Chapter 11
Agreement in Traditional
and E-Contracts
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
B1. An offer must be practical to be effective.
B2. An invitation to submit bids—“how much would you charge to do this work?”—is an
offer.
B3. A price list is an offer.
B4. An advertisement is generally considered an invitation to negotiate.
B5. An auction—“we ask you to bid on this item”—is an offer.
B6. In an auction, a bidder is an offeror.
B7. A contract lacking a quantity term, when appropriate, may not be enforceable.
B8. An offer may invite an acceptance to be worded in such specific terms that the
contract is made definite.
B9. If no time for acceptance is specified in an offer, the offer terminates at the end of a
reasonable time.
B10. An offer that a statute makes illegal automatically terminates the offer.
B11. An unequivocal acceptance operates as a rejection of the original offer.
B12. No offer can be accepted by silence.
B13. A contract for a sale of software generally involves a passage of title from the seller to
the buyer.
B14. An e-contract must meet the same basic requirements as a paper contract.
B15. Terms in a shrink-wrap agreement have been enforced in the same way as the terms
of other contracts.
B16. Browse-wrap terms are often unenforceable.
B17. Under federal law, an electronic document can be as enforceable as a paper one.
B18. Contracting parties cannot opt out of the terms of the UETA.
B19. The UETA applies to all writings and signatures.
B20. Any relevant evidence may be used to prove that an e-record is the act of a particular
person.
MULTIPLE CHOICE QUESTIONS
B1. Jill tells Ken, who has no knowledge of literary comedy, that she will tutor him in the
subject for $50. As an offer, this is
a. effective.
b. not effective, because comedy is not a serious subject.
c. not effective, because Jill’s tutoring will be subjective.
d. not effective, because Ken has no knowledge of the subject.
B2. John says to Kris, “I would like to sell you my sports memorabilia collection.” This is
not an offer because it
a. does not describe the subject matter specifically.
b. does not include a price term.
c. only expresses an opinion.
d. only invites Kris to negotiate.
B3. Consumer Sales, Inc. (CSI), sends its catalogue to Dean and includes a “personalized”
letter inviting him to buy any item in the catalogue at the advertised price. This is
a. an offer because of the “personalized” letter.
b. an offer because there is no room for price negotiation.
c. an offer only if Dean previously bought items from CSI.
d. not an offer.
B4. Brick Products, Inc., files a suit against City Trucking Service for breach of contract,
based on what Brick claims was City’s offer. For a court to determine if a contract has
been breached, under the common law, the offer must include terms that are
a. exactly precise.
b. reasonably definite.
c. unequivocally approximate.
d. vague or uncertain.
B5. Elmore offers to sell a Ford F-150 for $7,500 to Grace. Before Grace can respond,
Elmore refers to the prices for similar Fords and says, “Forget it. I changed my mind.”
Elmore’s offer was terminated by
a. Elmore.
b. Ford.
c. Grace.
d. no one—Elmore’s offer is still open.
B6. Quick Transport, Inc., offers to sell a truckload of palettes to Rapid Delivery Company.
Before accepting the offer, Rapid learns that the palettes have been sold to Speedy
Trucking Corporation. Quick is
a. liable to Rapid for breach of contract.
b. liable to Speedy for breach of contract.
c. not liable, because the sale revoked the offer to Rapid.
d. not liable, if Quick offers substitute goods to Rapid.
B7. Business Properties, Inc. (BPI), offers to sell a warehouse to Corporate Investments.
Corporate says that it will pay BPI $100 to hold the offer open for three business days.
This
a. creates an illegal contract by adding a clause to BPI’s offer.
b. makes the offer irrevocable for three days if BPI accepts.
c. negates BPI’s offer by changing the price term.
d. voids BPI’s offer by extending the time term.
B8. Callie owns two trucks. She offers to sell the Dodge for $20,000 to Evan, who accepts.
She offers to sell the Ford for $20,000 to Gwen, who says, “Too much.” Callie’s offer
was terminated by
a. Evan and Gwen.
b. Evan only.
c. Gwen only.
d. neither Evan nor Gwen.
B9. Sunshine Cell Phone Company offers to buy a laser printer, with a case of paper and
an extra cartridge, from Office Products, Inc. (OPI), for $200. Paul, OPI’s
representative, says, “Okay, but no paper and no extra cartridge.” Paul has
a. accepted the offer.
b. made a counteroffer without rejecting the offer.
c. rejected the offer and made a counteroffer.
d. rejected the offer without making a counteroffer.
B10. State Bank offers to lend money to Rodeo Promotions, Inc., at 15 percent interest.
Before Rodeo accepts, a statute is enacted prohibiting loans at interest rates greater
than 12 percent. Rodeo and the bank have
a. have a contract for a loan at 15 percent interest.
b. have a contract for a loan at 12 percent interest.
c. have a contract for a loan at 0 percent interest.
d. no contract for a loan.
B11. Eve tells Finlay that she will pay him $50 if he unloads her truck. Finlay’s acceptance is
complete
a. as soon as Finlay says he will unload the truck.
b. once Finlay starts to unload the truck.
c. only after Finlay unloads the truck.
d. when Finlay hears Eve’s offer.
B12. Retail Investment Company offers to sell a certain mall to Shopping Stores, Inc., if it
accepts before 10 A.M. Monday. A contract is formed if Shopping Stores’ acceptance is
received
a. any time on Monday.
b. before 10 A.M. Monday.
c. before 11 A.M. Monday.
d. within twenty-four hours of 10 A.M. Monday.
B13. Final Foto, Inc., makes photo and video editing software, which includes a shrink-wrap
agreement. Gert buys a package of the software. With respect to the contract for the
software’s purchase, the shrink-wrap agreement may not be enforced if
a. Gert does not read it.
b. Gert learns of it after contracting.
c. Gert learns of it before contracting.
d. the quality of the software is poor.
B14. Mica buys “Nature,” a movie, through Open View, an online entertainment vendor.
Before completing the purchase and downloading “Nature,” Mica is asked to review a
warning not to make and sell a copy of it but is not required to click “I agree.” This
warning is
a. a browse-wrap term.
b. a click-on agreement.
c. a shrink-wrap agreement.
d. none of the choices.
B15. Overnight Delivery Service delivers a package to Pam. At the request of Overnight’s
delivery person, to acknowledge receipt Pam signs a digital pad. This signing creates
a. a cybernotarized signature.
b. a digitized handwritten signature.
c. an asymmetric .cryptosystemic signature.
d. a public-key infrastructure digital signature.
B16. Global Shipping Corporation enters into contracts with distributors and other buyers
in e-commerce and in traditional commerce. The UETA applies, if at all, only to those
transactions in which the parties agree to use
a. electronic means.
b. paper documents.
c. updates and cross-checks to orally verify any e-terms.
d. notarized documents.
B17. Shelby offers to make digital copies of Relay Company’s business conference
videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule and the
Uniform Electronic Transactions Act (UETA), Relay’s acceptance by e-mail will be
considered effective when
a. received.
b. sent.
c. followed up by a confirmation letter sent by regular mail.
d. composed on a Relay computer.
B18. Consumer Payments Processing Corporation (CPPC) and Mall Kiosk Company make a
deal for CPPC’s services, via e–records. Under the UETA, an e-record is considered
received when
a. it enters the recipient’s processing system in a readable form.
b. the recipient is aware of its receipt.
c. the recipient is aware that it has been sent.
d. it leaves the sender’s control.
B19. On behalf of Bay Oyster Company, Celia types her name at the bottom of an e-mail
purchase order and submits the order to Deepwater Parts Company. Under the UETA,
Celia’s typed name qualifies as
a. her “signature.”
b. a cybernotary.
c. a partnering agreement.
d. nothing.
B20. Office Application Corporation (OAC) sends an e-record to Precision Design, Inc. Under
the UETA, the record will be considered received when
a. it enters Precision’s processing system in a readable form.
b. a Precision representative is aware of its receipt.
c. it is midway between the parties’ processing systems.
d. passes out of OAC’s control even if it is not in a readable form.
ESSAY QUESTIONS
B1. Myra owns a house, which she advertises for sale for $400,000. On May 1, Nico offers
Myra $380,000 for the house. On May 5, Myra has delivered to Nico at his office a
form that includes additional terms but does not state a price. At 9 A.M. on May 6,
Nico signs the form and gives it to Odell, his administrative assistant, with instructions
to mail it. At 10 A.M., Myra calls to tell Nico that the deal is off. The next day, Odell
mails the signed form to Myra. When she refuses to sell the house to Nico, he files a
suit against her, alleging breach of contract. Myra claims that there was no contract.
What are arguments supporting each party’s position? What is the court likely to rule?
Explain.
B2. Creative Solutions Corporation (CSC) agrees to sell software to Drew from CSC’s Web
site. To complete the deal, Drew clicks on a button that, with reference to certain
terms, states, “I agree.” What is this sort of agreement called? Do the parties have a
binding, enforceable contract that includes the terms? Explain.