Question 1

In general, the mailbox rule is beneficial to:

Accepted Answer

The mailbox rule primarily benefits the offeree because it deems acceptance to occur at the moment the acceptance is properly mailed, even if the offeror is unaware of the acceptance. This provides certainty and protects the offeree from the risk of the offeror revoking the offer after the offeree has already sent their acceptance.

Question 2

What is the legal status of an improperly dispatched acceptance that was sent by a means of communication that was nonauthorized by the offeror?

Accepted Answer

If an acceptance is sent by a means of communication that was nonauthorized by the offeror, it is still effective when received. As long as the acceptance is received by the offeror within a reasonable time, it is considered a valid acceptance and creates a binding contract. The fact that it was improperly dispatched may be relevant to the enforceability of the contract but does not invalidate the acceptance itself.

Question 3

On Thursday, Trista Dylan receives a letter from Charlie Holmes offering to sell her a diamond ring and stating that: "if you choose to accept, you must do so prior to 2:00 p.m. tomorrow." Trista had a telegram of acceptance dispatched well before 2:00 p.m. on Friday but it is delivered to Charlie's home only at 2:15 p.m. Do Trista and Charlie have a binding contract?

Accepted Answer

As long as Trista dispatched the telegram before 2:00 p.m. on Friday (as stated in the offer), her acceptance is valid and creates a binding contract according to the mailbox rule. The fact that the telegram was delivered late is not relevant as long as it was properly dispatched on time. The offer did not stipulate a particular method of acceptance, only a time limit. Therefore, Trista's use of a telegram is acceptable.

Question 4

Which of the following would indicate a rejection under the mirror image rule?

Accepted Answer

The mirror image rule states that an offer must be accepted exactly as it is made, without any modifications or changes. If there are material changes made to the offer, it indicates a rejection rather than an acceptance. A grumbling acceptance or an inquiry regarding terms can still be considered an acceptance under the mirror image rule, as long as there are no material changes made to the offer. Present intent to accept also indicates acceptance, but it is not a choice listed in the question.

Question 5

What can an offeror do to minimize the risk posed by the mailbox rule?

Accepted Answer

Including a receipt stipulation in the contract ensures that the offeree must confirm receipt of the offer before acceptance can occur. This minimizes the risk of the offer being accepted through the mailbox rule without the offeror's knowledge.

Question 6

Debbie Jones and Bill Schneider exchanged standard order forms to formalize their contract for a batch of goods and realized that their standard forms do not agree on material terms. Under UCC section 2-207, when will there be a contract? Assume that Bill did not make its acceptance conditional on Debbie's assent to any additional or different terms.

Accepted Answer

Under UCC section 2-207, if there is a "battle of the forms" and the acceptance contains additional or different terms, there will only be a contract if the acceptance is a definite and seasonable expression of acceptance. In this scenario, Bill's acceptance form is the last offer made and if it is a definite and seasonable expression of acceptance, it will create a contract. The other choices do not apply to this scenario.

Question 7

Why does traditional contract law view any kind of an attempt by offerees to change terms as constituting a counteroffer?

Accepted Answer

Traditional contract law views any attempt by offerees to change terms as constituting a counteroffer because such an action implies a rejection of the offer by the offeree. It indicates that the offeree is not willing to accept the terms of the original offer and is instead making a new offer with different terms.

Question 8

Which of the following is true regarding the approach taken by the UCC toward the proper means of acceptance and the implications of using it or not using it?

Accepted Answer

The UCC does not change the traditional rule that, where the offer stipulates a certain means of acceptance, the acceptance must use that means or there is no contract.

Question 9

Ian Sanders offered to sell his car to Beth Jones for $5,000 with Beth's agreement. Subsequently, Beth demanded that he provide new seat covers for the car as she was paying a rather heavy price for the car. Beth's response represents a(n) _____.

Accepted Answer

Beth's demand for new seat covers is an additional term to the original offer, making it a counteroffer. It is not a rejection of the offer, as she still wants to purchase the car but with added conditions. Therefore, the correct answer is D - additional term.

Question 10

When the offeror, as the master of the offer, specifies the precise time, place, and manner in which acceptance must be communicated, it is termed as _____.

Accepted Answer

When the offeror specifies the precise time, place, and manner in which acceptance must be communicated, it is termed as a stipulation.

Question 11

What does the term 'grumbling acceptance' mean?

Accepted Answer

Grumbling acceptance refers to accepting an offer or proposal while complaining about the terms or conditions. The person may not be fully satisfied with the terms, but they still accept the offer.

Question 12

Able Co. entered into a contract with Baker Co. for the sale of goods. Both parties are merchants under the UCC and each party used its own form as an offer and acceptance. On the reverse of each form, there were minor terms that conflicted with each other. What is impact of these minor differences in terms in the forms on the contract?

Accepted Answer

When both parties are merchants and use their own forms as offer and acceptance, there is a contract even if there are minor differences in terms. The terms agreed upon will be included in the contract along with gap-fillers from the UCC. Therefore, option D is the best choice. Options A and B are incorrect because a discrepancy in the standard forms or lack of "meeting of minds" does not necessarily mean there is no contract. Option C is incorrect because third-party beneficiaries may only benefit from a contract if they are explicitly named in the contract or the contract creates a trust or assignment for their benefit, which is not mentioned in the question.

Question 13

Ian Kendler makes Brian Hyson an offer for a plot of land. In the offer, Kendler stipulates that the acceptance of the offer must be sent by registered mail but Hyson mails his acceptance through the regular postal service. Which of the following is true? Assume that the Restatement (Second) of Contracts does not apply.

Accepted Answer

If the offeror stipulates a particular manner of acceptance,the offeree must respond in that stipulated mode to form a valid acceptance.

Question 14

According to the Code, when there is an acceptance that contains terms that are different from the original terms of the contract, the contract will consist of _____ and the appropriate gap-filling presumptions of the Code.

Accepted Answer

The correct option is D because when the terms of acceptance are different from the original terms, the contract will consist of the terms on which the parties' writings agree and the appropriate gap-filling presumptions of the Code. This is in accordance with the mirror-image rule under contract law, which requires the terms in the acceptance to mirror the terms of the offer for there to be a valid contract. However, if there are additional or different terms in the acceptance, then it is considered a counteroffer, which can be accepted or rejected by the original offeror. If the offeror accepts the counteroffer, then the contract will be based on the terms that both parties agreed to.

Question 15

Milner Developers proposed an offer to Henry Wright, an independent contractor, to hire him for their next project. They offered him a certain rate and specified the contract details along with describing the stipulated mode of acceptance, but received no response. Wright responded to the offer after a delay of two months with a quote for a higher amount than that mentioned by Milner Developers. Do the two parties have a binding contract?

Accepted Answer

Wright's response, after a delay of two months, with a quote for a higher amount constitutes a counteroffer, which means that the original offer made by Milner Developers is no longer valid. Therefore, the two parties do not have a binding contract.

Question 16

Which of the following conditions can prevent additional terms from becoming a part of a contract formed between parties who are merchants?

Accepted Answer

If the parties in a contract are both merchants,the additional terms become part of the contract unless the offer expressly limits acceptance to its own terms,the new terms would materially alter the offer,or the offeror gives notice of objection to the new terms within a reasonable time after receiving the acceptance.

Question 17

In a contract for the sale of land, how close must the terms of the acceptance be to the terms of the offer, in order to form a contract?

Accepted Answer

The contract for the sale of land is covered under traditional contract laws;these stipulate that that an acceptance must be the mirror image of the offer.In other words,the acceptance must be almost identical to the offer.

Question 18

Which of the following describes a stipulation?

Accepted Answer

The offeror,as the master of the offer,has the power to specify the precise time,place,and manner in which acceptance must be communicated.This is called a stipulation.

Question 19

Rex Garner recently made an offer to Harry Barns for the sale of his shop using a registered letter. The offer says that Harry "may accept by registered letter" and this detail is an example of a _____.

Accepted Answer

The detail in the offer about how acceptance must be communicated (by registered letter) is a stipulation or condition of the contract.

Question 20

Under the mailbox rule, the acceptance of an offer is effective at the time the acceptance is dispatched unless:

Accepted Answer

The mailbox rule only applies when the acceptance is properly communicated in the authorized mode of communication. If the acceptance is not in the authorized mode of communication, the mailbox rule does not apply, and the acceptance is only effective when it is received by the offeror.

Quiz 11: The Agreement: Acceptance