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Chapter 10
AGREEMENT
Practice Test
True/False Questions
Circle true or false:
1.
T
F
3.
T
F
5.
T
F
Shrinkwraps are typically enforceable even if the buyer does not bother to read
them.
If an offer demands a reply within a stated period, the absence of a reply
indicates acceptance.
Without a meeting of the minds there cannot be a contract.
Multiple-Choice Questions
7. On Monday night, Louise is talking on her cell phone with Bill. “I’m desperate for a manager in my
store,” says Louise. “I’ll pay you $45,000 per year, if you can start tomorrow morning. What do you
say?” “It’s a deal,” says Bill. “I can start tomorrow at 8 a.m. I’ll take $45,000 and I also want 10% of
any profits you make above last year’s.” Just then Bill loses his cell phone signal. The next morning
he shows up at the store, but Louise refuses to hire him. Bill sues. Bill will
(a)
Win, because there was a valid offer and acceptance.
(b)
Win, based on promissory estoppel.
(c)
Lose, because he rejected the offer.
(d)
Lose, because the agreement was not put in writing.
(e)
Lose, because Louise revoked the offer.
9. Reggie is hiring an accountant for his firm. During any negotiations that take place
(a)
The UCC governs.
(b)
The Restatement of Contracts governs.
(c)
The mirror image rule applies.
(d)
A letter of intent is mandatory.
(e)
Either party may accept while making a counteroffer.
Short-Answer Questions
11. No. The plaintiff must show that both sides intended to make a contract and that they agreed on
definite terms. Here, there is no indication that Roberts intended to make a final deal. Merely
handing out order forms is neither an offer nor an acceptance. Further, virtually no binding terms
were discussed. Arnold Pontiac-GMC, Inc. v. General Motors Co., 786 F.2d 564 (3d Cir. 1986).
13. The case is governed by UCC §2-207. Litronic offered to sell at a particular price, with a specified
warranty. Northrop accepted, but provided a warranty with a different time limit. Yes, there is a
contract. Pursuant to §2-207, Northrop intended to accept and create a contract, and the fact that
it proposed a different warranty period does not prevent formation of a contract. The question then
becomes, what is the warranty period? The conflicting warranty terms cancel each other out and will
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be replaced by the appropriate Code provision. In this case, the Code provides a “reasonable time”
(UCC §2-309). The court found that six months was within the reasonable time, and Northrop won.
Northrop Corp. v. Litronic Industries, 29 F.3d 1173, 1994 U.S. App. LEXIS 17736 (7th Cir. 1994).
15. YOU BE THE JUDGE WRITING PROBLEM Mrs. Cheever won. The court held, as stated in
her argument, that all of the key terms were missing. A court might be willing to supply a missing
term, where the parties stated most of the contract provisions and provided a clear basis for adding
additional ones. But here, all of the key terms were absent and there was no basis on which a court
crafted a contract. Academy Chicago Publishers v. Cheever, 144 Ill.2d 24, 578 N.E.2d 981, 1991 Ill.
LEXIS 47, (Sup. Ct. Ill. 1991).