Acct 324 exam 1

How is an offeror’s intent to be bound by an agreement demonstrated?

• The courts determine an offeror’s intent based upon how a reasonable person would interpret the offeror’s words and actions.

• The courts determine an offeror’s intent based upon what that person’s subjective principles are.

• The courts determine an offeror’s intent based upon his or her demonstrated acceptance of the offer when negotiations began.

• The courts determine an offeror’s intent based upon what the offeror’s belief was at the time negotiations began.

If nothing is stated to the contrary in the terms of an auction, the auction is presumed to be ________blank, which means that the seller is merely expressing intent to receive offers.

• with reserve

• conditional

• without reserve

• unconditional

George is planning to buy Karl’s car for $10,000. He gives Karl $1,000 to keep the offer open for 30 days. Karl will deduct the $1,000 from the price of the car if George purchases the car within the 30 days. If George does not buy the car during that time, Karl will keep the $1,000 and may then offer the car to someone else. Which of the following contracts does this scenario best illustrate?

• Implied contract

• Unenforceable contract

• Quasi-contract

• Option contract

At an auction, if the seller is treated as making an offer to accept the highest bid, then the auction is ________blank.

• with stipulation

• with reserve

• without stipulation

• without reserve

an offer is interpreted by the courts on a(n) _________ standard

• subjective

• objective

• personal

• judicial

a valid offer includes

• vague and ambiguous proposals

• offers communicated by the offeror to the offeree's agent

• preliminary negotiations and advertisements

• expressions of possible interest by the offeror

Formation of a contract begins when the party initiating the contract, called the ________blank, makes an offer to another party, called the ________blank.

• grantor; grantee

• delegator; delegatee

• offeror; offeree

• transferor; transferee

Julio agrees to buy Sophia's computer for $1,000. However, Sophia tells Julio that she will only sell the computer to him if he pays $1,200. In this scenario, Sophia makes a(n):

• collective bargain

• reverse bid

• addendum

• counteroffer

Jonathan offers to sell Paulette six video poker machines. Before Paulette can accept or reject Jonathan’s offer, the state legislature passes a statute that the purchase, sale, and possession of video poker machines is illegal. In this scenario, Jonathan’s offer terminates due to which of the following rules?

• lapse of time

• unilateral mistake

• subsequent illegality of the subject matter

• assumption of the risk

orge offers to build Larry a garage for $20,000. The offer stated that acceptance in person was required. Within a reasonable time, Larry e-mailed Jorge his acceptance. Which of the following statements is true about this situation?

• The agreement between Larry and Jorge will be valid but unenforceable.

• The acceptance by Larry will be presumed as an implied contract.

• Larry has accepted the offer because an e-mail is a reasonable means of acceptance.

• Larry has not accepted the offer as required by the offeror, and there is no contract.