FYLSX - Baby Bar Contract Formation Principles Questions and Answers

Question 1

An art collector sent a letter to a painter on May 1st, offering to purchase her latest masterpiece for $50,000.
The letter stated, 'This offer will remain open until May 10th.' The painter mailed a letter of acceptance on May 5th.
On May 6th, before receiving the painter's acceptance, the collector sent a fax revoking the offer.
The painter received the revocation on May 7th, and the collector received the acceptance on May 8th.
Is there a valid contract?

Accepted Answer

Yes, because the acceptance was effective when mailed.

Answer

No, because the revocation was received before the acceptance was received.

Answer

Yes, because the offer was an irrevocable option contract.

Answer

No, because the revocation was sent before the acceptance was received.

Question 2

Which of the following is an essential element for the formation of any valid common law contract?

Accepted Answer

Mutual assent.

Answer

A written document signed by both parties.

Answer

A promise to perform an illegal act.

Answer

A formal seal.

Question 3

A homeowner, impressed by her neighbor's recent landscaping work, tells the landscaper, 'Because you did such a great job for my neighbor, I'll pay you $500.' The landscaper, surprised, says, 'Thank you!' Is the homeowner's promise enforceable?

Accepted Answer

No, because the promise is based on past consideration.

Answer

Yes, because the landscaper's work provided a material benefit to the neighborhood.

Answer

Yes, because the homeowner made a clear and definite promise.

Answer

No, because the agreement was not in writing.

Question 4

A contractor offers to build a deck for a homeowner for $10,000. The homeowner replies, 'I accept your offer, but you must also agree to stain the deck for the same price.' Which of the following legal principles best describes the homeowner's reply?

Accepted Answer

A counteroffer.

Answer

An option contract.

Answer

A unilateral contract acceptance.

Answer

The mirror image rule.

Question 5

For consideration to be legally sufficient in the formation of a contract, it must involve:

Accepted Answer

A bargained-for exchange where both parties incur a legal detriment.

Answer

An exchange of money or goods of objectively equal value.

Answer

A promise made in recognition of a benefit previously received.

Answer

An act that one party was already legally obligated to perform.

Question 6

A company posts an advertisement stating: 'First 10 customers on Saturday get a new laptop for $1.' A customer is the third person in line on Saturday and attempts to purchase the laptop for $1, but the store refuses. In a breach of contract action, what is the likely legal status of the advertisement?

Accepted Answer

A valid unilateral contract offer.

Answer

A valid bilateral contract offer.

Answer

An invitation for an offer.

Answer

An unenforceable gratuitous promise.