152 MODULE 23 CONTRACTS

MULTIPLE·CHOICE ANSWERS

I. a 13. d 25. a 37. c - 49. a - -

- - - - - - -
2. b 14. b 26. c 38. d - - 50. a - -
- - - - - -
3. c 15. c 27. b 39. b - - 5I. c - -
4. a - - 16. c - - 28. b - - 40. c - - 52. d - -
- - - - - -
5. d 17. c 29. d 4I. c - - 53. a - -
- - - - - -
6. b 18. d 30. b - - 42. d - - 54. a - -
- - - - 55.
7. b 19. d 3I. a 43. d' - - c - -
, - - - - - - 56.
8. 20. b 32. d 44. a a
a - - - - - -
9. b - - 2I. c - - 33. d 45. a - - 57. b - -
- - - - - -
10. c 22. c 34. c - 46. c - -
- - - - - ~57= - %
I! 23. b 35. c 47. b 1st:
a - - - - - - - - _/57= - %
12. 24. d 36. b - 48. a 2nd:
c - - -

C.l. Offer
MUL TIPLE·CHOICE ANSWER EXPLANATIONS

C.2. Acceptance

= 1. (a) Under common law, an offer must be ~

and certain as to what will be agreed upon in the contract.
Esseilti:ilterms are the parties involved, the price, the time
for performance, and the subject matter (quantity and type).
The price element of the contract was not present.
2. (b) Advertisements in almost all cases are merely
invitations for interested parties to make an offer. Thus,
Harris has not made an offer, but is seeking offers through
the use of the advertisement.
3. (c) Generally an offeror may revoke an offer. at any
time prior to acceptance by the offeree. Revocation is ef-
fective when it is received by the offeree. Revocation also
occurs if the offeree learns by a reliable means that the of-
feror has already sold the subject of the offer. In this situa-
tion, Peters' offer was effectively revoked when Mason
learned that the lawn mower had been sold to Bronson.
Therefore, Mason's acceptance was ineffective. An-
swers (a) and (b) are incorrect because the offer had been
revoked prior to Mason's acceptance. Answer (d) is incor-
rect because Peters was not obligated to keep the offer open.
Note that if consideration had been paid-by Mason to keep
the offer open, an option contract would exist and the offer
could not be revoked before the stated time.
4. (a) Drake did not intend to reject the $300,0~0 offer
but is simply seeing if Calistoga might consider selling the
home for less. Answer (b) is incorrect because a counterof-
fer takes place when the original offer is rejected and a new
offer takes its place. Answer (c) is incorrect because Drake
showed no intention of rejecting the offer by his mere in-
quiry. Answer (d) is incorrect because ambiguity is not one
of the grounds to have an offer terminated by operation of
law.
 ts: (1) the death or 6.. (b) Under the mailbox rule, an acceptance is ordi-
5. r' narily effective when sent if transmitted by the means au-
insanity of either the offeror or offeree, (2) bankruptcy or
(d) insolvency of either the offeror or offeree, or (3) the de- thorized by the offeror, or by the same means used to trans-
struction of the specific, identified subject matter. Thus the mit the offer if no means was authorized. However, the
An offer automatically terminates at the date of Opal's death. It offeror may stipulate that acceptance is effective only when
off does not matter whether Larkin received notice of the death. received by the offeror. In this situation, no contract was
If Larkin had accepted the offer prior to Opal's death, a valid formed because Moss' acceptance was not received by the
er contract would have been formed. date specified in Fine's offer. Under common law, a method
of acceptance other than the means specified in the offer or
aut
the method used to communicate the offer, is considered
I
o
effective when received by the offeror.
ma
i 7. (b) Fresno's acceptance by overnight ~e~ivery was
tic made by a method other than the methods specified by Har-
ris in the written offer. When acceptance is sent by a
all
method other than the method specified in the offer or dif-
y ferent than the method used to transmit the offer, acceptance
is considered valid only when actually received by the of-
ter feror. Late acce tance is not valid, put instead constitutes a
mi counter~ A valid contract wouldbe formed only ITilie
original offeror (Hams) then accepts.
nat
~. (a) A unilateral offer exists when the offeror expects
es acceptance of an offer .£y~2-n of the offeree. A unilateral
contract is then formed when the offeree accepts the contract
up
through erform~ of the offeror's required action. In this
on case, a valid contract is formed when Hammer accepts Kay's
unilateral offer by obtaining the artifacts within a two-week
the period. Answers (b) and (d) are incorrect because a quasi
oc contract is an implied-in-law rather than express-agreement
which results when one of the parties has been unjustly en-
- riched at the expense of the other. The law creates such a
cu contract when there is no binding agreement present to keep
rre the unjust enrichment from occurring. Answer (c) is incor-
nc rect because public policy causes enforcement of promises
e despite lack of any other legal enforcement of the contract.
of For example, public policy would normally allow enforce-
an ment of a promise by a debtor to pay a debt barred by the
y statute of limitations.
of
th .A. (b) Common law applies to this contract because it
e involves real estate. In this situation, Fox's reply on Octo-
fol ber 2 is a counterofferand terminates Summers' original
lo offer made on September 27. The acceptance of an offer
wi must conform exactly to the terms of the offer tinder com-
ng mon law. By agreeing to purchase the vacation home at a
ev price different from the original offer, Fox is rejecting .
en Summers' offer and is makinga counteroffer. Answer (a) IS