Question 1

Revocation is the withdrawal of an offer by the offeror.

Accepted Answer

A) True 
 B)False  True

Question 2

Jack mails an offer to Joan that states,"I offer to sell you my car for $2000.If I don't hear from you in 10 days,I will assume you are willing to buy the car for the stated price." Jack hears nothing by the deadline and assumes he has a deal.What is the result?

Accepted Answer

A) Jack has a deal.His offer was intended and contains definite terms. 
B) Jack has a deal. Joan should have responded saying she is not interested in the car if she didn't want to be bound to the offer. 
C) Joan is not bound. Generally an offeree must say or do something to accept an offer. 
D) Joan is not bound. Ten days is not a reasonable amount of time to consider the offer and accept by mail. 
A) Jack has a deal.His offer was intended and contains definite terms. 
B) Jack has a deal. Joan should have responded saying she is not interested in the car if she didn't want to be bound to the offer. 
C) Joan is not bound. Generally an offeree must say or do something to accept an offer. 
D) Joan is not bound. Ten days is not a reasonable amount of time to consider the offer and accept by mail. C

Question 3

Discuss the effect of the Uniform Commercial Code on the law of sales contracts in the area of open terms.

Accepted Answer

The UCC makes the law of sales more flexible.Negotiations with open terms may create a binding agreement under the UCC even though the same negotiations under the common law would not have created a contract.UCC Section 2-204(3)states,"Even though one or more terms are left open,a contract does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy." The UCC will not create a contract where the parties never intended to create one.A contract may state a method for determining missing terms,but if it does not,the UCC contains "gap-filler" provisions or rules for supplying the missing terms.

Question 4

Regarding contracts,in seeking to determine whether there is a meeting of the minds,the courts look to how a reasonable person would objectively view the language or actions of the parties.

Accepted Answer

A) True 
 B)False

Question 5

You have placed an antique sofa up for auction and the auctioneer has not made any special announcements about the sale.You can withdraw the sofa at any time before the auctioneer closes the sale by announcement or by the fall of the hammer.

Accepted Answer

A) True 
 B)False

Question 6

A letter of intent summarizes progress made during business negotiations,but more importantly,it creates a binding contract.

Accepted Answer

A) True 
 B)False

Question 7

David and George have a contract wherein George agrees to buy sporting goods and equipment.Since the goods are not to be delivered for several months,they left the price open.Under the UCC,which of the following will be true?

Accepted Answer

A) The price will be the reasonable price based on the market value of the goods at the time of delivery or a price established by a neutral party or agency. 
B) David has the freedom to set any price he wants considering George was foolish enough to enter into a contract without a price established. 
C) George has the right to establish a price because he is the buyer. David should have taken steps to protect his sales interest. 
D) None of the above. The contract is not valid because the terms are not definite and certain. 
A) The price will be the reasonable price based on the market value of the goods at the time of delivery or a price established by a neutral party or agency. 
B) David has the freedom to set any price he wants considering George was foolish enough to enter into a contract without a price established. 
C) George has the right to establish a price because he is the buyer. David should have taken steps to protect his sales interest. 
D) None of the above. The contract is not valid because the terms are not definite and certain.

Question 8

In an option contract,the offeror may not revoke an offer during the option period.

Accepted Answer

A) True 
 B)False

Question 9

On January 8,Quastrar,Inc.sent Hylavian Company a letter offering to sell $10,000 in restaurant supplies.On January 18,Hylavian mailed a letter to Quastrar accepting the offer.Quastrar received the acceptance letter on January 20.On January 17,Quastrar sent a letter revoking the offer.Hylavian received this letter on January 21.A contract between Quastrar and Hylavian

Accepted Answer

A) was not formed because the revocation was effective before the acceptance was sent. 
B) was not formed because the revocation was effective before the acceptance was received. 
C) was formed on January 18. 
D) was formed on January 20. 
A) was not formed because the revocation was effective before the acceptance was sent. 
B) was not formed because the revocation was effective before the acceptance was received. 
C) was formed on January 18. 
D) was formed on January 20.

Question 10

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby.Prince Charming came in last,much to John's frustration and embarrassment.John exclaims in a loud voice,"I'm selling that horse to the first person who hands me $100!" John has

Accepted Answer

A) made an offer to anyone within hearing distance and will be bound by his offer to the first person who produces $100. 
B) made a firm offer and will be bound by his offer for a reasonable period of time. 
C) made an acceptance to the first person who can produce $100. 
D) not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer. 
A) made an offer to anyone within hearing distance and will be bound by his offer to the first person who produces $100. 
B) made a firm offer and will be bound by his offer for a reasonable period of time. 
C) made an acceptance to the first person who can produce $100. 
D) not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer.

Question 11

On Monday,Mick puts an offer in the mail to Sheri to sell his guitar for $50.Monday night when jamming with his buddies,he decides he will really miss his old guitar and has second thoughts about selling it.Tuesday morning he puts a revocation in the mail informing Sheri he has changed his mind and the guitar is no longer for sale.The revocation is effective on Tuesday morning.

Accepted Answer

A) True 
 B)False

Question 12

Software clickwrap and shrinkwrap agreements limiting the manufacturer's maximum responsibility to a refund of the purchase price even if the software destroys your hard drive have generally been found to be binding against consumers.

Accepted Answer

A) True 
 B)False

Question 13

Spangel Fashions sends out its spring and summer catalog to Cindy.Cindy falls in love with the cute dress featured on the front cover of the catalog.When Cindy calls to order the dress,she is informed that the company has sold out of the dress.Cindy is upset and claims that the store is in breach of contract.She argues that the catalog presented an offer,which she accepted when she called to order the dress.Is Cindy correct? Why/why not?

Accepted Answer

No.Advertisements,price lists,and catalo

Question 14

Acme Co.offers to buy 1000 widgets from Widget World Co.The written offer provides for 1000 at $10 per widget,to be delivered May 1.The offer has no other provisions.Widget World sends a written acceptance.However,the acceptance also states that if any claim arises under this contract,Widget World must be notified within 10 days.Acme does not object to this provision.Both parties are merchants.Which of the following best describes this situation?

Accepted Answer

A) No contract exists.The purported acceptance contains additional terms, so it is a counteroffer, which has not been accepted. 
B) No contract exists. The terms materially alter the original offer. 
C) A contract exists. The additional terms are not material, they are part of the contract. 
D) A contract exists, but the additional terms are not part of the contract no matter what. 
A) No contract exists.The purported acceptance contains additional terms, so it is a counteroffer, which has not been accepted. 
B) No contract exists. The terms materially alter the original offer. 
C) A contract exists. The additional terms are not material, they are part of the contract. 
D) A contract exists, but the additional terms are not part of the contract no matter what.

Question 15

April put an advertisement in the newspaper advertising the sale of her computer for $500.Simultaneously,six people responded to the ad by mail with formal written acceptances.April is bound on all six contracts to sell her computer for $500.

Accepted Answer

A) True 
 B)False

Question 16

McCann Construction purchased a poured concrete form from Advance Concrete Forms,Inc.McCann purchased the concrete form by placing a phone call to Advance in Madison,Wisconsin.Advance delivered the concrete form with an invoice stating the terms of the sale required payment within 30 days and a 1 1/2 % interest per month finance charge would be charged on accounts over 30 days.When McCann failed to pay the invoice on time,interest was charged according to this rate.Later,McCann refused to pay the accumulated interest charge,claiming there was not a meeting of the minds regarding the finance charge in any conversation prior to the sale.The trial court concluded that the finance charge was in fact an additional term added by Advance when it accepted McCann's purchase order.Discuss Uniform Commercial Code Section 2-207 in general and with regard to this situation.Does McCann owe the interest accrued?

Accepted Answer

Yes,he does.The big change brought about

Question 17

When Olga asks Sven if he wishes to sell his Harley motorcycle,he replies that he would not sell it "for less than $2,000." Olga replies,"I accept," and hands him $2,000.A contract exists.

Accepted Answer

A) True 
 B)False

Question 18

Collector Carl displays his beer can collection at the local swap meet.Mary sees the collection and is interested in buying it.Carl says he will sell the collection for $1,500.Mary says she really likes the collection but is only willing to pay $1,000.Which of the following is correct?

Accepted Answer

A) Mary's counteroffer terminates Carl's offer of $1,500. 
B) If Carl rejects Mary's counteroffer, she can still accept Carl's offer of $1,500. 
C) Neither offer is valid. Who would ever pay $1,000 or $1,500 for a beer can collection? 
D) Mary's offer is an option contract and she cannot revoke the offer. 
A) Mary's counteroffer terminates Carl's offer of $1,500. 
B) If Carl rejects Mary's counteroffer, she can still accept Carl's offer of $1,500. 
C) Neither offer is valid. Who would ever pay $1,000 or $1,500 for a beer can collection? 
D) Mary's offer is an option contract and she cannot revoke the offer.

Question 19

Vivian goes to an auction and sees a rare antique lamp that is an identical match to one she already has.At the proper time she bids on the lamp and is the highest bidder.Even though she is the highest bidder,the auctioneer refuses to accept her bid and withdraws the lamp from the auction.Can the auctioneer do that?

Accepted Answer

A) Unless otherwise stated, the auctioneer had the right to withdraw the item before the fall of the hammer. 
B) Generally, the auctioneer must sell to the highest bidder. Vivian will get the lamp. 
C) Generally, the auctioneer is the offeror and the bidders are the offerees so there is a contract and Vivian will get the lamp. 
D) Most auctions are without reserve and therefore the auctioneer cannot withdraw the lamp. 
A) Unless otherwise stated, the auctioneer had the right to withdraw the item before the fall of the hammer. 
B) Generally, the auctioneer must sell to the highest bidder. Vivian will get the lamp. 
C) Generally, the auctioneer is the offeror and the bidders are the offerees so there is a contract and Vivian will get the lamp. 
D) Most auctions are without reserve and therefore the auctioneer cannot withdraw the lamp.

Question 20

Travel Lines offered to sell 10 round-trip tickets to Elaine.Travel Lines stated that the acceptance must be in writing by USPS next-day service.Which of the following acceptances will create a contract between Travel Lines and Elaine?

Accepted Answer

A) Elaine calls Travel Lines and states that she will buy the tickets. 
B) Elaine sends a fax to Travel Lines stating she will buy the tickets. 
C) Elaine sends a letter by USPS next-day service to Travel Lines stating that she will buy the tickets. 
D) All of the above responses will create a contract between Travel Lines and Elaine since they constitute reasonable means of communication. 
A) Elaine calls Travel Lines and states that she will buy the tickets. 
B) Elaine sends a fax to Travel Lines stating she will buy the tickets. 
C) Elaine sends a letter by USPS next-day service to Travel Lines stating that she will buy the tickets. 
D) All of the above responses will create a contract between Travel Lines and Elaine since they constitute reasonable means of communication.

Exam 12: Agreement

Revocation is the withdrawal of an offer by the offeror.

Jack mails an offer to Joan that states,"I offer to sell you my car for $2000.If I don't hear from you in 10 days,I will assume you are willing to buy the car for the stated price." Jack hears nothing by the deadline and assumes he has a deal.What is the result?

Discuss the effect of the Uniform Commercial Code on the law of sales contracts in the area of open terms.

Regarding contracts,in seeking to determine whether there is a meeting of the minds,the courts look to how a reasonable person would objectively view the language or actions of the parties.

You have placed an antique sofa up for auction and the auctioneer has not made any special announcements about the sale.You can withdraw the sofa at any time before the auctioneer closes the sale by announcement or by the fall of the hammer.

A letter of intent summarizes progress made during business negotiations,but more importantly,it creates a binding contract.

David and George have a contract wherein George agrees to buy sporting goods and equipment.Since the goods are not to be delivered for several months,they left the price open.Under the UCC,which of the following will be true?

In an option contract,the offeror may not revoke an offer during the option period.

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby.Prince Charming came in last,much to John's frustration and embarrassment.John exclaims in a loud voice,"I'm selling that horse to the first person who hands me $100!" John has

Software clickwrap and shrinkwrap agreements limiting the manufacturer's maximum responsibility to a refund of the purchase price even if the software destroys your hard drive have generally been found to be binding against consumers.

April put an advertisement in the newspaper advertising the sale of her computer for $500.Simultaneously,six people responded to the ad by mail with formal written acceptances.April is bound on all six contracts to sell her computer for $500.

When Olga asks Sven if he wishes to sell his Harley motorcycle,he replies that he would not sell it "for less than $2,000." Olga replies,"I accept," and hands him $2,000.A contract exists.

Collector Carl displays his beer can collection at the local swap meet.Mary sees the collection and is interested in buying it.Carl says he will sell the collection for $1,500.Mary says she really likes the collection but is only willing to pay $1,000.Which of the following is correct?

Travel Lines offered to sell 10 round-trip tickets to Elaine.Travel Lines stated that the acceptance must be in writing by USPS next-day service.Which of the following acceptances will create a contract between Travel Lines and Elaine?

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Introduction to Contracts

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Introduction to Sales

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