IU L201 Exam 2 Final Test Questions
with Guaranteed Pass Solutions 2025-
2026 Updated.
3 elements of a contract - Answer 1. Offer
2. Acceptance
3. Consideration
3 elements of an offer - Answer 1. Intent to contract
2. Definiteness
3. communication
INTENT - Answer -present intent to contract on part of offeror upon acceptance
-Offeror is not joking, haggling, or equivocation
-Courts take objective approach of contracts: parties' outward manifestations of intent, words,
acts and circumstances signify about intent
-Reasonable person would be justified in believing that the offeror intended to contract =
contract
DEFINITENESS - Answer -Specificity: fails to state what the offeror is willing to do and what he
asks in return is unlikely to be considered an offer
-Indicate an intent to contract whereas lack of specificity tends to indicate negotiation
-If detailed and specific written document stating all material terms and conditions is exchanged
and an agreement is signed from the offeree, a contract would be created
Definiteness under UCC - Answer -sales contracts can be created in any manner sufficient to
show agreement, including conduct which recognizes the existence of a contract
-If they act like they have a contract, they have a contract (exchange of money, goods)
-Just because they left out one or more terms does not mean that their agreement is too
indefinite to enforce
-If a term was left out because they were unable to reach an agreement this would indicate
intent to contract was absent and there is NO CONTRACT
, COMMUNICATED - Answer Stevens and Meyer have been negociating over the sale of Meyer's
restaurant, stevens tells his friend Reilly that he plans to offer Meyer $150,000 for his
restaurant, Reilly tells Meyer that Stevens has decided to offer him $150,000 XXX Not a contract
Officious intermeddler: Reilly ^^^
Advertisements - Answer -don't equal offers, treated as an invitation to negotiate
-Can't expect to give every person who sees ad the power to bind to contract
Exception: highly specific + highly extraordinary + unfair
-First come first served: potential for unfairness to those who attempt to accept such ads justify
treating as offers
Auctions - Answer -treated as making an invitation to offer, those who bid on offered goods
are treated as making offers that the owner of the good may accept or reject
-SOLD means accepted, after the auctioneer strikes the goods off to the highests bidder
can reject at any time BEFORE acceptance
EXEMPTION: "without reserve" - highest bidder no matter what
Rewards - Answer -offer for a unilateral contract
-To accept and be entitled to reward, offerees must perform the requested act
-Some courts say offeree must have started performance with knowledge of the offer to be
entitled to the reward while some say they must know before finishing the task
Bids - Answer -Advertisements for bids are treated as invitations to offer
-Bidders can withdraw their bids at any time prior to acceptance
-Offeree is free to accept or reject any bid
-Previously announced terms may alter this - ad states the contract will be awarded to the
lowest responsible bidder, will be treated as an offer that is accepted by the lowest bidder
-Promissory estoppel may operate to prevent bidders from withdrawing their bids
Ways to terminate an offer - Answer Terms, time, revocation, rejection, death/destruction
with Guaranteed Pass Solutions 2025-
2026 Updated.
3 elements of a contract - Answer 1. Offer
2. Acceptance
3. Consideration
3 elements of an offer - Answer 1. Intent to contract
2. Definiteness
3. communication
INTENT - Answer -present intent to contract on part of offeror upon acceptance
-Offeror is not joking, haggling, or equivocation
-Courts take objective approach of contracts: parties' outward manifestations of intent, words,
acts and circumstances signify about intent
-Reasonable person would be justified in believing that the offeror intended to contract =
contract
DEFINITENESS - Answer -Specificity: fails to state what the offeror is willing to do and what he
asks in return is unlikely to be considered an offer
-Indicate an intent to contract whereas lack of specificity tends to indicate negotiation
-If detailed and specific written document stating all material terms and conditions is exchanged
and an agreement is signed from the offeree, a contract would be created
Definiteness under UCC - Answer -sales contracts can be created in any manner sufficient to
show agreement, including conduct which recognizes the existence of a contract
-If they act like they have a contract, they have a contract (exchange of money, goods)
-Just because they left out one or more terms does not mean that their agreement is too
indefinite to enforce
-If a term was left out because they were unable to reach an agreement this would indicate
intent to contract was absent and there is NO CONTRACT
, COMMUNICATED - Answer Stevens and Meyer have been negociating over the sale of Meyer's
restaurant, stevens tells his friend Reilly that he plans to offer Meyer $150,000 for his
restaurant, Reilly tells Meyer that Stevens has decided to offer him $150,000 XXX Not a contract
Officious intermeddler: Reilly ^^^
Advertisements - Answer -don't equal offers, treated as an invitation to negotiate
-Can't expect to give every person who sees ad the power to bind to contract
Exception: highly specific + highly extraordinary + unfair
-First come first served: potential for unfairness to those who attempt to accept such ads justify
treating as offers
Auctions - Answer -treated as making an invitation to offer, those who bid on offered goods
are treated as making offers that the owner of the good may accept or reject
-SOLD means accepted, after the auctioneer strikes the goods off to the highests bidder
can reject at any time BEFORE acceptance
EXEMPTION: "without reserve" - highest bidder no matter what
Rewards - Answer -offer for a unilateral contract
-To accept and be entitled to reward, offerees must perform the requested act
-Some courts say offeree must have started performance with knowledge of the offer to be
entitled to the reward while some say they must know before finishing the task
Bids - Answer -Advertisements for bids are treated as invitations to offer
-Bidders can withdraw their bids at any time prior to acceptance
-Offeree is free to accept or reject any bid
-Previously announced terms may alter this - ad states the contract will be awarded to the
lowest responsible bidder, will be treated as an offer that is accepted by the lowest bidder
-Promissory estoppel may operate to prevent bidders from withdrawing their bids
Ways to terminate an offer - Answer Terms, time, revocation, rejection, death/destruction
