Black Letter Outline On Contracts Book! Trivia Quiz

1. Blue, Inc. mails an order to Gates for certain computer services. Gates replies: "Order acknowledged; will receive our attention and advise shortly." Is there a contract?

To be effective, an acceptance must be unequivocal (here, Gates has apparently put off a decision). [§§192, 198]

Explanation

To be effective, an acceptance must be unequivocal (here, Gates has apparently put off a decision). [§§192, 198]

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2. Blue, Inc. mails an order to Gates for certain computer services. Gates replies: "Order acknowledged; will receive our attention and advise shortly." Two days later, Gates writes Blue, Inc. "accepting" the order, but stating that services cannot be provided for six weeks. Is there a contract?

Ordinarily, an acceptance must be a mirror image of an offer (except where the u.e.e. applies). Since Blue, Inc.'s order did not specify a time for the provision of services, the law will imply a term of "reasonableness" based on the nature of the contract, custom and usage in the community, and prior dealings between the parties. If six weeks is reasonable, the variance in the "acceptance" would not prevent the formation of a contract.

Explanation

Ordinarily, an acceptance must be a mirror image of an offer (except where the u.e.e. applies). Since Blue, Inc.'s order did not specify a time for the provision of services, the law will imply a term of "reasonableness" based on the nature of the contract, custom and usage in the community, and prior dealings between the parties. If six weeks is reasonable, the variance in the "acceptance" would not prevent the formation of a contract.

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3. Father writes to Daughter, who is living away from home, as follows: "I am old and lonely and miss you terribly. If you'll come back home and take care of me for the rest of my life, I'll make you sole beneficiary of my will. You don't need to promise-in fact, you can terminate the arrangement at any time if it doesn't suit you. Just Come." If Daughter gives up her career and moves back home and starts to take care of Father, can Father later revoke his offer?

Father's offer is for a unilateral contract. (He is Bargaining for Daughter's lifetime care, not for a mere promise.) Since the performance will take time to complete and the offeree has started the performance, the offer cannot be revoked under the principle of the Restatement Second section 45.

Explanation

Father's offer is for a unilateral contract. (He is Bargaining for Daughter's lifetime care, not for a mere promise.) Since the performance will take time to complete and the offeree has started the performance, the offer cannot be revoked under the principle of the Restatement Second section 45.

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4. A makes a written application for life insurance through an agent for B Insurance Company, pays the first premium, and is given a receipt stating that the insurance "shall take effect on the approval of the application" at B's home office. B's home office approves the next day, but the day after, before notice of approval has been sent, A dies. Was A covered by the insurance policy?

In a bilateral contract situation, the offeree must use "reasonable efforts" to communicate the return promise unless the offer expressly dispenses with notice (which seems to be the case here).

Explanation

In a bilateral contract situation, the offeree must use "reasonable efforts" to communicate the return promise unless the offer expressly dispenses with notice (which seems to be the case here).

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5. Frasier posts a $100 reward for the return of his dog. Roz reads the reward offer, searches for and finds the dog, and returns it. Can Roz collect the $100 even though she never notified Frasier that she was going to accept the reward offer?

Ordinarily, the offeree of a unilateral contract need not notify the offeror that she intends to perform or is performing the act. [§275]

Explanation

Ordinarily, the offeree of a unilateral contract need not notify the offeror that she intends to perform or is performing the act. [§275]

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6. Rich writes to Lender stating, "If you will lend my brother, B, $1,000, I will guaranty repayment." On receipt of this letter, Lender loans the money to B. If Lender fails to notify Rich that she has done so within a reasonable time, can Lender enforce Rich's guaranty?

While the offeree ordinarily does not need to give notice that performance has begun, she usually does have to give notice within a reasonable time after the performance is completed, unless the offeror has waived notice, or the performance itself would come to the offeror's attention in the reasonable course. If she does not give such notice, the offeror's obligation is discharged.

Explanation

While the offeree ordinarily does not need to give notice that performance has begun, she usually does have to give notice within a reasonable time after the performance is completed, unless the offeror has waived notice, or the performance itself would come to the offeror's attention in the reasonable course. If she does not give such notice, the offeror's obligation is discharged.

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7. Frasier posts a $100 reward for the return of his lost dog. In the meantime, Roz has found the dog and returns it to Frasier, unaware of the reward offer. If she later finds out about the reward, can Roz collect the $100?

MAJORITY RULE - Even though Roz performed the act bargained for, she did not do so with the intent of accepting Frasier's offer. Hence, no contract.

Explanation

MAJORITY RULE - Even though Roz performed the act bargained for, she did not do so with the intent of accepting Frasier's offer. Hence, no contract.

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8. A sends an order for 1,000 12-inch Frisbees to B Manufacturing Co., with instructions to ship immediately. Suppose that B immediately ships the goods by common carrier. The next day, and before receipt of the Frisbees, A wires a revocation of his order. Is there a contract?

Under u.e.e. section 2-206(1)(b), an offer to buy goods for prompt or current shipment can be accepted either by notice (promising to ship) or by actual shipment. Note that where an offeree chooses to accept by shipment, he must also notify the offeror that shipment has been made "within a reasonable time"; otherwise, the offeror could treat his offer as having lapsed before acceptance.

Explanation

Under u.e.e. section 2-206(1)(b), an offer to buy goods for prompt or current shipment can be accepted either by notice (promising to ship) or by actual shipment. Note that where an offeree chooses to accept by shipment, he must also notify the offeror that shipment has been made "within a reasonable time"; otherwise, the offeror could treat his offer as having lapsed before acceptance.

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9. A sends an order for 1,000 12-inch Frisbees to B Manufacturing Co., with instructions to ship immediately. Suppose B was out of 12-inch Frisbees, and therefore shipped 11.5 -inch Frisbees instead. Is there a contract at the time of shipment?

Shipment is an acceptance under section 2-206(1)(b), above, even if the goods shipped are nonconforming. However, the shipment of such goods is also a breach of the contract formed by the shipment, so that the buyer can either reject the goods or take delivery and sue the seller for any damages.

Explanation

Shipment is an acceptance under section 2-206(1)(b), above, even if the goods shipped are nonconforming. However, the shipment of such goods is also a breach of the contract formed by the shipment, so that the buyer can either reject the goods or take delivery and sue the seller for any damages.

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10. Brendan has been renting Anita's house for many years, and he has offered to buy it on several occasions but Anita has refused. Finally, Anita sends Brendan a letter stating, "I'm now ready to sell the house at the price we have been discussing over the past several years. Knowing that you want the house, I'll consider that we have a deal, unless I hear from you otherwise." Brendan makes no reply to this letter but does not wish to purchase the house at this time. Is there a contract?

Anita's letter cannot be regarded as an "acceptance" of any outstanding offer by Brendan. Rather, it is itself an offer. The mere fact that an offeror states that silence will constitute an acceptance does not deprive the offeree of the right to remain silent without acceptance. (Compare: If Brendan had remained silent with the intent of accepting, silence would constitute an acceptance.) [

Explanation

Anita's letter cannot be regarded as an "acceptance" of any outstanding offer by Brendan. Rather, it is itself an offer. The mere fact that an offeror states that silence will constitute an acceptance does not deprive the offeree of the right to remain silent without acceptance. (Compare: If Brendan had remained silent with the intent of accepting, silence would constitute an acceptance.) [

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11. Which, if any, of the following offers can be accepted only by performance?

A orders goods from B on specified terms and further states, "Ship at once."

A offers a reward of $100 for a lost diamond bracelet.

A says to B, "I'll pay you $15 to mow my lawn this afternoon."

Where it is clear from the circumstances that the offeror is not interested in a return promise, the offer is for a unilateral contract and can be accepted only by performance. In (A), (C), and (D) it is not clear whether the offer can be accepted only by performance, or whether a promise to perform would be sufficient. In such a case, Restatement Second construes the offer as inviting acceptance either by performance or by a promise to perform (i.e., bilateral contract).

Explanation

Where it is clear from the circumstances that the offeror is not interested in a return promise, the offer is for a unilateral contract and can be accepted only by performance. In (A), (C), and (D) it is not clear whether the offer can be accepted only by performance, or whether a promise to perform would be sufficient. In such a case, Restatement Second construes the offer as inviting acceptance either by performance or by a promise to perform (i.e., bilateral contract).

12. Father writes to Daughter, who is living away from home, as follows: "I am old and lonely and miss you terribly. If you'll come back home and take care of me for the rest of my life, I'll make you the sole beneficiary of my will. You don't need to promise-in fact, you can terminate the arrangement at any time if it doesn't suit you. Just Come." Assume Father does not revoke, but after a few years, Daughter tires of the arrangement and moves out and leaves Father alone. Can Father sue Daughter for breach of contract?

The father cannot sue the daughter for breach of contract because there was no binding agreement between them. The father's statement was an offer for a unilateral contract, where the daughter's acceptance would be shown by her actions of caring for him. The daughter's decision to move out and leave the father does not constitute a breach of contract because she was not obligated to continue caring for him indefinitely.

Explanation

The father cannot sue the daughter for breach of contract because there was no binding agreement between them. The father's statement was an offer for a unilateral contract, where the daughter's acceptance would be shown by her actions of caring for him. The daughter's decision to move out and leave the father does not constitute a breach of contract because she was not obligated to continue caring for him indefinitely.

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