Mutual Assent -- Offer & Acceptance

Question 1

An offer is…

Answer 1

a manifestation of an intention to be bound by the contract.

Question 2

Advertisements are generally…

Answer 2

not considered offers, just invitations to deal.

Question 3

Advertisements can be offers if the advertisement contains a…

Answer 3

(1) promise;
(2) with certain and definite terms;
(3) where the offeree is clearly identified.

Question 4

An offer usually must include…

Answer 4

(1) name of offeree;
(2) subject matter of offer; and
(3) price to be paid.

Question 5

Land sale offers must include…

Answer 5

(1) price terms; and
(2) description of the land.

Question 6

A requirements contract exists when…

Answer 6

the buyer promises to buy all the goods the buyer requires from the seller.

Question 7

An output contract exists where…

Answer 7

the seller promises to sell all the goods the seller produces to the buyer.

Question 8

Can a buyer increase its demand to the seller?

Answer 8

Yes – but only to a reasonable degree in line with their prior demands.

Question 9

An employment contract with an unspecified term of years is construed as creating…

Answer 9

a contract terminable at will by either party.

Question 10

For services contracts, the offer must include…

Answer 10

the nature of the work.

Question 11

The four methods of offer termination are:

Answer 11

1. Lapse of time;
2. Revocation;
3. Rejection;
4. Death.

Question 12

An offer may be terminated if not accepted within a reasonable time (or the time specified), this is called…

Answer 12

lapse of time.

Question 13

Indirect rejections of offers can occur through:

Answer 13

1. Rejection counteroffers;
2. Conditional acceptances;
3. Additional terms added to common law offers.

Question 14

Counteroffers are…

Answer 14

offers made by the offeree to the offeror that contain the same subject matter as the original offer, but differ in terms.

Question 15

Does bargaining terminate the original offer?

Answer 15

No – mere bargaining will not.

Question 16

An express rejection is a…

Answer 16

statement by the offeree that they do not intend to accept the offer. Such a rejection will terminate the offer.

Question 17

A mere bargaining inquiry can be distinguished from a counteroffer by asking, …

Answer 17

Would a reasonable person believe that the original offer had been rejected?

Question 18

A rejection is effective when…

Answer 18

received by the offeror.

Question 19

When an acceptance is made expressly conditional on the acceptance of new terms, it is a…

Answer 19

rejection of the offer.

Question 20

An option is a contract to…

Answer 20

keep an offer open.

Question 21

A rejection of a counteroffer to an option contract (does/does not) constitute a termination of the offer.

Answer 21

Does not; UNLESS the offeror has detrimentally relied on the offeree’s rejection.

Question 22

A revocation is a…

Answer 22

retraction of an offer by the offeror.

Question 23

An offeror may directly revoke an offer by…

Answer 23

communicating the revocation to the offeree.

Question 24

An offeror can revoke its offer…

(timeline)

Answer 24

any time before acceptance of the offer.

Question 25

An offer may be revoked indirectly if the offeree receives:

Answer 25

(1) correct information; (2) from a reliable sources; (3) of acts of the offeror that would indicate to a reasonable person that the offeror no longer wishes to make the offer.

Question 26

A revocation is generally effective when...

Answer 26

received by the offeree.

Question 27

Where revocation is by publication, it is effective when...

Answer 27

published.

Question 28

Offers can generally be revoked at will by the offeror, even if he has promised not to revoke for a certain period, except in the exceptions of:

Answer 28

1. Option contracts; 2. Merchant Firm Offers; 3. Detrimental foreseeable reliance; or 4. Beginning performance in response to a unilateral contract offer.

Question 29

An option contract is a contract in which...

Answer 29

the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer.

Question 30

Under Article 2, an offer can be irrevocable if:

Answer 30

(1) a merchant; (2) offers to buy or sell goods in a signed writing; and (3) the writing gives assuances that the offer will be held open.

Question 31

In a merchant firm offer, if there is a lack of consideration during the time stated...

Answer 31

the offer is still not revocable for this lack of consideration, but the time period cannot exceed 3 months.

Question 32

Detrimental reliance occurs when...

Answer 32

the offeror could reasonably expect that the offeree would rely to their detriment on the offer, and the offeree does so rely.

Question 33

An offer for a true unilateral contract becomes irrevocable once...

Answer 33

performance has begin.

Question 34

An offeror in a unilateral contract must give the offeree...

Answer 34

a reasonable time to complete performance.

Question 35

Substantial preparations to perform (do/do not) make an offer irrevocable.

Answer 35

Do not -- but they may constitute detrimental reliance sufficient to make the offeror's promise binding to the extent of detrimental reliance.

Question 36

Events that will terminate an offer by termination of law are:

Answer 36

1. Death or insanity of either party; 2. Destruction of the proposed contract's subject matter; OR 3. Supervening illegality. | (effective when occuring)

Question 37

Does a contract terminate due to death if it has already been accepted?

Answer 37

No... the estate will be responsible for the obligations.

Question 38

An acceptance is a...

Answer 38

manifestation of assent to the terms of the offer.

Question 39

An offer for a bilateral contract may be accepted by..

Answer 39

either a promise to perform or by beginning the performance.

Question 40

If an offer provides that it may be accepted only by performance (unilateral), then it will not be accepted until...

Answer 40

performance is completed.

Question 41

An offeree for a unilateral contract is not obligated to...

Answer 41

complete the performance merely because they have begun performance.

Question 42

Under the UCC, shipment of a nonconforming good is considered...

Answer 42

an acceptance, creating a bilateral contract, as well as a breach of the contract.

Question 43

An accomodation offered in place of a noncomforming good is considered...

Answer 43

a counteroffer.

Question 44

Generally, silence is not considered...

Answer 44

an acceptance.

Question 45

Under common law, a purported acceptance must...

Answer 45

mirror the offer terms exactly.

Question 46

HYPO: LL sends T a signed lease that says nothing about pets. Tenant adds, "Tenant may keep a pet," signs the lease, and returns it to LL. Has T accepted LL's offer?

Answer 46

No -- T has violated the mirror image rule, acceptance must mirror the terms of the offer exactly. | (rejection & counteroffer)

Question 47

Under Article II, an offeree's additional terms are not part of the contract unless...

Answer 47

(1) It's not material, and (2) Offeror doesn't object.

Question 48

Material changes (under Article II) are terms that...

Answer 48

cause hardship or surprise.

Question 49

Disclaiming warranties (are/are not) considered material changes.

Answer 49

are

Question 50

Industry customs (are/are not) material changes.

Answer 50

are not.

Question 51

The mailbox rule states that...

Answer 51

acceptance by mail or similar means are effective at the moment of dispatch.