BUSA 2106 MIDTERM 3 SAMPLE QUESTIONS AND ANSWERS
1. Bert's computer, worth $2,000, goes down for the third time in as many days. He says to his
roommate, Ernie, "I'd sell this hunk of junk for $5!" The next day, Ernie gives Bert $5 and expects Bert to
give him the computer. Do Ernie and Bert have a contract? Why or why not?
a. yes, B made a valid offer and E accepted
b. yes, B made a conditional offer and E's tendering the purchase price constituted an acceptance
c. no, Bert did not make an offer; there was no objective intent
d. no, the consideration of $5 is too low a price to pay for a $2,000 computer - CORRECT ANSWER✅✅c.
no, Bert did not make an offer; there was no objective intent
2. Suzy Q says to her friend Joe Blow, "I think I'll buy a house for $100,000." Joe happens to own a house
and says "Sold!" Do Joe and Suzy have a contract? Why or why not?
a. yes B made a valid offer and S accepted
b. no, there were definite terms but no objective intent
c. no, the statement was made in jest
d. no, there was no objective intent and no definite terms - CORRECT ANSWER✅✅d. no, there was no
objective intent and no definite terms
3. You see an advertisement in the Sunday paper that says "Go to your local UV dealer and buy a Jetto
for $219/month, no money down." You go to the dealer and say, "I accept your offer." Do you have a
contract with the dealer? Explain why or why not.
a. yes, there has been offer and acceptance
b. yes, by going to the dealer's show room, you accepted by performance.
c. no, advertisements are generally not considered offers
d. no, there were no definite terms - CORRECT ANSWER✅✅c. no, advertisements are generally not
considered offers
4. Mutt offers to lease Jeff a garage apartment for $2,000 per year and sends that offer through the
mail. Before Jeff accepts, Mutt sends a letter withdrawing the offer. Jeff receives the withdrawal letter,
but then says he accepts anyway.
, 4.1. Do Mutt and Jeff have a contract? Why or why not?
a. Yes, Jeff accepted the offer in a timely fashion
b. No, Jeff can't verbally accept a written offer
c. No, there are not sufficient definite terms to form an offer
d. No, the offer was withdrawn before acceptance - CORRECT ANSWER✅✅d. No, the offer was
withdrawn before acceptance
Assume Mutt never withdrew his offer. What if Jeff counter offered at $1,000 and Mutt said no. If Jeff
then said, "OK, I'll pay $2,000," would Mutt have a contractual obligation to lease to Jeff? Why or why
not?
a. yes, Jeff accepted Mutt's original offer
b. no, Jeff's counteroffer terminated Mutt's original offer
c. yes, the terms of the offer and acceptance do not need to be the same
d. no, Jeff's acceptance is ineffective for lack of consideration. - CORRECT ANSWER✅✅b. no, Jeff's
counteroffer terminated Mutt's original offer
5. Sally and Stew have been married for 25 years, but Stew forgot their anniversary. The day after, Stew
gave Sally this note: "In consideration of 25 years of marriage, my dearest, I will buy you a diamond
pendant." Sally says, "Yes." Do Stew and Sally have a contract?
a. Yes, there is offer, acceptance and consideration
b. Yes, because promises between spouses are always legally enforceable.
c. No, there is no objective intent
d. No, this is a gift promise - CORRECT ANSWER✅✅d. No, this is a gift promise
6. Tammy Teacher agrees to tutor Sam Student on her own time for free. She decides after three weeks
that she does not want to tutor anymore. Sam wants to force Tammy to continue helping him by
alleging that they have a contract. Will he be successful?
1. Bert's computer, worth $2,000, goes down for the third time in as many days. He says to his
roommate, Ernie, "I'd sell this hunk of junk for $5!" The next day, Ernie gives Bert $5 and expects Bert to
give him the computer. Do Ernie and Bert have a contract? Why or why not?
a. yes, B made a valid offer and E accepted
b. yes, B made a conditional offer and E's tendering the purchase price constituted an acceptance
c. no, Bert did not make an offer; there was no objective intent
d. no, the consideration of $5 is too low a price to pay for a $2,000 computer - CORRECT ANSWER✅✅c.
no, Bert did not make an offer; there was no objective intent
2. Suzy Q says to her friend Joe Blow, "I think I'll buy a house for $100,000." Joe happens to own a house
and says "Sold!" Do Joe and Suzy have a contract? Why or why not?
a. yes B made a valid offer and S accepted
b. no, there were definite terms but no objective intent
c. no, the statement was made in jest
d. no, there was no objective intent and no definite terms - CORRECT ANSWER✅✅d. no, there was no
objective intent and no definite terms
3. You see an advertisement in the Sunday paper that says "Go to your local UV dealer and buy a Jetto
for $219/month, no money down." You go to the dealer and say, "I accept your offer." Do you have a
contract with the dealer? Explain why or why not.
a. yes, there has been offer and acceptance
b. yes, by going to the dealer's show room, you accepted by performance.
c. no, advertisements are generally not considered offers
d. no, there were no definite terms - CORRECT ANSWER✅✅c. no, advertisements are generally not
considered offers
4. Mutt offers to lease Jeff a garage apartment for $2,000 per year and sends that offer through the
mail. Before Jeff accepts, Mutt sends a letter withdrawing the offer. Jeff receives the withdrawal letter,
but then says he accepts anyway.
, 4.1. Do Mutt and Jeff have a contract? Why or why not?
a. Yes, Jeff accepted the offer in a timely fashion
b. No, Jeff can't verbally accept a written offer
c. No, there are not sufficient definite terms to form an offer
d. No, the offer was withdrawn before acceptance - CORRECT ANSWER✅✅d. No, the offer was
withdrawn before acceptance
Assume Mutt never withdrew his offer. What if Jeff counter offered at $1,000 and Mutt said no. If Jeff
then said, "OK, I'll pay $2,000," would Mutt have a contractual obligation to lease to Jeff? Why or why
not?
a. yes, Jeff accepted Mutt's original offer
b. no, Jeff's counteroffer terminated Mutt's original offer
c. yes, the terms of the offer and acceptance do not need to be the same
d. no, Jeff's acceptance is ineffective for lack of consideration. - CORRECT ANSWER✅✅b. no, Jeff's
counteroffer terminated Mutt's original offer
5. Sally and Stew have been married for 25 years, but Stew forgot their anniversary. The day after, Stew
gave Sally this note: "In consideration of 25 years of marriage, my dearest, I will buy you a diamond
pendant." Sally says, "Yes." Do Stew and Sally have a contract?
a. Yes, there is offer, acceptance and consideration
b. Yes, because promises between spouses are always legally enforceable.
c. No, there is no objective intent
d. No, this is a gift promise - CORRECT ANSWER✅✅d. No, this is a gift promise
6. Tammy Teacher agrees to tutor Sam Student on her own time for free. She decides after three weeks
that she does not want to tutor anymore. Sam wants to force Tammy to continue helping him by
alleging that they have a contract. Will he be successful?
