1
Chapter 12
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. A request or invitation to negotiate is an offer.
B3. A price list is a form of invitation to negotiate or trade.
B4. An advertisement is generally considered an offer.
2 TEST BANK B: UNIT THREE: CONTRACTS AND E-CONTRACTS
B5. An “offer” to sell an item on an online auction site generally is treated an
invitation to negotiate.
B6. In an auction, a bidder is an offeree.
B7. Generally, a contract must express its terms—no reasonable inferences are
permissible.
B8. An offer may invite an acceptance to be worded in specific terms but that
cannot make the contract definite.
B9. If an offer does not specify a time for acceptance, the offer terminates at the
end of a reasonable time.
B10. A statute or court decision that makes an offer illegal automatically terminates
the offer
B11. An acceptance can impose new conditions or change the terms of the original
offer without rejecting it.
B12. No offer can be accepted by silence.
CHAPTER 12: AGREEMENT IN TRADITIONAL AND E-CONTRACTS 3
B13. An e-contract must meet basic requirements that are different from those
required of a paper contract.
B14. An important rule to keep in mind is that the offeree (the buyer) controls the
acceptance and thus the resulting 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 e-document is not as enforceable as a paper one.
B18. Contracting parties cannot opt out of the terms of the UETA.
B19. The UETA does not apply to all writings and signatures.
B20. Only the United States has created regulations for global Internet transactions.
4 TEST BANK B: UNIT THREE: CONTRACTS AND E-CONTRACTS
MULTIPLE-CHOICE QUESTIONS
B1. Naomi tells Ogden, who has no knowledge of Shakespearean 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 Naomi’s tutoring will be subjective.
d. not effective because Ogden has no knowledge of the subject.
B2. Lon says to Milli, “I would like to sell you my comic book 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 Milli to negotiate.
B3. Octavio receives from Pastry Dough, Inc., its catalogue and a “personalized”
letter inviting Octavio to buy any item 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 Octavio previously bought items from Pastry Dough.
d. not an offer.
B4. Barrett files a suit against City Moving Service for breach of contract, based on
what Barrett claims was City Moving’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.
CHAPTER 12: AGREEMENT IN TRADITIONAL AND E-CONTRACTS 5
c. unequivocally approximate.
d. vague or uncertain.
B5. Casey offers to sell a certain used forklift to DIY Lumber Outlet, but Casey dies
before DIY accepts. Most likely, Casey’s death
a. did not affect the offer.
b. shortened the time of the offer but did not terminate it.
c. extended the time of the offer.
d. terminated the offer.
B6. Signe offers to sell Thomas her textbook but conditions the sale on Thomas ac–
cepting the offer by March 1. Signe may revoke the offer
a. before Thomas accepts the offer.
b. before March 1, whether or not Thomas has accepted the offer.
c. only after Thomas accepts the offer.
d. only after March 1.
B7. Liz offers to sell Max her iPad for $200. Max says, “Okay, but only if you
include the case and other accessories.” Max 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.
B8. Farmland County Bank offers to lend money to Gino, the owner of Home
Hardware Store, at 15 percent interest. Before Gino accepts, a state statute is
enacted prohibiting loans at rates greater than 12 percent. Gino and the bank
have
6 TEST BANK B: UNIT THREE: CONTRACTS AND E-CONTRACTS
a. a contract for a loan at 15 percent interest.
b. a contract for a loan at 12 percent interest.
c. a contract for a loan at 0 percent interest.
d. no contract for a loan.
B9. Shasta offers to sell a used hay baler to Roberto, but receives a letter of accep–
tance from Quito, who has no relation to Roberto. A valid contract exists
between
a. Shasta and Roberto.
b. Shasta and Quito.
c. Roberto and Quito.
d. none of the choices.
B10. Quay Trucking Service tells Rafe that it will pay him $50 if he unloads a certain
truck at the Shipping Warehouse. Rafe’s acceptance is complete
a. as soon as Rafe says he will unload the truck.
b. once Rafe starts to unload the truck.
c. only after Rafe unloads the truck.
d. when Rafe hears Quay’s offer.
B11. Crafted Metal Works, Inc., offers to design, make, and sell Downtown Transit
Agency fourteen streetcars. Crafted Metal authorizes a particular mode of
communication, but Downtown Transit sends an acceptance via a substituted
means. This acceptance is effective when it is
a. in transit.
b. received.
c. sent.
d. written.
CHAPTER 12: AGREEMENT IN TRADITIONAL AND E-CONTRACTS 7
B12. Mark is creating Nu2U.com, a Web site through which he will enter into
contracts over the Internet. Important terms to include in his offers include
a. provisions specifying the remedies if the contract is breached.
b. a detailed history of his business.
c. glowing reviews from former customers.
d. his educational background.
B13. Diverse Diversions, Inc., makes computer, video, and mobile device games.
Ember buys a hard copy of Final Infinity. Inside the package is a shrink-wrap
agreement. With respect to the contract for the game’s purchase, the shrink-
wrap agreement may not be enforced if
a. Ember does not read it.
b. Ember learns of it after contracting.
c. Ember learns of it before contracting.
d. the play of the game is poor.
B14. Deb buys a song through eSongs, an online music vendor. Before completing
the purchase and downloading the song, Deb must review a provision stating
that she will not make and sell copies of the song and is required to click “I
agree.” This provision is
a. a browse-wrap term.
b. a click-on agreement.
c. a shrink-wrap agreement.
d. none of the choices.
B15. Standard Purchasing Corporation and Topmost Sales, Inc., enter into a part–
nering agreement. Under a partnering agreement, parties agree
a. in advance to terms that apply to their future e-transactions.
b. to become partners.
c. to conduct transactions solely in electronic form.
d. to resolve all disputes without involving a third party.
8 TEST BANK B: UNIT THREE: CONTRACTS AND E-CONTRACTS
B16. Kay and Leo enter into a contract that falls within the provisions of the UETA.
Under the UETA, “an electronic sound, symbol, or process attached to or
logically associated with a record and executed or adopted by a person with
the intent to sign the record” is
a. an e-document.
b. an e-signature.
c. an e-transaction.
d. a record.
B17. World 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.
B18. On behalf of Bobble Head Manufacturing Company, Carmela types her name
at the bottom of an e-mail purchase order and submits the order to Designer
Parts Company. Under the UETA, Carmela’s typed name qualifies as
a. a “signature.”
b. a statement of future intent.
c. a partnering agreement.
d. a preliminary negotiation.
B19. Lewis offers to make digital copies of Motivational Sales Company’s business
conference videotapes, CDs, DVDs, and other media for $500. Under the
CHAPTER 12: AGREEMENT IN TRADITIONAL AND E-CONTRACTS 9
mailbox rule and the UETA, Motivational Sales’ 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 Motivational Sales computer.
B20. Medical Billing Collection Corporation and Naturopath Clinic make a deal for
Medical Billing’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.
ESSAY QUESTIONS
B1. Isabel owns a house, which she advertises for sale for $300,000. On April 1,
Jon-Pierre offers Isabel $280,000 for the house. On April 5, Isabel has
delivered to Jon-Pierre at his office a form that includes additional terms but
does not state a price. At 9 A.M. on April 6, Jon-Pierre signs the form and gives
it to Karla, his administrative assistant, with instructions to mail it. At 10 A.M.,
Isabel calls to tell Jon-Pierre that the deal is off. The next day, Karla mails the
signed form to Isabel. When Isabel refuses to sell the house to Jon-Pierre, he
files a suit against her, alleging breach of contract. Isabel claims that there was
no contract. What are arguments supporting each party’s position? What is the
court likely to rule? Explain.
10 TEST BANK B: UNIT THREE: CONTRACTS AND E-CONTRACTS
B2. Business Solutions Corporation (BSC) sells business application software—
wage, price, and inventory coordinating programs, for example—in different
combinations and packages, at different prices, downloadable online. To
complete a deal, a purchaser 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.