Question 1

Michelle's Boutique places an ad in the Sunday paper for beautiful, top-of-the-line designer suits for $3.00. Alice sees the ad in the paper and goes to the store to stock up on business suits for her new job. Michelle apologizes for the misprint. Alice has just finished a class in contract law and insists that the store sell her five suits for $15. Alice threatens to sue Michelle for breach of contract.

Accepted Answer

An advertisement is generally considered an invitation to negotiate or a solicitation for offers, not a binding offer itself. Therefore, there is no enforceable contract.

Question 2

Lyle offers to sell his house to Dennis for $95,000. Dennis responds, "I will pay you $95,000 for the house if you first paint the second floor." This response could best be described as:

Accepted Answer

Dennis's response is a counteroffer because he is not accepting the original terms but instead proposing a new condition for the sale.

Question 3

Charlene hears about a reward being offered by the local television station 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 television station was a unilateral contract offer made to the general public, which Charlene accepted by performing the requested act of providing information.

Question 4

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

Once Marilyn began performing the act of swimming the laps, the offer became irrevocable, and she must be given the opportunity to complete the performance.

Question 5

A __________ is the refusal to accept an offer.

Accepted Answer

A rejection is the refusal to accept an offer, effectively terminating the original offer.

Question 6

Which is not a revocable offer?

Accepted Answer

The answer of Which is not a revocable offer?
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Question 7

A conditional acceptance:

Accepted Answer

A conditional acceptance is a type of counteroffer because it introduces new terms or conditions, thus rejecting the original offer and proposing a new one.

Question 8

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

Accepted Answer

Under common law, the acceptance must be the mirror image of the offer, meaning it must exactly match the terms of the offer without any modifications.

Question 9

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

The contract is valid for the initial 100 square yards as agreed upon. The additional term about future purchases is not binding as it was not part of the original offer and was not agreed upon by Jack.

Question 10

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 a newspaper advertisement was an offer because it contained a promise of performance in definite terms in return for a requested act, making it an enforceable offer.

Question 11

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 12

If Anna Laura, in return for the payment of $200 to her by Catherine, gives Catherine an option to buy Jesse, 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

The payment of $200 by Catherine to Anna Laura creates an option contract, which is irrevocable for the duration specified, in this case, 14 days.

Question 13

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

Accepted Answer

The payment of $100 by Jennifer to James creates an option contract, which is a type of contract that keeps an offer open for a specified period in exchange for consideration.

Question 14

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, which means he has not accepted the original terms, so no contract is formed.

Question 15

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

Once a bid is submitted, it is typically considered irrevocable if it is under statutory or contractual obligations, unless there is a provision allowing for revocation.

Question 16

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

Accepted Answer

A person selling inherited items is not considered a merchant under Article 2 of the UCC, as they are not regularly engaged in the business of selling such goods.

Question 17

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 18

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

Accepted Answer

The destruction of the subject matter of an offer typically results in the termination of the offer, as the specific subject matter is no longer available to fulfill the terms of the offer.

Question 19

The way parties usually show mutual assent is by:

Accepted Answer

Mutual assent is typically shown through an offer and acceptance, which can be communicated through words or conduct.

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

Under the UCC, a merchant is someone who deals in goods of the kind or otherwise holds themselves out as having special knowledge or skill related to the goods. All options involve individuals who deal in goods of the kind they are selling, making them merchants.

Quiz 10: Mutual Assent