Formation - Offer & Acceptance

Question 1

Define “offerror.”

Answer 1

Party who makes the offer.

Question 2

Define “offeree”

Answer 2

Party with the right to accept the offer.

Question 3

What are the requirements for the formation of a contract?

Answer 3

1. Offer
2. Acceptance
3. Consideration
4. No defenses

Question 4

List the requirements of an offer.

Answer 4

1. Present intent to contract
2. Definite terms
3. Communication of offer

Question 5

T/F - An offer can be revoked at any time prior to acceptance.

Answer 5

True

Question 6

What is an option contract?

Answer 6

Agreement that allows the offeree time to make a decision on whether to enter into contract.

Question 7

T/F - Under common law acceptance must be absolute, unequivocal, and unqualified.

Answer 7

True

Question 8

T/F - Conditional acceptance is considered acceptance under both UCC and the common law.

Answer 8

False. Conditional acceptance is never acceptance but rather a counteroffer.

Question 9

List the ways an offer can be terminated by the act of the parties to the offer.

Answer 9

1. Revocation
2. Rejection
3. Counteroffer

Question 10

T/F: Revocation must be received prior to acceptance by the offeree in relations to terminating an offer.

Answer 10

True

Question 11

List the three types of irrevocable offers.

Answer 11

1. Options
2. Sales of goods firm offers
3. Offers irrevocable by estoppel
   Flashcard

Question 12

What is UCC Article 2 version of options?

Answer 12

Merchant’s firm offer

Question 13

T/F: A rejection is effective when it is received.

Answer 13

True.

Question 14

Conditional acceptance is also a form of what?

Answer 14

Counteroffer

Question 15

When is a revocation by the offeror effective?

Answer 15

When the offeree knows of or receives the revocation

Question 16

Define “option contract.”

Answer 16

An option contract is a distinct contract in which the offeree gives consideration to keep the offer open.

Question 17

When does the acceptance of an unilateral offer occur?

Answer 17

It takes place upon completion of the act required by the offeror.

Question 18

List the ways in which an offer can be terminated by operation of law.

Answer 18

1. Lapse of time
2. Death or insanity of either party (unless the offer is irrevocable)
3. Destruction of the specific subject matter of the contract
4. Intervening illegality

Question 19

What conditions must exist for the acceptance of a bilateral offer to take place?

Answer 19

Acceptance must be unequivocal and communicated to the offeror

Question 20

T/F: Under UCC Article 2, for non-merchants, if an offer is accepted w/ addt’l terms, then the contract is formed w/ the addt’l terms.

Answer 20

False. The contract is formed without the addt’l terms.

Question 21

T/F: Under UCC Article, for merchants, if an offer is accepted followed by immaterial addt’l terms, then the contract is formed.

Answer 21

True.

Question 22

What is an example of material additional terms?

Answer 22

Waiver of warranties

Question 23

T/F: Silence

generally is not an acceptance.

Answer 23

True

Question 24

What happens under common law if there are additional terms in an acceptance?

Answer 24

The acceptance is a counteroffer and a rejection.

Question 25

What happens under Uniform Commercial Code (UCC) law if there are additional terms in acceptance and the parties are non-merchants?

Answer 25

There is a contract, but without the additional terms.

Question 26

What happens under Uniform Commercial Code (UCC) law if there are additional terms in acceptance and the parties are merchants?

Answer 26

There is a contract with the additional terms unless those terms are material, are objected to, or if the offer was specifically limited to its terms.