Contracts midterm Questions With Complete Solutions
.After receiving Y's note on Friday, X answers the same day:
Dear Y: Sorry, but I can't go as low as that. I know it's worth at
least $15K, and I might be able to get even more. - X
After thinking it over for a few days, Y responds to X on
Monday with the following note:
Dear X: It's a stretch for me, but I hate to see Grandpa's desk
leave the family. I'll meet your price of $15K. Let me know
when I can come to pick it up. - Y
Assuming the facts of Questions 1, 2, and 3, which of the
following statements is/are potentially accurate?
A.Y's last note to X is an acceptance of X's original offer.
B.Y's last note to X is not an acceptance of X's original offer,
because that was terminated by an earlier rejection.
C.Y's last note to X is not an effective acceptance of X's original
offer, because it was not communicated in time to be effective.
D.Y's last note to X is an offer which Y is free to accept or
reject. Correct Answers All four answers are potentially
accurate, depending on the way various issues are resolved.
Answer B could be correct, if—as indicated might be the case in
the answer to Question 2—Y's first response is treated as a
counter-offer and also as a rejection. Answer C could be correct
if X's original reference to a response "by the end of the week"
is treated as a firm deadline for acceptance, rather than merely a
request for a reasonably prompt reply (". . . if possible").
,Answer D could be correct if X's last note is interpreted as
generally a revival of her earlier offer but without any particular
firm deadline. ("I can't go as low as that" might imply a
willingness to continue negotiation over her original price.) And
Answer A also could be correct if outcomes B and C are both
incorrect (not a clear rejection; not a firm deadline).
1.Xena (X) is a young woman living in Ohio. Recently she
wrote the following email to her cousin Yancey (Y), an Indiana
resident:
Dear Y: After some consideration, I've decided that I need to
sell the antique roll-top desk that our grandfather left to me. I
need the money, and it takes up a lot of space in my small house.
I know you've always admired it, so I thought I would give you
a chance to buy it before I put it up for sale on Craigslist. I had it
appraised not long ago, and I was told that it's worth at least
$15,000. I'd certainly sell it for that, or you could make me an
offer. I need to hear from you by the end of the week, if
possible.
- Fondly, your cousin X.
Has X made an offer to Y? Correct Answers 1.Yes, X has
made an offer to Y. She identified the subject matter - a
particular desk, probably known to Y (the next question
confirms this)—and the price ($15,000). She expressed a
willingness to commit herself to this bargain ("I'd certainly sell
it for [$15,000] . . ."). The time and method of delivery and
payment could have been stated also, but failure to include all
possible terms does not prevent a communication from being
,complete enough to be legally an offer. She indicated a
(somewhat soft?) time limit for acceptance. The fact that the
parties are related does not keep her note from being an offer for
an exchange. The fact that neither of them is (so far as we know)
a "merchant" does not mean that the Uniform Commercial Code
will not apply; it is still a sale of goods. However, the UCC does
not have its own definition of "offer," so the common law rules
will still apply. Also, the fact that X indicated willingness to
entertain a lower offer from Y does not negate her expression of
willingness to sell for $15,000; it simply reflects her
understanding that the price she set may be too high for Y to
accept her offer.
2.Y responds to X's note the next day, with the following note:
Dear X: Thanks for thinking of me. I'd certainly love to own
Grandpa's desk, but $15K is pretty high for me. I guess I can go
up to $12K. Would you take that for it? - Y
Given the facts of Questions 1 and 2, which of the following
statements is/are potentially accurate?
A. If X's communication was not an offer, Y's response is an
offer.
B. If X's communication was an offer, Y's response is a counter-
offer.
C. If X's communication was an offer, Y's response necessarily
acts as a rejection of that offer. Correct Answers 2.A and B. Y's
communication, like X's earlier one, has enough detail, and
evidences a possible willingness to commit to a purchase at the
price of $12,000. Y's intent is not as clear as X's was, however,
, as Y says only "I guess I can go up to . . ." the lower price. And
Y follows that with an inquiry "Would you take that for it?"
which again is somewhat equivocal. So this note could be an
offer, but this is less certain than was the answer to Question 1.
Even if X's original note was not an offer, however, Y's response
to it might still be characterized as one (Answer A). If X's note
was an offer, then if Y's response is an "offer" at all, it will also
be a "counter-offer" (Answer B). The outcome in Question C
could be a possibility also, because a counter-offer is ordinarily
treated as a rejection, terminating the counter-offeror's power to
accept the original offer. On these facts this is not a necessary
outcome, however, because the counter-offeror seems to be
indicating a possible continuing interest in the original offer, not
actually rejecting it: He doesn't flatly reject buying for $15,000
("pretty high for me . . .") and he seems to suggest an ongoing
negotiation ("would you take . . .?").
A writing is ambiguous if
A. one or more of its terms or provisions are susceptible to more
than one reasonablemeaning based on the facts actually or
constructively known by the parties whenthey executed the
writing.
B. one or more of its terms or provisions are susceptible to more
than one reasonablemeaning based on the facts actually or
constructively known by the parties whenthe court considers the
writing.
C. the parties disagreed about the meaning of a term or provision
when theyexecuted the writing.
D. the parties disagree about the meaning of a term or provision
when a courtinterprets the writing. Correct Answers Answer A
is the best answer. An instrument is ambiguous if one or more
.After receiving Y's note on Friday, X answers the same day:
Dear Y: Sorry, but I can't go as low as that. I know it's worth at
least $15K, and I might be able to get even more. - X
After thinking it over for a few days, Y responds to X on
Monday with the following note:
Dear X: It's a stretch for me, but I hate to see Grandpa's desk
leave the family. I'll meet your price of $15K. Let me know
when I can come to pick it up. - Y
Assuming the facts of Questions 1, 2, and 3, which of the
following statements is/are potentially accurate?
A.Y's last note to X is an acceptance of X's original offer.
B.Y's last note to X is not an acceptance of X's original offer,
because that was terminated by an earlier rejection.
C.Y's last note to X is not an effective acceptance of X's original
offer, because it was not communicated in time to be effective.
D.Y's last note to X is an offer which Y is free to accept or
reject. Correct Answers All four answers are potentially
accurate, depending on the way various issues are resolved.
Answer B could be correct, if—as indicated might be the case in
the answer to Question 2—Y's first response is treated as a
counter-offer and also as a rejection. Answer C could be correct
if X's original reference to a response "by the end of the week"
is treated as a firm deadline for acceptance, rather than merely a
request for a reasonably prompt reply (". . . if possible").
,Answer D could be correct if X's last note is interpreted as
generally a revival of her earlier offer but without any particular
firm deadline. ("I can't go as low as that" might imply a
willingness to continue negotiation over her original price.) And
Answer A also could be correct if outcomes B and C are both
incorrect (not a clear rejection; not a firm deadline).
1.Xena (X) is a young woman living in Ohio. Recently she
wrote the following email to her cousin Yancey (Y), an Indiana
resident:
Dear Y: After some consideration, I've decided that I need to
sell the antique roll-top desk that our grandfather left to me. I
need the money, and it takes up a lot of space in my small house.
I know you've always admired it, so I thought I would give you
a chance to buy it before I put it up for sale on Craigslist. I had it
appraised not long ago, and I was told that it's worth at least
$15,000. I'd certainly sell it for that, or you could make me an
offer. I need to hear from you by the end of the week, if
possible.
- Fondly, your cousin X.
Has X made an offer to Y? Correct Answers 1.Yes, X has
made an offer to Y. She identified the subject matter - a
particular desk, probably known to Y (the next question
confirms this)—and the price ($15,000). She expressed a
willingness to commit herself to this bargain ("I'd certainly sell
it for [$15,000] . . ."). The time and method of delivery and
payment could have been stated also, but failure to include all
possible terms does not prevent a communication from being
,complete enough to be legally an offer. She indicated a
(somewhat soft?) time limit for acceptance. The fact that the
parties are related does not keep her note from being an offer for
an exchange. The fact that neither of them is (so far as we know)
a "merchant" does not mean that the Uniform Commercial Code
will not apply; it is still a sale of goods. However, the UCC does
not have its own definition of "offer," so the common law rules
will still apply. Also, the fact that X indicated willingness to
entertain a lower offer from Y does not negate her expression of
willingness to sell for $15,000; it simply reflects her
understanding that the price she set may be too high for Y to
accept her offer.
2.Y responds to X's note the next day, with the following note:
Dear X: Thanks for thinking of me. I'd certainly love to own
Grandpa's desk, but $15K is pretty high for me. I guess I can go
up to $12K. Would you take that for it? - Y
Given the facts of Questions 1 and 2, which of the following
statements is/are potentially accurate?
A. If X's communication was not an offer, Y's response is an
offer.
B. If X's communication was an offer, Y's response is a counter-
offer.
C. If X's communication was an offer, Y's response necessarily
acts as a rejection of that offer. Correct Answers 2.A and B. Y's
communication, like X's earlier one, has enough detail, and
evidences a possible willingness to commit to a purchase at the
price of $12,000. Y's intent is not as clear as X's was, however,
, as Y says only "I guess I can go up to . . ." the lower price. And
Y follows that with an inquiry "Would you take that for it?"
which again is somewhat equivocal. So this note could be an
offer, but this is less certain than was the answer to Question 1.
Even if X's original note was not an offer, however, Y's response
to it might still be characterized as one (Answer A). If X's note
was an offer, then if Y's response is an "offer" at all, it will also
be a "counter-offer" (Answer B). The outcome in Question C
could be a possibility also, because a counter-offer is ordinarily
treated as a rejection, terminating the counter-offeror's power to
accept the original offer. On these facts this is not a necessary
outcome, however, because the counter-offeror seems to be
indicating a possible continuing interest in the original offer, not
actually rejecting it: He doesn't flatly reject buying for $15,000
("pretty high for me . . .") and he seems to suggest an ongoing
negotiation ("would you take . . .?").
A writing is ambiguous if
A. one or more of its terms or provisions are susceptible to more
than one reasonablemeaning based on the facts actually or
constructively known by the parties whenthey executed the
writing.
B. one or more of its terms or provisions are susceptible to more
than one reasonablemeaning based on the facts actually or
constructively known by the parties whenthe court considers the
writing.
C. the parties disagreed about the meaning of a term or provision
when theyexecuted the writing.
D. the parties disagree about the meaning of a term or provision
when a courtinterprets the writing. Correct Answers Answer A
is the best answer. An instrument is ambiguous if one or more
