Solution Manual for Cengage Advantage Books Law for

Business 18th Edition by Ashcroft and Ashcroft ISBN

1133587615 9781133587613
Full download link at:

Solution manual: https://testbankpack.com/p/solution-manual-for-cengage-

advantage-books-law-for-business-18th-edition-by-ashcroft-and-ashcroft-isbn-
1133587615-9781133587613/

Test bank: https://testbankpack.com/p/test-bank-for-cengage-advantage-books-

law-for-business-18th-edition-by-ashcroft-and-ashcroft-isbn-1133587615-
9781133587613/

CHAPTER 6—OFFER AND ACCEPTANCE

MULTIPLE CHOICE

1. Which of the following is true of a valid offer?

a. It is indefinite in nature.
b. It is instituted by the offeree to the offeror.
c. It is seriously intended.
d. It can be accepted by anyone who hears about it.
ANS: C PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 6-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Requirements of a Valid Offer KEY: Bloom's: Knowledge

2. Ryan, a college student, intends to sell his car. He contacts his friend Luiz and enquires whether he is
interested in buying the car. Luiz finds the quoted price reasonable and buys the car from Ryan. In this
scenario, Ryan is the _____.
a. claimant
b. offeror
c. acceptor
d. summoner
ANS: B PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 6-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Requirements of a Valid Offer KEY: Bloom's: Application

3. Which of the following is true of offers and invitations?

a. Window displays and catalogs are examples of personal invitations.
b. Letters addressed to a specific person automatically makes them personal sales letters.
c. The general rule is that circulars are offers made to specific customers.
d. Circulars are invitations to the recipients to make an offer.
ANS: D PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 6-2 NAT: BUSPROG: Analytic STA: AICPA: BB-Legal
TOP: A-head: Invitations to Make Offers KEY: Bloom's: Comprehension

4. A firm offer can be best defined as:

 a. an offer that cannot revoked for a reasonable time if no time is stated.
b. an offer that becomes invalid if payment is not made to the offeror.
c. a written document which has a seal in place of the merchant’s signature.
d. a verbal promise to hold an offer open.
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 6-3 NAT: BUSPROG: Analytic STA: AICPA: BB-Legal
TOP: A-head: Duration of the Offer KEY: Bloom's: Knowledge

5. Which of the following is true of a binding contract?

a. It allows an offer to be revoked once the contract is formed.
b. It is created when an offeree makes a proposal to the offeror.
c. It is considered valid when the offer made is indefinite in nature.
d. It is created when the offeree clearly shows an intention to accept the offer.
ANS: B PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 6-3 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: The Acceptance KEY: Bloom's: Knowledge

6. Which of the following is true of revocation of an offer?

a. The offeror can revoke an offer any time after a contract is formed.
b. The binding promise to hold an offer open can be revoked at will.
c. The offer is terminated by the lapse of the time specified in the offer.
d. The revocation of an offer should be communicated to the offeree after his assent.
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 6-3 NAT: BUSPROG: Analytic STA: AICPA: BB-Legal
TOP: A-head: Duration of the Offer KEY: Bloom's: Comprehension

7. Maya, an elderly lady, wanted to sell her house. She offered the house to Lily, a friend. However,
before the house deeds were transferred, Maya passed away. Which of the following scenarios is
legally acceptable in such a case?
a. Lily is still entitled accept the offer through legal action.
b. Lily can accept the offer within a period of ten days after Maya’s death.
c. Lily must consider the offer automatically revoked and void.
d. Lily can claim that she was not aware of Maya’s death and accept the offer.
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 6-3 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Offer and Acceptance KEY: Bloom's: Application

8. Which of the following is a requirement for the acceptance of an offer to be valid?

a. Acceptance of the offer must be made through a set of prescribed procedures.
b. The acceptance must be communicated by the offeree to the offeror.
c. The acceptance should be made through a mere mental intention to accept the offer.
d. Acceptance of the offer must be made after a binding contract has been formulated.
ANS: C PTS: 1 DIF: Difficulty: Moderate
OBJ: LO: 6-3 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: The Acceptance KEY: Bloom's: Comprehension

9. An offeree’s response that rejects an offer by varying its terms is known as a(n) _____.
a. counteroffer
b. option
c. circular
 d. invitation
ANS: A PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 6-4 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Counteroffers KEY: Bloom's: Knowledge

TRUE/FALSE

10. An offer expresses the willingness of the offeror to enter into a contractual agreement.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Requirements of a Valid Offer KEY: Bloom's: Knowledge

11. A valid offer is one that is indefinite.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-1 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Offer and Acceptance KEY: Bloom's: Knowledge

12. Advertisements and catalogs are examples of general invitations.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-2 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Invitations to Make Offers KEY: Bloom's: Knowledge

13. If a merchant displays a coat at a particular price, he has a binding requirement to sell at that price.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-2 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Invitations to Make Offers KEY: Bloom's: Knowledge

14. When an offeree is not aware of the insanity of the offeror and communicates assent to an offer, it is
considered as accepted.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-3 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Duration of the Offer KEY: Bloom's: Knowledge

15. Silence constitutes acceptance to an offer if because of previous dealings, it is reasonable for the
offeree to notify the offeror of non-acceptance.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-3 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: The Acceptance KEY: Bloom's: Knowledge

16. If the intended acceptance varies or qualifies an offer, the counteroffer rejects the original offer.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-3 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Counteroffers KEY: Bloom's: Knowledge
 17. The offeree may make an inquiry about terms that differ from the offer’s terms without rejecting the
offer.

ANS: T PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-3 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Inquiries not Constituting Rejection KEY: Bloom's: Knowledge

18. The “mailbox rule” does not apply in situations where the offeror does not receive the acceptance.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-5 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Manner of Acceptance KEY: Bloom's: Knowledge

19. According to the Uniform Commercial Code, a contract can be formulated only when acceptance to an
offer is made.

ANS: F PTS: 1 DIF: Difficulty: Easy

OBJ: LO: 6-5 NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Manner of Acceptance KEY: Bloom's: Knowledge

ESSAY

20. What are the requirements of a valid offer? Explain.

ANS:
A valid offer includes three requirements:
1. It must be definite: A contract will not be enforced unless the court can ascertain what the parties
agreed to. The offeror’s intentions are ascertained from the offer, and these intentions cannot be
ascertained unless the offer is definite.Terms usually required to be stated would include who the
offeree is; the subject matter of the offer; and the price, quantity, and time of performance.
2. It must appear to be seriously intended: One may make an offer in jest, banter, fear, or extreme
anger, and if this fact is known or should be known by the offeree because of the surrounding
circumstances, no contract is formed. There are times when the offer is not seriously intended, but the
offeree has no way of knowing this. In that event, if the offer is accepted, a binding contract results.
3. It must be communicated to the offeree: Until the offeror makes the offer known to the offeree, it is
not certain that it is intended that the offeree may accept and thereby impose a binding contract.
Accordingly, the offeree cannot accept an offer until the offeror has communicated the offer to the
offeree.

PTS: 1 DIF: Difficulty: Moderate OBJ: LO: 6-1

NAT: BUSPROG: Ethics STA: AICPA: BB-Legal
TOP: A-head: Requirements of a Valid Offer KEY: Bloom's: Comprehension