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Exam 14: Agreement

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Question 1

True/False

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An offer by a retailer to purchase seasonal goods from a wholesaler would not lapse sooner than an offer to purchase goods that could easily be sold all year long.

A) True
B) False

Correct Answer

verified

False

Question 2

Multiple Choice

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In an auction _________, the seller is treated as making an offer to accept the highest bid.

A) Without controls
B) With controls
C) Without reserve
D) With reserve
E) Without qualifications

F) B) and D)
G) A) and B)

Correct Answer

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Question 3

Multiple Choice

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"Leaky Tub and Flaming Watercraft." Charles finished college, got a good job, and decided to sell some used toys and buy newer ones. A used hot tub with a leak in it and a personal watercraft were at the top of the list. Charles offered to sell to Constance the hot tub for $500. Constance was interested but not willing to pay $500. She said "I'll give you $400." Charles said that he would think about it. Later, the same day, Charles offered to sell Donna the hot tub for $500. Donna said "Would you consider $450?" Charles said he would think on it. A few minutes later, Everett who had heard that Charles wanted to sell the hot tub accepted Charles' offer to sell for $500, and they agreed that the transfer would be made the next day. A few minutes later, Constance called saying that she accepted Charles' offer to sell the hot tub for $500. A few minutes after that, Donna called and told Charles that she accepted his offer to sell the hot tub for $500. Charles told Constance and Donna that he had already sold it, and they are angry, threatening to sue. Charles offered to sell the personal watercraft to Joan for $800. She said that she would think it over and let him know the next day. Unfortunately, through no fault of anyone, there was a fire at Charles' home that night and the personal watercraft burned. Joan called the next day and accepted before Charles could tell her the watercraft burned. When she found out about the fire, Joan told Charles that he had better come up with another watercraft, or she was going to sue. -What effect does the accidental destruction of the personal watercraft have on the deal between Charles and Joan?

If a person wishes to ensure that an offer will in fact be held open for a set period of time, the person may do so by entering into a[n] ______________ contract with the offeror.

"Used Car Sales." Walter sells used cars. He is seeking a way to increase sales and profits because he would like to take his girlfriend on a nice diving trip to the Grand Cayman Islands. The first thing that Walter does is say that during the first week of December, he will give a $500 rebate on used cars that are under two years old. To spice things up, he also offers to sell any car on the lot that is over five years old for $1,000 to the first three customers who can hula hoop ten hours straight on December 7th. (Hula hooping was a practice popular some years ago in which a large hoop would be swung around by a person, usually around the waist.) Walter was not very concerned about the hula hooping issue because he thought that no one would be able to hula hoop for ten hours straight. Walter put an advertisement pertaining to the rebate and the hula hoop opportunity in the local newspaper. The promotion went over very well. Although Walter had several cars available, he ran out of cars under two years old within one day. During the rest of the week shoppers were told that no cars of that description were available. Sam was very angry at Walter for not having a car available that was under two years old so that he could get a good deal and a $500 rebate. On December 7th, while Walter was watching the hula hoopers, Sally was shopping for a car. She was in college and did not have much money. She saw one, an older car, a real clunker, that she liked; but she really did not know if it could be repaired sufficiently to be dependable. Walter had not even put a price on it because he planned to have it crushed. Sally was going to talk to her parents about it. Walter eventually approached her, and Sally asked him if he would take $450 for the car. Walter said, "Yes, sold." Sally tried to explain that she needed to talk to her parents first, but Walter would not hear of it. While Walter was still fuming from his encounter with Sally, Zack walked up and started to criticize the nature of Walter's inventory. Walter told him that he had great cars. Zack pointed at an old jalopy that was banged up, had 200,000 miles on it, and a cracked windshield. Zack said, "Sure, I'll pay $100,000 for that car!" Walter said, "Sold." Zack said, "Wait a minute. I was only kidding." Walter said, "No way." Meanwhile all the hula hoopers dropped out well prior to ten hours of hula hooping except for Barbara. She completed the hula hooping and asked for her car for $1,000. Walter refused saying that the offer was revoked. Sam and Barbara sued Walter, and Walter sued Zack and Sally. Under the applicable law in Walter's state, common law will be applied, and there are no state statutes impacting the situation. -Which of the following is the most likely result in the lawsuit brought by Sam complaining that Walter ran out of cars available for a rebate?

As a general rule, when is revocation effective?

If the subject matter of an offer becomes illegal, what is the result?

Trudy signs a contract with ABC Book Club without reading it. The contract provides that new books will be sent to her eBook reader every month unless she sends notification rejecting the receipt of new books. Which of the following is true regarding whether the contract is binding?

Which of the following was the result in Alexander v. Lafayette Crime Stoppers Inc., the case in the text in which the plaintiffs sued for collection of reward money offered to catch a serial killer by the defending publications, and the publications defended on the basis that the plaintiffs failed to provide notice as required by the reward offers because the plaintiffs provided relevant information to law enforcement, not the defendants?

Under the Mailbox Rule, a valid contract has been formed if a rejection is dispatched, but before it is received, the acceptance is communicated to the offeror.

"Used Car Sales." Walter sells used cars. He is seeking a way to increase sales and profits because he would like to take his girlfriend on a nice diving trip to the Grand Cayman Islands. The first thing that Walter does is say that during the first week of December, he will give a $500 rebate on used cars that are under two years old. To spice things up, he also offers to sell any car on the lot that is over five years old for $1,000 to the first three customers who can hula hoop ten hours straight on December 7th. (Hula hooping was a practice popular some years ago in which a large hoop would be swung around by a person, usually around the waist.) Walter was not very concerned about the hula hooping issue because he thought that no one would be able to hula hoop for ten hours straight. Walter put an advertisement pertaining to the rebate and the hula hoop opportunity in the local newspaper. The promotion went over very well. Although Walter had several cars available, he ran out of cars under two years old within one day. During the rest of the week shoppers were told that no cars of that description were available. Sam was very angry at Walter for not having a car available that was under two years old so that he could get a good deal and a $500 rebate. On December 7th, while Walter was watching the hula hoopers, Sally was shopping for a car. She was in college and did not have much money. She saw one, an older car, a real clunker, that she liked; but she really did not know if it could be repaired sufficiently to be dependable. Walter had not even put a price on it because he planned to have it crushed. Sally was going to talk to her parents about it. Walter eventually approached her, and Sally asked him if he would take $450 for the car. Walter said, "Yes, sold." Sally tried to explain that she needed to talk to her parents first, but Walter would not hear of it. While Walter was still fuming from his encounter with Sally, Zack walked up and started to criticize the nature of Walter's inventory. Walter told him that he had great cars. Zack pointed at an old jalopy that was banged up, had 200,000 miles on it, and a cracked windshield. Zack said, "Sure, I'll pay $100,000 for that car!" Walter said, "Sold." Zack said, "Wait a minute. I was only kidding." Walter said, "No way." Meanwhile all the hula hoopers dropped out well prior to ten hours of hula hooping except for Barbara. She completed the hula hooping and asked for her car for $1,000. Walter refused saying that the offer was revoked. Sam and Barbara sued Walter, and Walter sued Zack and Sally. Under the applicable law in Walter's state, common law will be applied, and there are no state statutes impacting the situation. -What is the most likely result in the lawsuit brought by Walter against Zack?

Tina tells Barry that she will mow his yard for the summer for $800. Barry thinks about it and drops a note in the mail to Tina telling her that he rejects her offer. He thinks about it, however, and calls her to tell her that he accepts the offer before she receives his rejection. Which of the following is true under the mailbox rule?

Which of the following provides that an acceptance is valid when it is placed in the mailbox?

Which of the following is an offer made by an offeree to an offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer?

"Saturday Auction." Barry, an auctioneer, held an auction on a Saturday morning. At the beginning of the auction, Barry announced that the auction was being held without reserve. Helen, Mary, and Chris were all in attendance. Helen saw an old cash register with a stuck drawer that she thought would look great in her den. The auctioneer put the cash register up for sale noting that the drawer was stuck but that it could probably be fixed with little effort. Helen bought it for $20. When she got it home, she discovered that it actually contained $5,000. Unfortunately, Helen had a teenage son named Tad who started bragging to his friends about the family's good fortune. Barry heard about what had happened and sued Helen for return of the $5,000. At the same auction, Mary saw a great deal on a used table. She bid $20 on it. No one else bid anything. Barry announced that $20 was clearly insufficient for the table, that it was worth much more than that, and that he was taking it out of the auction. Chris started bidding on a diamond ring for his girlfriend. He bid $2,000. Just as Barry was getting ready to say "Sold," Chris looked over at his girlfriend, decided that he was not sure about marriage, and leaped up yelling "I revoke." Barry, however, immediately after, yelled "Sold." Barry sues Chris attempting to obtain the money for the engagement ring. Barry also sues Helen seeking to recover the $5,000 contained in the stuck drawer. Mary sues Barry attempting to obtain possession of the table. -What is the likely result in the lawsuit Barry brought against Chris?

Which doctrine may courts use to estop, or prevent, an offeror from revoking an offer based on a party's taking steps in reasonable reliance on an offer?

Which of the following is true regarding acceptable means of acceptance if no means of communicating an acceptance is specified in an offer?

Which of the following provides that a revocation is effective only when received by the offeree?

In which of the following ways may an offeree accept a unilateral contract?

Set forth the ways in which an offer can be terminated.