Verified Test Bank The Agreement Acceptance Chapter.11

Business Law, 17e (Langvardt)

Chapter 11 The Agreement: Acceptance

1) When determining the presence of the intent to accept, a subjective standard is used.

2) The intent to accept is objectively demonstrated by words or conduct or a combination of the two.

3) In recent times, the mirror image rule is applied such that only a material difference between offer and acceptance creates a rejection of the offer.

4) If the offeree accepts the offer's terms while complaining about them, it is called a grumbling acceptance.

5) UCC section 2-207 allows a contract to be formed even though the terms of the offer and the terms of the acceptance differ.

6) An acceptance is assent to a proposal by the offeree to the offeror.

7) The intention to accept an offer must be a present intent to contract on the part of the offeree.

8) Kevin offered to mow his Uncle Jordan's lawn for $100. To his offer, Uncle Jordan replied by saying "I know you're taking advantage of me but I accept." Uncle Jordan has indeed accepted the offer made by Kevin.

9) Acceptances by instantaneous forms of communication are effective immediately upon communication to the offeror.

10) Where an offer stipulates a certain means of acceptance, the offeree's acceptance is effective upon dispatch even if it uses means other than those specified in the offer.

11) To accept an offer for a unilateral contract, the offeree must make the promise requested by the offer.

12) To accept an offer for a bilateral contract, the offeree must perform the requested act.

13) Mr. White sends his acceptance for a business contract to Mr. Green. But Mr. White put insufficient postage on the envelope. One day later, Mr. Green revokes the offer through the mail. Mr. White, upon receipt of the undelivered acceptance, overnighted the acceptance letter to Mr. Green. The overnighted acceptance letter reaches Mr. Green before the revocation letter reached Mr. White. If a court finds that the UCC rule applies, a valid acceptance occurred and a contract was created between Mr. White and Mr. Green.

14) Transfer of title deeds is a function wherein silence signals acceptance of the offer.

15) When Carol Whittaker makes an offer to a contractor, Jacob Phelps, directing him to inform her of his acceptance through registered letter mail, she is making an ambiguous offer.

16) When an offer is unclear about the form of acceptance it requires, there cannot be a valid acceptance.

17) The only manner in which a request for prompt or current shipment of goods can be honored is by a prompt or current shipment of the goods to the buyer.

18) The only person with the legal power to accept an offer and create a contract is the original offeree.

19) Mr. Blue enters into negotiation with Mr. Green to build a house. Both parties expected a written and signed purchase agreement. After agreeing on the terms, Mr. Green is told by his subcontractors that some of their prices have gone up. Mr. Blue objects and indicates that there was a contract when the parties agreed to the original terms orally. A court will find that no contract existed since the parties expected acceptance to be in written form.

20) Mr. White contracts with Mr. Green for 100 black coffee mugs. Mr. White decides he needs the mugs faster than the time allotted in the contract and asks for a rush shipment. Mr. Green notifies Mr. White that he will ship 100 coffee mugs but that the only ones available are red. A court will find that the shipment of red mugs under the UCC is not a breach of the original agreement.

21) Which of the following actions constitutes acceptance of an offer?

A) Offeree made material alterations to the terms of the offer

B) Offeree intended to enter the contract only if requisite changes were made

C) Offeree reflected assent to the terms of the offer in the requisite manner

D) Offeree suggested addition of new terms that were earlier not addressed in the offer

22) In determining whether an offeree accepted an offer, the court is looking for the same ________ on the part of the offeree that it found on the part of the offeror.

A) present intent to contract

B) inquiry regarding terms

C) subjective standard

D) silent acceptance

23) Which of the following actions is considered to reflect a counteroffer?

A) A grumbling acceptance

B) An inquiry regarding terms

C) A demand for additional terms

D) A silent acceptance

24) You wish to download free software from the Internet. The download procedure includes a page titled "download now" that asks you to "please review" the licensing agreement that is available to you on another webpage. The "download now" page has a button that initiates the download process. You click that button without going to the licensing agreement page. You later learn that the licensing agreement contains an arbitration provision. Are you bound by this provision?

A) Yes, because the "please review" statement in the "download now" page informed you of the licensing agreement.

B) Yes, because when you clicked the button to initiate the download process you agreed to the provisions in the licensing agreement.

C) No, because you did not perform an action that indicated your assent to the licensing agreement.

D) No, because laws relating to Internet privacy consider silence to be an acceptance of the offer.

25) Which source of law requires the acceptance to be a "mirror image" of the offer in order to form a contract?

A) Common Law

B) Constitutional Law

C) Natural Law

D) Theocratic Law

26) Milner Developers proposed an offer to Henry Wright, an independent contractor, offering to hire him for their next project. They offered him a certain rate and specified the contract details along with describing the stipulated mode of acceptance but received no response. Wright responded to the offer with a quote for a higher amount than that mentioned by Milner Developers. Do the two parties have a binding contract?

A) No, because the offer made by Milner Developers was ambiguous.

B) No, because Wright's letter was a counteroffer to the original offer.

C) Yes, because Milner Developers did receive a response from Wright.

D) Yes, because Wright's silence signaled his acceptance of the offer.

27) In determining whether an offeree accepted an offer and created a contract, a court will look for evidence of three factors.  Which of the following is not one of those factors?

A) Whether the offeree intended to enter the contract

B) Whether the offeree understood the terms of the offer

C) Whether the offeree accepted on the terms proposed by the offeror

D) Whether the offeree communicated his acceptance to the offeror

28) Why does traditional contract law view any kind of an attempt by offerees to change terms as constituting a counteroffer?

A) A material change to an original offer is disfavored by traditional contract law.

B) It changes the degree of the offeror's interest to contract.

C) Such an action implies a rejection of the offer by the offeree.

D) It puts the offeree in a dominant position, which is contrary to traditional contract laws.

29) Which of the following would indicate a rejection under the mirror image rule?

A) Inquiry regarding terms

B) Material changes to offer

C) Grumbling acceptance

D) Present intent to accept

30) What does the term "grumbling acceptance" mean?

A) Accepting the offer by maintaining one's silence

B) Making material changes to a contract when accepting it

C) Inquiring about the terms of the offer without rejecting it

D) Accepting an offer while complaining about the terms

31) Debbie Jones and Bill Schneider exchanged standard order forms to formalize their contract for a batch of goods and realized that their standard forms do not agree on material terms. Under UCC section 2-207, when will there be a contract? Assume that Bill did not make his acceptance conditional on Debbie's assent to any additional or different terms.

A) Only when Debbie and Bill are merchants.

B) When Bill's form is a definite and seasonable expression of acceptance.

C) When the conduct of one party recognizes the existence of a contract.

D) When the offer expressly limits acceptance to its own terms.

32) Which of the following conditions can prevent additional terms from becoming a part of a contract formed between parties who are merchants?

A) There is a grumbling acceptance by both parties.

B) The contract is regarding the sale of goods.

C) The offer expressly limits acceptance to its own terms.

D) The additional terms would not materially alter the contract.

33) According to the Code, when there is an acceptance that contains terms that are different from the original terms of the contract, the contract will consist of ________ and the appropriate gap-filling presumptions of the Code.

A) an inquiry regarding terms

B) notifications to prevent breach of conduct

C) counteroffers from either party

D) terms on which the parties' writings agree

34) Ian Sanders offered to sell his car to Beth Jones for $5,000. Subsequently, Beth demanded that he provide new seat covers for the car as she was paying a rather heavy price for the car. Beth's response represents a(n) ________.

A) inquiry regarding terms

B) rejection of the offer

C) conditional acceptance of the offer

D) additional term

35) Able Co. entered into a contract with Baker Co. for the sale of goods. Both parties are merchants under the UCC and each party used its own form as an offer and acceptance. On the reverse side of each form, there were minor terms that conflicted with each other. What is impact of these minor differences in terms in the forms on the contract?

A) There is no contract because there is a discrepancy between the standard forms used by the two companies.

B) There is no contract because there is no "meeting of the minds."

C) A contract does exist and is favorable to the third party beneficiaries who can take advantage of the situation.

D) A contract does exist and it includes the terms agreed upon plus gap-fillers from the UCC.

36) Which of the following describes a stipulation?

A) An offeror's right to determine the manner of acceptance

B) An offeree's right to determine who to contract with

C) The court's right to provide gap-fillers in a contract

D) Additional terms in a contract in order to make it binding

37) When the offeror, as the master of the offer, specifies the precise time, place, and manner in which acceptance must be communicated, it is termed as a(n) ________.

A) documentation

B) authentication

C) stipulation

D) notification

38) Rex Garner recently made an offer to Harry Barns for the sale of his shop using a registered letter. The offer says that Harry "may accept by registered letter." This detail is an example of a ________.

A) contract

B) notification

C) rejection

D) stipulation

39) Ian Kendler makes Brian Hyson an offer for a plot of land. In the offer, Kendler stipulates that the acceptance of the offer must be sent by registered mail but Hyson mails his acceptance through the regular postal service. Which of the following is true? Assume that the Restatement (Second) of Contracts does not apply.

A) There is no acceptance and no contract.

B) A contract was formed at the time Hyson dispatched the letter.

C) A contract was formed at the time Kendler received the letter.

D) The acceptance is invalid because the contract does not relate to sale of goods.

40) What is the term for "a manifestation of assent to the terms made by the offeree"?

A) Offer

B) Acceptance

C) Consideration

D) Revocation

41) Which party to contract negotiations is the master of the offer and can specify what behavior is necessary to constitute a valid acceptance?

A) The Offeror

B) The Offeree

C) The Secretary of State

D) The court

42) In general, the mailbox rule is beneficial to:

A) the offeror.

B) the offeree.

C) the courts.

D) third-party beneficiaries.

43) What can an offeror do to minimize the risk posed by the mailbox rule?

A) Include separate additional terms

B) Include a receipt stipulation in the contract

C) Select only known parties as original offerees

D) Revoke the offer before acceptance

44) Under the mailbox rule, the acceptance of an offer is effective at the time the acceptance is dispatched unless:

A) both the offeror and offeree are merchants.

B) the offer proposes a sale of real estate.

C) the acceptance is not in the authorized mode of communication.

D) the acceptance is lost or never reaches the offeror.

45) On Thursday, Trista Dylan receives a letter from Charlie Holmes offering to sell her a diamond ring and stating that: "if you choose to accept, you must do so prior to 2:00 p.m. tomorrow." Trista had a telegram of acceptance dispatched well before 2:00 p.m. on Friday but it is delivered to Charlie's home at 2:15 p.m. Do Trista and Charlie have a binding contract?

A) No, because Trista's purported acceptance was delayed.

B) Yes, because Trista dispatched the telegram prior to 2:00 p.m.

C) No, because Trista's use of a telegram was not stipulated in the offer.

D) Yes, unless Charlie is not home to receive the telegram.

46) Which of the following is true regarding the approach taken by the UCC toward the proper means of acceptance and the implications of using it or not using it?

A) If the offer authorizes a certain means of acceptance, the offeree must use that means or else there is a void contract.

B) If the offer authorizes a certain means of acceptance and the offeree uses another means, a contract is formed, but never before the offeror receives the acceptance.

C) Where the offer stipulates a certain means of acceptance, any reasonable means of acceptance will create a contract.

D) The UCC does not change the traditional rule that, where the offer stipulates a certain means of acceptance, the offeree must use that means or there is no contract.

47) Under the common law of contracts, what is the legal status of an improperly dispatched acceptance that was sent by a means of communication that was nonauthorized by the offeror?

A) It is valid but unenforceable.

B) It is invalid but enforceable.

C) It is effective when received.

D) It leads to an immediate revocation.

48) Which of the following considers a properly dispatched acceptance sent by any reasonable means of communication within a reasonable time to be effective on dispatch?

A) Traditional contract laws

B) UCC

C) CISG

D) Restatement (Second)

49) Judith George makes an offer to sell a plot of land using a normal letter and states no authorized means by which the offeree, Helga Holmes, must respond if she accepts. If Helga accepts the offer using a normal letter, which of the following is true?

A) The acceptance is effective upon dispatch.

B) The acceptance is effective when it is received.

C) The offer is invalid because it fails to stipulate the means of acceptance.

D) The acceptance would be effective upon dispatch even if the means of acceptance is unreasonable.

50) Under the common law, an offer for a unilateral contract:

A) is accepted by full performance of the requested act.

B) is accepted either by an appropriate act or an appropriate promise.

C) is accepted by whatever means are reasonable under the circumstances.

D) is accepted by making the promise requested by the offer.

51) How can courts prevent an offeror from revoking a unilateral contract once the offeree has started performance?

A) By providing additional terms according to the Code's gap-filling provisions

B) By holding that the offeree's acceptance curtailed the power of revocation

C) By holding that the offeree's performance made it a bilateral contract

D) By making material changes in the terms of the original contract

52) A bilateral contract is accepted when the offeree:

A) performs the requested act.

B) makes the promise requested by the offer.

C) accepts the offer in silence without prior indication.

D) makes additional inquiries regarding the terms.

53) Mr. Green creates a unilateral contract with his nephew, Paul. Mr. Green promises to buy Paul a laptop if he gets accepted to college. In order for Paul to accept this contract what must he do?

A) Get accepted into college

B) Send a certified letter to Mr. Green agreeing to the terms of the contract

C) Immediately call and orally accept the terms of the contract with Mr. Green

D) Notify the Secretary of State's office that he accepts Mr. Green's contract

54) Mr. Yellow delivers a stack of newspapers to Mr. Green's store to see if he wants them. A note attached indicates the stack of papers is $50. Mr. Green, without communicating an acceptance, sold the entire stack of papers to his customers. What is the status of the agreement between Mr. Yellow and Mr. Green?

A) There is no contract because Mr. Green did not expressly accept the offer

B) There is a contract because Mr. Green implied acceptance by his action

C) There is no contract because the goods are treated as gifts to Mr. Green

D) There is no contract because the Secretary of State was not notified

55) Which of the following is true regarding silence as acceptance?

A) Contract law explicitly recognizes silence as constituting acceptance.

B) An offeree's silence is considered acceptance when he/she indicates so.

C) An offeror can impose on the offeree a duty to respond to the offer.

D) The Code explicitly recognizes silence as constituting acceptance.

56) Sue Sandon and Joe Rhine concluded their agreement in all substantial matters of their contract for goods, such as price, quantity, and mode of delivery. But the formal written agreement has not been signed yet. Is there a binding contract at present?

A) Yes, because an oral contract should suffice.

B) Yes, because a contract is formed at the time the agreement is concluded.

C) No, because the minor terms also need to be taken care of.

D) No, because the agreement is not yet signed and thus, legally unenforceable.

57) An offer that is unclear about the form of acceptance that is necessary to create a contract, is called a(n) ________ offer.

A) ambiguous

B) reasonable

C) implied

D) counter

58) An ambiguous offer may be accepted in any manner that is ________ in light of the circumstances.

A) stipulated

B) authorized

C) recognizable

D) reasonable

59) The shipment of nonconforming goods intended as an accommodation to the buyer is a(n) ________.

A) ambiguous offer

B) prompt shipment

C) counteroffer

D) inquiry regarding terms

60) April Roberts ordered one hundred 19-inch color television sets from Carl Soans and requested prompt shipment of the goods. Carl promptly shipped fifty 21-inch color television sets and fifty 19-inch color television sets without informing April that the shipment of nonconforming television sets was an accommodation. Which of the following is true?

A) There is no acceptance because Carl's shipment materially differed from the terms of the offer.

B) There is an acceptance and April is bound to pay the reasonable value of the fifty 21-inch television sets she did not ask for.

C) There is an acceptance but Carl has breached the contract by shipping nonconforming television sets.

D) There is a new offer that Carl has made by sending the nonconforming goods which April can accept or reject.

61) The original offeree is one who:

A) first makes the offer and determines its terms and conditions.

B) has the legal power to accept an offer and create a contract.

C) hears of the contract indirectly and has an intent to accept.

D) first accepts the additional terms presented by the offeree.

62) Arthur offered to sell his house to Mike for $50,000. Even before Mike responded to the offer, Jack learned of the offer and called Arthur to accept the offer. Jack's action represents a(n) ________.

A) offer

B) promise

C) notification

D) acceptance

63) Which section of the UCC states that an order to a manufacturer requesting shipment of goods may be accepted by a prompt shipment of the goods?

A) 2-206

B) 9-301

C) 1-105

D) 2-345

64) Which of the following statements about the mirror image rule is false?

A) No rejection is implied if an offeree merely asks about the terms of the offer without indicating its rejection.

B) In recent years, the courts tend to apply the mirror image rule in a more liberal fashion.

C) The common law rule requires that acceptance be the mirror image of the offer.

D) No rejection is implied if an offeree accepts the offer's terms while complaining about them.

65) In the case in the text, Pena v. Fox, the court held that the release delivered constituted a(n):

A) counteroffer because the release did not mirror Pena's offer.

B) counteroffer because the release contained a different settlement amount.

C) acceptance because the additional terms were not material.

D) acceptance because the release mirrored Pena's offer.

66) The UCC's modified version of the mirror image rule is called the:

A) Knock-Out Rule.

B) Substantive Form Rule.

C) Last Shot Rule.

D) Battle of the Forms.

67) Which of the following statements about the UCC's Battle of the Forms is false?

A) The Battle of the Forms allows the formation of a contract when there is some variance between the terms of the offer and the terms of its acceptance.

B) The Battle of the Forms makes it possible, in some circumstances, for a term contained in the acceptance form to become part of the contract.

C) The Battle of the Forms provides that a definite and timely expression of acceptance creates a contract, even if it includes terms that are different from those stated in the offer or even if it states additional terms that the offer did not address.

D) The Battle of the Forms provides that an acceptance that was expressly conditioned on the offeror's agreement to the offeree's terms would be a valid acceptance.

68) If both parties are not merchants, additional terms contained in the offeree's standardized form are treated as:

A) proposals for addition to the contract.

B) part of the contract.

C) an acceptance.

D) a limited acceptance.

69) If both parties are merchants, additional terms contained in the offeree's standardized forms become part of the contract unless an exception applies. Which of the following is not one of those exceptions?

A) The offer was for the sale of goods under $500

B) The offer expressly limited acceptance to its own terms

C) The new terms would materially alter the offer

D) The offeror gives notice of objection to the new terms within a reasonable time after receiving the acceptance.

70) Which of the following is used by the majority of courts when there is an acceptance that contains terms that are different from (not merely additional to) the terms of the offer?

A) Battle of the Forms

B) Mailbox Rule

C) Last Shot Rule

D) Knock-Out Rule

71) Which of the following describes the effect of the knock-out rule?

A) The contract will consist of those terms on which the parties' writings agree plus any different terms that are reasonable under the circumstances.

B) The contract will include the different terms and any appropriate gap-filling presumptions in the Code.

C) The contract will consist of those terms on which the parties' writings agree plus any appropriate gap-filling presumptions of the Code.

D) No contract exists.

72) In the case in the text, Duro Textiles, LLC v. Sunbelt Corporation, the court held that a forum selection clause:

A) was incorporated into the parties' contract.

B) materially altered the contract within the meaning of the Code.

C) was not a material term.

D) was prima facie invalid.

73) Which of the following stands for the notion that a properly addressed and dispatched acceptance can become effective when it is dispatched, even if it is lost and never received by the offeror?

A) Battle of the Forms

B) Knock-Out Rule

C) Last Shot Rule

D) Mailbox Rule

74) In The United States Life Insurance Company in the City of New York v. Wilson, the case in the text, the court held that the check was dispatched within the meaning of the mailbox rule when:

A) the bank sent the insurance company a letter indicating its intention to send a check.

B) the bank sent the insurance company the check.

C) Griffith directed the bank to send the insurance company a check.

D) the insurance company received the check.

75) Which of the following would not be used to determine whether an acceptance was communicated by reasonable means?

A) Subjective beliefs

B) Speed and reliability

C) Nature of the transaction

D) Trade usage

76) Under the UCC, an acceptance sent by unreasonable means:

A) would be effective on dispatch as long as it is actually received by the offeror.

B) cannot form a contract.

C) would be effective on dispatch if it is received within the time that an acceptance by a reasonable means would normally have arrived.

D) would be effective on receipt only.

77) Patrick, a farmer, leaves 10 bushels of corn with Jackie, the owner of a grocery store, saying "Look this corn over. If you want it, it's $5 a bushel." Jackie sells the corn. Which of the following statements is true?

A) Jackie is liable for conversion.

B) Jackie expressly accepted Patrick's offer.

C) Jackie impliedly accepted Patrick's offer.

D) Jackie does not owe Patrick any money because he abandoned the corn.

78) Grace offers to sell Misti her car for $5,000. Grace tells Misti, "If I don't hear from you in three days, I'll assume you're buying the car." Four days go by and Grace has not heard from Misti. Does Misti's silence amount to acceptance?

A) No, because acceptance must be oral or written.

B) No, because an offeror cannot impose on the offeree a duty to respond to the offer.

C) Yes, because Misti did not reject to the term.

D) Yes, because Misti failed to notify Grace of any rejection within three days.

79) Kevin offers to sell Howard his vintage piano for $1,000. Howard tells Kevin, "If you don't hear from me in seven days, I accept." Kevin did not hear from Howard in those seven days. Does Howard's silence amount to acceptance?

A) No, because an offeree's silence can never operate as an acceptance.

B) Yes, because an offeree's silence can operate as an acceptance if he has indicated that it will.

C) No, because Howard did not have the present intent to accept the offer.

D) No, because Kevin and Howard did not have a prior course of dealings.

80) In Bauer v. Qwest Communications Company, LLC, the case in the text, the court held that Susman's silence:

A) amounted to acceptance because he failed to reject the offer within the stated time period.

B) amounted to acceptance due to the parties' lengthy relationship and course of dealings.

C) did not amount to acceptance because the other parties could not impose a duty for him to respond to the offer.

D) did not amount to acceptance because the offer was not communicated by reasonable means.

81) If it appears that the parties had concluded their negotiations and reached agreement on all the essential aspects of the transaction, most courts would probably find a contract at the time agreement was reached, even though no formal agreement had been signed. Which of the following is an exception to this rule?

A) During the negotiation process, the parties gave a clear expression of intent that prevents the formation of a contract until both parties have signed.

B) The parties provide proof of prior dealings that indicate an agreement is usually only reached between the parties when it is put into writing.

C) The parties demonstrate that it is customary in their trade to only sign written agreements.

D) The parties demonstrate that it was not their intention to be in a binding agreement until it was put into writing and signed.

82) In Cabot Oil & Gas Corporation v. Daugherty Petroleum, Inc., the case in the text, the court determined whether the parties intended for a written document to be their formal written contract. Which of the following was not one of the factors the court considered?

A) Whether the contract has few or many details

B) Whether a reasonable person would believe such a document to be a binding contract

C) Whether the contract amount is large or small

D) Whether the negotiations themselves indicate that a written draft is contemplated as a final conclusion of the negotiations

83) Home Décor orders 200 red candlesticks from Scent Co. to be shipped immediately. Scent promptly ships Home Décor 200 red candlesticks, in conformity with its order. That same day, Scent receives an order from a different company to pay double the price Home Décor paid for the same candlesticks. However, Scent is now out of stock and attempts to cancel its shipment to Home Décor. Which of the following statements is true?

A) Scent can cancel the shipment because it has not yet been delivered to Home Décor.

B) Scent can cancel the shipment because it has not accepted Home Décor's offer.

C) Scent cannot cancel the shipment because the shipment amounted to acceptance, which cannot be revoked.

D) Scent cannot cancel the shipment because Home Décor requested prompt shipment.

84) Which of the following statements about The United Nations Convention on Contracts for the International Sale of Goods (CISG) and acceptance is false?

A) The CISG adopted the Code's Battle of the Forms.

B) Statements or other conduct by the offeree that shows assent is an acceptance.

C) A contract is concluded when an acceptance of an offer becomes effective.

D) Acceptances are effective when they are received.

85) The United Nations Convention on Contracts for the International Sale of Goods (CISG) generally holds acceptances to be effective when:

A) they are received.

B) they are dispatched.

C) the offeror reasonably learns of the acceptance.

D) the offeree subjectively decides to accept the offer.

86) Why is the mirror image rule not strictly applied to modern commercial transactions?

87) What is the "mailbox rule"? What risk does it create for the offeror?

88) The UCC states that a properly dispatched acceptance sent by any reasonable means of communication within a reasonable time is effective on dispatch. What does the UCC mean by "reasonable" here?

89) Why is an offeree's silence not considered to be acceptance of an offer?

90) Why does the Code provide for "accommodation" in cases of acceptance by shipment of nonconforming goods?