15e Test Bank Docx Ch.8 Offer, Acceptance, and Mutual Assent

Business Law with UCC Applications, 15e (Sukys)

Chapter 8 Offer, Acceptance, and Mutual Assent

1) In the case of an open offer, there must be merely reasonable intent, clear and reasonably definite terms, and communication to the offeree.

Difficulty: 2 Medium

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Apply

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

2) Teri sends an offer to Morris to sell her car for its Blue Book value. Morris is the offeree.

Difficulty: 2 Medium

Topic: Mutual Assent and the Offer

Learning Objective: 08-01 Define mutual assent.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

3) A newspaper advertisement addressed to "Ohio residents only" would be an invitation to trade.

Difficulty: 3 Hard

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

4) Henry sends an e-mail to Bernice regarding the sale of his truck to her for a price "to be determined in good faith." If Bernice e-mails back stating "I Accept," the agreement would be unenforceable.

Difficulty: 3 Hard

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

5) Most of the time, printed and electronic advertisements are bait-and-switch confidence games.

Difficulty: 2 Medium

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

6) Acorn Outfitters advertises a large tent, usually selling for $250, to be sold to the first customer the next morning for $25. Samuel is the first in line, but Acorn claims that the tent has already been sold. Acorn has engaged in an auction.

Difficulty: 3 Hard

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

7) An auction with reserve is a contract in which one party consents to sell to a second party all of the goods that party makes in a given period of time.

Difficulty: 2 Medium

Topic: Mutual Assent and the Offer

Learning Objective: 08-03 Explain the UCC's concept of offer in contract law.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

8) Foster Aircraft Co. has agreed with the U.S. government to rapidly produce a new fighter aircraft in exchange for specified production expenses and a 10% profit. This is a requirements contract.

Difficulty: 3 Hard

Topic: Mutual Assent and the Offer

Learning Objective: 08-03 Explain the UCC's concept of offer in contract law.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

9) According to general contract law, a contract for the sale of goods comes into existence when any reasonable means under the circumstances is used to communicate the acceptance.

Difficulty: 1 Easy

Topic: Mutual Assent and the Offer

Learning Objective: 08-03 Explain the UCC's concept of offer in contract law.

Bloom's: Remember

AACSB: Ethics

Accessibility: Keyboard Navigation

10) When dealing with a text offer which requests a text back to accept, the acceptance is complete when the text acceptance is received by the offeror.

Difficulty: 2 Medium

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

11) A condition precedent is one in which the parties agree that the contract will be terminated when a prescribed event occurs or does not occur.

Difficulty: 2 Medium

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

12) Clickwrap contracts have been generally held to be unenforceable.

Difficulty: 1 Easy

Topic: Mutual Assent in Cyberspace

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Remember

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

13) On June 1 Alberto sent out texts offering to sell his car and asking for text acceptances. On June 7, Cruz texted Alberto accepting his offer. However, Cruz's text was not received by Alberto until June 10 due to connection problems. The text from Cruz created an enforceable agreement between Cruz and Alberto the moment it was sent.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

14) Omar offers to sell a motorcycle to Adanne for $10,000. Adanne replies, "I will pay $10,000 if you overhaul the engine." Adanne's reply is a counter offer.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-05 Define the mirror image rule.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

15) During a lunch with Russell, Josephine offers to sell Russell her laptop for $1,000. Russell rejects her offer when he says "nah, not interested" during the lunch. But the next day, before Josephine has taken any additional action, Russell calls her to say, "I've changed my mind, I'll take the laptop." An enforceable contract has been formed, and Josephine is legally required to sell Russell her laptop for $1,000.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

16) The lawyers of Leo's estate put an auction ad in the local newspaper asking "without reserve" bids on his 100-acre ranch along the Guadalupe River. All bids were to be texted by 5 P.M. August 1st. Only one bid was sent, and that was Sam's bid of $100. Assuming no other legal issues, the Estate of Leo and Sam have an enforceable agreement for the purchase and sale of the ranch for $100.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

17) Under the general law of contracts, an option contract holds an offer open for an agreed period of time, regardless of whether there is sufficient legal consideration.

Difficulty: 2 Medium

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

18) A merchant in a sale of goods contract under Article can agree to an option that exceeds one month in duration.

Difficulty: 2 Medium

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

19) A lease option permits a party to lease real property while at the same time holding an option to purchase that property.

Difficulty: 2 Medium

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

20) An e-contract must have additional consideration to be as valid as a paper contract.

Difficulty: 1 Easy

Topic: Mutual Assent in Cyberspace

Learning Objective: 08-07 Identify those statutes that affect mutual assent in cyberspace.

Bloom's: Remember

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

21) The Uniform Computer Information Transactions Act (UCITA) covers diverse areas, such as database contracts and software licensing agreements.

Difficulty: 2 Medium

Topic: Mutual Assent in Cyberspace

Learning Objective: 08-07 Identify those statutes that affect mutual assent in cyberspace.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

22) A unilateral mistake offers each party the right to rescind the contract.

Difficulty: 2 Medium

Topic: The Destruction of Mutual Assent

Learning Objective: 08-09 Identify the effects of mistake on mutual assent.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

23) The first rule of contract interpretation, under the ________, tells judges that their primary objective in the interpretation of a written contract is to uncover the goals that the parties had when they entered into the contract in the first place.

A) standard construction rule

B) state of frauds

C) subjective construction rule

D) mutual assent rule

Difficulty: 2 Medium

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

24) Silas, very angry because his new car broke down, yells out "Anyone wanna buy a piece of junk for $100?" Ida overhears Silas and says, "I do, here's $100." What result?

A) Silas must sell his car for $100, since his statement was clear and definite.

B) Silas need not sell his car for $100, since he was clearly angry.

C) Silas must sell his car for $100, but only if he were speaking directly to Ida.

D) Silas must sell his car for $100, because his anger does convey serious intent.

Difficulty: 3 Hard

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

25) Hazel offers to sell her home to Mandisa for "about $100,000 plus closing costs." Mandisa accepts Hazel's offer, but a dispute arises concerning the precise dollar amount of the purchase price. How will a court resolve this dispute?

A) The court will declare the purchase price and terms too indefinite to create a binding contract.

B) The court will determine a reasonable price to be paid by Mandisa.

C) The court will appoint a licensed real estate appraiser to determine the price to be paid by Mandisa.

D) The court will require Mandisa to pay the average of her price and Hazel's price.

Difficulty: 3 Hard

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

26) Matrix Corporation, a computer manufacturer, agrees to purchase from Chipmaster, Inc. all the computer chips that Chipmaster can produce during the next 12 months, at cost plus a twelve-percent markup. Matrix later does not purchase any computer chips during the 12-month year. Can Chipmaster enforce the agreement made with it?

A) Yes, this is an enforceable requirement contract.

B) No, the price is not sufficiently defined.

C) No, the agreement to purchase is illusory.

D) Yes, this is an enforceable output contract.

Difficulty: 3 Hard

Topic: Mutual Assent and the Offer

Learning Objective: 08-03 Explain the UCC's concept of offer in contract law.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

27) In a(n) ________ contract, one party consents to sell to a second party all of the goods that party makes in a given period of time.

A) requirements

B) current market price

C) cost-plus

D) output

Difficulty: 2 Medium

Topic: Mutual Assent and the Offer

Learning Objective: 08-03 Explain the UCC's concept of offer in contract law.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

28) Highflight Foundation offers $1 million to the makers of the first private spacecraft to fly to the moon and back. Spaceview, Inc. succeeds in producing the first private spacecraft to fly to the moon and back, but Highflight refuses to pay. This is a ________ contract and Highlight is ________.

A) unilateral; not bound by the offer unless there is a written and signed contract with Spaceview

B) unilateral; bound because Spaceview performed the required action, which was an acceptance of the offer

C) unilateral; not bound since the moon is not under U.S. legal jurisdiction

D) bilateral; bound since Spaceview had a firm offer

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

29) Jose agrees to sell his car to Diego for $5,000 if he is accepted to Harvard Medical School. This contract is:

A) illusory.

B) subject to a condition precedent.

C) subject to a condition subsequent.

D) subject to concurrent conditions.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

30) Anthony offers to sell a computer to Salvador for $900 if Salvador replies by e-mail only, sent no later than noon on Saturday. On Saturday, Salvador is unable to access his e-mail, so he mails an acceptance at the post office before noon. Which of the following is true of the situation?

A) A legal contract exists since Salvador's acceptance was sent by noon on Saturday.

B) No contract exists since Salvador's acceptance is not effective until reviewed.

C) Anthony is legally bound to the contract since Salvador's e-mail malfunction was no fault of his own.

D) A legal contract does not exist since the mode of acceptance specified in the offer was not used.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

31) Mercedes receives a box of unordered office supplies in the mail. What is her legal obligation?

A) She must return it.

B) She must report this to the local postal inspector.

C) She must pay for it.

D) She may consider it a gift.

Difficulty: 2 Medium

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

32) When forming online contracts, ________ is a cyber-technique that preserves electronic data of offer and acceptance without using local hard drives and flash drives.

A) social media

B) encryption

C) cloud computing

D) E-SIGN

Difficulty: 2 Medium

Topic: Mutual Assent in Cyberspace

Learning Objective: 08-04 Explain the nature of acceptance.; 08-07 Identify those statutes that affect mutual assent in cyberspace.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

33) Rosa sends an offer to Kellen that requires acceptance to be made by U.S. mail. Kellen accepts in a timely manner, but sends the acceptance by FedEx which delivers the acceptance to Rosa two days faster than the U.S. mail would. Under traditional common law rules, has Kellen accepted Rosa's offer?

A) No, since the offer specified a particular manner of acceptance that was not used.

B) Yes, since FedEx was faster than the U.S. mail.

C) No, since the acceptance was delivered by a private, rather than a public, delivery service.

D) Yes, since acceptance sent in any form—even if early or delayed—confirms the offer.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

34) Soft Feet, Inc. manufactures shoes. Walk Style, Inc. is a retailer of shoes. Soft Feet offers to sell Walk Style 1,000 pairs of shoes at $5 per pair with delivery to be made by October 31. Walk Style accepts, but writes in the margin "delivery to be made by October 20." According to the UCC, what is the legal status of Walk Style's October 20 delivery date?

A) Under the UCC, the writing is not a mirror of the offer and is a counteroffer.

B) Under the UCC, the writing binds Soft Feet to accept the conditions about the delivery date.

C) Under the UCC, the writing binds Soft Feet, unless it objects.

D) Under the UCC, the writing is an unequivocal acceptance.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.; 08-05 Define the mirror image rule.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

35) Brett offers to dust and vacuum all the rooms in Arlene's apartment for $45. Arlene says she will accept his offer if he lowers his fee to $40. According to the common law of contracts, Arlene has:

A) made an unequivocal acceptance.

B) made a counteroffer.

C) demonstrated the mirror image rule.

D) entered into an option contract.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-05 Define the mirror image rule.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

36) An option contract:

A) removes the possibility of revocation through death or insanity of the offeror.

B) is valid only if in return for the agreement to hold the offer open, the offeror receives no money or something else of value from the offeree.

C) is a contract that permits a party to lease real property while at the same time holding an option to purchase that property.

D) is an agreement that binds an offeror to a promise to hold open an offer with no time limit specified.

Difficulty: 2 Medium

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

37) While looking for apartments, Brittany finds one that she likes. The building manager agrees to an option contract in which he will hold the apartment for Brittany for four days in return for $100. At the end of the fourth day, Brittany finds another apartment that she likes better and signs a lease with its building manager. Because Brittany's contract with the original building manager is an option contract, the building manager is under:

A) no legal obligation to return more than $50 to Brittany.

B) legal obligation to return Brittany's $100 payment.

C) legal obligation to return one-fourth of Brittany's $100 payment.

D) no legal obligation to return Brittany's $100 payment.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

38) Booksellers, Inc. makes a written offer to sell Smallville City Library 20,000 books at $5 each. In writing, Booksellers also agrees to keep the offer open for sixty (60) days. However, before the 60 days have passed, Booksellers sells all the books to Universal Library for $7 each. Which of the following is true of this situation?

A) Smallville cannot file a legal claim, since a firm offer may be revoked prior to acceptance.

B) Smallville can file a legal claim, since Booksellers agreed to hold the offer open, even though no consideration was given.

C) Smallville had not taken possession of the books, nor paid any of the purchase prices, and hence cannot file a lawsuit.

D) Smallville can bring a lawsuit, since Booksellers engaged in bait-and-switch tactics.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

39) According to the E-SIGN Act:

A) diverse areas such as database contracts, software licensing agreements, customized software formulation, and the rights to multimedia commodities are covered.

B) the participants must concur on the use of an electronic medium to create their contractual relationship.

C) e-contracts that are entered into over the Internet will be valid, provided that the parties to the e-contract have agreed that electronic signatures will be used.

D) an e-contract, even if it cannot be duplicated and stored, will have the same validity as a paper contract.

Difficulty: 2 Medium

Topic: Mutual Assent in Cyberspace

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

40) The ________ has unified, streamlined, and refined the legal principles regarding such diverse areas as reverse engineering, consumer protection, shrinkwrap licenses, fair use, and consumer warranties.

A) Law Enforcement Access to Entity Information Act

B) Discovery of Electronically Stored Information Act

C) Uniform Computer Information Transactions Act

D) Secured Electronic Transactions Act

Difficulty: 2 Medium

Topic: Mutual Assent in Cyberspace

Learning Objective: 08-07 Identify those statutes that affect mutual assent in cyberspace.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

41) ________ occurs when one party does not say something about certain facts that he is under an obligation to reveal.

A) Passive fraud

B) Fraud inducement

C) Fraud in inception

D) Active Fraud

Difficulty: 2 Medium

Topic: The Destruction of Mutual Assent

Learning Objective: 08-08 Explain the elements of fraud and misrepresentation.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

42) Harvey and Myra Church were interested in buying land from Sam and Barb Houston. When the Churches asked about the appraised value of the property, the Houstons said that the appraisals ranged from $185,000 to $198,000. Without looking at any appraisals, the Churches agreed to buy the property for $185,000. After the contract was signed, the Houstons provided an appraisal listing the value as $155,000. When the Churches refused to go through with the deal, the Houstons sued to recover the difference between $185,000 and the lower price for which the house was later sold. The Churches counterclaimed the contract should be rescinded based on their mistaken assumption about the value of the house. The Churches' best argument for rescission would be based on:

A) the active fraud of the Houstons.

B) a bilateral mistake of value.

C) the Churches' unilateral mistake of value.

D) the Houstons' exertion of undue influence.

Difficulty: 3 Hard

Topic: The Destruction of Mutual Assent

Learning Objective: 08-08 Explain the elements of fraud and misrepresentation.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

43) A mistake by only one of the parties is called a ________ and ________ offer sufficient grounds for rescission or renegotiation.

A) unilateral mistake; does not

B) mutual mistake; does

C) binding mistake; does not

D) bilateral mistake; does

Difficulty: 2 Medium

Topic: The Destruction of Mutual Assent

Learning Objective: 08-09 Identify the effects of mistake on mutual assent.

Bloom's: Understand

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

44) ________ occurs when the dominant party in a special relationship uses excessive pressure to convince the weaker party to enter into a contract that greatly benefits the dominant party.

A) Business compulsion

B) Physical duress

C) Undue influence

D) Economic duress

Difficulty: 2 Medium

Topic: The Destruction of Mutual Assent

Learning Objective: 08-10 Describe duress and undue influence.

Bloom's: Understand

AACSB: Reflective Thinking

Accessibility: Keyboard Navigation

45) When Garibaldi rented an office from the landlord, Jonas Properties, Jonas agreed to reimburse Garibaldi a fair share of the expenses he incurred in redecorating the office. After the project was completed, Jonas refused to pay for any of the expenses. Analyze the situation in a case where Garibaldi files a lawsuit against Jonas for breach of contract.

Difficulty: 3 Hard

Topic: Mutual Assent and the Offer

Learning Objective: 08-02 Identify the elements of an offer.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

46) Girard University offered Steamer Ferris a professional position. Girard offered to provide Steamer a house and to pay him an annual salary of $50,000 plus benefits for teaching three classes per semester. Steamer agreed to the contract as long as Girard would also provide an administrative position for his wife. Discuss the agreements between the parties.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-02 Identify the elements of an offer.; 08-04 Explain the nature of acceptance.; 08-05 Define the mirror image rule.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

47) Dale posts an ad in the local newspaper—"$100 reward for the return of my dog, Buster"—with a picture. Henry, after seeing the newspaper advertisement, finds that a dog has strayed into his garden. Henry checks the dog's collar that has a tag with Dale's address and returns the dog. Is Henry legally entitled to the $100 reward? Explain.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

48) Joseph offered to sell Chelsea his electric bicycle for $650. Chelsea told Joseph she would be happy to buy his bicycle, and asked if the price included an extra tire. Joseph said there was no extra tire. Chelsea then agreed to pay $650 for the bicycle, but Joseph refused to sell stating that he now wanted $750 for the bicycle and that Chelsea had made a counteroffer when she mentioned an extra tire. Discuss whether or not Joseph may insist on receiving $750 for the bicycle.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

49) Todd offered in writing on Monday to sell his desk to Mike for $150. Todd's offer stated that unless Mike rejected Todd's offer by Thursday, it would be considered accepted. Mike did not reply until Saturday, when he rejected the offer and refused to buy the desk. Todd insists that Mike is bound to purchase the desk, since he did not reject the offer by Thursday. Discuss the validity of the contract and the legal obligation of Mike.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-04 Explain the nature of acceptance.

Bloom's: Analyze

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

50) On May 1st, Alpha Oil Company sends an electronic offer via the "cloud" to Zeno Refining Co. as follows: "Offer to sell 10,000 barrels of crude oil at $85 per barrel, will hold the offer open until July 1st." On July 2nd, Zeno responds with an acceptance to Alpha. But by the time of Zeno's response, the market price of crude oil has risen to $98 per barrel. Alpha says no contract, and Zeno threatens to sue. What result?

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Evaluate

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

51) On October 10th, Juliana sends Linda a letter offering to sell her book collection for $15,000. Three days later, on October 13th, Juliana dies. On October 15th, without knowing Juliana had died, Linda sends Juliana a letter accepting her offer. Juliana's heirs inform Linda that the $15,000 offer is revoked and that they will not sell the collection for less than $20,000. Linda demands specific performance. What result?

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

52) Melinda is considering opening a fast-food business across the street near a university campus. Melinda needs to secure $100,000 in loans to open her business. The owner of the land promises her that she has two months to accept his offer of $50,000 for the land. Discuss how Melinda can ensure that the owner does not sell the land to another buyer.

Difficulty: 3 Hard

Topic: Acceptance of an Offer

Learning Objective: 08-06 Explain the process of revocation.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

53) Mike and Mickey live at the opposite ends of Texas, some 750 miles apart. They want to make a contract via computer rather than using paper, since this will be faster and more convenient. Considering the three current model codes, what steps must Mike and Mickey take under each to make a legal binding agreement?

Difficulty: 3 Hard

Topic: Mutual Assent in Cyberspace

Learning Objective: 08-07 Identify those statutes that affect mutual assent in cyberspace.

Bloom's: Apply

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

54) Shelly was involved in an auto accident and was admitted to the local hospital, as she had suffered severe injuries. She informed the hospital staff that she was covered under accident insurance, and that the insurance company would pay for the medical bills. When the insurance agent arrives, he informs her that the insurance will cover every cost and that all she has to do is sign some papers for the insurance company to start the procedures. The papers that Shelly signs are actually an agreement that the insurance company will pay only 30 percent of the medical bills, since Shelly was driving recklessly. Analyze the case.

Difficulty: 3 Hard

Topic: The Destruction of Mutual Assent

Learning Objective: 08-08 Explain the elements of fraud and misrepresentation.

Bloom's: Evaluate

AACSB: Analytical Thinking

Accessibility: Keyboard Navigation