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Review Questions REVIEW QUESTIONS TRUE/FALSE QUESTIONS (CIRCLE THE CORRECT ANSWER) 1. T F An offeror can propose either a unilateral or bilateral contract. 2. T F The offer for a unilateral contract is a promise. 3. T F If the offer is for a bilateral contract, the offeree must have knowledge of the offer before responding with a promise. 4. T F If an offer is for a unilateral contract, the offeree’s performance is acceptance of the offer even though the offeree performed without learning of the offer until after completing the requested performance. 5. T F The “preexisting duty” rule, which applies to consideration for the promisor’s promise, does not apply to consideration for the promisee’s promise or performance. 6. T F Under the common law, the offeree may accept the offer without agreeing to all of the offeror’s terms. 7. T F Alfred sent a letter promising to purchase Jan’s 1965 T-Bird for Jan’s promise to sell for $5,500. Jan wrote Alfred that she would sell for $5,500 if Alfred would let her drive it in one more road rally. Under the common law, the offer has been accepted. 8. T F The offeror is master of the offer and controls the terms of the contract. 9. T F Under the common law mirror image rule, the offeree cannot change the terms of the offer without rejecting the offer. 10. T F The preprinted terms on the forms used in commercial transactions are called “armor plate.” 11. T F When the offeror and the offeree say the same thing but mean different things, the party proving by a preponderance of the evidence that his or her meaning coincides with the reasonable person’s perception prevails. 12. T F A mistake in understanding the terms of the offer can be resolved by considering what the average person would have meant if he or she had been placed in this situation. 13.T FThe seller wrote the buyer that she would sell her bean crop to him for $3 a bushel. The buyer wrote back that he would be happy to buy her bean crop for $3 a bushel. The seller has a crop of Kentucky Wonders. The buyer thinks the seller has a crop of Blue Lakes. The buyer has never seen the seller’s crop. If both the buyer’s and the seller’s perception of the manifestation “bean” were reasonable, the buyer’s letter would not be an acceptance of the seller’s offer. 14. T F As a general rule, the offeree does not need to notify the offeror that the offer has been accepted. 15. T F If the offeree decides not to accept the offer, he or she may empower someone else to accept it. 16. T F An offer may not be directed to the general public. 17. T F The offeror may establish the method by which the offeree must accept the offer. 18. T F If the offeror does not mandate the method of acceptance, the general rules of contract law apply. 19. T F The “mailbox” rule is also known as the “posting” rule. 20. T F Under the “mailbox” rule, an acceptance is effective when it is received in the mail by the offeror. 21. T F If after an offer has been created, the offeror confers a benefit on the offeree and the offeree subsequently rejects the offer but retains the benefit, the offeror could successfully maintain a restitution cause of action against the offeree for unjust enrichment. FILL-IN-THE-BLANK QUESTIONS 1. __________. The phase after the transaction passes through the post- offer/pre-acceptance phase. 2. __________. The type of contract that results when the offer is a promise for a performance. 3. __________. The type of contract that results when the offer is a promise for a promise. 4. __________. A common law rule that prevents the offeree from changing the terms of the offer in his or her acceptance. 5. __________. A rule that prevents a prior obligation from being consideration for a promise or performance. 6. __________. The master of the offer. 7. __________. Preprinted terms on the forms used in commercial transactions. 8. __________. A rule that provides that acceptance is effective when the offeree posts his or her acceptance. 9. __________. An action that may be available but only when a breach of contract action cannot be maintained. 10. __________. The doctrine where the last form under the common law mirror image rule is the offer. 11. __________. The problem that occurs when the offeror and offeree say the same thing but mean different things. 12. __________. The party controlling who may accept the offer. 13. __________. A manifestation of assent to the terms of the offer. MULTIPLE-CHOICE QUESTIONS (CIRCLE ALL THE CORRECT ANSWERS) 1. One evening, Harry, a chimpanzee, escaped from the local zoo. WGAB, a local radio station, offered a reward of $500 for the capture and return of Harry. That evening Carlos found a chimpanzee in his garage. Since it was too late to call the animal shelter, Carlos thought he would try to take the chimp to the zoo. Maybe they could take care of him. Carlos put the chimp in his van and began to drive to the zoo. As he drove he happened to hear an announcement on WGAB about Harry’s escape and the information concerning the reward. Carlos continued to the zoo, left Harry, and then demanded his reward from WGAB. (a) Carlos is not entitled to the reward because rewards are not offers. (b) Carlos is not entitled to the reward because he did not call WGAB to promise to capture Harry. (c) Carlos is not entitled to the reward because under Restatement (First) of Contracts § 53 (1932) he must have knowledge of the offer before beginning the requested performance. (d) Carlos is entitled to the reward because under Restatement (Second) of Contracts § 51 (1979) he must have knowledge of the offer only before completing the requested performance. (e) Carlos is not entitled to the reward because as a good citizen, he had a preexisting duty to capture and return Harry to the zoo. 2. ABC Company sent the XYZ Company a purchase order for 50,000 metal bracelets at $.50 each. ABC’s purchase order contained the following provision in its fine print: “all disputes will be settled by arbitration.” XYZ sent its acknowledgment form to ABC and subsequently shipped the bracelets. XYZ’s form stated in its fine print: “all disputes will be settled by mediation-arbitration.” ABC accepted the shipment and paid. (a) Under common law, XYZ’s acknowledgment form constitutes the acceptance. (b) Under common law, XYZ’s shipment constitutes the acceptance. (c) Under common law, ABC’s acceptance of the shipment and payment constitutes the acceptance. (d) Under UCC § 2–207(1), XYZ’s acknowledgment form constitutes the acceptance. (e) Under UCC § 2–207(3), ABC’s acceptance of the shipment and payment constitutes the acceptance. 3. ABC Company sent the XYZ Company a purchase order for 50,000 metal bracelets at $.50 each. ABC’s purchase order contained the following provision in its fine print: “all disputes will be settled by arbitration.” XYZ sent its acknowledgment form to ABC and subsequently shipped the bracelets. XYZ’s form stated in its fine print: “all disputes will be settled by mediation-arbitration.” XYZ’s form also stated “this is not an acceptance unless the buyer assents to all of the seller’s terms.” ABC accepted the shipment and paid. (a) Under common law, XYZ’s acknowledgment form constitutes the acceptance. (b) Under common law, XYZ’s shipment constitutes the acceptance. (c) Under common law, ABC’s acceptance of the shipment and payment constitutes the acceptance. (d) Under UCC § 2–207(1), XYZ’s acknowledgment form constitutes the acceptance. (e) Under UCC § 2–207(3), ABC’s acceptance of the shipment and payment constitutes the acceptance. 4. ABC Company sent its purchase order form to XYZ Company for the purchase of 4,000 valves at $32 each. ABC’s form stated in its boilerplate “ABC reserves all express and implied warranties.” XYZ responded with its acknowledgment form which stated in its boilerplate “all express and implied warranties are disclaimed.” XYZ shipped the valves. ABC accepted the shipment and paid. (a) Under UCC § 2–207(1), XYZ’s acknowledgment form is the acceptance of ABC’s offer, even though it states terms different from those in the offer. (b) Under UCC § 2–207(3), a contract has been formed by the conduct of the parties. (c) XYZ’s disclaimer is a term in the first form but not in the second and therefore is a term in the contract. (d) XYZ’s disclaimer is an additional term and under UCC § 2–207(2) may or may not be a term in the contract. (e) XYZ’s disclaimer is a different term and may or may not be a term in the contract depending on whether the knockout, dropout, or the UCC § 2–207(2) approach is used. 5. ABC Company sent its purchase order to XYZ Company for the purchase of 5,000 steel rods at $1 each. XYZ sent its acknowledgment form which stated 4,500 steel rods at $1 each. In the boilerplate of XYZ’s acknowledgment form, XYZ disclaimed all express and implied warranties. XYZ shipped the rods. ABC accepted the shipment and paid. (a) Under UCC § 2–207(1), XYZ’s acknowledgment form was the acceptance.
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