Helix BBQ: Contract Law-Mutual Assent with Explanations

When does an offeree’s rejection of an offer mailed to the offeror become legally operative?

C.When received.

 

Answer option C is correct. A rejection sent through the mail is legally operative when received by the offeror.

Which of the following is NOT a consideration when determining whether a method of accepting an offer is reasonable?

C.Whether the method strictly complied with the method for acceptance dictated by the offer.

Solution: The correct answer is C.

Answer option C is correct. A method of expressing acceptance is reasonable if it is the same as the method used by the offeror, is customary in the industry, or was used in the past between the same parties. The reasonableness test for the method of acceptance is used only when an offer does not specify the method of acceptance. If an offer dictates the method of acceptance (as in answer option C), then acceptance is valid only in the method identified in the offer; "reasonableness" is not considered.

A buyer offered to pay $100 to a seller to purchase an ornate cup. The seller asked if the buyer would be willing to pay $120 for it.

Which of the following statements accurately describes the legal significance of the seller’s question?

C.The seller has neither made a counteroffer nor rejected the offer.

Solution: The correct answer is C.

 

Answer option C is correct. A dialogue in which the offeree asks whether the offeror would accept a new or different term, without refusing the original terms, does not constitute a counteroffer or a rejection.

Under what circumstances, if ever, can an offer that has been rejected be accepted thereafter?

D.There are no circumstances under which a rejected offer may be accepted.

Solution: The correct answer is D.

Answer option D is correct. Once an offer is rejected it cannot be accepted thereafter.

Which of the following best defines when an offer sent to the offeree through the mail lapses?

C. At whatever time a reasonable person in the offeree’s position would consider satisfactory to the offeror.

Solution: The correct answer is C.

Answer option C is correct. An offer made by mail will be considered accepted if an acceptance is mailed by midnight on the day the offer is received. However, an acceptance mailed after this time may also be valid. The most important consideration in determining whether such an acceptance will be valid is what a reasonable person in the offeree’s position would consider satisfactory to the offeror.

 All the following represent situations in which an offeror’s power to revoke an offer may be limited, EXCEPT which?

C.There is a clear mutual understanding between the offeror and offeree.

Solution: The correct answer is C.

Answer option C is correct. An offeror’s power to revoke an offer may be limited under four circumstances: the parties have entered into an option contract in which the offeror has promised to hold open the offer; the offeror has made a firm offer under the UCC; the offeror should expect reasonable reliance on the offer; and the offeror has made an offer inviting acceptance by performance only.

When does a revocation become effective?

A.When the offeree receives reliable news of it.

Answer option A is correct. Revocation is effective when the offeree receives reliable news of it.

 Which of the following constitutes a valid acceptance under the mailbox rule?

C.Placing an acceptance inside a properly stamped envelope marked with the correct address and putting the envelope in the mail.

Solution: The correct answer is C.

Answer option C is correct. Under the mailbox rule, a contract is formed as soon as a valid acceptance is placed in the mail in an envelope that has sufficient postage and that is marked with the correct address.

Which of the following statements is true?

D.Both offerors and offerees can be promisors.

Solution: The correct answer is D.

Answer option D is correct. A promisor is a person who makes a promise. Both offerors and offerees can be promisors.

Which of the following is a valid criterion used to distinguish an offer from an invitation to an offer?

A.Audience size.

Solution: The correct answer is A.

Answer option A is correct. A communication may be deemed an invitation to make an offer because it is made to a very large group of people, or because it lacks the specificity associated with an offer.

Which of the following would negate the creation of a valid offer?

B.The offeree believed the offeror was joking and did not intend to make an offer.

Solution: The correct answer is B.

Answer option B is correct. In order to be an offer, the purported offeree must actually believe that an offer has been made. Thus, if a purported offeree knows that an offeror is merely joking, then there is no offer, even if a reasonable person would have believed that the offeror was serious.

A coffee shop owner proposed to purchase all the coffee beans she needed from a wholesaler, who agreed to supply them.

Which statement below most accurately characterizes this arrangement?

D.There is a valid requirements contract under the UCC.

Solution: The correct answer is D.

Answer option D is correct. The UCC recognizes requirements contracts based on need. The contract is sufficiently definite because the quantity is the number of goods the buyer needs.

Which of the following is an example of an illusory promise?

A.“I’ll provide you with 1,000 bolts if it suits me.”

Solution: The correct answer is A.

Answer option A is correct. A promise is illusory if the promisor retains the choice to decide whether to perform, as reflected here in the language “if it suits me.”

 In determining whether an offer to provide something of value is a conditional gift, the court will focus on which of the following?

C.Whether the promisor’s motive in attaching conditions to her promise was to induce a return promise or performance.

Solution: The correct answer is C.

Answer option C is correct. If the promisor attaches conditions to the receipt of the promised item, the promisor’s motive will determine whether there is a bargained-for exchange. If the purpose of the conditions is to induce a return promise or performance especially sought by the promisor, there is a bargained-for exchange and consideration. If not, it is a conditional gift.

Which of the following may NOT be considered valid consideration?

B.A conditional gift.

Solution: The correct answer is B.

Answer option B is correct. Conditional gifts cannot constitute consideration, because by definition such gifts do not involve a bargained-for exchange.

What normally happens if an agreement is indefinite?

A.The agreement is unenforceable.

Solution: The correct answer is A.

Answer option A is correct. An indefinite agreement is unenforceable.

 A painter told a group of people that she would paint the home of anyone who paid a price that she found to be “worth the effort.”

Why is this statement unlikely to result in an enforceable contract?

B.A court would find it difficult to determine the price.

Solution: The correct answer is B.

Answer option B is correct. Courts will only enforce agreements with terms specific enough that the parties’ intent can be determined. Although a contract for the sale of services need not specify the exact price, either the contract terms must indicate how the price can be determined or the court must be able to reasonably supply the missing price term.

 Under the common law, which of the following is NOT a requirement for contractual certainty of terms?

B.The offeror must be reasonably certain.

Solution: The correct answer is B.

 

Answer option B is correct. For there to be certainty of terms under common law, the offeree must be reasonably certain, the price or other definable obligations must be reasonably certain, and the subject matter must be reasonably certain.

An offeror offered to purchase a specific tract of land from an offeree, who agreed.

What additional contract term or circumstance, if any, is necessary to make this agreement sufficiently certain to be enforceable?

A.An exact price term.

Solution: The correct answer is A.

Answer option A is correct. In a contract for the sale of land, the exact price must be identified.

When does mutual assent exist in the context of a contract?

B.When a reasonable person would interpret the parties’ actions as indicating intent to enter an agreement.

Solution: The correct answer is B.

Answer option B is correct. Mutual assent is determined based on an objective standard, namely whether a reasonable person would interpret the parties’ words and conduct as reflecting a sincere intent to enter an agreement. Note that the purported offeree must also actually believe that an offer has been made.