Formation—Offer and Acceptance Flashcards
On September 27, Summers sent Fox a letter offering to sell Fox a vacation home for $150,000. On October 2, Fox replied by mail agreeing to buy the home for $145,000.
Summers did not reply to Fox.
Do Fox and Summers have a binding contract?
A. No, because Fox failed to sign and return Summers’ letter.
B. No, because Fox’s letter was a counteroffer.
C. Yes, because Summers’ offer was validly accepted.
D. Yes, because Summers’ silence is an implied acceptance of Fox’s letter.
B. No, because Fox’s letter was a counteroffer.
A counteroffer rejects the original offer. This is a counteroffer, because the terms differ from those in the original offer. For a contract involving real estate or almost anything other than a sale of goods, the “mirror image” rule is in place. If the response is not a mirror image acceptance of the offer, then it is a rejection and if accompanied by a new offer, a counteroffer.
Wrong answer selected because I did not properly read the question.. overlooked the price difference.
C. Yes, because Summers’ offer was validly accepted.
This is a counteroffer and not an acceptance, because the terms differ from those in the original offer. For a contract involving real estate, or almost anything other than a sale of goods, the “mirror image” rule is in place. If the response is not a mirror image acceptance of the offer, then it is a rejection and if accompanied by a new offer, a counter offer.
On day 1, Jackson, a merchant, mailed Sands a signed letter that contained an offer to sell Sands 500 electric fans at $10 per fan. The letter was received by Sands on day 3. The letter contained a promise not to revoke the offer but no expiration date. On day 4, Jackson mailed Sands a revocation of the offer to sell the fans. Sands received the revocation on day 6. On day 7, Sands mailed Jackson an acceptance of the offer. Jackson received the acceptance on day 9. Under the Sales Article of the UCC, was a contract formed?
A. No contract was formed because the offer failed to state an expiration date.
B. No contract was formed because Sands received the revocation of the offer before Sands accepted the offer.
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C. A contract was formed on the day Jackson received Sands’ acceptance.
D. A contract was formed on the day Sands mailed the acceptance to Jackson.
D. A contract was formed on the day Sands mailed the acceptance to Jackson.
The offer was accepted using the same means of communication and so is valid when sent on day 7.
This is the wrong answer that was selected.
B. No contract was formed because Sands received the revocation of the offer before Sands accepted the offer.
This was a merchant’s firm offer and cannot be revoked because it is like an option. It has to remain open for a reasonable time, and day 9 would be a reasonable amount of time for nonperishable goods.
On April 1, Fine Corp. faxed Moss an offer to purchase Moss’ warehouse for $500,000. The offer stated that it would remain open only until April 4 and that acceptance must be received to be effective. Moss sent an acceptance on April 4 by overnight mail and Fine received it on April 5.
Which of the following statements is correct?
A. No contract was formed because Moss sent the acceptance by an unauthorized method.
B. No contract was formed because Fine received Moss’
acceptance after April 4.
C. A contract was formed when Moss sent the acceptance.
D. A contract was formed when Fine received Moss’ acceptance.
B. No contract was formed because Fine received Moss’
acceptance after April 4.
Although most acceptances of bilateral offers are sent by an authorized medium and effective when sent by the authorized medium, the offeror can condition acceptance to not be effective until received. Therefore, regardless of the medium used, the acceptance must be received before the offer terminates by lapse of time. This offer terminated at midnight on April 4, and the acceptance was not received until April 5, after the offer was terminated.
Wrong Answer selected was
C. A contract was formed when Moss sent the acceptance.
This answer is incorrect because although the acceptance was sent by an authorized medium (mail under the mailbox rule), acceptance was not effective until received. Thus, sending acceptance by the midnight April 4 deadline did not create a contract.
