1. the Terms of a Contract Must Be Accepted by the Party to Whom It Was Communicated

Directions:Place a T for True or an F for False on the blank provided to show whether each of the following statements is true or false.

1. The terms of a contract must be accepted by the party to whom it was communicated.

2. Anagreementtocommitacrimecanbeconsideredacontract.

3. An arrangement between two friends to attend an opera performance is not a contract.

4. Anofferormustappeartobeseriouswhenmakinganoffer.

5. Wordsspokeninangerarenotconsideredanoffer.

6. Preliminarynegotiationsareconsideredtobeoffers.

7. Apurportedofferthatlacksessentialinformationislegally ineffective.

8. Advertisementsareusuallyconsideredlegaloffers.

9. Apersonwhoisnottheintendedoffereecanaccepttheoffer.

10. Advertisements that ask the offeree to perform an act as a way of accepting cannot be considered offers.

11. Anoffermadetoonepersoncanbeacceptedbyanother.

12. The mirror image rule requires that the terms in the acceptance must be close to the terms contained in the offer.

13. Anoffercanbemadetoaparticulargrouportothepublic.

14. Any variation made to a contract dealing with the sale of goods is a counteroffer if agreed in advance.

15. A bilateral acceptance occurs when an offeree indicates acceptance by performing his or her obligations under the contract.

16. A unilateral acceptance occurs when an offeree indicates acceptance by giving a promise.

17. Contractual communications such as offers and counteroffers can only be communicated in writing.

18. An acceptance is the only form of contractual communication that is effective when sent.

19. Oral acceptances are effective the moment the words are spoken directly to the offeror.

20. A telegram becomes an effective acceptance when it is handed to the clerk at the telegraph office.

Directions:Fill in the blank(s) with the most appropriate term or phrase to complete the sentence.

21. The right of ______allows an offeror to withdraw an offer before it is accepted.

22. An acceptance to an offer must be received within the ______stated in the offer.

23. When an offeree rejects the offer, the offer is ______.

24. A(n) ______results when the offeree changes the offeror’s terms.

25. Death or ______on the part of the offeror or the offeree terminates their offer.

LegalApplications

26. Cheya asks her college roommate how much money she would give her for a scientific graphing calculator that she no longer needs. The roommate replies, “I’d probably give you around $50 for it.” Has Cheya made a legal offer? Explain your answer.

27. Duane Johnston raises Angus beef. A representative from a large meat plant visits the farm and looks over a large herd of two-year-old steers. He agrees to pay Duane a down payment of $30 per animal for fifty of the steers. Duane is to receive the remaining money when the cattle are shipped in two weeks. Did Duane and the representative make a binding contract? Explain your answer.

28. Jennifer offers to sell her collection of radio-controlled cars to Tess for $1500. Tess tells Jennifer she wants to think it over. Tess later phones Jennifer and says, “I think $1500 is too high for your cars. I’ll give you $1200 for them.” Jennifer tells Tess that she’ll think about it. Tess later learns that the cars are actually worth more than $1500, and she calls Jennifer back and accepts the original offer. Is Jennifer legally obligated to sell the cars to Tess for $1500? Explain your answer.

29. Juan was vacationing at a Mexican resort when he lost a valuable necklace. He put a notice in the local newspaper that promised a $500 reward for finding and returning the necklace. Because Juan had to leave the resort two days later, he included his home address and phone number. Two months later, Mia found his necklace and contacted him. Juan told her he would give her only $300 for returning the necklace since he had to wait so long for it. Can Juan revoke his $500 offer for this reason? Explain your answer.

PRACTICEACTIVITY

Readthefollowingcasesandanswerthequestionsaboutthem.

30. The widow of the widely published author, John Cheever, entered into a written contract with Academy Chicago Publishers. The contract terms stated that Mrs. Cheever (along with Franklin H. Dennis, an Academy editor) was to permit and assist in publishing a collection of Mr. Cheever’s short stories. (These stories, though previously published, had never been collected into a single anthology.) Under the contract, the publisher was to maintain control over the contents of the book. Cheever and Dennis received a partial advance and Academy began locating and gathering the necessary stories. Within a few months, they had gathered more than 60 uncollected stories and sent them to Mrs. Cheever. Mrs. Cheever then told them that she did not want to go through with the contract, she objected to publication of the book, and she attempted to return the partial advance. Do the parties have an enforceable contract? Explain. [Academy Chicago Publishers v. Cheever, 578 N.E. 2d 981 (1991)]

31. Treece is vice-president, board of director member, and 50 percent stockowner of Vend-A-Win, a Washington corporation in the business of distributing punchboards. He spoke before the Washington State Gambling Commission in support of punchboard legitimacy and Vend-A-Win’s application for a temporary license to distribute punchboards. During the testimony, Treece stated that if anyone found a crooked board, he would pay them one hundred thousand dallars. The audience laughed. Barnes heard the statement on the television news and in the newspaper the next day. Barnes telephoned Treece, announced that he had two crooked punchboards, and asked Treece if his earlier statement had been made seriously. Treece said yes, advised Barnes that the statement was firm, and informed Barnes that the $100,000 was safely being held in escrow. Treece directed Barnes to bring the punchboard to the Seattle office of Vend-A-Win for inspection. Barnes did so and received a receipt for the board written on Vend-A-Win stationery, signed by Treece and witnessed by Vend-A-Win’s secretary-treasurer. Barnes was informed that the punchboard would be taken to Chicago for inspection. Barnes produced his second punchboard at a later meeting before the Gambling Commission. Treece and the Corporation refused to pay, and Barnes brought suit for breach of contract. Did Treece’s speech create an enforceable contract? Explain. [Barnes v. Treece, 15 Wash. App. 437 (1976)]

32. The Simmons’ son is deceased. When their son was in college, he took out a life insurance policy valued at $5,000, which was offered free by the alumni association for nine months. The policy gave the option of continuing as a $25,000 policy after the initial coverage for an amount to be determined at a later date. Acceptance of the additional coverage was to be done by paying the premium, which the son did. Shortly before the policy expired, he received a letter offering him the additional coverage and stating the amount of the premium. He had been injured the day before he received the letter and died several weeks later without regaining consciousness. His lawyer later returned the premium, and the Simmons then filed for the $25,000. The insurance company refused to pay. Can the parents recover from the insurance company? Explain. [Simmons v. All American Life Ins. Co., 838 P. 2d 1088 (Ore. Ct. App. 1992)]

33. Donald mailed a written offer and a deposit to Dwayne for a piece of property Dwayne owned that Donald wanted to buy. In his written offer, Donald stipulated that his offer would expire on February 4, at which time Dwayne was to return the deposit if Dwayne had not accepted Donald’s offer. When Dwayne received the offer, he made several changes to it, including extending the acceptance date until February 14. Donald received the counteroffer before the 14th but did not sign the contract until February 18. He returned the contract to Dwayne on February 19. On February 14, when Dwayne had not received an acceptance from Donald, Dwayne considered the negotiations terminated and sold the property to someone else. Donald sued claiming breach of contract. Is Donald’s claim correct? Explain. [Sullivan v. Economic Research Properties, 455 So. 2d 630 (Fla. Ct. App. 1984)]

34. Hall sponsored a boat race in which the first prize was advertised as a 14-foot boat trailer and a 20-horsepower motor. After verifying with Hall that the prizes advertised were correct, Bean entered the race and won. When he went to collect the prizes, he was told that there had been a mistake and was offered a 6-horsepower motor as first prize. Bean sued, alleging that he had a contract for the prizes offered. Does Bean get to have the 20-horsepower boat? Explain. [Hall v. Bean, 582 S.W. 2d 263 (Tex. 1979)]

35. Schiff is the author of several books advocating that citizens are not required by any law to pay income taxes. While appearing on an evening television show, he said, “If anybody calls this show…and cites any section of this Code [the Internal Revenue Code] that says an individual is required to file a tax return, I will pay them $100,000.” The next morning, John Newman saw the offer rebroadcast on a morning show, found several sections of the IRS code that required the filing of a tax return, and demanded the money from Schiff. Schiff refused to pay Newman, alleging that he could only accept his offer if he called into the show the night it was broadcast. Who is right? Explain. [Newman v. Schiff, 778 F. 2d 460 (8th Cir. 1985)]