Question 1

The owner of a new building wanted four maple trees,6 metres tall,planted on the north side of the building.Lloyd Landscaper submitted his offer of four 6-metre maples planted for $800.The owner said he would pay $600 for that.Lloyd said for $600 he would supply four smaller 5-metre trees.The owner said,"$600 for 5-metre trees plus a Christmas tree for my kids." Lloyd was disgusted and said,"Forget it.I don't need this job." As he was leaving the owner said,"All right,I'll accept your offer of $600 for the 5-metre maples planted." Lloyd kept on walking.Which of the following is true?
A) There is no contract because Lloyd's last offer was revoked.
B) There is no contract because Lloyd's last offer had been rejected by a counter-offer.
C) There is no contract because Lloyd's last offer had lapsed after a reasonable time.
D) There is a contract because at one point in the conversation Lloyd was willing to sell and the owner was willing to buy four trees.
E) There is no contract because there is a presumption in law in these circumstances that the parties did not intend to create legal relationship.

Accepted Answer

There is no contract because the owner's counter-offer of $600 for 5-metre trees plus a Christmas tree rejected Lloyd's last offer, thereby terminating it.

Question 2

Mary bought a new Macintosh computer and advertised her old computer system for $1500.Mr.Jones offered to pay $1000.Mary said no,she wanted $1500.Mr.Jones offered $1250.Mary rejected that and said she wanted $1500 but then said to him,"I withdraw my offer,I've decided to give it to school and apply for the tax benefit." Mr.Jones said,"All right,I'll accept your offer of $1500." Which of the following is true?
A) There is a contract because at some point in time Mary was willing to sell and Mr. Jones was willing to buy the computer system for $1500.
B) There is no contract because the last offer had lapsed.
C) There is no contract because Mary revoked the offer before Mr. Jones attempted to accept it.
D) There is a contract, because once a seller makes an offer she cannot change her mind; she is bound to receive an acceptance.
E) There is a contract and Mr. Jones has to pay a reasonable price for Mary's old computer.

Accepted Answer

Mary revoked her offer before Mr. Jones attempted to accept it. Revocation of an offer terminates it, and a contract cannot be formed if an offer has lapsed or been revoked. Therefore, there is no contract between Mary and Mr. Jones.

Question 3

Which of the following would best satisfy the requirements for a good legal offer?
A) "I'll pay you at least $300 for your horse, Blackie, and even more if the horse is lucky."
B) "I'll drive you to Seattle on Saturday."
C) "The purchaser will pay $1000 for one of the seller's laser printers, the exact model to be determined at a later date."
D) "I'll give you $1 for your new green bike."
E) On a flyer placed on your windshield):"We have the best offer in town! A mint 1956 Chevrolet for $20 000."

Accepted Answer

D

Question 4

Sarah wanted an antique lamp for the bedroom.While in a second-hand shop,she saw a lamp that she really wanted marked $100.She offered the owner $75 for it.He said "I'll take $95." She answered "$80!" He said,"Lady,you're pushing me a bit,aren't you? I'll take $90,that's it." She said "OK I'll pay $90 if you throw in this old 'Vote-for-Trudeau' button." He said,"Forget it,lady,my shop is closed," and asked her to leave.She said,"OK,I accept your offer of $95." He made no response.If she sues for breach of contract,which of the following is true?
A) There is no contract because his offer to sell for $95 lapsed after a reasonable time.
B) There is a contract because at one time he offered to sell the lamp for $95 and she accepted it.
C) There is a contract because he wanted to sell the lamp for $95 and she was willing to pay that much.
D) There is no contract because his offer to sell the lamp for $95 was rejected by counter-offer, and her offer to buy it for $95 wasn't accepted.
E) There is no contract because his offers to sell the lamp for $95 and $90 were revoked and he didn't accept her offers.

Accepted Answer

There is no contract because her counter-offer of $80 rejected his $95 offer, and her later acceptance of $95 was not accepted by him.

Question 5

Which of the following is an offer as opposed to an "invitation to treat"?
A) An ad in a real-estate paper: "Best offer in Vancouver! 3 bedroom home in Kitsilano for only $350 000!"
B) A sweater displayed in the window of a shop with the price tag attached and showing.
C) A notice in the Toronto Star: "I will pay $100 to whoever finds and returns my lost female calico cat which answers to the name Marx."
D) The display of goods on the shelves of Safeway.
E) A notice in the catalogue from the gift shop of the Edmonton Aquarium: "15% off the price of all jewellery until January."

Accepted Answer

An offer is a clear, definite, and explicit proposal to contract, which is intended to create legal obligations upon acceptance. Option C is an offer because it is a unilateral offer to the public, promising a reward for a specific action.

Question 6

An ad in the morning newspaper read "Absolutely the best offer anywhere in Calgary.We'll give you an IBM-compatible PC with a Roland PR-1011 printer for only $4000!!! Pick it up today." This is an example of which of the following?
A) offer
B) invitation to treat
C) gratuitous promise
D) bilateral contract
E) unilateral contract

Accepted Answer

This is an invitation to treat, as the ad is simply inviting people to come to the store and make an offer for the computer and printer. It is not a unilateral or bilateral contract yet, as there has been no acceptance of an offer made by the customer.

Question 7

Jed,who lived on Cape Breton Island,needed money for a trip to France.He decided to sell his electric guitar.On Monday,October 29,he called the owner of a music store in Halifax and offered to sell his Fender Stratocaster guitar for $400,the offer to be open until Friday noon,November 2.Jed told the store owner to send a letter of acceptance since he (Jed)would be away for a few days.The store owner examined his inventory and mailed a letter of acceptance on Thursday,November 1.When Jed returned home on Saturday,November 3,the letter had not yet arrived,so that afternoon he sold the guitar to a music teacher in his town.The store owner in Halifax sued for breach of contract.Which of the following is true?
A) Sending a letter by mail was not a reasonable method of acceptance.
B) The offer lapsed before the store owner accepted.
C) The offer was revoked before the store owner accepted.
D) The letter of acceptance was effective when it was received, and by then Jed had sold it, so there was no contract.
E) The acceptance was effective before the offer lapsed, so there was a contract between Jed and the store owner.

Accepted Answer

The acceptance was effective when the letter was mailed on November 1, before the offer lapsed on November 2, creating a contract between Jed and the store owner.

Question 8

Which of the following is an ingredient necessary to form a contract?
A) exemption clauses
B) assignment
C) capacity
D) privity
E) fairness

Accepted Answer

Capacity is necessary to form a contract, as all parties must have the legal ability to enter into an agreement. Exemption clauses and fairness may be considered factors in the enforceability of a contract, but they are not necessary for formation. Assignment and privity are related to the transferability of rights under a contract, but they are also not necessary for initial formation.

Question 9

Indicate the correct statement about consideration.
A) In a bilateral contract, the exchange of promises does not provide consideration for both parties.
B) The common law holds that consideration must be adequate to insure that contracts are fair bargains.
C) Consideration is "the price for which the promise (or the act) of the other is bought."
D) An altered course of action-e.g., forbearance-is not good consideration.
E) In a unilateral contract, the performance of the promisee provides no consideration to the promisor.

Accepted Answer

This statement comes from the Restatement (Second) of Contracts, which defines consideration as "a performance or return promise that is bargained for and given in exchange for the original promise or performance." Choice A is incorrect because in a bilateral contract, the exchange of promises provides consideration for both parties. Choice B is incorrect because the common law does not require that consideration be "adequate," only that it be present. Choice D is incorrect because forbearance can be good consideration if it involves giving up a legal right or changing one's legal position. Choice E is incorrect because in a unilateral contract, the performance of the promisee provides consideration to the promisor.

Question 10

Roberts has the chance to buy three adjacent city lots zoned "duplex." The most profitable return would be the building of four townhouses across the three lots,but that would necessitate getting permission from the city,and that procedure takes time.If Roberts buys a 60-day option from the seller of the properties for $400,which of the following is true?
A) The offer for the properties will expire before the end of the designated 60-day period, if another person offers a higher price.
B) If Roberts does not exercise the option during the option period, she can later force the seller to sell that property to her at that price.
C) By buying the option, Roberts has bought a period of time during which she must accept the land offer.
D) If Roberts does not exercise the option, she will get her $400 back because she didn't get what she was bargaining for.
E) The seller is bound by contract neither to sell the property to any other party nor to revoke the offer within the option period.

Accepted Answer

Buying the option gives Roberts the right, but not the obligation, to buy the properties at a specified price within a specified time period. The seller is bound by contract not to sell the properties to anyone else or revoke the offer within the option period. However, if Roberts chooses not to exercise the option, she forfeits the $400 option fee, and the seller can then sell the properties to someone else. Therefore, option E is the most accurate statement.

Question 11

In contract cases,the court generally
A) does not look to see if the bargain is fair.
B) attempts to punish the party in breach of the contract by imposing a sentence.
C) will rewrite an agreement for the parties if their existing agreement did not include all the essential terms.
D) will enforce all promises.
E) will require the recipient of a service to pay a reasonable price where it is determined that the agreed-upon price was too low.

Accepted Answer

The answer of In contract cases,the court generally
A) does not...

Question 12

The postbox rule applies when which of the following means of communication is used?
A) telephone
B) fax
C) electronic mail
D) mail
E) messenger

Accepted Answer

The postbox rule is a common law contract rule that deems acceptance of a contract as effective when it is posted in a mailbox. This rule only applies when communicating through mail, not through telephone, fax, electronic mail, or messenger.

Question 13

Which of the following would best satisfy the requirements for a good legal offer?
A) "I'll pay you at least $300 for your horse, Blackie, and even more if the horse is lucky."
B) "I'll drive you to Seattle on Saturday."
C) "The purchaser will pay $1000 for one of the seller's laser printers, the exact model to be determined at a later date."
D) "I'll give you $1 for your new green bike."
E) On a flyer placed on your windshield: "We have the best offer in town! A mint 1956 Chevrolet for $20 000."

Accepted Answer

The answer of Which of the following would best satisfy...

Question 14

Which of the following is an example of a unilateral contract?
A) Joe agrees to paint Sam's house for $500.
B) Joe pays $50 for groceries at a grocery store.
C) Carrie returns a lost dog and claims the $50 reward.
D) Joe promises to give Harry his old boat when he gets his new one.
E) Sam orders a meal in a restaurant.

Accepted Answer

A unilateral contract is a promise in exchange for an act or performance. In this case, Carrie performs the act of returning a lost dog and claims the reward, making it an example of a unilateral contract. In options A and D, there is a promise made, but there is no indication that anyone has actually performed an act to fulfill the contract. Option B is an example of a completed transaction, and option E is a typical purchase with no promise or act involved.

Question 15

When Mr.Adams tells the local Boys' and Girls' Club that he will give them $5000 if they promise to use the funds for their summer camping program,this is an example of which of the following?
A) gratuitous promise
B) when accepted by the club, a bilateral contract
C) when accepted by the club, a unilateral contract
D) promissory estoppel
E) inadequate consideration

Accepted Answer

The answer of When Mr.Adams tells the local Boys' and...

Question 16

Which one of the following is enforceable?
A) Mr. Ho promised to give his needy friend Mr. Jahn $100.
B) Ms. Jones promised to pay an additional $100 to Mr. Wood if Wood finished the existing contract on time, according to the terms of the contract.
C) Mr. Baker was so sick of an old chair that, when Mr. Venson offered him $10 for it, he agreed (i.e., promised to sell it to him), although the market value of the chair was $80.
D) Ms. Goode promised to send $10 to Mr. Paul, who kindly came and warned her when he saw a tow truck approach her car.
E) An ad in the paper promises to pay $5 for the return of a lost ring, but the person who finds and returns the ring never saw the offer in the newspaper.

Accepted Answer

The answer of Which one of the following is enforceable?
A)...

Question 17

Carlos visited Vancouver last summer and instead of going back to Ontario he stayed and enrolled at Simon.He needed money but didn't need things left in Ontario,including his car.In mid-December,he wrote a friend and offered to sell the car for $4000 and told him to send him a letter with his answer.His friend received the letter on January 2,checked his financial situation,and sent a letter of acceptance January 3.Meanwhile Carlos,short of cash and not hearing from his friend,sold the car to Mr.Reno on December 31.Carlos received his friend's letter January 8.Based on these facts,which of the following is true?
A) In order for there to be a binding contract, there must be an offer and receipt of the letter.
B) All methods of acceptance are effective upon receipt by the offeror.
C) Sending an acceptance by mail was not a reasonable method of acceptance in this situation.
D) The letter of acceptance was effective when it was received, and by then Carlos had sold the car, so there was no contract.
E) The acceptance was effective before it was received, so there was a contract between Carlos and his friend.

Accepted Answer

The acceptance was effective when the friend sent the letter on January 3, before Carlos received it, which means a contract was formed before Carlos sold the car to Mr. Reno.

Question 18

Which of the following is not an example of a contract?
A) a written promise to give your husband a ring for christmas
B) a verbal agreement to work for someone starting next week
C) a verbal agreement for the sale of a car where neither the money nor the car has yet changed hands
D) an agreement not to sue someone for negligence in exchange for their promise to pay you a specified amount
E) an implied promise to pay for a meal when you order it

Accepted Answer

A written promise to give a gift, such as a ring for Christmas, is not a contract because it lacks consideration, which is a necessary element for a contract. There is no exchange of value or mutual obligation.

Question 19

Sam placed an announcement in the newspaper as follows: "$200 reward for the return of two lost Siamese kittens." Joe read the ad,found the kittens,and returned them.This is an example of which of the following?
A) invitation to treat
B) offer
C) gratuitous promise
D) bilateral contract
E) unilateral contract

Accepted Answer

This is an example of a unilateral contract because the offeror (Sam) is promising a reward for the return of his lost kittens, and the offeree (Joe) can accept the offer by performing the requested act of returning the kittens. Since Joe has performed the act (i.e., returning the kittens), he is entitled to the reward.

Question 20

Franz bought a round-trip ticket to Germany to visit relatives.Unfortunately,a week before flight time,he broke his leg.He offered his co-worker,Joe,the ticket for 80 percent of the full price,offer to remain open until 10:00 p.m.on December 15.Indicate to Joe which of the following is true with regard to the law of offer and acceptance.
A) If Franz sells to someone else, it is too late for Joe to accept the original offer.
B) Franz could revoke the offer anytime before acceptance, even before 10:00 p.m. on December 15.
C) To create a contract, an offer must be in writing.
D) A letter of acceptance is always effective when it is dropped in the mailbox.
E) If Joe makes a counter-offer of 50 percent of the full price, and Franz rejects the counter-offer, Joe can still accept the original offer.

Accepted Answer

According to the law of offer and acceptance, an offer can be revoked by the offeror before acceptance. Therefore, Franz can revoke the offer anytime before Joe accepts it, even before the deadline of 10:00 p.m. on December 15. Option A is incorrect because Joe can only accept the original offer before Franz sells the ticket to someone else. Option C is incorrect because a written offer is not always necessary to create a contract. Option D is incorrect because the acceptance is effective when it is communicated to the offeror, not just when it is dropped in the mailbox. Option E is incorrect because a counter-offer terminates the original offer, and if Franz rejects the counter-offer, Joe cannot go back and accept the original offer.

Quiz 6: The Elements of a Contractconsensus and Consideration

Which of the following would best satisfy the requirements for a good legal offer?

Which of the following is an offer as opposed to an "invitation to treat"?

An ad in the morning newspaper read "Absolutely the best offer anywhere in Calgary.We'll give you an IBM-compatible PC with a Roland PR-1011 printer for only $4000!!! Pick it up today." This is an example of which of the following?

Which of the following is an ingredient necessary to form a contract?

Indicate the correct statement about consideration.

In contract cases,the court generally

The postbox rule applies when which of the following means of communication is used?

Which of the following would best satisfy the requirements for a good legal offer?

Which of the following is an example of a unilateral contract?

When Mr.Adams tells the local Boys' and Girls' Club that he will give them $5000 if they promise to use the funds for their summer camping program,this is an example of which of the following?

Which one of the following is enforceable?

Which of the following is not an example of a contract?

Sam placed an announcement in the newspaper as follows: "$200 reward for the return of two lost Siamese kittens." Joe read the ad,found the kittens,and returned them.This is an example of which of the following?