PACO 501 EXAM 3 FINAL PAPER 2026
COMPLETE QUESTIONS AND SOLUTIONS
◉ Carlyle v. Carbolic Smoke Ball Co. Answer: - Carbolic Smoke Ball
Company offers an award of 100 pounds to anyone who used their
product three times a week and still obtained influenza.
- Plaintiff used the smoke ball three times a week and still obtained
influenza.
- Company claims their advertisement was not an offer.
- Court disagrees and states this was an offer for a unilateral
contract. Plaintiff accepted offer by using the smoke ball as directed.
◉ Lucy v. Zehmer. Answer: -Lucy and Zehmer were drinking. Lucy
wants to buy land from Zehmer. Zehmer agrees to sell the land to
Lucy and writes down the "contract" on a piece of paper/napkin.
- Zehmer then claims it was a "joke"
- Court says Zehmer and Lucy formed a legally enforceable contract
Objective intent the standard not "subjective"
◉ Valid Offer requirements. Answer: Must
- Be made with serious objective intent
- Be communicated to the offeree
- Be made with enough specific terms to hold the offeror liable
,◉ Objective Standard. Answer: When determining the intent of the
offeror, use what?
◉ Types of Non-Offers. Answer: - Expression of opinion
+ "I would like to"
- Statements of intention
+ "I plan"
- Solicitation of bids
+ "How much would you charge?"
◉ Advertisements. Answer: Generally not offers unless they limit the
number of people that can accept or the quantity that can be
accepted (an invitation to bid)
◉ Auction. Answer: Generally not an offer but an "invitation to bid"
◉ "With Reserve" (Auction). Answer: The offeror can rescind offer
before gavel bangs
◉ "Without Reserve" (Auction). Answer: The offeror cannot rescind
their offer once bidding has started
,◉ Can cause Termination of Offers. Answer: - Lapse of Time
- Destruction of subject matter
- Death or incapacity of the offeror
- Subject matter of offer becomes illegal
◉ Revocation. Answer: Offeror rescinds their offer
- Common law: offer is revoked once notice is received by the offeree
◉ Promissory Estoppel. Answer: A doctrine which allows the
recipient of a promise to enforce a contract in court
- Needs:
+ A party makes a promise
+ Person receiving the promise (called promisee) must justifiably
rely on the promise
+ A detriment (harm) must be suffered by the promisee
+ Justice must be served by enforcement of the promise
◉ Rejections. Answer: Must be received by the offeror
- Counter-offer counts
◉ Mirror Image Rule. Answer: Acceptance must be the mirror image
of the offer. I offer to sell you my car for $2000, you can't say "I
accept, but you have to fill it up with gas before delivering"
, ◉ UCC 2-207. Answer: Abolished mirror image rule for the UCC
- Additional terms may be included by offeree
- If a party incorporates additional terms in their acceptance and
one of the two parties is not a merchant, then the additional terms
are just proposals the other party can reject or accept
- If both parties are merchants then the additional terms become
part of the contract unless an exception applies
-terms become part of the contract unless an exception applies
◉ Roto-Lith case. Answer: - Plaintiff mails an order form to
defendant i.e. "offer"
- Defendant prepares and mails both an acknowledgement and an
invoice
- Documents disclaimed warranties related to the goods
- Plaintiff accepts foods but states the disclaimer of the warranty is
not valid
- Court says Plaintiff became bound by disclaimer because they
accepted the goods
◉ UCC 1-202 (notice of revocation). Answer: Revocation can be:
- given to offeree
- given to an agent of the offeree
- given indirectly to offeree
COMPLETE QUESTIONS AND SOLUTIONS
◉ Carlyle v. Carbolic Smoke Ball Co. Answer: - Carbolic Smoke Ball
Company offers an award of 100 pounds to anyone who used their
product three times a week and still obtained influenza.
- Plaintiff used the smoke ball three times a week and still obtained
influenza.
- Company claims their advertisement was not an offer.
- Court disagrees and states this was an offer for a unilateral
contract. Plaintiff accepted offer by using the smoke ball as directed.
◉ Lucy v. Zehmer. Answer: -Lucy and Zehmer were drinking. Lucy
wants to buy land from Zehmer. Zehmer agrees to sell the land to
Lucy and writes down the "contract" on a piece of paper/napkin.
- Zehmer then claims it was a "joke"
- Court says Zehmer and Lucy formed a legally enforceable contract
Objective intent the standard not "subjective"
◉ Valid Offer requirements. Answer: Must
- Be made with serious objective intent
- Be communicated to the offeree
- Be made with enough specific terms to hold the offeror liable
,◉ Objective Standard. Answer: When determining the intent of the
offeror, use what?
◉ Types of Non-Offers. Answer: - Expression of opinion
+ "I would like to"
- Statements of intention
+ "I plan"
- Solicitation of bids
+ "How much would you charge?"
◉ Advertisements. Answer: Generally not offers unless they limit the
number of people that can accept or the quantity that can be
accepted (an invitation to bid)
◉ Auction. Answer: Generally not an offer but an "invitation to bid"
◉ "With Reserve" (Auction). Answer: The offeror can rescind offer
before gavel bangs
◉ "Without Reserve" (Auction). Answer: The offeror cannot rescind
their offer once bidding has started
,◉ Can cause Termination of Offers. Answer: - Lapse of Time
- Destruction of subject matter
- Death or incapacity of the offeror
- Subject matter of offer becomes illegal
◉ Revocation. Answer: Offeror rescinds their offer
- Common law: offer is revoked once notice is received by the offeree
◉ Promissory Estoppel. Answer: A doctrine which allows the
recipient of a promise to enforce a contract in court
- Needs:
+ A party makes a promise
+ Person receiving the promise (called promisee) must justifiably
rely on the promise
+ A detriment (harm) must be suffered by the promisee
+ Justice must be served by enforcement of the promise
◉ Rejections. Answer: Must be received by the offeror
- Counter-offer counts
◉ Mirror Image Rule. Answer: Acceptance must be the mirror image
of the offer. I offer to sell you my car for $2000, you can't say "I
accept, but you have to fill it up with gas before delivering"
, ◉ UCC 2-207. Answer: Abolished mirror image rule for the UCC
- Additional terms may be included by offeree
- If a party incorporates additional terms in their acceptance and
one of the two parties is not a merchant, then the additional terms
are just proposals the other party can reject or accept
- If both parties are merchants then the additional terms become
part of the contract unless an exception applies
-terms become part of the contract unless an exception applies
◉ Roto-Lith case. Answer: - Plaintiff mails an order form to
defendant i.e. "offer"
- Defendant prepares and mails both an acknowledgement and an
invoice
- Documents disclaimed warranties related to the goods
- Plaintiff accepts foods but states the disclaimer of the warranty is
not valid
- Court says Plaintiff became bound by disclaimer because they
accepted the goods
◉ UCC 1-202 (notice of revocation). Answer: Revocation can be:
- given to offeree
- given to an agent of the offeree
- given indirectly to offeree
