BUL 3320 EXAM 2 QUESTIONS AND
ANSWERS
Intent to make an offer - Correct Answers -Offer is the manifestation of willingness to
enter into a bargain, so made as to justify another person in understanding that his
assent to that bargain is invited and will conclude it. Three elements required:
1. The offeror must objectively intend to be bound by offer.
2. terms of the offer must be definite or reasonably certain.
3. offer must be communicated to offeree.
mirror image rule - Correct Answers -a rule stating that, for an acceptance to exist, the
offeree must accept the terms as stated in the offer without modification. Any attempt to
accept offer on different terms is a counteroffer.
Quasi Contract - Correct Answers -implied-in-law contract. An equitable doctrine
whereby a court may award monetary damages to a plaintiff for providing work or
services to a defendant even though no actual contract existed. The doctrine is intended
to prevent unjust enrichment and unjust detriment. Recovery generally based on the
reasonable value of the services received by the defendant.
EX: Heather gets into a serious accident and is knocked unconscious. She is rushed to
the hospital where doctors and other staff members perform necessary medical
procedures to save her life. Heather comes out of her coma and after recovering, she
receives a bill. Charges are reasonable and Heather is responsible for any charges not
covered by insurance.
rejection of offer effective when... - Correct Answers -received by offeror
revocation of offer effective when... - Correct Answers -received by offeree
Acceptance of offer for a bilateral contract effective when... - Correct Answers -
dispatched by offeree. Only the offeree has the legal power to accept an offer and
, create a contract. Acceptance must be an unequivocal acceptance; a response that is
clear and unambiguous with only 1 possible meaning.
Pre-existing contractual duties - Correct Answers -A promise lacks consideration if a
person promises to perform an act or do something he is already under an obligation to
do. The promise is unenforceable because no new consideration has been given.
EX: public servants such as police officers or fire fighters cannot demand money
because they are under a preexisting duty to perform their functions.
special business contracts - Correct Answers -contracts that allow a greater-than-usual
degree of uncertainty concerning consideration: Output contract, Requirements
contract, Best-Efforts contract
Bilateral Contract - Correct Answers -a contract entered into by way of exchange of
promises of the parties; "a promise for a promise." creates an enforceable contract. No
act of performance is necessary. If there is any ambiguity as to which it is, it is
presumed to be a bilateral contract.
EX: Mary says to Peter, "If you promise to paint my store by July 1, I will pay you
$3000." Peter says, "I promise to do so." Mary can sue peter if he breaches contract
and vice versa.
Parol evidence rule - Correct Answers -A rule that says if a written contract is a
complete and final statement of the parties' agreement, any prior or contemporaneous
oral or written statements that alter, contradict, or are in addition to the terms of the
written contract are inadmissible in court regarding a dispute over the contract.
main purpose doctrine - Correct Answers -the main purpose of a transaction and an oral
collateral contract is to provide pecuniary (i.e., financial) benefit to the guarantor, the
collateral contract is treated like an original contract and does not have to be in writing
to be enforced.
Main purpose exception (leading object exception) if guarantor is involved.
Guaranty Contract - Correct Answers -A guaranty contract occurs when one person
agrees to answer for the debts or duties of another person. Guaranty contracts are
required to be in writing under the Statute of Frauds.
The primary or original contract is between the debtor and creditor, then the guaranty or
secondary contract is between the original creditor and the person who will pay the
contract if the original debtor can't.
Output Contract - Correct Answers -the seller agrees to sell all of its production to a
single buyer. Serve the legitimate business purpose of (1) assuring the seller of a
purchaser for all its output and (2) assuring the buyer of a source of supply for the
goods it needs.
EX: Organic Foods Inc. must sell all of its output to Urban Foods Market, and Urban
Foods Market must buy all of the output.
ANSWERS
Intent to make an offer - Correct Answers -Offer is the manifestation of willingness to
enter into a bargain, so made as to justify another person in understanding that his
assent to that bargain is invited and will conclude it. Three elements required:
1. The offeror must objectively intend to be bound by offer.
2. terms of the offer must be definite or reasonably certain.
3. offer must be communicated to offeree.
mirror image rule - Correct Answers -a rule stating that, for an acceptance to exist, the
offeree must accept the terms as stated in the offer without modification. Any attempt to
accept offer on different terms is a counteroffer.
Quasi Contract - Correct Answers -implied-in-law contract. An equitable doctrine
whereby a court may award monetary damages to a plaintiff for providing work or
services to a defendant even though no actual contract existed. The doctrine is intended
to prevent unjust enrichment and unjust detriment. Recovery generally based on the
reasonable value of the services received by the defendant.
EX: Heather gets into a serious accident and is knocked unconscious. She is rushed to
the hospital where doctors and other staff members perform necessary medical
procedures to save her life. Heather comes out of her coma and after recovering, she
receives a bill. Charges are reasonable and Heather is responsible for any charges not
covered by insurance.
rejection of offer effective when... - Correct Answers -received by offeror
revocation of offer effective when... - Correct Answers -received by offeree
Acceptance of offer for a bilateral contract effective when... - Correct Answers -
dispatched by offeree. Only the offeree has the legal power to accept an offer and
, create a contract. Acceptance must be an unequivocal acceptance; a response that is
clear and unambiguous with only 1 possible meaning.
Pre-existing contractual duties - Correct Answers -A promise lacks consideration if a
person promises to perform an act or do something he is already under an obligation to
do. The promise is unenforceable because no new consideration has been given.
EX: public servants such as police officers or fire fighters cannot demand money
because they are under a preexisting duty to perform their functions.
special business contracts - Correct Answers -contracts that allow a greater-than-usual
degree of uncertainty concerning consideration: Output contract, Requirements
contract, Best-Efforts contract
Bilateral Contract - Correct Answers -a contract entered into by way of exchange of
promises of the parties; "a promise for a promise." creates an enforceable contract. No
act of performance is necessary. If there is any ambiguity as to which it is, it is
presumed to be a bilateral contract.
EX: Mary says to Peter, "If you promise to paint my store by July 1, I will pay you
$3000." Peter says, "I promise to do so." Mary can sue peter if he breaches contract
and vice versa.
Parol evidence rule - Correct Answers -A rule that says if a written contract is a
complete and final statement of the parties' agreement, any prior or contemporaneous
oral or written statements that alter, contradict, or are in addition to the terms of the
written contract are inadmissible in court regarding a dispute over the contract.
main purpose doctrine - Correct Answers -the main purpose of a transaction and an oral
collateral contract is to provide pecuniary (i.e., financial) benefit to the guarantor, the
collateral contract is treated like an original contract and does not have to be in writing
to be enforced.
Main purpose exception (leading object exception) if guarantor is involved.
Guaranty Contract - Correct Answers -A guaranty contract occurs when one person
agrees to answer for the debts or duties of another person. Guaranty contracts are
required to be in writing under the Statute of Frauds.
The primary or original contract is between the debtor and creditor, then the guaranty or
secondary contract is between the original creditor and the person who will pay the
contract if the original debtor can't.
Output Contract - Correct Answers -the seller agrees to sell all of its production to a
single buyer. Serve the legitimate business purpose of (1) assuring the seller of a
purchaser for all its output and (2) assuring the buyer of a source of supply for the
goods it needs.
EX: Organic Foods Inc. must sell all of its output to Urban Foods Market, and Urban
Foods Market must buy all of the output.
