Question 1

The way parties usually show mutual assent is by:

Accepted Answer

A)  an offer by words or conduct and an acceptance by words or conduct. 
B)  a proposal in words and an acceptance in words. 
C)  an act exchanged for an act. 
D)  an offer and a counteroffer. 
A)  an offer by words or conduct and an acceptance by words or conduct. 
B)  a proposal in words and an acceptance in words. 
C)  an act exchanged for an act. 
D)  an offer and a counteroffer.

Question 2

Action Play Equipment ordered 200 feet of chain, 400 clasps, and 50 swing seats from Brace Company for $1,600 to be delivered within three weeks of the order.Brace sent back an acceptance form which stated payment was due within 30 days of delivery or a finance charge of 2% per month would be added to the balance.What is the status of the interaction between Action and Brace?

Accepted Answer

A)  There is a valid contract under the UCC, and the additional payment terms become part of the contract unless Action objects within a reasonable period of time. 
B)  There is a valid contract for the goods, but the payment terms will not become part of the contract. 
C)  There is no contract, because Brace has made a counteroffer by adding payment terms. 
D)  There is no contract, because the method of transportation has not been decided. 
A)  There is a valid contract under the UCC, and the additional payment terms become part of the contract unless Action objects within a reasonable period of time. 
B)  There is a valid contract for the goods, but the payment terms will not become part of the contract. 
C)  There is no contract, because Brace has made a counteroffer by adding payment terms. 
D)  There is no contract, because the method of transportation has not been decided.

Question 3

Discuss silence as acceptance of an offer.

Accepted Answer

Silence or inaction does not ordinarily

Question 4

Will makes an offer to Ike, but before Ike can accept, the state legislature passes a law that makes Will's offer illegal.The new statute:

Accepted Answer

A)  automatically terminates the offer. 
B)  has no effect on the offer. 
C)  acts as a condition on the offer. 
D)  acts as a rejection of the offer by the offeree. 
A)  automatically terminates the offer. 
B)  has no effect on the offer. 
C)  acts as a condition on the offer. 
D)  acts as a rejection of the offer by the offeree.

Question 5

The Code's firm offer rule applies only to offers in writing that are made by a merchant offeror.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  Arthur is an authorized IBM computer dealer. 
B)  Brian employs two salesmen to sell his homemade furniture. 
C)  Clarence has a store in which he sells used lawn mowers. 
D)  All of these would be merchants. 
E)  None of these would be merchants. 
A)  Arthur is an authorized IBM computer dealer. 
B)  Brian employs two salesmen to sell his homemade furniture. 
C)  Clarence has a store in which he sells used lawn mowers. 
D)  All of these would be merchants. 
E)  None of these would be merchants.

Question 7

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

Accepted Answer

A)  Diane cannot accept because the offer wasn't made to her. 
B)  this is a valid acceptance. 
C)  the offer has not been communicated to the offeree. 
D)  Diane cannot accept because this is an invitation seeking offers and not an offer. 
A)  Diane cannot accept because the offer wasn't made to her. 
B)  this is a valid acceptance. 
C)  the offer has not been communicated to the offeree. 
D)  Diane cannot accept because this is an invitation seeking offers and not an offer.

Question 8

A standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved and in terms of the facts and circumstances of the case is:

Accepted Answer

A)  good faith. 
B)  a subjective standard. 
C)  commercial reasonableness. 
D)  None of these. 
A)  good faith. 
B)  a subjective standard. 
C)  commercial reasonableness. 
D)  None of these.

Question 9

Under the UCC, an acceptance must always be identical to an offer for a valid contract to be formed.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A)  a offer with reserve. 
B)  an option. 
C)  promissory estoppel. 
D)  a unilateral contract. 
A)  a offer with reserve. 
B)  an option. 
C)  promissory estoppel. 
D)  a unilateral contract.

Question 11

Unless an auction is advertised or announced to be without reserve, when a bid is made at an auction, it can be withdrawn if the auctioneer has not yet accepted the bid, because the auctioneer has the power of acceptance.

Accepted Answer

A) True 
 B)False

Question 12

Ricardo posts a sign in the neighborhood offering $50 for the return of his Saint Bernard.Alicia, who knows nothing of the reward, finds the dog and returns it to Ricardo.Alicia is entitled to the reward.

Accepted Answer

A) True 
 B)False

Question 13

For an offer to be valid:

Accepted Answer

A)  the offeree must have knowledge of the offer. 
B)  the offeree must have first-hand knowledge of the offer. 
C)  the offer must be stated or communicated by words. 
D)  the offer must be made by the offeror. 
A)  the offeree must have knowledge of the offer. 
B)  the offeree must have first-hand knowledge of the offer. 
C)  the offer must be stated or communicated by words. 
D)  the offer must be made by the offeror.

Question 14

The UCC provides missing contract terms in which of the following instances?

Accepted Answer

A)  The contract fails to specify the price. 
B)  The contract fails to specify the place of delivery. 
C)  Both failure to specify the price and failure to specify the place of deliver. 
D)  The UCC cannot provide missing contract terms; only the parties can provide terms. 
A)  The contract fails to specify the price. 
B)  The contract fails to specify the place of delivery. 
C)  Both failure to specify the price and failure to specify the place of deliver. 
D)  The UCC cannot provide missing contract terms; only the parties can provide terms.

Question 15

Robinson Wiring Co.submits a written offer for Turner Construction's use as part of its bid as a general contractor for an office complex.Robinson knows Turner is relying on Robinson's bid.Robinson:

Accepted Answer

A)  can revoke its offer at any time until it is notified that Turner's bid has been accepted. 
B)  cannot, under the doctrine of promissory estoppel, revoke its bid even prior to acceptance. 
C)  cannot revoke its offer since it is a "firm offer." 
D)  can revoke its offer for a reasonable time under the doctrine of "commercial reasonableness." 
A)  can revoke its offer at any time until it is notified that Turner's bid has been accepted. 
B)  cannot, under the doctrine of promissory estoppel, revoke its bid even prior to acceptance. 
C)  cannot revoke its offer since it is a "firm offer." 
D)  can revoke its offer for a reasonable time under the doctrine of "commercial reasonableness."

Question 16

Alexio read SmartHome's ad in the local newspaper advertising a home communications system for $489.Alexio rushed to the store to buy the system only to be told by the salesperson that the ad was a misprint and the price should have been $849.Alexio gave the salesperson $489 plus sales tax and demanded the system.

Accepted Answer

A)  The ad is a firm offer by the merchant, and the communication system must be sold for $489. 
B)  Alexio can successfully sue SmartHome for the difference if he buys the system for $849. 
C)  The store must accept the price stated in the ad, but only if Alexio has a copy of the ad with him. 
D)  Alexio is merely making an offer to SmartHome  to buy the communication system for $489 plus sales tax. 
A)  The ad is a firm offer by the merchant, and the communication system must be sold for $489. 
B)  Alexio can successfully sue SmartHome for the difference if he buys the system for $849. 
C)  The store must accept the price stated in the ad, but only if Alexio has a copy of the ad with him. 
D)  Alexio is merely making an offer to SmartHome  to buy the communication system for $489 plus sales tax.

Question 17

Distinguish between a rejection of an offer and a revocation of an offer.

Accepted Answer

Revocation of an offer is the cancellati

Question 18

George offered to paint Catherine's barn for $3,000.Catherine said she would accept the offer if George would paint the woodshed, too.At this point, they have made a valid and enforceable contract.

Accepted Answer

A) True 
 B)False

Question 19

An offer is an indefinite proposal made by one person to another.

Accepted Answer

A) True 
 B)False

Question 20

An auctioneer is the offeror and a contract is formed when a bid is made.

Accepted Answer

A) True 
 B)False

Exam 10: Mutual Assent

The way parties usually show mutual assent is by:

Discuss silence as acceptance of an offer.

Will makes an offer to Ike, but before Ike can accept, the state legislature passes a law that makes Will's offer illegal.The new statute:

The Code's firm offer rule applies only to offers in writing that are made by a merchant offeror.

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

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

A standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved and in terms of the facts and circumstances of the case is:

Under the UCC, an acceptance must always be identical to an offer for a valid contract to be formed.

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

Unless an auction is advertised or announced to be without reserve, when a bid is made at an auction, it can be withdrawn if the auctioneer has not yet accepted the bid, because the auctioneer has the power of acceptance.

Ricardo posts a sign in the neighborhood offering $50 for the return of his Saint Bernard.Alicia, who knows nothing of the reward, finds the dog and returns it to Ricardo.Alicia is entitled to the reward.

For an offer to be valid:

The UCC provides missing contract terms in which of the following instances?

Robinson Wiring Co.submits a written offer for Turner Construction's use as part of its bid as a general contractor for an office complex.Robinson knows Turner is relying on Robinson's bid.Robinson:

Distinguish between a rejection of an offer and a revocation of an offer.

George offered to paint Catherine's barn for $3,000.Catherine said she would accept the offer if George would paint the woodshed, too.At this point, they have made a valid and enforceable contract.

An offer is an indefinite proposal made by one person to another.

An auctioneer is the offeror and a contract is formed when a bid is made.

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

Introduction to Contracts

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Bankruptcypart Ix: Regulation of Business

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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