MGMT 402 EXAM 2 QUESTIONS & ANSWERS
If you are the offeree, then _______________. - Answer -you have the power to accept the offer
and form a binding contract
If TIP Tech signs a contract to lease office space, which of the following is most likely a material
term of the contract? - Answer -An agreement on the date and time when TIP Tech can move into
the space
If Inez offers $5000 to a salesperson to purchase a machine and he replies, "My boss won't let me
go that low, but I will sell it to you for $6000," then Inez's offer has been _____________ and the
salesperson is now the _______________. - Answer -rejected; offeror
Which of the following is
not
necessary in order to form a valid contract? - Answer -Terms that are fair to each party
Big-Mart ran a television advertisement stating that it was selling tablets for $299. Kyle rushes
down to Big-Mart and attempts to purchase three tablets, but just as he arrives, he sees a Big-Mart
employee changing the price tag on the tablets from $299 to $599. Kyle insists he be allowed to
buy the tablets at $299 because he saw the ad. Is he correct? - Answer -No, because
advertisements are generally not offers
If a salesperson offers to sell Inez a piece of equipment for $10,000, and Inez says, "I accept your
offer to purchase the equipment for $9900," have they formed a contract? - Answer -No, because
Inez's acceptance violated the mirror-image rule
Suppose Ergoffice offers to sell Paulo three desk chairs. The offer states, "This offer may only be
accepted by telephoning us before 5:00 p.m." Paulo sends an email accepting the offer at 4:59
p.m. Have the parties formed a contract if the email doesn't arrive in Ergoffice's inbox until 5:02
p.m.? - Answer -No, because Paulo did not use an authorized means to accept the offer
Which of the following mistakes will allow one party to rescind a contract? - Answer -Mutual
mistake of fact
Which of the following is
not
something you must prove in order to have a claim for fraud? - Answer -The other person thought
that what they were telling you was true.
Declan is quite enamored with Beatrice, a real-estate leasing agent. She knows that he has a
crush on her, and she persuades him to sign a contract that has very unfair terms. Can Declan
rescind the contract because of undue influence? - Answer -No, because Declan and Beatrice did
not have a fiduciary relationship
Which of the following is
1/5
, not
required to be present in order for a contract to have consideration? - Answer -Both parties giving
goods or services of equal value
Suppose a police officer assigned to your neighborhood knocks on your door during her shift. She
offers to keep an eye on your house if you will pay her some money. You agree to do so. Is this an
enforceable contract? - Answer -No, because the police officer had a preexisting duty to do this,
so there is no consideration.
Suppose you live in a state where gambling is prohibited by law. Your grandfather offers you
$10,000 on your 18th birthday if you will agree to refrain from gambling until you turn 21. Is this an
enforceable promise? - Answer -No, because it is supported by illegal consideration.
Generic Corporation owes Technology R Us $100,000 for computers it purchased. Generic
Corporation acknowledges that the contract price for the computers was $100,000 but doesn't
want to pay that amount because it thinks some of the computers it received were defective.
Technology R Us agrees to accept $85,000 instead of the full amount owed. After Generic
Corporation pays the $85,000, Technology R Us decides it wants to sue for the remaining $15,000.
Will Technology R Us be successful in the lawsuit? - Answer -No, because this was an accord and
satisfaction that was fully satisfied.
After becoming very wealthy later in life, Haruki gets really into the art world. To solidify his social
status, he calls up the Metropolitan Museum of Art and says, "I pledge to give you $10 million!"
The museum is so excited that it begins constructing a new building it plans to name after Haruki.
Later, Haruki decides that he would rather buy a new private jet instead, so he doesn't give the
money to the museum. The museum sues him to make him pay. Who wins? - Answer -The
museum wins because it reasonably relied on his promise to make a gift.
Which of the following contracts is enforceable as an oral agreement? - Answer -Generic
Corporation's agreement to borrow $10 million, plus interest, from Big Bank
Which of the following actions would form an unenforceable contract? - Answer -Someone writing
the word "no" on the signature line on a contract
Zippers Unlimited is negotiating with a landlord to lease some new office space. They finally agree
on all the terms of the lease, and both parties are ready to sign the written agreement. At the
meeting where they are both getting ready to sign, Zippers Unlimited informs the landlord that it
wants the right to use 10 extra parking spots free of charge, which was not part of the original
contract. The landlord verbally agrees, and both parties sign the contract without changing any of
the written portion. Once Zippers Unlimited moves into the space, the landlord informs the
company that it is using the 10 parking spots without permission, and any cars parked there will be
towed. Does Zippers Unlimited have the right to use these parking spaces? - Answer -No,
because the parol evidence rule prohibits oral agreements from being enforced.
The doctrine of promissory estoppel requires each of the following elements to be present, except:
- Answer -one party intentionally misled the other party.
If two parties negotiating a contract exchange multiple documents that contain the agreed-upon
terms of the deal, the idea that all of these documents can be combined to form one single
contract, even if the parties didn't specifically state that they should, is known as: - Answer -
implied integration.
2/5
If you are the offeree, then _______________. - Answer -you have the power to accept the offer
and form a binding contract
If TIP Tech signs a contract to lease office space, which of the following is most likely a material
term of the contract? - Answer -An agreement on the date and time when TIP Tech can move into
the space
If Inez offers $5000 to a salesperson to purchase a machine and he replies, "My boss won't let me
go that low, but I will sell it to you for $6000," then Inez's offer has been _____________ and the
salesperson is now the _______________. - Answer -rejected; offeror
Which of the following is
not
necessary in order to form a valid contract? - Answer -Terms that are fair to each party
Big-Mart ran a television advertisement stating that it was selling tablets for $299. Kyle rushes
down to Big-Mart and attempts to purchase three tablets, but just as he arrives, he sees a Big-Mart
employee changing the price tag on the tablets from $299 to $599. Kyle insists he be allowed to
buy the tablets at $299 because he saw the ad. Is he correct? - Answer -No, because
advertisements are generally not offers
If a salesperson offers to sell Inez a piece of equipment for $10,000, and Inez says, "I accept your
offer to purchase the equipment for $9900," have they formed a contract? - Answer -No, because
Inez's acceptance violated the mirror-image rule
Suppose Ergoffice offers to sell Paulo three desk chairs. The offer states, "This offer may only be
accepted by telephoning us before 5:00 p.m." Paulo sends an email accepting the offer at 4:59
p.m. Have the parties formed a contract if the email doesn't arrive in Ergoffice's inbox until 5:02
p.m.? - Answer -No, because Paulo did not use an authorized means to accept the offer
Which of the following mistakes will allow one party to rescind a contract? - Answer -Mutual
mistake of fact
Which of the following is
not
something you must prove in order to have a claim for fraud? - Answer -The other person thought
that what they were telling you was true.
Declan is quite enamored with Beatrice, a real-estate leasing agent. She knows that he has a
crush on her, and she persuades him to sign a contract that has very unfair terms. Can Declan
rescind the contract because of undue influence? - Answer -No, because Declan and Beatrice did
not have a fiduciary relationship
Which of the following is
1/5
, not
required to be present in order for a contract to have consideration? - Answer -Both parties giving
goods or services of equal value
Suppose a police officer assigned to your neighborhood knocks on your door during her shift. She
offers to keep an eye on your house if you will pay her some money. You agree to do so. Is this an
enforceable contract? - Answer -No, because the police officer had a preexisting duty to do this,
so there is no consideration.
Suppose you live in a state where gambling is prohibited by law. Your grandfather offers you
$10,000 on your 18th birthday if you will agree to refrain from gambling until you turn 21. Is this an
enforceable promise? - Answer -No, because it is supported by illegal consideration.
Generic Corporation owes Technology R Us $100,000 for computers it purchased. Generic
Corporation acknowledges that the contract price for the computers was $100,000 but doesn't
want to pay that amount because it thinks some of the computers it received were defective.
Technology R Us agrees to accept $85,000 instead of the full amount owed. After Generic
Corporation pays the $85,000, Technology R Us decides it wants to sue for the remaining $15,000.
Will Technology R Us be successful in the lawsuit? - Answer -No, because this was an accord and
satisfaction that was fully satisfied.
After becoming very wealthy later in life, Haruki gets really into the art world. To solidify his social
status, he calls up the Metropolitan Museum of Art and says, "I pledge to give you $10 million!"
The museum is so excited that it begins constructing a new building it plans to name after Haruki.
Later, Haruki decides that he would rather buy a new private jet instead, so he doesn't give the
money to the museum. The museum sues him to make him pay. Who wins? - Answer -The
museum wins because it reasonably relied on his promise to make a gift.
Which of the following contracts is enforceable as an oral agreement? - Answer -Generic
Corporation's agreement to borrow $10 million, plus interest, from Big Bank
Which of the following actions would form an unenforceable contract? - Answer -Someone writing
the word "no" on the signature line on a contract
Zippers Unlimited is negotiating with a landlord to lease some new office space. They finally agree
on all the terms of the lease, and both parties are ready to sign the written agreement. At the
meeting where they are both getting ready to sign, Zippers Unlimited informs the landlord that it
wants the right to use 10 extra parking spots free of charge, which was not part of the original
contract. The landlord verbally agrees, and both parties sign the contract without changing any of
the written portion. Once Zippers Unlimited moves into the space, the landlord informs the
company that it is using the 10 parking spots without permission, and any cars parked there will be
towed. Does Zippers Unlimited have the right to use these parking spaces? - Answer -No,
because the parol evidence rule prohibits oral agreements from being enforced.
The doctrine of promissory estoppel requires each of the following elements to be present, except:
- Answer -one party intentionally misled the other party.
If two parties negotiating a contract exchange multiple documents that contain the agreed-upon
terms of the deal, the idea that all of these documents can be combined to form one single
contract, even if the parties didn't specifically state that they should, is known as: - Answer -
implied integration.
2/5
