BLAW Final Review - Chapter 11

In general, which of these contract terms is NOT required to meet the requirement of definiteness?

• Acceptance

• The time of payment

• The subject matter of the contract

• The parties involved

Answer explanation

In general, the terms of the contract must include:

1. The parties

2. The subject matter of the contract

3. The quantity, time of payment, and delivery, if applicable

4. The terms of the performance

In general, certain terms must be included in contracts to satisfy the requirement of definiteness. What are the exceptions to this rule? Choose 2 answer choices.

• Courts can rewrite contracts even if the intent is vague

• Courts can complete a contract to supply some missing items

• If the contract is in writing, not all terms are required to be included

• Sales contracts under the UCC

Which of the following is a valid offer?

• Eric offers to buy Arun’s house for $290,000. Arun says, “No, but I will sell it to you for $300,000.” Eric seems to be upset, so Arun says he will sell it for $290,000

• Arun tells Eric he will sell one of his houses for $250,000 by the end of the summer

• Eric offers to buy Arun’s house for $775,000 with no contingencies because Eric’s lease ends in two months. Arun wants to think about it and six days later has not yet responded

• Arun distributes flyers at work stating he wants to sell his house, listing the address and the asking price

Answer explanation

Intention – The offeror must have a serious intention to enter into the agreement. If Lorenzo says, “I am thinking about selling my car for $10,000,” he is not displaying sufficient intent to make an offer.

Definiteness – The terms of the offer must be sufficiently definite so the parties and a court could understand the terms. This includes who the parties are, the subject matter of the contract, and, if applicable, quantity, time of payment, and delivery, as well as terms regarding performance. If Lorenzo says he will sell his car for $10,000, Lindsay cannot interrupt Lorenzo and say, “I accept your offer to sell your car for $10,000. Now give me the keys to your Maserati!” Lorenzo has ten cars and he actually planned to sell his old Ford Escort, not his Maserati. Thus, a very important piece of information was missing when Lindsay interrupted Lorenzo.

Communication – The offeror must communicate the terms of the offer to the offeree.

Which act or statement is a valid offer?

• A typical advertisement

• A price quote

• A completed auction with a reserve

• A detailed advertisement

Answer explanation

Some types of acts or statements are usually not offers:

1. An Invitation to Bargain or Negotiate

2. Price Quotes

3. Letter of Intent – This letter states what the parties are considering, and does not create a legal obligation.

4. Advertisements – Ads are generally not offers, but instead are requests for someone to make an offer. A very detailed advertisement is an exception, and could be considered an offer.

5. Auctions – Auctions are considered requests for offers. In some auctions, the bidding must meet or exceed a certain bid price to complete the sale.

What type of acceptance requires an affirmative action for the offeree to accept that offer?

• Offeree’s silence in response to an offer

• Unilateral contracts

• Browsewrap Agreements

• The typical type of acceptance to an offer

Lilly hired Harris Lawn Service to cut her grass one summer, and paid through automatic charges to her credit card. After taking three months off for winter weather, Harris staff cut Lilly’s grass for four weeks in a row before charging the fees on Lilly’s credit card. Lilly protested the charges, stating she did not hire the company to cut grass for the second summer. Harris sues Lilly. What law applies? Choose 2 answer choices.

• Lilly’s silence is acceptance because of the parties’ past dealings

• Lilly’s silence is not acceptance and Harris’s service in the spring is considered a gift to her

• Lilly’s silence is not acceptance in this case because the offeree must affirmatively accept the terms of the offer in full and communicate that acceptance to the offeror

• Lilly’s silence is acceptance because the offeree accepted the benefit offered

Answer explanation

Silence can be acceptance when:

1. the offeree takes the benefits of offered goods or services and should have known payment is expected.

2. the parties have had prior dealings.

What elements are required for an offer to be effective under the common law? Choose 3 answers

• The offer must be communicated to the offeree

• The terms of the offer must be reasonably definite so that all parties understand them

• The offeror must intend to be bound by the offer

• The offer must be irrevocable for a set period of time to allow acceptance

What conditions must be met for an offer to be legally accepted? Choose 2 answers

• It may only be accepted by the intended offeree or the offeree’s agent

• The offer must be accepted within 24 hours of communication

• Acceptance must be unequivocal with no requests for changes in the offer

• Acceptance must be communicated in words, either written or oral

How may a revocable offer effectively be revoked? Choose 2 answers

• The offeror may take an action that contradicts the offer and make that known to the offeree

• The offeror may convert the offer to an option contract

• The offeree may reject the offer with a clear expression

• The offeror may withdraw the offer with a clear expression

Answer explanation

Revocation may be accomplished by either of the following:

1. Express repudiation of the offer

2. Performance of acts that are inconsistent with the existence of the offer and are made known to the offeree

Under the UETA, if a party does not follow the security procedures and then fails to detect an error, what happens?

• The contract becomes a quasi-contract

• The contract becomes void

• The party who did not follow the procedures can the effect of the error

• The party who followed the procedures can avoid the effect of the error