Question 1

A price list is an invitation to negotiate.

Accepted Answer

A) True 
 B)False

Question 2

Rafi offers a tour of Bay Harbor aboard his sailboat, Sea Siren, to Tiara's Travel Group for $500. Referring to the prices for similar tours, Tiara's says, "We'll pay no more than $400." Rafi's offer is

Accepted Answer

A)  ​still open. 
B)  ​terminated. 
C)  ​rejected and subject to a counteroffer. 
D)  ​revoked. 
A)  ​still open. 
B)  ​terminated. 
C)  ​rejected and subject to a counteroffer. 
D)  ​revoked.

Question 3

On December 1, Petro, Inc., sent Rachel & Rico (R&R) a letter, via overnight delivery, offering to employ R&R to review Petro's tax situation for the current year for $10,000. In the letter, the company stated that R&R had ten days to accept. On December 5, R&R sent an e-mail message that stated, "The price for the tax analysis seems too low. Would you consider paying $15,000?" Petro received the message without responding immediately. The next day, Smith & Taylor, an R&R competitor, offered to conduct the appraisal for $8,000. On learning of this offer, R&R immediately e-mailed Petro, agreeing to do the work for $10,000. Petro received this message on December 7. Explain why R&R and Petro do, or do not, have a contract.

Accepted Answer

R&R and Petro have a contract. R&R effec

Question 4

Waste Management Corporation enters into contracts for its services online. Waste Management can protect itself against disputes involving these contracts by making important terms

Accepted Answer

A)  ​reasonably clear. 
B)  ​vaguely ambiguous. 
C)  ​practical. 
D)  ​standardized. 
A)  ​reasonably clear. 
B)  ​vaguely ambiguous. 
C)  ​practical. 
D)  ​standardized.

Question 5

An essential element for contract formation is agreement.

Accepted Answer

A) True 
 B)False

Question 6

The first requirement for an offer is that it must be practical.

Accepted Answer

A) True 
 B)False

Question 7

An invitation to negotiate-"can you afford this?"-is an offer.

Accepted Answer

A) True 
 B)False

Question 8

Green River Gas Company offers to sell Far East Energy, Ltd., a certain quantity of liquefied natural gas. If Far East sends an acceptance via Green River's authorized mode of communication, it will be effective when it is

Accepted Answer

A)  ​in transit. 
B)  ​received. 
C)  ​sent. 
D)  ​written. 
A)  ​in transit. 
B)  ​received. 
C)  ​sent. 
D)  ​written.

Question 9

Corporate Code, Inc., sells business software-accounting and book-keeping 2, blank business forms, inventory control functions, and the like-in different combinations, in different packages, at different prices. Each package includes a shrink-wrap agreement that limits warranties and remedies. Developmental Research Corporation (DRC) buys a Corporate Code package and uses the product. Later, DRC files a suit against the software seller, claiming that the product was flawed and that the flaws caused DRC to suffer business losses. DRC asks for relief that exceeds the limits in the shrink-wrap agreement. What is a shrink-wrap agreement? Are such agreements always enforced? Under what circumstances is a court likely to enforce this agreement?

Accepted Answer

A shrink-wrap agreement is an agreement

Question 10

Gayla tells Franco that she will pay him $50 to haul the trimmed tree limbs and other lawn debris from her property. Franco's acceptance is complete

Accepted Answer

A)  ​as soon as he says he will do the job. 
B)  ​once he starts to work. 
C)  ​only after he hauls away the debris. 
D)  ​when he hears the offer. 
A)  ​as soon as he says he will do the job. 
B)  ​once he starts to work. 
C)  ​only after he hauls away the debris. 
D)  ​when he hears the offer.

Question 11

Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when

Accepted Answer

A)  ​received. 
B)  ​sent. 
C)  ​followed up by a confirmation letter sent by regular mail. 
D)  ​composed on a Relay computer. 
A)  ​received. 
B)  ​sent. 
C)  ​followed up by a confirmation letter sent by regular mail. 
D)  ​composed on a Relay computer.

Question 12

Lou offers to service Millie's heating and air conditioning system for one year for $500. Under the mirror image rule, Millie's response will be considered an acceptance if the terms of the acceptance

Accepted Answer

A)  ​exactly mirror those of the offer. 
B)  ​change the items offered, but do not change the price. 
C)  ​change the price, but do not change the items offered. 
D)  ​change both the price and the items offered. 
A)  ​exactly mirror those of the offer. 
B)  ​change the items offered, but do not change the price. 
C)  ​change the price, but do not change the items offered. 
D)  ​change both the price and the items offered.

Question 13

In a bilateral contract, communication of acceptance is necessary.

Accepted Answer

A) True 
 B)False

Question 14

Coffee Brokers, Inc., offers to buy Dining Company's coffee-roasting services for a certain price. Dining responds that the price is too low and thereby rejects the offer. The offer is

Accepted Answer

A)  ​terminated. 
B)  ​valid for a reasonable time to give Interstate a "second chance." 
C)  ​valid for the period of time prescribed by a state statute. 
D)  ​valid until Interstate revokes the offer. 
A)  ​terminated. 
B)  ​valid for a reasonable time to give Interstate a "second chance." 
C)  ​valid for the period of time prescribed by a state statute. 
D)  ​valid until Interstate revokes the offer.

Question 15

Business Properties, Inc. (BPI), offers to sell a cold storage warehouse to Corporate Investments. Corporate says that it will pay BPI $100 to hold the offer open for three business days. This

Accepted Answer

A)  ​creates an illegal contract by adding a clause to BPI's offer. 
B)  ​makes the offer irrevocable for three days if BPI accepts. 
C)  ​negates BPI's offer by changing the price term. 
D)  ​voids BPI's offer by extending the time term. 
A)  ​creates an illegal contract by adding a clause to BPI's offer. 
B)  ​makes the offer irrevocable for three days if BPI accepts. 
C)  ​negates BPI's offer by changing the price term. 
D)  ​voids BPI's offer by extending the time term.

Question 16

Bret buys a subscription to the catalog of music provided by Concerto, an online music vendor. Before accessing the catalog, Bret must agree to a provision stating that she will not make and sell copies of the music. This provision is

Accepted Answer

A)  ​a browse-wrap term. 
B)  ​a click-on agreement. 
C)  ​a shrink-wrap agreement. 
D)  ​a partnering agreement. 
A)  ​a browse-wrap term. 
B)  ​a click-on agreement. 
C)  ​a shrink-wrap agreement. 
D)  ​a partnering agreement.

Question 17

Wally offers to repair and service a forklift for Valu Lumber Outlet, but Wally dies before Valu accepts. Most likely, Wally's death

Accepted Answer

A)  ​does not affect the offer. 
B)  ​shortens the time of the offer but does not terminate it. 
C)  ​extends the time of the offer. 
D)  ​terminates the offer. 
A)  ​does not affect the offer. 
B)  ​shortens the time of the offer but does not terminate it. 
C)  ​extends the time of the offer. 
D)  ​terminates the offer.

Question 18

Fresh Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to Fresh's

Accepted Answer

A)  ​assumptions. 
B)  ​beliefs. 
C)  ​intentions. 
D)  ​words and conduct. 
A)  ​assumptions. 
B)  ​beliefs. 
C)  ​intentions. 
D)  ​words and conduct.

Question 19

Anton tells Brooke, who has no knowledge of Shakespearean comedy, that he will tutor her in the subject for $50. As an offer, this is

Accepted Answer

A)  ​effective. 
B)  ​not effective because comedy is not a serious subject. 
C)  ​not effective because Anton's tutoring will be subjective. 
D)  ​not effective because Brooke has no knowledge of the subject. 
A)  ​effective. 
B)  ​not effective because comedy is not a serious subject. 
C)  ​not effective because Anton's tutoring will be subjective. 
D)  ​not effective because Brooke has no knowledge of the subject.

Question 20

Generally, an offeree's power of acceptance is terminated when the offeror or offeree dies.

Accepted Answer

A) True 
 B)False

Exam 12: Agreement in Traditional and E-Contracts

A price list is an invitation to negotiate.

Rafi offers a tour of Bay Harbor aboard his sailboat, Sea Siren, to Tiara's Travel Group for $500. Referring to the prices for similar tours, Tiara's says, "We'll pay no more than $400." Rafi's offer is

Waste Management Corporation enters into contracts for its services online. Waste Management can protect itself against disputes involving these contracts by making important terms

An essential element for contract formation is agreement.

The first requirement for an offer is that it must be practical.

An invitation to negotiate-"can you afford this?"-is an offer.

Green River Gas Company offers to sell Far East Energy, Ltd., a certain quantity of liquefied natural gas. If Far East sends an acceptance via Green River's authorized mode of communication, it will be effective when it is

Gayla tells Franco that she will pay him $50 to haul the trimmed tree limbs and other lawn debris from her property. Franco's acceptance is complete

Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when

Lou offers to service Millie's heating and air conditioning system for one year for $500. Under the mirror image rule, Millie's response will be considered an acceptance if the terms of the acceptance

In a bilateral contract, communication of acceptance is necessary.

Coffee Brokers, Inc., offers to buy Dining Company's coffee-roasting services for a certain price. Dining responds that the price is too low and thereby rejects the offer. The offer is

Business Properties, Inc. (BPI), offers to sell a cold storage warehouse to Corporate Investments. Corporate says that it will pay BPI $100 to hold the offer open for three business days. This

Bret buys a subscription to the catalog of music provided by Concerto, an online music vendor. Before accessing the catalog, Bret must agree to a provision stating that she will not make and sell copies of the music. This provision is

Wally offers to repair and service a forklift for Valu Lumber Outlet, but Wally dies before Valu accepts. Most likely, Wally's death

Fresh Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to Fresh's

Anton tells Brooke, who has no knowledge of Shakespearean comedy, that he will tutor her in the subject for $50. As an offer, this is

Generally, an offeree's power of acceptance is terminated when the offeror or offeree dies.

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