Mytest For Smyth: The Law and Business Administrations, Thirteenth Edition Chapter 5: Formation of A Contract: Offer and Acceptance

MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition
Chapter 5: Formation of a Contract: Offer and Acceptance
1) An offer is
a. a gift.
b. an agreement to give something to another party.
c. a donation.
d. a tentative promise made by one party, subject to a condition or containing a request to
the other party.
e. a gesture made by one party to another to make a donation.
Answer: d
Diff: 1
Type: MC
Topic: The Nature of an Offer
Skill: Recall
2) Which of the following is true? An invitation to do business

a. is a legally binding promise.
b. is a commitment to enter into a contract upon acceptance.
c. is a kind of offer.
d. is not an offer.
e. is an offer.
Answer: d
Diff: 1
Type: MC
Skill: Recall
3) Use this fact situation to answer the related questions that follow:
Alexander enters a grocery store to purchase some tea. He walks through the aisles until
he finds the aisle he wants with the different kinds of tea displayed on the shelves. He
finds the tea that he wants and then goes to the cashier, who scans the tea and tells
Alexander the price, which Alexander then pays. The cashier then hands the tea to
Alexander, who leaves the store.
In this situation, the tea on the store shelves is

a. an offer.
Copyright © 2013 Pearson Canada Inc.

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b. a contract.
c. a promise to sell.
d. an invitation to treat.
e. all of the above
Answer: e
Diff: 1
Type: MC
Skill: Applied
4) Use the fact situation in Q3 to answer the related question that follows:
In the above fact situation, an offer occurs
a. when Alexander takes the tea home.
b. when the cashier tells Alexander the price of the tea.
c. when Alexander hands the money to the cashier.
d. when Alexander sees the price beside the teas on the shelves.
e. when Alexander takes the tea off the shelf.
Answer: c
Diff: 2
Type: MC
Skill: Recall/Applied
5) Use the fact situation in Q3 to answer the related question that follows:
In the above fact situation, acceptance occurs
a. when the cashier takes Alexander's money and hands the tea to Alexander.
b. when Alexander takes the tea off the shelf.
c. when Alexander takes the tea home.
d. when Alexander hands the money to the cashier.
e. when the cashier says goodbye to Alexander.
Answer: a
Diff: 2
Type: MC
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6) Mary goes into a store in which she sees a SALE sign. While she is looking round, she
notices that a sign that says 50 percent off has been placed against a pair of knee-high
boots. She takes the pair of boots to the cashier. The cashier refuses to sell the boot at the
50 percent discount. Which of the following is true?
a. The cashier is in breach of contract.
b. Mary is not entitled to a 50 percent discount because the sign was not an offer.
c. The conduct of the store amounts to false advertising and Mary will be entitled to the
50 percent discount.
d. Mary is entitled to a 50 percent discount because that boots were advertized as being
sold at a discount of 50 percent.
e. The store is in breach of contract.
Answer: b
Diff: 2
Type: MC
7) An offer is made by an ________ to an ________.

a. inviter; invitee
b. offeror; offeree
c. initiator; offeree
d. initiator; receiver
e. offeror; invitee
Answer: b
Diff: 1
Type: MC
Skill: Recall
8) Joe sees a dog wandering around his yard. He lets the dog in. Later he learns that the
dog belongs to Mary, a woman who lives a kilometre away. Joe returns the dog to her the
next day. A few days later as Joe is riding his bike, he sees an old advert in which Mary
offers to pay $100 to any person who will find and return her dog. Joe realizes that he

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should have claimed the reward at the time that he returned the dog to Mary, and he
decides to go to Mary's place. Which of the following is true?
a. Joe will be entitled to the reward because he found the dog and returned it.
b. Joe will not be entitled to the reward because Mary made no offer.
c. Joe will not be entitled to the reward because he did not see the offer of the reward
until he had returned the dog and so he did not act in response to the offer of Mary.
d. Mary's advert is an invitation to do business and cannot give rise to a contract.
e. Joe will be entitled to the reward because Mary made an offer and his act of finding
and returning the dog is an acceptance.
Answer: c
Diff: 2
Type: MC
Topic: The Elements of Acceptance
Skill: Applied
9) Joe finds a dog wandering in his yard and he lets it into the house. A day later he sees
an advert on a tree stating that the owner of the dog will pay $100 to anyone who finds
and returns the dog to the local SPCA office. Joe takes the dog to the local SPCA office.
Which of the following is true?
a. Joe did not communicate his acceptance of the offer to the SPCA and so no contract
arose.
b. The kind of advert that is placed on the tree cannot give rise to a contract.
c. When Joe takes the dog to the SPCA, he makes the offer and if the SPCA accepts the
offer, they are obliged to pay him.
d. The advert on the tree is an invitation to do business and cannot give rise to a contract.
e. Joe will be entitled to the reward because his performance of the obligation in response
to the offer is all that is needed in a unilateral contract.
Answer: e
Diff: 2
Type: MC
Skill: Applied
10) Jack is speaking to Michael and Michael happens to mention that he will be painting
his home soon. Jack, who is in some financial difficulty, decides to paint Michael's home
in the hope that Michael will pay for the service. One weekend, when Michael is away,
Jack paints the whole house. He believes that he is entitled to approximately $1500.

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When Michael returns, Jack approaches him and asks for $1500. Which of the following
is true?
a. Jack, by painting the home, makes an offer that Michael is free to accept or reject.
b. When Michael mentions the need to paint his home to Jack, he indirectly makes an
offer that Jack accepts by painting the home.
c. Michael has benefited from the painted home and so he is obliged to pay for it.
d. Michael is not obliged to pay for the work done because he was never made any offer.
e. Jack's conduct is an invitation to do business that has not been accepted by Michael
and so Michael is not obliged to pay him.
Answer: d
Diff: 2
Type: MC
Skill: Applied
11) When an offer is not accepted, it will

a. lapse.
b. no longer be an offer.
c. terminate.
d. end.
e. be void.
Answer: a
Diff: 1
Type: MC
Topic: The Lapse and Revocation of an Offer
Skill: Recall
12) An offer may be revoked before it is accepted. To be valid, a revocation must be

a. promised.
b. communicated to the offeree before acceptance.
c. subject to a condition.
d. loud and clear.
e. exclusive.

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Answer: b
Diff: 1
Type: MC
Skill: Recall
13) On June 10, A delivered to B a written offer to sell his (A's) property to B for
$6000.00. The offer stated that it would be open for acceptance until 9 a.m. on June 12.
On June 11, B heard that A was agreeing to sell or had sold his property to C. On the
evening of June 11, B delivered an acceptance of A's offer to the place where A was
staying and on the following morning personally delivered his acceptance to A, who
declined the acceptance stating, "You are too late." In this situation
a. A's offer must remain open until 9 a.m. on June 12th.
b. B's acceptance of A's offer is a valid acceptance.
c. because B did not give A the money, there is no acceptance.
d. B's failure to accept A's offer immediately constitutes a rejection of A's offer.
e. having heard that A had sold or was selling the property to C, B knows A's offer has
been revoked.
Answer: e
Diff: 3
Type: MC
Skill: Applied
14) Jack tells Mike, "I'd like to buy your boat for $100 000." Mike, in response, says,
"That's too cheap. I'll sell you my boat for $150 000." Mike's statement is a ________
and a ________.
a. refusal; new offer
b. rejection; new offer
c. refusal; rejection
d. rejection; counter-offer
e. rejection; valid offer
Answer: d
Diff: 1
Type: MC
Topic: Rejection and Counter-offer by the Offeree

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Skill: Applied
15) An acceptance of an offer must be

a. made slowly.
b. loud and clear.
c. by conduct only.
d. positive.
e. in writing only.
Answer: d
Diff: 3
Type: MC
Skill: Applied
16) On October 1, Allan mailed an offer to Bob to sell to Bob 1000 boxes of tin plates at
a fixed price. The offer was received by Bob on October 11, and Bob immediately
accepted the offer by telegram on October 11 and confirmed by letter on October 15. On
October 8, Allan mailed a revocation of his offer, which was received by Bob on October
20. In this situation
a. Allan's revocation is really a counter–offer.
b. Allan has no right to try to revoke his offer.
c. Allan's revocation comes too late and there is a contract between Allan and Bob.
d. Allan's revocation of his offer is proper and effective to prevent a contract between
Allan and Bob.
e. none of the above
Answer: c
Diff: 3
Type: MC
17) On June 1 George goes to Harry's fruit store, and while he is there, Harry offers to
sell George 100 bushels of grapes that have just been delivered to his store for $20.00 per
bushel. Harry also tells George that he should not wait too long to accept Harry's offer,
because the best time to sell grapes is within three to four days of delivery. George
simply says, "Let me think about it and I'll get back to you before the end of the day."

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However, George does not return that day; instead, he comes back seven days later to tell
Harry that he accepts the offer. Harry replies, "You're much too late, I sold the grapes to
Mr. Smith on June 5.” In this situation
a. George's statement "Let me think about it and I'll get back to you before the end of the
day" is a counter-offer.
b. Harry's offer has lapsed given the perishable nature of the grapes.
c. Harry was wrong in selling the grapes to Mr. Smith.
d. Harry must keep his offer open until George accepts it.
e. Harry's offer has been withdrawn.
Answer: b
Diff: 3
Type: MC
18) A offers to sell his car to B for $6000.00. However, B replies, "I will not buy it at that
price," and walks away, never to be heard from again. In this situation, B's reply
constitutes
a. a lapse of A's offer.
b. a rejection of A's offer.
c. a revocation of A's offer.
d. a counter-offer.
Answer: b
Diff: 1
Type: MC
Skill: Recall
19) A standing offer is

a. one that may be accepted from time to time as needed.
b. one that can be revoked even after acceptance.
c. an offer that is made and withdrawn before it is accepted.
d. one that is said to stand because it is fixed and cannot be changed.

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e. one that cannot be revoked after acceptance without the consent of the offeree.
Answer: a
Diff: 1
Type: MC
Skill: Recall
20) Revocation takes effect

a. when an offeror contracts with someone other than the offeree.
b. when sent.
c. when the offeror becomes bankrupt.
d. when received.
Answer: d
Diff: 1
Type: MC
Skill: Recall
21) When communication between parties is by fax, the place where a contract is formed
is
a. where the offeror resides.
b. where the offeree receives the offer.
c. where the subject matter is located.
d. where the offeror receives the acceptance.
e. where the offeree resides.
Answer: d
Diff: 1
Type: MC
Skill: Recall
22) Where is a contract said to be formed?

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a. at the place where the offer is made

b. at the place where the acceptance is dropped into a mailbox
c. at the place where the offer is revoked
d. at the place where the parties do business
e. at the place when the acceptance becomes effective
Answer: e
Diff: 1
Type: MC
Topic: Transactions Between Parties at a Distance from Each Other
Skill: Recall
23) Jill tells Jack that she will pay $1000 for his pail of water. If he accepts this kind of
agreement, it is
a. a standing offer.
b. a multilateral contract.
c. a bilateral contract.
d. a unilateral contract.
e. a collateral contract.
Answer: c
Diff: 1
Type: MC
Topic: Unilateral and Bilateral Contracts
Skill: Applied
24) A offers in writing to sell his truck to B for $8000.00. The offer goes on to state that
acceptance must be hand-delivered in writing to A. However, B decides to send A a fax
in which he accepts A's offer. In this case,
a. A must sell his truck to B.
b. as far as B is concerned, the only important part of A's offer is B's acceptance in any
form.
c. the failure of B to accept the offer by fax causes A's offer to lapse.
d. B's fax is a proper acceptance of A's offer.
e. B's fax is not a proper acceptance of A's offer.

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Answer: e
Diff: 1
Type: MC
Skill: Recall
25) On January 1, A offers to sell his property to B for $175 000.00 and gives B an
option to purchase the property until July 1. The option reads: "The said option shall be
exercisable by notice in writing to the seller at any time within 6 months from the date of
the option." B mails his acceptance to A on February 12, but the letter never reaches A.
In this situation,
a. B's acceptance by mail is not in accordance with the option and there is no contract
between A and B.
b. since the option states that it is exercisable by notice in writing to the seller, mailing
the acceptance is deemed to be notice to the seller.
c. since the option states that it is exercisable by notice in writing to the seller, and since
the acceptance never came to the seller, B's acceptance by mail is not acceptance at all.
d. B's acceptance of the option by mail is a proper acceptance, creating a contract
between A and B.
Answer: c
Diff: 3
Type: MC
Skill: Applied
26) John and Edward are negotiating the sale and purchase of one of John's very
expensive paintings. In the course of the negotiations, John says, "I'll sell it to you for $20
000.00, to which Edward replies, "That is a little too much for me; I'll give you $14
500.00." John thinks about this for a moment and says, "No, but I'll take $17 500.00.
Edward says, "That is still too much; I'll buy it for $15 500.00. John looks at the painting
and replies, "You know it is worth more than that. Why don't you give me $16 500.00
and we'll call it a day." Edward responds with, "I only have $16 000.00 so that is all I will
pay for it," to which John replies, "Done." In this case,
a. the contract is for $16 500.00.
b. the contract is for $17 500.00.
c. the contract is for $14 500.00.
d. there is no contract at all.

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e. the contract is for $16 000.00.
Answer: e
Diff: 2
Type: MC
Skill: Applied
27) Mary places a notice in a local variety store. The notice reads as follows: "I shall pay
$1000 for the return of my dog, Mundo." Jim sees the notice. Jim finds the dog and
returns it to her. Which of the following is true?
a. Mary can refuse to pay Jim because Jim did not communicate his acceptance of the
offer to Mary, and an acceptance must be communicated to the offeree.
b. The notice is an invitation to treat and could not give rise to a contract.
c. Mary makes a counteroffer.
d. Mary is obliged to pay Jim because by finding the dog, he accepted the contract and no
notification was needed.
e. When Jim finds the dog, he makes the offer and it is up to Mary to determine whether
she wishes to accept the offer. Mary is thus entitled to reject the offer.
Answer: d
Diff: 2
Type: MC
Skill: Applied
28) Margaret finds a stray cat and takes it in. The following day she is speaking to some
friends and learns that Kelly, a woman who lives some distance away, has lost a cat. She
goes around to the home of Kelly, leaves the cat in the yard and leaves a note for Kelly.
The next day she gets a voice mail message from Kelly thanking her. A few days later
Margaret sees a notice in which Kelly offers to pay $500 to anyone who returns her cat.
Margaret, who needs some cash, returns to Kelly's home and demands the $500 reward.
Which of the following is true?
a. Kelly's notice is an invitation to treat.
b. Because Margaret did not demand the $500 when she returned the cat, she cannot go
back and request it. The offer has lapsed.
c. By returning the cat, Margaret performed the contract and so has to be paid. Margaret's
performance gives rise to a unilateral contract.
d. Kelly and Margaret have a bilateral contract.

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e. Margaret did not know of the offer before she returned the cat. So she could not have
been accepting the offer when she returned the cat. No contract arose. There is thus no
obligation on Kelly to pay the $500.
Answer: e
Diff: 2
Type: MC
Skill: Applied
29) Silence can be a sufficient method of acceptance

a. when the contract is a bilateral contract.
b. if the parties to a contract have habitually used this method to communicate assent.
c. when the offeror leaves the jurisdiction after making the offer.
d. when the contract is a unilateral contract.
e. when the offeree forgot to communicate its acceptance.
Answer: b
Diff: 1
Type: MC
Skill: Applied
30) We study business contract law in order to

a. know the consequences of breaking one's obligation.
b. understand and bargain for contractual obligations.
c. resolve commercial disputes.
d. understand legislation that pertains to business.
e. know when a binding contract is entered into.
Answer: b
Diff: 2
Type: MC
Topic: The Role of Contract Law

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31) Within a standard form contract there always exists the ability to bargain the terms of
the contract.
a. True
Incorrect: Incorrect
b. False
Correct: Correct
Answer: b
Diff: 2
Type: TF
Topic: An Offer Made by Tendering a Written Document to the Offeree
Skill: Applied
32) When the offeror specifically states in the contract that acceptance can be given by
performing an act, direct verbal communication of acceptance is not needed to make the
contract binding.
a. True
Correct: Correct
b. False
Answer: a
Diff: 2
Type: TF
Skill: Recall
33) When an offer is proposed to an interested party, the mode of acceptance does not
matter even if a preferred method of communication is stipulated within the offer.
a. True
Correct: Correct
b. False
Answer: a
Diff: 2
Type: TF

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34) When an offeror invites acceptance by mail, it is possible for the offeror to state in
the offer that the offer will only become a contract once acceptance is actually received
by the offeror. That is, the postal rule does not apply even though an invitation to
acceptance by mail was given.
a. True
Correct: Correct
b. False
Answer: a
Diff: 3
Type: TF
35) Like acceptance, revocation of an offer by mail is valid and binding once the letter of
revocation is placed in the mailbox.
a. True
b. False
Correct: Correct
Answer: b
Diff: 3
Type: TF
36) An invitation to do business is a commitment to enter into a contract upon

acceptance.
a. True
b. False
Correct: Correct
Answer: b
Diff: 1
Type: TF
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Skill: Recall
37) An offer must be communicated to the offeree.

a. True
Correct: Correct
b. False
Answer: a
Diff: 3
Type: TF
Skill: Applied
38) An acceptance must always be communicated to the offeror for a valid contract to
arise.
a. True
b. False
Correct: Correct
Answer: b
Diff: 1
Type: TF
Topic: The Communication of an Offer
39) Goods displayed on shelves in a store constitute an offer.

a. True
b. False
Correct: Correct
Answer: b
Diff: 1
Type: TF
Skill: Recall

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40) An offer will lapse only if the offeree has had a reasonable time to accept.
a. True
b. False
Correct: Correct
Answer: b
Diff: 2
Type: TF
Skill: Recall
41) A counter-offer by its very nature contains a rejection of the offer. Explain.
Answer:
When a counter-offer is made, it is the same as saying no to the original offer and making
a new offer in its place. In other words, by its very nature a counter-offer contains both a
rejection and new offer.
Diff: 2
Type: ES
Skill: Recall
42) Explain why a newspaper advertisement by a merchandising company is not a

binding and enforceable contract.
Answer:
Newspaper advertisements are invitations to do business. They are a device used to
attract new customers and to start negotiations toward a contract. A customer may make
an offer which the merchant can either refuse or accept, or the merchant may make an
offer as soon as the customer shows interest. Newspaper advertisements are also
invitations to the public to visit the merchant's place of business with a view to buying.
This is because a business is not expected to sell the goods to everyone who reads its
advertisements, only those who, having read an advertisement, either contact the
merchant so as to begin negotiations towards a contract or actually go to the merchant for
the same purpose.
Diff: 2

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Type: ES
43) Explain the theory behind lapse as a way of preventing the formation of a contract.
Answer:
The common law requires that the making of a contract should take place in a timely
fashion. For this reason it was considered unrealistic that offers should remain open for
acceptance forever or for inordinate amounts of time. This view was also applied in
situations where the very nature of the subject matter of the offer (such as fruit or some
other perishable) required acceptance within a reasonable amount of time.
Diff: 3
Type: ES
44) What is a negative option?
Answer:
A negative option is a provision in a contract that provides that if a party does not provide
notice before its current term runs out, the contract is automatically renewed for another
term.
Diff: 1
Type: ES
Skill: Recall
45) Explain how the rule concerning withdrawal of an offer by post differs from that
concerning the time of acceptance by post.
Answer:
When the post is used to accept an offer, the general rule is that acceptance is complete
when a properly addressed and stamped letter of acceptance is dropped in the mail.
Regarding the withdrawal of an offer by post, the general rule is that the offer is revoked
by post when the offeree actually receives notification of the revocation and not when it
is dropped in the mail.

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Diff: 1
Type: ES
Skill: Applied
46) What is a unilateral contract?
Answer:
A unilateral contract is one in which one party makes an offer to the whole world, and the
contract is accepted by a person stepping forward to perform an act or acts required by
the terms of the offer.
Diff: 1
Type: ES
Skill: Applied
47) Explain how a bilateral contract differs from a unilateral contract.
Answer:
In a bilateral contract, both parties trade promises and an offeree accepts and
communicates such acceptance to the offeror. In a unilateral contract, only the offeree
makes a promise to all. A contract arises when a person, the offeree, steps forward to
perform the contract. There is no communication of acceptance by an offeree in a
unilateral contract.
Diff: 1
Type: ES
Skill: Applied
48) Explain the difference between an invitation to do business and an offer.
Answer:
An offer to make a contract can be accepted, and when it is accepted, this gives rise to a
contract. However, an invitation to do business is not an offer that is capable of being
accepted. It is an invitation to enter into negotiations that could result in a contract. An
example of an invitation to do business is an advert in a store that advertises products for
a particular price. When a person picks up a product in a store, he or she cannot insist on
purchasing it for the price in an advert because the advertised price is not an offer.

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Diff: 1
Type: ES
Skill: Applied
49) Not all offers must be communicated to the offeror for a valid contract to arise.
Explain.
Answer:
As a general rule, when a person makes an offer, the acceptance of the offer must be
communicated to the offeror before a contract can arise. This is the general rule where a
bilateral contract is concerned. That is a contract where both parties make promises to
each other. In a unilateral contract, however, where one party makes a promise to
whomever steps forward to accept the contract, the acceptance of the contract does not
have to be communicated before a valid contract arises. For instance, if Jack says, “I'll
pay $1000 to anyone who finds and returns my cat,” all that is required is for Jim to find
and return the cat and Jack will be obliged to pay the $1000. Jim does not have to notify
Jack that he, Jim, intends to look for the cat.
Diff: 2
Type: ES
Skill: Applied
50) All contracts begin with a promise, but not all promises become contracts. Explain.
Answer:
A contract is a legally binding promise. A legally binding promise is a promise that gives
rise to a contract. Where a promise is not legally binding, for example, it is gratuitous, it
will not give rise to a contract. The law will not enforce a gratuitous promise.
Diff: 1
Type: ES
Topic: The Nature of a Contract
Skill: Applied
51) What is a counter-offer? What effect does a counter-offer have on an offer?
Answer:

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A counter-offer is made when an offeree responds to an offer by indicating his or her

willingness to enter into a contract with the offeror, but on terms that are different from
the offer. A counter-offer, when made by an offeree, amounts to a rejection of the earlier
offer and the making of a new offer by the offeree, who now becomes the offeror.
Diff: 1
Type: ES
Skill: Recall
52) What is the legal effect of a counter-offer?
Answer:
An offer is a tentative promise made by one party, subject to a condition, or containing a
request to the other party. An offer must be communicated to the other party before it can
be accepted. In most situations where parties bargain, an offer that is made is not
accepted immediately but is followed by another offer by the other party. For instance, if
Jack says, “I would like to sell the car to you for $5000” and Mary says, “I will pay only
$4000,” Mary does not accept the offer of Jack but makes another offer. Mary's offer is
known as a counter-offer. The legal principle is that when a party makes a counter-offer,
it amounts to a rejection of the offer and the substitution in its place of a new offer from
the other party.
Diff: 1
Type: ES
Skill: Recall
53) Why should you not make an agreement to sell your car to a purchaser "for a fair
price"?
Answer:
Although the courts have a policy of making contracts effective whenever possible, they
will not make a contract for the parties. If an offer is vague, the court may find that there
was no offer at all, and neither party will be bound. Price is an essential element, and if
there has been no agreement between the parties as to price, there will be no contract to
enforce. The expression "fair price" is too vague.
Diff: 2
Type: ES
Topic: Uncertainty in the Wording of an Offer

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Skill: Applied
54) Explain how an Internet contract is formed.
Answer:
Businesses selling online use standard form terms and conditions in their contracts. E-
commerce legislation has modernized contract formation rules so that "clicking an icon"
satisfies the acceptance and communication requirements of contract formation. In an
Internet contract, the Internet consumer is the offeree, and after seeing the terms required
to be disclosed by the retailor (offeror), that consumer will be bound by the terms of the
Internet contract at the moment the consumer clicks the "I accept" icon on the computer
screen. However, some retailers specifically design their websites to require multiple
acceptances before a "submit" icon is finally clicked. This would appear to satisfy the
legislative "agreement to terms" requirement before the entire offer to purchase is
submitted. In this context, the contract may not be formed until the retailer communicates
acceptance with a confirmation number.
Diff: 2
Type: ES
Topic: Formation of Internet Contracts

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Mytest For Smyth: The Law and Business Administrations, Thirteenth Edition Chapter 5: Formation of A Contract: Offer and Acceptance

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MyTest for Smyth: The Law and Business Administrations, Thirteenth Edition

Chapter 5: Formation of a Contract: Offer and Acceptance

2) Which of the following is true? An invitation to do business

In this situation, the tea on the store shelves is

Copyright © 2013 Pearson Canada Inc.

Topic: The Nature of an Offer

7) An offer is made by an ________ to an ________.

Copyright © 2013 Pearson Canada Inc.

Copyright © 2013 Pearson Canada Inc.

11) When an offer is not accepted, it will

12) An offer may be revoked before it is accepted. To be valid, a revocation must be

Copyright © 2013 Pearson Canada Inc.

Copyright © 2013 Pearson Canada Inc.

15) An acceptance of an offer must be

Copyright © 2013 Pearson Canada Inc.

19) A standing offer is

Copyright © 2013 Pearson Canada Inc.

20) Revocation takes effect

22) Where is a contract said to be formed?

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a. at the place where the offer is made

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Copyright © 2013 Pearson Canada Inc.

e. the contract is for $16 000.00.

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29) Silence can be a sufficient method of acceptance

30) We study business contract law in order to

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Copyright © 2013 Pearson Canada Inc.

36) An invitation to do business is a commitment to enter into a contract upon

37) An offer must be communicated to the offeree.

39) Goods displayed on shelves in a store constitute an offer.

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42) Explain why a newspaper advertisement by a merchandising company is not a

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44) What is a negative option?

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46) What is a unilateral contract?

47) Explain how a bilateral contract differs from a unilateral contract.

48) Explain the difference between an invitation to do business and an offer.

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51) What is a counter-offer? What effect does a counter-offer have on an offer?

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A counter-offer is made when an offeree responds to an offer by indicating his or her

52) What is the legal effect of a counter-offer?

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54) Explain how an Internet contract is formed.

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7) An offer is made by an to an .