Question 1

A(n) ________ is a withdrawal of an offer by the offeror that terminates the offer.

Accepted Answer

A)  rejection 
B)  advertisement 
C)  revocation 
D)  counteroffer 
A)  rejection 
B)  advertisement 
C)  revocation 
D)  counteroffer

Question 2

An offer is not effective until it is actually received by the offeree.

Accepted Answer

A) True 
 B)False

Question 3

________ is a stipulation in an offer that says the acceptance must be by a specified means of communication.

Accepted Answer

A)  An option contract 
B)  The mirror image rule 
C)  Implied authorization 
D)  Express authorization 
A)  An option contract 
B)  The mirror image rule 
C)  Implied authorization 
D)  Express authorization

Question 4

To meet the mirror image rule, the offeree must accept the terms of the offer without modification.

Accepted Answer

A) True 
 B)False

Question 5

George made an offer to Jacob to sell his house for $1 million. The offer was received by Jacob on May 1, 2014, and he stipulated that he had 13 days to accept it. But Jacob could not arrange the money, and on May 16, 2014 he made a counteroffer to buy the house for $850,000. Which of the following is true of the original offer made by George to Jacob?

Accepted Answer

A)  It is terminated by the counteroffer. 
B)  It is still valid as the house has not been sold. 
C)  It is invalid due to lapse of the stated time. 
D)  It is invalid due to incompetency of the offeree. 
A)  It is terminated by the counteroffer. 
B)  It is still valid as the house has not been sold. 
C)  It is invalid due to lapse of the stated time. 
D)  It is invalid due to incompetency of the offeree.

Question 6

Peter plans to sell his two houses, numbered Lot 1 and Lot 2, at $800,000 each. David, who was interested in buying Lot 2, could not make up his mind on the final offer and asks Peter to give him a week to decide. Peter accepts, but David takes two weeks to decide the counteroffer. Before he could give David a reply to his counteroffer, Peter is killed in a fire that burned down Lot 1. Which of the following would be true in this case?

Accepted Answer

A)  The offer is terminated due to lapse of time. 
B)  The offer is terminated due to destruction of the subject matter. 
C)  The offer is terminated due to death of the offeror. 
D)  David can still buy the house for Peter's original offer. 
A)  The offer is terminated due to lapse of time. 
B)  The offer is terminated due to destruction of the subject matter. 
C)  The offer is terminated due to death of the offeror. 
D)  David can still buy the house for Peter's original offer.

Question 7

A(n) ________ is a voluntary exchange of promises between two or more legally competent persons to do, or refrain from doing, an act.

Accepted Answer

A)  offer 
B)  advertisement 
C)  agreement 
D)  proposal 
A)  offer 
B)  advertisement 
C)  agreement 
D)  proposal

Question 8

An offer is terminated on the grounds of "supervening illegality" when ________.

Accepted Answer

A)  the set period in the offer has expired 
B)  the subject matter in the offer has been destroyed 
C)  a statute or court decision deems an object of the offer unlawful 
D)  the offeror or offeree passes away prior to the offer being accepted 
A)  the set period in the offer has expired 
B)  the subject matter in the offer has been destroyed 
C)  a statute or court decision deems an object of the offer unlawful 
D)  the offeror or offeree passes away prior to the offer being accepted

Question 9

An offer is terminated on the grounds of "lapse of time" if ________.

Accepted Answer

A)  the offeror dies before the offeree has accepted the offer 
B)  the offer is not communicated to the offeree 
C)  the offeror has communicated to the offeree a set time which is not mentioned in the offer 
D)  the offer is not accepted within a stated time period 
A)  the offeror dies before the offeree has accepted the offer 
B)  the offer is not communicated to the offeree 
C)  the offeror has communicated to the offeree a set time which is not mentioned in the offer 
D)  the offer is not accepted within a stated time period

Question 10

In an auction without reserve, the seller is the offeree.

Accepted Answer

A) True 
 B)False

Question 11

The mirror image rule states that ________.

Accepted Answer

A)  the offeree's counteroffer should match the value of the offeror's offer 
B)  the offeree is allowed to modify the terms of the offer 
C)  the offeror can modify the terms of the offer even after the offeree has accepted them 
D)  the offeree must accept the terms as stated in the offer 
A)  the offeree's counteroffer should match the value of the offeror's offer 
B)  the offeree is allowed to modify the terms of the offer 
C)  the offeror can modify the terms of the offer even after the offeree has accepted them 
D)  the offeree must accept the terms as stated in the offer

Question 12

In an auction with reserve, the bidder can withdraw his or her bid after an acceptance has been indicated from the offeror.

Accepted Answer

A) True 
 B)False

Question 13

Give an account of termination of offer due to lapse of time.

Accepted Answer

An offer expires at the lapse of time of

Question 14

Which of the following is true for an auction with reserve?

Accepted Answer

A)  The seller retains the right to refuse the highest bidder. 
B)  Invitations to make an offer are not allowed. 
C)  Goods cannot be withdrawn from sale after the offer has been made. 
D)  A bid once made cannot be withdrawn and is legally binding. 
A)  The seller retains the right to refuse the highest bidder. 
B)  Invitations to make an offer are not allowed. 
C)  Goods cannot be withdrawn from sale after the offer has been made. 
D)  A bid once made cannot be withdrawn and is legally binding.

Question 15

Luke offered to sell his farm to Kent at $75,000, an offer which Kent declined. A week later, Luke offered to sell the farm for $65,000, stating it was the final offer that would be valid for one month only. Two days later, Kent offered to pay $60,000 for the farm. Luke received Kent's offer a week later and he declined it. After ten days, Kent agreed to buy the farm for $65,000, but Luke refused to sell the farm. Kent decided to sue Luke for a breach of contract. The judge ruled in favor of Luke. Which one of the following is the reason for the ruling in Luke's favor?

Accepted Answer

A)  Luke's original offer of $75,000 is still valid, even though rejected. 
B)  Kent's counteroffer of $60,000 had rendered the offer for $65,000 invalid. 
C)  Kent's acceptance was past the set time period in the offer. 
D)  Kent acted in an incompetent manner toward the offer. 
A)  Luke's original offer of $75,000 is still valid, even though rejected. 
B)  Kent's counteroffer of $60,000 had rendered the offer for $65,000 invalid. 
C)  Kent's acceptance was past the set time period in the offer. 
D)  Kent acted in an incompetent manner toward the offer.

Question 16

What is the key difference between an agreement and a contract?

Accepted Answer

A)  A contract is always enforceable in the court of law, while an acceptance may or may not be. 
B)  A contract can only be between two individuals, while an acceptance can have two or more people involved. 
C)  A contract requires mutual assent from all parties, while an acceptance needs only to be accepted by a majority of people involved. 
D)  A contract need not be legally binding, while an agreement must be legally binding. 
A)  A contract is always enforceable in the court of law, while an acceptance may or may not be. 
B)  A contract can only be between two individuals, while an acceptance can have two or more people involved. 
C)  A contract requires mutual assent from all parties, while an acceptance needs only to be accepted by a majority of people involved. 
D)  A contract need not be legally binding, while an agreement must be legally binding.

Question 17

Implied terms in a contract can be supplied by the courts.

Accepted Answer

A) True 
 B)False

Question 18

Bilateral contracts are accepted only upon the offeree's performance of the required act.

Accepted Answer

A) True 
 B)False

Question 19

Ron uses his status message on his Facebook account to invite his friends to buy his desktop computer. His friend Carl is interested and calls Ron to express his interest. Ron tells him that he is selling the computer for $400. Carl offers to pay $350 and Ron accepts the offer. Carl's response to Ron's offer to sell for $400 is considered as a(n) ________.

Accepted Answer

A)  mirror image rule acceptance 
B)  rejection 
C)  unequivocal acceptance 
D)  counteroffer 
A)  mirror image rule acceptance 
B)  rejection 
C)  unequivocal acceptance 
D)  counteroffer

Question 20

How can an offeror revoke an offer?

Accepted Answer

Under the common law, an offeror may rev

Exam 10: Agreement

A(n) ________ is a withdrawal of an offer by the offeror that terminates the offer.

An offer is not effective until it is actually received by the offeree.

________ is a stipulation in an offer that says the acceptance must be by a specified means of communication.

To meet the mirror image rule, the offeree must accept the terms of the offer without modification.

A(n) ________ is a voluntary exchange of promises between two or more legally competent persons to do, or refrain from doing, an act.

An offer is terminated on the grounds of "supervening illegality" when ________.

An offer is terminated on the grounds of "lapse of time" if ________.

In an auction without reserve, the seller is the offeree.

The mirror image rule states that ________.

In an auction with reserve, the bidder can withdraw his or her bid after an acceptance has been indicated from the offeror.

Give an account of termination of offer due to lapse of time.

Which of the following is true for an auction with reserve?

What is the key difference between an agreement and a contract?

Implied terms in a contract can be supplied by the courts.

Bilateral contracts are accepted only upon the offeree's performance of the required act.

How can an offeror revoke an offer?

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