Question 1

Harry saw Joe in his classic Buick at a local drive-in restaurant and talked about wanting to buy the car.Joe offered to sell it to him for $1500.Harry said he needed some time to think about it and that he would send Joe a letter.The next day, Joe changed his mind and mailed Harry a letter of revocation.The day after that, before Harry had received the letter of revocation, he sent a letter of acceptance to Joe.The next day, the two letters arrived at their respective destinations, Joe receiving Harry's letter of acceptance just after Harry received Joe's letter of revocation.Explain the legal liabilities of the parties.

Accepted Answer

The answer of Harry saw Joe in his classic Buick...

Question 2

A revocation of an offer is effective only when it has been communicated to the offeree.

Accepted Answer

A revocation of an offer must be communicated to the offeree to be effective. Until then, the offer remains open and legally binding.

Question 3

If an offeror makes an offer that states "This offer to be open until noon tomorrow," which of the following ends the offer?
A)An inquiry by the offeree
B)The insanity of the offeree
C)Revocation of the offer by the offeror before the time specified (i.e., before "noon tomorrow")
D)A counter-offer by the offeror
E)The selling of the item to someone else before noon tomorrow

Accepted Answer

The offeror has specified a deadline until noon tomorrow, and unless the offeror revokes the offer before the specified time, the offer will expire. Therefore, revocation of the offer by the offeror before the time specified (i.e., before "noon tomorrow") would end the offer.

Question 4

A letter of revocation takes effect when received by the offeree.

Accepted Answer

A revocation of an offer is effective when it is received by the offeree. This means that if the offeree has already accepted the offer prior to receiving the revocation, the revocation will not have any effect on the previously formed contract.

Question 5

Harry saw Joe in his classic Buick at a local drive-in restaurant, and told Joe that he'd like to buy the car.He offered Joe $1500.Joe said he had to think about it and that he'd let Harry know.Two days later, Joe decided that he needed the money and couldn't afford to keep the car.He wrote Harry a letter accepting the offer and mailed it that afternoon.The next day, Harry phoned Joe, saying that he'd changed his mind and that he needed the money for something else.Joe told Harry about the letter, and in fact Harry received the letter later that day.Joe insisted on going through with the deal.Explain the legal liability of the parties.

Accepted Answer

The answer of Harry saw Joe in his classic Buick...

Question 6

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 "Okay, 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, "Okay, 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 the owner's offer to sell the lamp for $95 was rejected by counter-offer, and Sarah's offer to buy it for $95 wasn't accepted.
B)There is a contract because at one time the owner offered to sell the lamp for $95 and Sarah accepted it.
C)There is a contract because the owner wanted to sell the lamp for $95 and Sarah was willing to pay that much.
D)There is no contract because the owner's offer to sell for $95 lapsed after a reasonable time.
E)There is no contract because the owner's offers to sell the lamp for $95 and $90 were revoked and he didn't accept Sarah's offers.

Accepted Answer

The owner's initial offer to sell the lamp for $95 was effectively rejected by Sarah's counter-offer. When Sarah later agreed to pay $95, the owner did not accept this new offer, thus no contract was formed.

Question 7

Joe drove his car to a shopping mall and parked it there to attend a movie.The place where he parked was designated as a one-hour parking space on a sign at the entrance where Joe drove in.There were many similar signs around the shopping mall stating that people were parking their cars at their own risk.But this particular sign said that the time limit for parking there was one hour, and as a term of the contract anyone parking over this one-hour limit would have to pay a fee of $60.When Joe got out of the movie, he found a ticket on his car (a demand for payment of the $60).He refused to pay and was sued.What would be Joe's defence in these circumstances?

Accepted Answer

The answer of Joe drove his car to a shopping...

Question 8

If an offer is made by mail and an acceptance by mail is requested, when does a letter revoking the previous offer actually take effect?
A)At the time it is posted
B)At any time before a letter of acceptance is received by the offeror
C)At the time it is received, if before acceptance
D)Never.A revocation must be done in person.
E)At any time before actual performance of the contract has begun

Accepted Answer

The revocation of the previous offer takes effect at the time it is received, if before acceptance. This means that the offer can still be accepted until the revocation is received by the offeror. Once the offeror receives the revocation, it is too late and the offer is no longer valid.

Question 9

Joe made an offer to sell his car to Harry, promising to keep the offer open for a week.However, he changed his mind, sold the car to someone else, and phoned Harry to inform him that he was withdrawing the offer because he had sold the car to someone else.Harry was angry and said that he wanted the car and was going to hold Joe to his promise to hold the offer open for a week.He sued for breach of contract.Will he win? Explain.

Accepted Answer

The answer of Joe made an offer to sell his...

Question 10

Mary bought a new Macintosh computer and advertised her old computer system for sale for $1500.Mr.Jones offered to pay $1000.Mary said no, that she wanted $1500.Mr.Jones offered $1250.Mary rejected that offer and said she wanted $1500, but then said, "I withdraw my offer, I've decided to give it to a 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 and Mr.Jones has to pay a reasonable price for Mary's old computer.
B)There is a contract, because once a seller makes an offer she cannot change her mind; she is bound to receive an acceptance.
C)There is no contract because Mary revoked the offer before Mr.Jones attempted to accept it.
D)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.
E)There is no contract because the last offer had lapsed.

Accepted Answer

Mary withdrew her offer before Mr. Jones attempted to accept it. Therefore, no contract was formed between the two parties.

Question 11

Once a person has promised to hold an offer open for a specified period of time, she cannot change her mind.

Accepted Answer

While it is generally considered good practice to keep an offer open for the specified time period, the person who made the offer still has the right to revoke it at any time before it is accepted. However, revoking an offer may have legal consequences depending on the circumstances.

Question 12

Even though a person promises to hold an offer open for a specified period of time, the offeror can revoke that offer before that time if he or she feels like it.

Accepted Answer

In most situations, an offeror can revoke an offer at any time before it is accepted, regardless of any promise to hold it open for a certain period of time. However, there are some exceptions such as options contracts and firm offers under the Uniform Commercial Code.

Question 13

Only the person or group to whom an offer is made can accept it.

Accepted Answer

Only the person or group who receives an offer can legally accept it.

Question 14

Jones was a caterer; Smith was a florist.Jones won a contract to provide a banquet for a convention of florists.He wanted to decorate the hall with flowers.He sent a letter to Smith, describing what he wanted and asking for a price quote.Smith responded in a letter dated January 5, offering to supply the flowers for $5000.Jones received the letter on January 10 and responded on the same date, saying the price was too high and that he would pay $4500.While that letter was in the mail, but before it had been received by Smith, Jones learned that the convention was on artificial flowers and the organizers wanted no real flowers on display.On January 13, Jones quickly sent another letter telling Smith to ignore the letter of January 10 and that he wouldn't need any flowers at this time.This letter of the January 13 was received on January 18.Smith had received the letter of January 10 on January 15 and sent a letter of acceptance on the same day, and had placed orders with his suppliers for the flowers.The letter of acceptance was received by Jones on January 20.Is there a contract between Jones and Smith? Explain.

Accepted Answer

The answer of Jones was a caterer; Smith was a...

Question 15

Sylvia had contracted with Produce Palace to sell it her entire crop of elephant garlic (100 kilograms) and her entire crop of tomatoes (100 kilograms).On the day for delivery, Produce Palace took the garlic but not the tomatoes.In an effort to mitigate her loss, Sylvia called the owner of Val's Veggies and offered her the tomatoes at a reduced price with the words, "Let me know quickly; they are ripe and must be moved out today." That afternoon, Val sent Sylvia a letter accepting the offer.On these facts, which is the most likely outcome?
A)There is no contract between Sylvia and Val because the offer has probably lapsed before the acceptance was received by Sylvia.
B)There is a contract between Sylvia and Val the moment Val drops the letter of acceptance in the postbox.
C)There is a contract between Sylvia and Val on the day the letter of acceptance is received by Sylvia.
D)If the post-box rule does not apply, there would be a contract as soon as Val mails the letter unless Sylvia had sold the tomatoes to someone else.
E)There is no contract between Sylvia and Val because Sylvia had revoked the offer.

Accepted Answer

The offer likely lapsed because Sylvia indicated urgency by stating the tomatoes must be moved out that day, suggesting the offer was only open for a short period. Val's acceptance by mail would not be timely enough to form a contract.

Question 16

Joe offered to sell Harry his car and agreed to hold the offer open for one week, expiring Saturday at noon.The following Sunday, Harry phoned Joe to tell him that he had decided to accept the offer and purchase Joe's car.Joe said at that time that he had decided to keep the car and was just about to phone Harry to revoke the offer.Harry said, "Too bad," and demanded performance of the contract.Explain the legal responsibilities of the parties.

Accepted Answer

The answer of Joe offered to sell Harry his car...

Question 17

Which one of the following will cause an offer to end?
A)The purchase of an option to hold the offer open for a designated period of time
B)The expiration of a reasonable time if the offeror did not specify that the offer would end at a definite time or upon the happening of a specific event
C)The arrival of 4:00 p.m., if the offeror specified that the offer would end at 5:00 p.m.
D)The sale of the object of the offer to someone other than the original offeree
E)The communication of a revocation to the offeree after acceptance

Accepted Answer

If the offeror did not specify a definite time or event upon which the offer would end, it will automatically terminate after a reasonable amount of time has passed.

Answer: D
 If the object of the offer has been sold to someone other than the original offeree, the offer is no longer available for acceptance.

Answer: E
 A revocation communicated to the offeree after acceptance would effectively terminate the offer, as acceptance would no longer be possible.

Therefore, the correct answer is B, D, and E.

Question 18

The owner of a new building wanted four maple trees, each six metres tall, planted on the north side of the building.Lloyd Landscaper submitted his offer of four six-metre maples planted for $800.The owner said he would pay $600 for that.Lloyd said that for $600 he would supply four smaller, five-metre trees.The owner said, "$600 for five-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 five-metre maples planted." Lloyd kept on walking.Which of the following is true?
A)There is no contract because Lloyd's last offer had been rejected by a counter-offer.
B)There is no contract because Lloyd's last offer was revoked.
C)There is no contract because there is a presumption in law in these circumstances that the parties did not intend to create a legal relationship.
D)There is no contract because Lloyd's last offer had lapsed after a reasonable time.
E)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.

Accepted Answer

According to the scenario, the owner rejected Lloyd's last offer of $600 for four smaller, five-metre trees and proposed a counter-offer for $600 and a Christmas tree. Lloyd was then disgusted and refused the offer, which means that his last offer was rejected, and there was no acceptance of the owner's counter-offer. As a result, there is no contract because Lloyd's last offer had been rejected by a counter-offer.

Question 19

If the mail is a reasonable means for accepting an offer, is a contract formed when the offeror drops a letter of revocation in the mailbox at the very same instant that the offeree drops a letter of acceptance in the mailbox? Explain.

Accepted Answer

The answer of If the mail is a reasonable means...

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% 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)A letter of acceptance is always effective when it is dropped in the mailbox.
C)If Joe makes a counter-offer of 50% of the full price, and Franz rejects the counter-offer, Joe can still accept the original offer.
D)Franz could revoke the offer at any time before acceptance, even before 10:00 p.m.on December 15.
E)To create a contract, an offer must be in writing.

Accepted Answer

Franz could revoke the offer at any time before acceptance, even before 10:00 p.m. on December 15.

Quiz 3: Formation of Contracts

A revocation of an offer is effective only when it has been communicated to the offeree.

If an offeror makes an offer that states "This offer to be open until noon tomorrow," which of the following ends the offer?

A letter of revocation takes effect when received by the offeree.

If an offer is made by mail and an acceptance by mail is requested, when does a letter revoking the previous offer actually take effect?

Once a person has promised to hold an offer open for a specified period of time, she cannot change her mind.

Even though a person promises to hold an offer open for a specified period of time, the offeror can revoke that offer before that time if he or she feels like it.

Only the person or group to whom an offer is made can accept it.

Which one of the following will cause an offer to end?

If the mail is a reasonable means for accepting an offer, is a contract formed when the offeror drops a letter of revocation in the mailbox at the very same instant that the offeree drops a letter of acceptance in the mailbox? Explain.