Question 1

A conditional acceptance:

Accepted Answer

A conditional acceptance is considered a counteroffer because it effectively rejects the original offer and proposes a new set of terms for the agreement.

Question 2

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

Accepted Answer

The "mirror image rule" in common law contract formation requires that the acceptance must exactly match the offer for a valid contract to be formed.

Question 3

The way parties usually show mutual assent is by:

Accepted Answer

Parties show mutual assent through an offer (which can be made through words or conduct) and an acceptance (which can also be made through words or conduct). This is the most common way to form a valid contract. B is incorrect because a proposal does not have to be done in words and C is too broad of a statement. D is incorrect because a counteroffer would not result in mutual assent until it is accepted by the original offeror.

Question 4

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

Accepted Answer

Under Article 2 of the UCC, a merchant is defined as someone who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction. Option C, a person selling inherited speedboats to buy a car, does not regularly deal in goods of that kind nor is presumed to have specialized knowledge about them, making them not a merchant for the purposes of Article 2.

Question 5

If Anna Laura, in return for the payment of $200 to her by Catherine, gives Catherine an option to buy Achraji, a prime Arabian mare, at any time within the next 14 days at a price of $50,000, Anna Laura's offer to Catherine is:

Accepted Answer

An option contract, where consideration ($200) is paid for the promise to keep an offer open for a specified period (14 days), is irrevocable during that time.

Question 6

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

In Lefkowitz v. Great Minneapolis Surplus Store, Inc., the court held that the newspaper advertisement constituted an offer because it was clear, definite, and explicit, and left nothing open for negotiation. It promised a reward in return for performance of a specified act, thus meeting the criteria for an offer in contract law.

Question 7

Carlissa hears about a reward being offered by the local sheriff's office 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 sheriff's office for information leading to an arrest and conviction is an example of a unilateral contract open to the public, which Carlissa accepted by performing the requested action of supplying the information.

Question 8

Brooks 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 Brooks $100. Which statement describes the payment of $100?

Accepted Answer

The payment of $100 by Jennifer to Brooks in exchange for keeping the offer open for a month creates an option contract. This means Jennifer has the exclusive right to accept the offer within the specified time frame without Brooks being able to revoke it.

Question 9

Which of these is a revocable offer?

Accepted Answer

The answer of Which of these is a revocable offer?
...

Question 10

Serafina's Boutique places an ad in the Sunday paper for finely tailored, top-of-the-line designer suits for $10.00, which is a misprint. Alice sees the ad in the paper and goes to the store to stock up on business suits for her new job. Serafina apologizes for the misprint. Alice has just finished a class in contract law and insists that the store sell her five suits for $50. Alice threatens to sue Serafina for breach of contract.

Accepted Answer

The ad in the newspaper is generally considered an invitation to treat or a solicitation for offers, rather than a legally binding offer. This means that Alice cannot successfully claim a breach of contract because a formal offer that could be accepted to form a contract was not actually made by Serafina's Boutique through the ad.

Question 11

A __________ is the refusal to accept an offer.

Accepted Answer

A rejection occurs when the offeree refuses to accept the offer, effectively terminating the offer.

Question 12

Destruction of the subject matter has what effect on the offer?

Accepted Answer

Destruction of the subject matter terminates the offer because it is no longer possible to perform the contract as originally intended.

Question 13

Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is opening another branch of his furniture stores, and offers to sell him 100 square yards of carpet at $20 per square yard. Bob 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 square yards of Saxony "heather blue" carpeting at the rate of $20 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,
Bob
Which of the following is true?

Accepted Answer

Bob's letter is an acceptance of Jack's original offer for 100 square yards of carpeting. The mention of additional yardage at the same rate for one year is an attempt to modify the original offer, which does not alter the acceptance of the initial offer for 100 square yards. Therefore, a contract exists only for the 100 square yards of carpeting initially offered by Jack.

Question 14

A contract that binds the offeror to keep an offer open for a specified period of time is known as:

Accepted Answer

An option contract is a type of contract that keeps an offer open for a specified period of time, allowing the offeree to accept the offer within that time frame without the offeror being able to revoke it.

Question 15

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

Accepted Answer

An offer can only be accepted by the person to whom it is made. Since the offer was made to Emily, Diane cannot accept it.

Question 16

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 rejection arrived before the acceptance, so there was no contract.

Question 17

Marilyn read an ad in the school newspaper offering a $1,000 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

Marilyn's actions of beginning to swim in response to the offer constitute acceptance through performance. The advertiser cannot revoke the offer once performance has begun, and must allow Marilyn to complete the task or face potential damages for interference. This is based on the principle that an offer for a unilateral contract (an agreement where one party makes a promise in exchange for the performance of an act by the other party) becomes irrevocable once performance has commenced.

Question 18

Arnold has offered to take Bob into his accounting firm as a partner upon payment of $5,000 cash. In response, Bob 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."

Accepted Answer

Bob's response is a counteroffer because he proposes different terms (payment amount and timing) than those originally offered by Arnold. This means the original offer is rejected, and no contract exists unless Arnold accepts Bob's counteroffer.

Question 19

Jeb submits a bid to construct a student union building for the local community college. He realizes after submitting the final bid that he forgot to include the cost of the window casings for the entire building. He may:

Accepted Answer

Jeb cannot revoke his bid due to the statutory irrevocability of the bid, which means once a bid is submitted, it cannot be withdrawn if it is subject to such a statute.

Question 20

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

Accepted Answer

All of these individuals are considered merchants under the UCC because they regularly deal in goods of the kind or otherwise hold themselves out as having knowledge or skill peculiar to the goods involved. Arthur is an authorized dealer, Brian sells his homemade furniture with salesmen, and Clarence has a store for used lawn mowers, indicating they each have a business in selling specific goods.

Quiz 10: Mutual Assent