Case 2 – Contracts

One or two sentence answers to each question. Let the space beneath each question
be your guide to the amount of answer required.

1) Distinguish a promise from an offer.
An offer is a tentative promise, dependent on an acceptance. A promise is not tentative.

2) Why is an agreement to agree not a binding contract?
Because the terms of the agreement are undefined

3) In what ways may an offer close?
By acceptance, lapse of time, or revocation

4) What is the legal effect of a counter-offer?
A counter-offer voids or rejects the original offer.

5) What is required for an acceptance to be effective?
The offeree must agree to the conditions set forth in the offer
The acceptance must be in the same terms as the offer.
The acceptance must be communicated to the offeror.
6) Is it possible for a contract to be formed without communication of an acceptance? Explain
If a letter accepting an offer is sent via the mail, a contract is formed once the letter is in the
postal system.

7) An engineering company has been doing design work for a charitable organization without
charge. The design work is for construction of buildings and the installation of equipment
used by the charity. The construction and installation is done by contractors who do charge
for their work. A government inspector has found defects in the design and installation of
several pieces of equipment in two buildings and insists that these be fixed immediately. The
remedial work would likely cost several thousand dollars. Does the charity have any recourse
against the engineering company in this situation? Why or why not?
The charity does have recourse to both the engineering firm for any defects in their design
because once a promisor begins to perform a service without consideration, the service must
be carried out with reasonable and appropriate care.

APSC 450 Professional Engineering Practice 2
Case 2 - Contracts
8) Endorphintech employs J ane who sends an offer by e-mail on behalf of the company to
BioMachines to purchase equipment. Sam, a BioMachines employee, receives the e-mail and
replies three days later accepting the offer. In this interval, J ane leaves her job at
Endorphintech and her e-mail account is closed. Sam’s reply bounces back as undeliverable.
After a cumbersome effort of some days to find out who replaced J ane, Sam is informed that
the offer has lapsed as J ane’s replacement found an alternate equipment supplier.
a) Was there an enforceable contract between Biomachines and Endorphintech? Explain.
No because according to e-commerce law, the acceptance must be out of the control of
the party accepting the offer (i.e., received at the recipient’s server)

b) Can Endorphintech be held vicariously liable for the offer J ane made? Explain.
No, the offer was made and there is no liability attached to an offer.

c) Would it have made any difference if Sam had faxed his acceptance? Explain.
Yes, if the fax were successfully received, then the contract would be binding.