BUL 3320 Ch. 12 Exam Questions with
Complete Answers
At auction, a beautiful painting was up for bid. The auctioneer announced the item.
She then announced that bidding was opened. Billy raised his paddle and yelled,
"$10,000." The auctioneer called for more bids, but no one else did. The auctioneer
then stated, "I am very sorry, gentleman who bid $10,000, but the reserve has not
been met and, thus, I must withdraw this item from auction unless you would like to
bid the $15,000 reserve." Billy was insulted and refused to bid higher even though
the painting was worth $15,000. Does Billy have a right to the painting?
Yes, because Billy is entitled to the benefit of his bargain.
Yes, because $10,000 is within 50% of the reserve price.
No, because there was no acceptance.
No, because no one bid against Billy. - ANSWER-No, because there was no
acceptance.
After quite a few beers, Edward turns to his buddy Rudy and says, "I'll give you my
brand new Corvette if you will drive me home." Rudy drives Edward home and then
asks for the title and keys. Edward refuses. Does Rudy own the Corvette?
No, because the offer did not have definite terms.
Yes, because there was a meeting of the minds.
Yes, because this was a unilateral contract and Rudy performed.
No, because Edward did not have the intention to make an offer. - ANSWER-No,
because Edward did not have the intention to make an offer.
Under the UCC, a contract for the sale of goods may be enforced when a key term is
missing.
True
False - ANSWER-True
A company e-mails a manufacturer, "Will buy 1,000 soda machines, model XU568,
at $5,200 per unit. Payable on delivery, 30 days from today." The manufacturer
writes back, "We accept your offer for 1,000 soda machines, model XU568. Payable
on delivery, 30 days from today. Interest at normal rates for unpaid balances." Is
there a contract?
Yes, and the company must pay interest at normal trade rates if payment is late.
Yes, but only if the manufacturer actually delivers the soda machines in 30 days.
Yes, but the interest at normal trade rates is not part of the contract.
No, no contract was formed. - ANSWER-Yes, and the company must pay interest at
normal trade rates if payment is late.
The following events happened:
, April 1: Gwen sent a letter to Jane offering to sell her car for $5000. The letter did not
specify a medium for acceptance.
April 2: Gwen sent a letter revoking the offer.
April 3: Jane received the offer.
April 4: Jane called Gwen and left a message on her answering machine accepting
the offer.
April 5: Jane received the revocation.
April 6: Gwen received the message on her answering machine.
Is there a contract between Gwen and Jane?
No, the offer did not meet the statute of frauds.
No, a telephone call is not a proper medium of acceptance.
Yes, the offer was accepted before Jane had notice of the revocation.
No, the offer was revoked on April 2. - ANSWER-Yes, the offer was accepted before
Jane had notice of the revocation.
Joey offered to sell his riding lawnmower to Josiah. Before Josiah responded, Joey's
house burned down and the mower was destroyed. Which statement is correct?
Josiah cannot accept the offer. The offer is terminated by law.
Josiah must accept the offer. This is a force majeure.
Josiah has the option to accept or reject the offer. If Josiah accepts, Joey must find a
comparable mower.
Josiah has the option to accept or reject the offer. If Josiah accepts, Joey must give
Josiah the insurance money. - ANSWER-Josiah cannot accept the offer. The offer is
terminated by law.
Jane offers her motorcycle for sale to Keisha for $1,000. Keisha will not accept the
offer if she does which of the below?
says, "I will accept your offer after I get paid tomorrow."
says, "I accept!" and smiles broadly.
says, "It's a deal," and hands Keisha a check for $1,000.
hands Jane $1,000 but says nothing. - ANSWER-says, "I will accept your offer after I
get paid tomorrow."
If an offeree accepts a lawful offer before it is effectively revoked:
a voidable contract is formed.
an unenforceable contract is formed.
a valid contract is formed.
a void contract is formed. - ANSWER-a valid contract is formed.
Someone offers to sell you a concert ticket for $50, and you reply, "I'll give you $40,"
The seller refuses to sell at the lower price, and you say, "OK, OK, I'll pay you $50."
Has a contract been formed?
Yes. Buyer must pay $50.
Complete Answers
At auction, a beautiful painting was up for bid. The auctioneer announced the item.
She then announced that bidding was opened. Billy raised his paddle and yelled,
"$10,000." The auctioneer called for more bids, but no one else did. The auctioneer
then stated, "I am very sorry, gentleman who bid $10,000, but the reserve has not
been met and, thus, I must withdraw this item from auction unless you would like to
bid the $15,000 reserve." Billy was insulted and refused to bid higher even though
the painting was worth $15,000. Does Billy have a right to the painting?
Yes, because Billy is entitled to the benefit of his bargain.
Yes, because $10,000 is within 50% of the reserve price.
No, because there was no acceptance.
No, because no one bid against Billy. - ANSWER-No, because there was no
acceptance.
After quite a few beers, Edward turns to his buddy Rudy and says, "I'll give you my
brand new Corvette if you will drive me home." Rudy drives Edward home and then
asks for the title and keys. Edward refuses. Does Rudy own the Corvette?
No, because the offer did not have definite terms.
Yes, because there was a meeting of the minds.
Yes, because this was a unilateral contract and Rudy performed.
No, because Edward did not have the intention to make an offer. - ANSWER-No,
because Edward did not have the intention to make an offer.
Under the UCC, a contract for the sale of goods may be enforced when a key term is
missing.
True
False - ANSWER-True
A company e-mails a manufacturer, "Will buy 1,000 soda machines, model XU568,
at $5,200 per unit. Payable on delivery, 30 days from today." The manufacturer
writes back, "We accept your offer for 1,000 soda machines, model XU568. Payable
on delivery, 30 days from today. Interest at normal rates for unpaid balances." Is
there a contract?
Yes, and the company must pay interest at normal trade rates if payment is late.
Yes, but only if the manufacturer actually delivers the soda machines in 30 days.
Yes, but the interest at normal trade rates is not part of the contract.
No, no contract was formed. - ANSWER-Yes, and the company must pay interest at
normal trade rates if payment is late.
The following events happened:
, April 1: Gwen sent a letter to Jane offering to sell her car for $5000. The letter did not
specify a medium for acceptance.
April 2: Gwen sent a letter revoking the offer.
April 3: Jane received the offer.
April 4: Jane called Gwen and left a message on her answering machine accepting
the offer.
April 5: Jane received the revocation.
April 6: Gwen received the message on her answering machine.
Is there a contract between Gwen and Jane?
No, the offer did not meet the statute of frauds.
No, a telephone call is not a proper medium of acceptance.
Yes, the offer was accepted before Jane had notice of the revocation.
No, the offer was revoked on April 2. - ANSWER-Yes, the offer was accepted before
Jane had notice of the revocation.
Joey offered to sell his riding lawnmower to Josiah. Before Josiah responded, Joey's
house burned down and the mower was destroyed. Which statement is correct?
Josiah cannot accept the offer. The offer is terminated by law.
Josiah must accept the offer. This is a force majeure.
Josiah has the option to accept or reject the offer. If Josiah accepts, Joey must find a
comparable mower.
Josiah has the option to accept or reject the offer. If Josiah accepts, Joey must give
Josiah the insurance money. - ANSWER-Josiah cannot accept the offer. The offer is
terminated by law.
Jane offers her motorcycle for sale to Keisha for $1,000. Keisha will not accept the
offer if she does which of the below?
says, "I will accept your offer after I get paid tomorrow."
says, "I accept!" and smiles broadly.
says, "It's a deal," and hands Keisha a check for $1,000.
hands Jane $1,000 but says nothing. - ANSWER-says, "I will accept your offer after I
get paid tomorrow."
If an offeree accepts a lawful offer before it is effectively revoked:
a voidable contract is formed.
an unenforceable contract is formed.
a valid contract is formed.
a void contract is formed. - ANSWER-a valid contract is formed.
Someone offers to sell you a concert ticket for $50, and you reply, "I'll give you $40,"
The seller refuses to sell at the lower price, and you say, "OK, OK, I'll pay you $50."
Has a contract been formed?
Yes. Buyer must pay $50.
