Quiz on Offer and Acceptance

1.  Larson Lexus, a new car dealer, runs the following newspaper ad during the Fall of 1994. “Three ’94 Lexus LS-400s must go! $45,500 each! The first three customers who arrive at our dealership on Saturday, October 8 with this ad can buy one of these cars for $45,500!” Knowing that $45,500 is a very good price for an LS-400, Mike is the first customer to appear at the Larson lot on Saturday, October 8. He hands the ad to the Larson salesman and says that he’d like to buy one of the LS-400s for $45,500. Is the dealership contractually bound to sell Mike the car at that price?

  Yes, because this particular ad is an offer and Mike accepted it.

No, because a written offer must be accepted in writing.

Ads are offers if they leave nothing to negotiation.  Since this ad referred to specific cars at specific prices with nothing left to negotiate, the ad is an offer.  It was accepted by Mike when he presented the ad to the salesman and said that he would buy one of those cars.

No, because in general, advertisements are not offers but rather are invitations to negotiate. 
 

2. Kyle sent Tara a letter offering to sell Tara his car. Tara left the letter on her desk, where her roommate, Maggie, saw it. After reading the letter, Maggie wrote to Kyle and stated that she (Maggie) wanted to accept Kyle’s offer. Which of the following is true? 

  Maggie’s letter is a valid acceptance of Kyle’s offer.

There is no contract between Kyle and Maggie because Kyle did not communicate the offer to Maggie.

Kyle communicated the offer to Tara, not Maggie.

Kyle and Tara have a contract for the purchase of Kyle’s car.

Kyle must sell Maggie his car unless Kyle is a merchant under the UCC. 

3. When can the offeror effectively revoke his/her offer? 

 Only before payment for goods or services has been made.

Only before an effective acceptance.

Only after an effective acceptance.

Only before the parties have completed their obligations under the contract. 
 

4. Adam makes Bob an offer for the sale of land. The offer says that Bob “must accept by registered letter.” Bob accepts the offer with a regular letter. Which of the following is true?

  Adam contract was formed at the time Bob dispatched the letter

Adam contract was formed between the time Bob dispatched the letter and A received it.

Adam contract was formed at the time Adam received the letter. 

There is no acceptance and no contract.

Since Adam specified acceptance by “registered letter,” since Bob didn’t register the letter, he did not accept on the same terms.
 

5   On Thursday, Trista receives a text  from Charlie in which he offers to sell her a diamond ring.  (The offer included present intent to contract, definite terms, and it was communicated to Trista by text.) The text states: “if you choose to accept, you must do so prior to 2:00 p.m. tomorrow.” Trista sent a letter, that she mailed at 1:30pm on Friday, accepting the offer.  Charlie did not receive the letter until Monday. Did Trista timely accept the offer? 

No, because offers cannot be accepted by text.

Yes, because Trista mailed the letter prior to 2:00 p.m.

No, because Trista’s use of the mail was not a reasonable means of acceptance since the offer was sent by text.  Therefore, the mailbox rule would not apply.

Mail was not a reasonable means of acceptance since the offer was sent by text.  

Yes, unless Charlie is out of town and does not receive the letter.

Quiz on Offer and Acceptance Answers

1.  Larson Lexus, a new car dealer, runs the following newspaper ad during the Fall of 1994. “Three ’94 Lexus LS-400s must go! $45,500 each! The first three customers who arrive at our dealership on Saturday, October 8 with this ad can buy one of these cars for $45,500!” Knowing that $45,500 is a very good price for an LS-400, Mike is the first customer to appear at the Larson lot on Saturday, October 8. He hands the ad to the Larson salesman and says that he’d like to buy one of the LS-400s for $45,500. Is the dealership contractually bound to sell Mike the car at that price?

Answer:     Yes, because this particular ad is an offer and Mike accepted it.