend the lease at an amount of rent to be agreed on at the time of the ex?ten?sion. The clause is

Elmo advertises a reward for the return of his lost dog. Floyd, who does not know of the reward, finds and returns the dog. Floyd cannot recover the re?ward because he

Nate tells Opal, "I might sell the skis that I bought last fall since I haven't used them and the skiing season is almost over." This is