Question 1

Pam offers a reward for the return of the pet snake that escaped from her purse while she was having dinner at a restaurant.Fred finds the snake and returns it to her.Which of the following is relevant in deciding whether Pam must pay the reward?

Accepted Answer

The relevant factor in deciding whether Pam must pay the reward is whether Fred knew about the reward when he returned the snake. If he knew about the reward and returned the snake with the intention of claiming it, then Pam must pay the reward. If he returned the snake without knowledge of the reward, then Pam is not obligated to pay the reward. Whether Fred is a minor or whether the offer was in writing are not relevant factors in this scenario.

Question 2

Supervening illegality of the object of a contract occurs in which of the following circumstances?

Accepted Answer

Supervening illegality of the object of a contract occurs when the object of the contract was legal when the offer was made but has subsequently become illegal. This may occur due to changes in the law or regulations. In such cases, the contract becomes void and unenforceable.

Question 3

The rejection of an offer:

Accepted Answer

A rejection is effective when received by the offeror and it terminates the offeree's power to accept the offer.

Question 4

Which of the following is correct regarding a "counteroffer?"

Accepted Answer

A counteroffer is treated as both a rejection of the original offer and a new offer. It terminates the original offer and creates a new offer with different terms or conditions.

Question 5

In an auction when the highest bid has been made and no higher bids are forthcoming,the highest bid is treated as an acceptance in:

Accepted Answer

In auctions without reserve, the highest bid is automatically accepted as there is no minimum price set by the seller.

Question 6

Sally owns a very expensive fur coat that Mary would like to buy.During the course of conversation,Mary asks how much Sally would take for the coat.Sally replies,"I am not sure I want to sell the coat,but I think it is worth about $3,000." Mary says,"That is a little more than I wanted to spend." Several days later,Mary calls Sally on the telephone and says,"I'll bring over the $3,000 today." Sally refuses to sell the coat,and Mary sues.What results?

Accepted Answer

Sally's statement was not an offer but rather an expression of opinion or an invitation to negotiate. There was no definite offer for Mary to accept, so no contract was formed.

Question 7

Silence will operate as acceptance in the following circumstances EXCEPT:

Accepted Answer

Silence cannot operate as acceptance unless it has been explicitly agreed upon or is established through prior dealings. In option A, the offeree has indicated that silence will operate as acceptance. In option C, prior dealings indicate that silence will be accepted as agreement. In option D, the offeree has signed an agreement agreeing to future shipments, which implies acceptance until further notice. However, if the offeror indicates that silence will operate as acceptance, it does not automatically make it so. The offeree must agree to this condition. Therefore, option B is incorrect.

Question 8

Jess says to a friend,"I'll sell you my 2-year-old Toyota Camry for $4,000." The friend says,"I'll take it," and they sign a short agreement to that effect.The friend didn't know this,but Jess intended the offer as a joke.There will be a contract if which of the following is true?

Accepted Answer

For a contract to be formed, there must be a serious intent to make an offer. In this case, if a reasonable person would have believed that Jess was serious about selling the car for $4,000, then a contract would have been formed. The approximate fair value of the car (option A) is irrelevant, as the issue is whether there was an intention to create a contract. Option C is incorrect because Jess did not accept the offer but only made a joke. Option D is not relevant since a contract can be formed without a formal written agreement.

Question 9

Which of the following would be a valid offer?

Accepted Answer

The answer of Which of the following would be a...

Question 10

Which of the following will not generally automatically terminate an open offer?

Accepted Answer

Changed economic circumstances do not automatically terminate an open offer unless specified in the contract terms. Other options involve events that typically lead to automatic termination.

Question 11

Which of the following would terminate an offer?

Accepted Answer

All of the given options can terminate an offer. The offeror can revoke the offer at any time before acceptance, the offeree can reject the offer, and if the offeree makes a counteroffer, it terminates the original offer. Therefore, options A, B, and C can all terminate an offer.

Question 12

Sandy notices a dog tied to a chain behind a fence and recognizes it as belonging to an acquaintance who lives a couple of blocks away.Sandy goes to the acquaintance's house and says,"Your dog is tied up in someone's yard,and for $100 I will tell you where." The dog's owner says,"No way! I can't believe you won't simply tell me where the dog is!" The dog's owner drives around the neighborhood and finds the dog and retrieves it.The next day Sandy notices an advertisement in the paper where the owner offered a reward of $200 for information leading to the return of her dog.Sandy is:

Accepted Answer

Sandy is not entitled to any money because she did not accept the original offer of $200 and instead made a counteroffer, which was not accepted by the dog's owner.

Question 13

David decides to sell his coin collection at an auction that is advertised as being "without reserve." Can David change his mind and withdraw the collection from the auction?

Accepted Answer

David can only withdraw the collection before the auction begins if he wants to maintain the integrity of the "without reserve" advertising. Once the auction has begun, he is obligated to sell the collection to the highest bidder, regardless of the price or his own personal preference to withdraw the collection.

Question 14

What is the legal effect of an auction being with reserve?

Accepted Answer

An auction being with reserve means that the seller has the right to reject all of the bids if they are not satisfied with the highest bid. This is in contrast to an auction being without reserve, where the highest bid will result in the sale of the item.

Question 15

The requirement that the terms of the acceptance be the same as those of the offer is the:

Accepted Answer

The requirement that the terms of acceptance be the same as those of the offer is known as the mirror image rule. Under this rule, any attempt to change the terms of the offer constitutes a counteroffer, and the original offer is considered rejected. Therefore, the acceptance must be a mirror image of the offer without any modification.

Question 16

Which of the following statements is true regarding acceptances?

Accepted Answer

If an auction is "without reserve," the item must be sold to the highest bidder. This means that there is no minimum price set for the item and it will be sold to whoever places the highest bid, regardless of how much it is.

Question 17

The mailbox rule means which of the following?

Accepted Answer

A properly dispatched acceptance is effective even if the offeror never receives it.

Question 18

If an offeree gives a rejection to the offeror,which of the following is true at this point?

Accepted Answer

Rejection of an offer terminates the offer and the offeree loses the ability to accept the original offer.

Question 19

Mary,the seller,and Jane contract for the sale of 500 sweaters.They agree on color and style,but not on price or time of delivery.Mary refuses to deliver the sweaters,and Jane sues.What results?

Accepted Answer

Under the Uniform Commercial Code (UCC), which governs the sale of goods, a contract can be valid even if some terms are missing, as long as there is intent to contract and a reasonably certain basis for giving an appropriate remedy. The courts can fill in missing terms such as price and time of delivery.

Question 20

What does an offeree use to simply indicate that he/she is not interested in an offer?

Accepted Answer

The offeree can use rejection to indicate that he/she is not interested in the offer. It terminates the offer and the offeror can no longer accept it.

Quiz 10: Agreement