Chapter 10 The Agreement Offer Test Bank Answers

Business Law, 17e (Langvardt)

Chapter 10 The Agreement: Offer

1) The three requirements for a valid offer are: present intent to contract, definiteness, and communication to the offeree.

2) Strictly speaking, a contract has nothing to do with the subjective intent of the parties.

3) Courts look at the parties' outward manifestations of intent as a requirement to enforce a contract. This is called the subjective standard of intent.

4) An offer is the first step in the contract formation process.

5) Generally speaking, the UCC's rules for the definiteness of an offer make it easier to form a contract than traditional common law rules.

6) If a term is left open in a sale of goods contract, that open term or "gap" can be filled by inserting a presumption found in the UCC's "gap-filling" rules.

7) The UCC often creates contractual liability in situations where no contract would have resulted at common law.

8) To meet the requirements to form a contract, the parties must have future intent to agree and form a contract.

9) Mr. Blue and Mr. Green are in negotiations for a regular delivery of newspapers to Mr. Blue's business. Mr. Blue did not formally announce his acceptance to the offer. But when Mr. Green sent a shipment of newspapers as they agreed, Mr. Blue accepted the shipment and paid for them. According to the UCC, Mr. Blue and Mr. Green have an enforceable contract.

10) Generally speaking, advertisements for the sale of goods at specified prices are considered to be offers.

11) All terms of contracts, even "fine-print" provisions of standard form contracts, are always part of the parties' deal and binding on them, because parties have an obligation to read their contracts and are assumed to have done so.

12) An advertisement offering a reward for the return of lost property is usually treated as an offer for a unilateral contract.

13) Sellers at auctions are generally treated as makers of an invitation to offer.

14) Mr. Green is a general contractor and is accepting bids from subcontractors for the building of a new hotel. Mr. Blue submits a bid for his work associated with the project. In this instance, Mr. Green was the offeror.

15) The offeror is said to be "the master of the offer." This means that offerors have the power to determine the terms and conditions under which they are bound to a contract.

16) Bob offers to sell his bike to Sue for $100 and promises to keep his offer open for five days. Sue thanks him and leaves. At this point, Bob still has the power to revoke his offer.

17) Offers that fail to provide a specific time for acceptance are invalid because they are deemed to be indefinite.

18) A revocation is effective at the time it is dispatched by the offeror.

19) A firm offer for the sale of goods requires consideration to be given in exchange for the offeror's promise to keep the offer open.

20) The offeror's death automatically terminates an offer, but the offeree's death does not.

21) The ________ has the power to bind the person who makes an offer simply by accepting the offer.

A) leasor

B) offeree

C) leasee

D) offeror

22) Which of the following is the first step in the contract formation process?

A) Signing the agreement

B) An offer in definite terms

C) Selection of partners

D) Drafting the agreement

23) To determine whether a proposal qualifies as an offer, courts first look at:

A) the communication to the offeree.

B) the definiteness of terms.

C) the present intent to contract.

D) a description of the parties involved.

24) What does "present intent to contract" mean?

A) Intent to enter the contract upon acceptance

B) Intent to negotiate in case of rejection of offer

C) Intent to set contractual conditions

D) Intent to engage more than one partner in the deal

25) The term for a person who makes an offer is called?

A) Offeree

B) Offeror

C) Leasor

D) Incorporator

26) Ashley says to Ford, "I'd like to buy your house," and Ford responds, "You've got a deal." This exchange lacks ________.

A) partners

B) communication

C) object

D) specificity

27) Ashburn had a big ranch in Georgia. One day, Pamela stated, "I'd like to buy your sheep for $50. They're so cute!" to which Ashburn immediately replied, "Sure. That's a deal!" This cannot be enforced as a contract due to lack of:

A) consideration.

B) definiteness.

C) communication to offeree.

D) present intent to contract.

28) Abby orally offers to sell Carl 100 premium-grade fountain pens but neglects to state the price. Such pens typically sell for $1 each. Carl orally accepts. Immediately thereafter, Abby tries to back out of the deal. At this point in time, which of the following is most likely to be true?

A) There is no offer and no contract because the offer is indefinite.

B) There is no offer and no contract because the offer must be in writing.

C) There is a contract if the parties intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.

D) There is a contract because the offer contained all material terms.

29) According to classical contract law, courts are:

A) contract makers.

B) contract breakers.

C) contract enforcers.

D) contract negotiators.

30) Which of the following characterizes definiteness standards under classical contract law?

A) Courts are contract enforcers.

B) Contracts need to contain all the terms.

C) Courts should be able to provide "gap fillers" in contracts.

D) Courts can take a "hands-on" approach to contracts.

31) Which of the following characterizes the Code's standards of definiteness?

A) It sees courts as contract enforcers.

B) It requires a high degree of definiteness in contracts.

C) It can create contractual liabilities.

D) It cannot fill in gaps in contracts.

32) Which of the following is true of a sales contract under the UCC?

A) The courts cannot fill any "gaps" in the contracts.

B) The court needs to determine if the parties intended to make a contract.

C) An intent to contract exists even if the parties were unable to reach an agreement.

D) All terms of contract need to be clear for the court to decide the case.

33) Sue offers to buy a house from John and they were negotiating the price of the house. In the meantime, Sue confides in John's wife that she is willing to pay an amount of $50,000 for the house. Delighted to hear this, John's wife tells John the good news. John immediately calls Sue and accepts her offer. Is there a binding contract?

A) Yes, because there is valid consideration.

B) Yes, because a third party has communicated the terms of Sue's offer to John and John accepted the same.

C) No, because the offeror did not communicate the terms of the offer to the offeree.

D) No, because the contract is still not signed by both the parties.

34) Kyle sent Tara a letter offering to sell Tara his car. Tara left the letter on her desk, where her roommate, Maggie, saw it. After reading the letter, Maggie wrote to Kyle and stated that she (Maggie) wanted to accept Kyle's offer. Which of the following is true?

A) Kyle must sell Maggie his car unless Kyle is a merchant under the UCC.

B) There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie.

C) Kyle and Tara have a contract for the purchase of Kyle's car.

D) Maggie's letter is a valid acceptance of Kyle's offer.

35) For a proposal to be considered a contractual offer, the offeror must have what type of intent?

A) Present intent to contract

B) Future intent to contract

C) No intent to contract

D) Past intent to contract

36) Advertisements for the sale of goods at specific prices are considered to be:

A) bids.

B) unenforceable contracts.

C) invitations to offer.

D) unilateral contracts.

37) Ads that (1) limit the power of acceptance to one offeree or a small number of offerees, (2) are highly specific about the nature and number of items offered for sale and what is requested in return, and (3) leave nothing further to be negotiated are considered to be ________.

A) offers

B) invitations to negotiate

C) invitations to offer

D) obligations

38) When an auction is advertised as being ________, the seller is treated as having made an offer to sell the goods to the highest bidder.

A) without intent

B) without reserve

C) without price

D) without offer

39) Which of the following characterizes an auction "without reserve"?

A) Bidders must be merchants

B) Sellers must be merchants

C) Goods cannot be withdrawn after a call for bids

D) Buyers are treated as having made an offer to sell

40) Which of the following is true regarding bids?

A) Advertisements for bids are treated as offers.

B) Promissory estoppel can be used to prevent withdrawal of bids.

C) Bids for governmental contracts are covered under contract principles.

D) Those that submit a bid are called offerees.

41) Austen Construction, a general contractor, advertised for bids from subcontractors on the electrical work for the renovation of one of State University's parking structures. The advertisement announced that the contract would be awarded to the lowest responsible bidder. Bronte, a responsible electrical subcontractor, submitted the lowest bid to Austen for the electrical portion of the work. Austen informed Bronte that she should begin work immediately. Bronte then stated that she is "withdrawing" her bid from Austen. Which of the following statements is most accurate?

A) Austen should not rely on Bronte's offer to do the electrical work.

B) Austen accepted Bronte's offer, thereby forming a contract.

C) Austen is not bound by Bronte's bid until he informs her of his intent to accept.

D) Bronte has accepted Austen's offer by submitting the lowest bid.

42) An online agreement that presents contract terms and conditions but does not require readers to click to indicate agreement is called a:

A) clickwrap agreement.

B) shrinkwrap agreement.

C) browsewrap agreement.

D) minimum contracts agreement.

43) Ms. White lost her puppy. She advertises a reward of $50 for the return of her puppy. What is the contractual nature of Ms. White's advertisement?

A) An offer for a unilateral contract

B) An invitation for an offer

C) An invitation for a gift

D) An acceptance on a bilateral promise

44) Offers that fail to provide a specific time for acceptance are:

A) considered to be illegal.

B) are valid for a reasonable time.

C) are valid but unenforceable.

D) can be used to penalize the offeror.

45) When can the offeror effectively revoke his/her offer?

A) Only after an effective acceptance.

B) Only before an effective acceptance.

C) Only before payment for goods or services has been made.

D) Only before the parties have completed their obligations under the contract.

46) Which of the following offers terminates earliest? Assume that there is no time limitation on the offer unless the offer says otherwise.

A) An offer for the sale of land.

B) An offer to purchase stock on a stock exchange.

C) An offer that says that it will stay open for one week.

D) An offer with a valid five-day option attached to it.

47) Ian, a lawyer, sent an offer to Raymond on October 1 offering to sell Ian's car for $5,000. The offer did not contain a provision stating when it would terminate. Under these circumstances, when will that offer terminate?

A) After 5 days, as per the "5 day rule."

B) After 10 days, as per the "10 day rule."

C) After a "reasonable time."

D) When either Ian or Raymond terminates it.

48) Which of the following is true of a revocation?

A) The power of revocation of an offer lies with the offeree.

B) Death or insanity cannot be reasons for revocation.

C) Promissory estoppel is used to prevent revocations.

D) Offers that fail to state a specified time period are considered invalid.

49) A(n) ________ is a separate contract in which an offeror agrees not to revoke her offer for a stated time in exchange for some valuable consideration.

A) offer

B) option

C) bid

D) advertisement

50) Which of the following helps to prevent offerors from revoking their offers prior to acceptance when the offeree relies on it being kept open?

A) Option

B) Promissory estoppel

C) Unilateral contracts

D) Firm offer

51) A firm offer differs from an option in that, a firm offer:

A) is a separate contract by itself.

B) is irrevocable for a certain period of time.

C) does not require consideration in exchange for the offer.

D) is not covered under the UCC.

52) Which of the following conditions characterizes a firm offer regarding the sale of goods?

A) It must be verbally communicated.

B) It can be revoked by the offeror prior to acceptance.

C) It must be made in the presence of a government official.

D) It must be made by an offeror who is a merchant.

53) In which of the following circumstances are offerors free to revoke their offers?

A) In case of common law rule on revocation.

B) In case of unilateral contracts.

C) In case of the availability of an option.

D) In case of a promissory estoppel.

54) How does the presence of facts that constitute promissory estoppel make a difference in the law of offers and revocations?

A) It makes an offer enforceable, even without consideration.

B) It does away with the requirement that rejections and revocations be communicated.

C) It makes an offer automatically revocable at any time.

D) It does away with the requirement that offers be definite.

55) Sara tells Kate that she will give her $50 to clean her garage. When Kate is halfway done, Sara decides to revoke her offer. Is this a valid revocation?

A) Yes, because Sara is the master of the offer here.

B) Yes, because Sara can revoke the offer any time she feels like.

C) No, because this is a valid contract that cannot be revoked.

D) No, because this is now a bilateral contract.

56) The outer limit on a firm offer's irrevocability is:

A) 1 month.

B) 3 months.

C) 6 months.

D) 1 year.

57) How can an offeree impliedly reject an offer?

A) By indicating that he will not accept it

B) By asking for more time to consider it

C) By making a counteroffer

D) By writing his nonacceptance

58) Why does a rejection by the offeree terminate his power to accept the offer?

A) It indicates his inability to perform the contract.

B) It indicates that the offeree is uninterested.

C) It allows the offeror to approach a different offeree.

D) It indicates a lack of intent making any future contract illegal.

59) When is the revocation of an offer effective?

A) When received by the offeror

B) When received by the offeree

C) When sent by the offeree

D) When sent by the offeror

60) A newspaper advertisement made to the general public:

A) usually is an offer.

B) can be revoked by using a similar newspaper advertisement.

C) can only be rejected by using a similar newspaper advertisement.

D) is a firm offer that cannot be revoked.

61) On May 1, Ida makes a written offer to Miranda for the sale of Ida's car. On May 2, Ida mails Miranda a letter revoking the offer. On May 3, Ida telephones Miranda to tell him that he is revoking the offer. On May 4, Miranda learns that Ida sold the car to Chris. On May 5, Ida's letter finally gets to Miranda. Ida's offer terminated on:

A) May 2.

B) May 3.

C) May 4.

D) May 5.

62) Which of the following is an exception to the general rule that rejections terminate offers?

A) Unilateral contracts

B) Bilateral contracts

C) Firm offers

D) Option contracts

63) What legal effect does death or insanity of the offeror have on the offer?

A) It terminates the offer automatically.

B) It terminates only the last contract that has been formed with that offeror.

C) It has no legal effect unless and until the offeree is notified of the death of the offeror.

D) It makes the offer voidable.

64) A computer manufacturer offered to sell sophisticated computer equipment to another country. Two days later, before the offer was accepted, Congress placed an embargo on all sales to this country; and therefore, the offer was terminated by the embargo. This is an example of:

A) promissory estoppel.

B) destruction of subject matter.

C) intervening illegality.

D) revocation.

65) When negotiations occur through the mail, there is usually a limit put on the time:

A) the offeree has to accept the offer.

B) the offeror has to register the contract with the state.

C) the offeror has to register the contract with the federal government.

D) to have a judge approve the contract.

66) Early American courts took a subjective approach to contract determination. This was troublesome as it created uncertainty in the enforcement of contracts because:

A) every contract was vulnerable to disputes about actual intent.

B) the intent of the parties was not required to be in writing.

C) no evidence could be admitted as to the parties' intent.

D) there was no "meeting of the minds" between parties.

67) Which of the following statements about the objective theory of contracts is false?

A) The objective standard looks to the offeror's words, acts, and the circumstances signifying about his intent.

B) If a reasonable person familiar with the circumstances would be justified in believing that the offeror intended to contract, the intent requirement is satisfied.

C) The objective standard is often unpredictable and creates inconsistent results.

D) A court could find that intent existed even if the offeror says that he did not intend to contract.

68) The trend of modern contract law is to tolerate ________ degree of specificity in agreements in comparison to classical contract law.

A) a reasonable

B) a lower

C) a higher

D) the same

69) The case in the text, Domingo v. Mitchell, demonstrates that:

A) if certain terms are left out of an offer, any subsequent contract is unenforceable.

B) important terms of a contract can be implied under certain circumstances.

C) omitted terms in a contract are construed against the drafter.

D) price must be included in an offer to form a valid contract.

70) In J.D. Fields & Company, Inc. v. United States Steel International, Inc., the case in the text, the court stated that:

A) a price quotation can only ever be an invitation to offer.

B) a price quotation on a flyer is always considered to be an offer.

C) a price quotation ripens the offer into a contract, regardless of whether it is detailed.

D) a detailed price quotation can constitute an offer capable of acceptance.

71) Under the United Nations Convention on Contracts for the International Sale of Goods (CISG), a proposal will be considered an offer if it meets three requirements. Which of the following is not one of those requirements?

A) The proposal clearly explains the obligations of the parties.

B) The proposal is addressed to one or more specific persons.

C) The proposal is sufficiently definite, especially as to quantity and price.

D) The proposal indicates the intent of the offeror to be bound in case of acceptance.

72) Ann receives an advertisement in the mail for Big Box's special edition tablet computers for $500. Ann goes to Big Box's store indicating her acceptance of the advertisement. Ann is informed that Big Box is sold out. Which of the following statements is true?

A) Big Box's advertisement constituted an offer because it contained definite terms.

B) Big Box's advertisement constituted an offer because it mailed the ad directly to Ann.

C) Big Box's advertisement did not constitute an offer, but rather, it was an invitation for an offer.

D) Big Box's advertisement constituted an offer because it expressed intent to contract.

73) A newspaper advertisement for Cashmere Closet states "This Saturday 9 a.m., 1 Red Cashmere Scarf, worth $299.95… $10.00 First Come First Served." Which of the following statements is false?

A) The ad is clear and specific about what was being offered and asked for in exchange.

B) The number of people who have the power of acceptance is limited.

C) The ad lacks intent to constitute an offer.

D) There are no terms left open for negotiation.

74) In Kolodziej v. Mason, the case in the text, the court held that Mason's Dateline statement:

A) was an offer because its terms were definite and specific.

B) was an offer because there were no terms left to negotiate.

C) was an offer because Mason created an escrow account for the funds in anticipation of acceptance.

D) was not an offer because he did not have the intent to create an offer.

75) At an auction, acceptance occurs when:

A) the auctioneer strikes the goods off to the highest bidder.

B) an auction begins.

C) a bid is placed.

D) the auctioneer calls for the last bid.

76) Which of the following statements about governmental contracts is true?

A) Promissory estoppel can be used to allow a bidder to withdraw a bid but impose a penalty.

B) Governmental contracts are generally covered by statute.

C) The rules governing governmental contracts give the entity discretion as to who to award the contract to.

D) The rules governing governmental contracts allow parties to withdraw bids without penalty.

77) Janet goes to an electronics store to purchase design software. The software comes in a sealed package and when Janet opens it, she finds that the CD containing the program is sealed in an envelope that states, "By opening this envelope, you are accepting the terms of the license agreement that is contained in this packaging. If you do not want to accept the terms of the license, you can return this product." This method of contracting is referred to as:

A) browsewrap contracting.

B) shrinkwrap contracting.

C) clickwrap contracting.

D) software contracting.

78) An online agreement that presents contract terms and conditions and requires users to click a button to indicate agreement is called a:

A) browsewrap agreement.

B) shrinkwrap agreement.

C) clickwrap agreement.

D) webclick agreement.

79) In Cordas v. Uber Technologies, Inc., the case in the text, the court held that:

A) Uber's terms and conditions constituted an enforceable browsewrap agreement.

B) Uber's arbitration clause was unenforceable because it did not require an affirmative assent from its users.

C) Uber's arbitration clause was enforceable because Cordas downloaded the app voluntarily.

D) Uber's arbitration clause was enforceable because Cordas affirmatively acknowledged it.

80) Which of the following offerors is free to revoke his offer?

A) An offeror that agreed to keep an offer open without consideration.

B) An offeror, who is a merchant, agreed in writing to sell goods and gave assurances that the offer would remain open.

C) An offeror of a unilateral contract where the offeree already started performance.

D) An offeror who promised to keep an offer open without consideration, but later changed his mind and the offeree foreseeably and reasonable relied on the offeror's promise.

81) A(n) ________ is when a merchant offeror makes written offer to buy or sell goods, giving assurances that the offer will be held open.

A) option

B) firm offer

C) unilateral contract

D) bilateral contract

82) Yasmin offers to landscape Bert's property for $2,000. Two days after making the offer, Yasmin changes her mind and mails Bert a letter revoking her offer. The next day, Bert, who has not received Yasmin's letter, calls Yasmin and accepts her offer. Does a contract exist?

A) No, because Yasmin mailed her revocation before Bert's acceptance.

B) No, because Yasmin can revoke her offer at any time.

C) Yes, because Bert was not notified of Yasmin's revocation at the time he accepted.

D) Yes, because mail is not a proper method of revoking an offer.

83) Which of the following statements about the CISG's rules on revocation is false?

A) The CISG states that an offer cannot be revoked if the offer states that it is irrevocable.

B) The CISG requires offers to have consideration to make them irrevocable.

C) The CISG allows an offer that says it is irrevocable to be revoked if the revocation reaches the offeree before or at the same time as the offer.

D) The CISG does not require offers to be in writing to be irrevocable.

84) In the case in the text, D'Agostino v. Federal Insurance Company, the court found in favor of:

A) Federal because its response to D'Agostino's offer was timely.

B) Federal because the additional terms were not substantive.

C) D'Agostino because Federal's response was untimely.

D) D'Agostino because Federal's response was a counteroffer.

85) Which of the following circumstances would not terminate an offer?

A) Death of the offerer

B) The subject matter of the offer was destroyed by fault of the offeror

C) The offeree has been deemed insane

D) Intervening illegality

86) Gail offers to sell Belinda 1000 boxes of nails, but forgets to state the price. All other material terms are present, however. Belinda accepts, but later wants to back out of the deal, arguing that the offer is indefinite. Is there a contract here? Why or why not? Assume that at the time of the deal the parties intended to make a contract. Assume also that there was an established market price for the nails in question here.

87) Ashley says to Bob: "I promise to pay you $20 if you shovel my sidewalk." Bob begins to shovel, and he soon completed 90% of the job. Then Ashley tells him: "Thanks, but I revoke." Bob then finishes the job in about ten minutes. Can Bob recover against Ashley in contract? Why or why not? In any event, what other theory might Bob use? Assume that an offer for a unilateral contract is accepted by full performance of the requested act.

88) Adam offers to sell Bill his house. The offer is complete and certain as to all material terms. The offer also contains a promise that for a price of $100, Adam will keep the offer open for 30 days. Bill never pays Adam the $100. Ten days after making the offer, Adam telephones Bill to revoke it. Three days after that, Bill accepts. Is there a contract here? Why or why not?

89) The Toy Company offers to sell Wal-Mart 10,000 dolls at a certain price. The offer, which is signed by TTC's President, is complete and certain as to all material terms. The offer also states that it will remain open for four months, but does not require any consideration in support of this promise. TTC revokes the offer 100 days after it was made. Is this revocation effective? Would your answer change if TTC revoked 80 days after the offer was made?

90) E-Systems, Inc., a manufacturer of computer chips, offers to sell 1,000 chips to Swell Computers for $2,000 in a signed memo that states the offer is good for one year. Four months later, E-Systems revokes the offer, having never received an acceptance from Swell. After receiving the revocation, Swell wants to accept E-Systems's offer. What is the result?