Chapter 12 Homework

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Question #1

First State Bank offers to lend money to Todd at 15 percent interest. Before Todd accepts, a statute is enacted prohibiting loans at interest rates greater than 12 percent. Todd and the bank have

A no contract for a loan.

B have a contract for a loan at 0 percent interest.

C have a contract for a loan at 12 percent interest.

D have a contract for a loan at 15 percent interest.

Question #2

Brick Products, Inc., files a suit against City Trucking Service for breach of contract, based on what Brick claims was City’s offer. For a court to determine if a contract has been breached, under the common law, the offer must include terms that are

A reasonably definite.

B unequivocally approximate.

C exactly precise.

D vague or uncertain.

Question #3

May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick’s Pre-owned Autos, hands May $10. This is

A not a valid acceptance because Nick is a car dealer.

B a valid acceptance because Nick is a car dealer.

C a valid acceptance because May is seriously frustrated.

D not a valid acceptance because May does not seriously intend to sell.

Question #4

Bill offers to sell his Consumer Service Center business to Dina for $100,000. Dina replies, “The price is too high. I will buy it for $90,000.” Dina has

A made a counteroffer without rejecting the offer.

B rejected the offer and made a counteroffer.

C accepted the offer.

D rejected the offer without making a counteroffer.

Question #5

Optimal Sales Corporation plans to move to a new office. Optimal offers to sell its office furniture to Plentiful Marketing, Inc., but does not specify a time for Plentiful to respond. The offer expires

A after a reasonable period of time.

B never.

C after thirty minutes.

D after thirty days.

Question #6

Interstate Coffee Brokers, Inc. (ICBI), offers to sell Java Roasters, Inc., fifty bags of coffee beans. Java rejects the offer. The offer is

A valid for a reasonable time to give Java a “second chance.”

B valid for the period of time prescribed by a state statute.

C terminated.

D valid until ICBI revokes the offer.

Question #7

State Trucking Company mails to Transport Delivery, Inc., an offer to sell a delivery truck and to hold the offer open for five days. The five-day period begins to run when the offer is

A received.

B sent.

C in transit.

D written.

Question #8

Elmo advertises a reward for the return of his lost dog. Floyd, who does not know of the reward, finds and returns the dog. Floyd cannot recover the reward because he

A did not know of the reward when he found and returned the dog.

B did not confer a benefit on Elmo by returning the dog.

C returned the dog.

D does not need the money.

Question #9

Yvon asks Zack, “Do you want to buy one of my fishing rods?” This is

A not a valid offer because Zack did not respond.

B a valid offer.

C not a valid offer because Yvon did not state an intent.

D not a valid offer because the terms are not definite.

Question #10

Royal Properties, Inc., mails a flyer to hundreds of firms, advertising a building for sale. Standard Manufacturing Company responds by saying, “We accept your offer.” Between Royal and Standard, there is

A a contract for the sale of the building.

B a contract to negotiate a sale of the building.

C a contract to consider the offer before any others.

D no contract.

Question #11

Nate tells Opal, “I might sell the skis that I bought last fall since I haven’t used them and the skiing season is almost over.” This is

A an invitation to accept an offer.

B an offer.

C an acceptance of an offer.

D a statement of future intent.

Question #12

Dona and Eden sign a lease that includes a clause permitting Dona to extend the lease at an amount of rent to be agreed on at the time of the extension. The clause is

A not enforceable, because it does not include a price term.

B not enforceable, because it is not in the right form.

C enforceable, because it is part of a lease.

D enforceable, if the parties intend the clause to be binding.

Question #13

No offer can be accepted by silence.

A TRUE

B FALSE

Question #14

A valid offer requires a reasonable price related to market value.

A TRUE

B FALSE

Question #15

In a bilateral contract, communication of acceptance is necessary.

A TRUE

B FALSE

Question #16

If no time for acceptance is specified in an offer, the offer terminates at the end of a reasonable time.

A FALSE

B TRUE

Question #17

The communication of an offer must be by mail or in person.

A TRUE

B FALSE

Question #18

A contract lacking a quantity term may not be enforceable.

A TRUE

B FALSE

Question #19

An advertisement–“this property for sale”–is an offer.

A FALSE

B TRUE

Question #20

An invitation to negotiate–“can you afford this?”–is an offer.

A TRUE

B FALSE

Question #21

A valid offer requires reasonably certain terms.

A FALSE

B TRUE

Question #22

The death of a party to a contract will always result in the automatic termination of that contract.

A TRUE

B FALSE

Question #23

Rejection of an offer terminates it.

A FALSE

B TRUE

Question #24

An expression of opinion–“your customers will like this”–is an offer.

A FALSE

B TRUE

Question #25

An acceptance is sufficient to evidence an agreement.

A TRUE

B FALSE

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