Chapter 2 Multiple-choice questions

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. For there to be a binding contract, both parties must actually intend to be bound by such a contract.

True correct incorrect

False correct incorrect

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. An offer can either be created by a statement that shows willingness to be bound (if accepted by the addressee) or by a statement that contains all the necessary details to form a contract (once it has been accepted by the addressee).

True correct incorrect

False correct incorrect

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. According to the Court of Appeal in Pharmaceutical Society of GB v Boots [1953] 1 QB 401, which one of the following statements most accurately describes the normal process of contract formation in a self-service shop?

The display of goods is an offer and the customer accepts that offer by placing the goods into the shopping basket/trolley. correct incorrect

The customer makes an offer by placing the goods into their shopping basket/trolley and the cashier accepts that offer by ringing up the price of the goods on the cash register (or passing the goods over the barcode reader). correct incorrect

The customer makes an offer by taking the goods to the checkout and the cashier accepts that offer by ringing them up on the cash register. correct incorrect

The display of goods is an offer and the customer accepts that offer when they take the goods to the checkout. correct incorrect

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. Where two parties make identical offers to each other at approximately the same time, these two offers do not constitute a contract between the parties.

True correct incorrect

False correct incorrect

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. In Adams v Lindsell (1818) 1 B & Ald 681, it was decided that a letter of acceptance by post would normally take effect at the moment of posting.

True correct incorrect

False correct incorrect

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. In a 'battle of forms' situation, which of the following represent the possible approaches currently adopted by the English courts? [Please select all that apply.]

The courts may declare that there is no contract between the parties and allow claims on a restitutionary basis, as to hold otherwise would leave the receiving party unjustly enriched through receiving goods without having to pay for them. correct incorrect

The courts will uphold the contract between the parties and adopt the first received correspondence that contains conflicting terms. correct incorrect

The courts may uphold the contract between the parties and adopt the last received correspondence that contains conflicting terms as long as that 'last shot' is accepted (expressly or impliedly). correct incorrect

The court may uphold the contract between the parties and adopt what the court believes is reasonable, rather than correspondence from either side, as part of the contract. correct incorrect

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. Where a referential bid is accepted ahead of a non-referential bid, there is no contract between the referential bidder and the person who accepts the bid.

True correct incorrect

False correct incorrect

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. A sends a fax to B saying: 'I offer to sell my BMW car to you for £2,000. Please let me know your answer.' B posts a letter accepting the offer. Before the letter reaches A, B receives a notice of A's death from his executor. Which one of the following statements is true?

A's executor is bound by a contract between A and B, which is formed at the moment when B posts the accepting letter. correct incorrect

A's executor is not bound by any contract between A and B because B's acceptance takes effect only when the letter is received and the notice of A's death prevents B's acceptance from taking effect. correct incorrect

A's executor is bound by a contract between A and B because the executor can perform the contract for the sale of car using A's estate. correct incorrect

A's executor is not bound by any contract between A and B because A's death automatically terminates the offer. correct incorrect

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. In which one of the following circumstances is the acceptance ineffective because it does not comply with the prescribed method of acceptance in the offer?

The offeree uses an equally efficacious method of acceptance as that prescribed in the offer. correct incorrect

The offeree uses a method of acceptance that is more advantageous to the offeror than the prescribed method of acceptance in the offer. correct incorrect

The offeror makes it clear that the prescribed method of acceptance is the only and mandatory method. correct incorrect

The offeree knows that the offeror prefers the prescribed method of acceptance. correct incorrect

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. A Ltd sends a brochure to B, which prices a certain type of mountain bike at £250. B replies: 'I am prepared to pay £240 in cash for the mountain bike.' Which one of the following statements is true?

B's reply constitutes a counter-offer. correct incorrect

B's reply constitutes an acceptance of A's offer. correct incorrect

B's reply constitutes an offer. correct incorrect

B's reply constitutes a request for information. correct incorrect

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. The auctioneer is bound to accept the highest bid at an auction advertised as being 'without reserve'.

True correct incorrect

False correct incorrect

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. A, the owner of Tyr Supermarket, advertises a 'reward of £500 for the first person to supply information if that information leads to the successful prosecution of the criminal mastermind responsible for a series of thefts from Tyr Supermarket'. B supplies the information from which the criminal is successfully arrested and prosecuted. B thereupon claims the reward. Which one of the following statements is true?

The advertisement is only an invitation to treat and therefore B has no right to the reward. correct incorrect

The advertisement is only an invitation to treat but B can claim the reward once the criminal has been successfully prosecuted. correct incorrect

The advertisement is a unilateral offer under which A is bound to pay B £500 when B supplies the information. correct incorrect

The advertisement is a unilateral offer under which A is bound to pay B £500 only when the information supplied by B finally leads to the successful prosecution of the criminal. correct incorrect

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. A offers to sell his electronic tablet to B for £75. A and B agree that, if B does not contact A by the following Thursday, then A can assume that B has accepted the offer. Thursday passes and A claims that a contract has been formed. B refuses to pay. Which one of the following statements is true?

A cannot impose silence on B as a means of acceptance so no contract has yet been formed. correct incorrect

The Unsolicited Goods Act 1971 prevents A from forcing the sale to B. correct incorrect

Because A and B have agreed upon the mode of acceptance, a contract of sale is formed after Thursday by B's failure to respond to A. correct incorrect

B's offer lapses after Thursday, so B does not have a contract with A. correct incorrect

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. A offers to sell his car to B for £2,000. B replies: 'Can I pick it up tomorrow by any chance?' A responds: 'If you pay by cheque, then it must be cleared by my bank before you can drive the car away, but if you pay by cash, you can pick up the car immediately if you wish.' B replies: 'I accept your very generous offer. I'll pay by cheque but I need to collect the car immediately.' The next morning, B sends another message to A: 'OK. I can pay by cash.' B turns up to pay that afternoon, but A then refuses to sell his car to B because he has received a better offer from C. Which one of the following statements most accurately describes the legal position between A and B?

B's first response is a counter-offer, which destroys A's original offer. No contract can therefore take place. correct incorrect

B's first response is a request for information but no contract can take place because B's second response is a counter-offer, which destroys A's original offer, and this counter-offer is never accepted by A. correct incorrect

Both of B's first two responses are requests for information and a contract is made when B's third response is communicated to A accepting A's offer. correct incorrect

There is a contract between A and B because A has failed to respond to B's last message expeditiously and B has relied upon A's silence by turning up to pay. correct incorrect

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. A, a private landowner, sends a letter to B and C inviting them to make tenders for a construction project. In the letter, A requires that tenders 'must reach me before the 1 June' and must be submitted by returning a quite detailed document. A also states he 'will accept the most competitive bid'. B submits a bid of £30,000; C submits a bid of £28,000. Both bids arrive in A's office before 6pm, on 1 June. Due to a mistake by A's secretary, C's bid is not processed. The two bids are similar in all aspects but the price. After careful consideration, A decides to employ B as the constructor for £30,000. Which of the following statements are true? [Please select all that apply.]

There is a bilateral contract between A and C when C submits its bid. A has breached this contract by employing B. correct incorrect

There is no contract between A and C because A has accepted B's bid. correct incorrect

There is a unilateral contract between A and C when C submits its bid. A is bound to consider C's bid and has breached this duty by neglecting it. correct incorrect

There is a unilateral contract between A and C when C submits its bid. A has breached this contract by employing B. correct incorrect

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. On 1 June, A, a manufacturer, sends a fax to B, the owner of a stationery shop, offering to sell one ton of standard quality A4 paper to him for £500. On 3 June at 10pm, B faxes an acceptance to A. Later that night, B changes his mind and emails a revocation of his acceptance to A's private email address. At 9am the next day, A opens up his shop as usual and immediately sees the fax. Two hours later he checks his private emails (from his shop) and reads B's withdrawal. Which one of the following statements most accurately describes the legal position between A and B?

A contract exists between A and B because B can assume that A's fax machine is manned 24 hours a day and B's faxed acceptance is effective when it arrives at A's office at 10pm on 3 June. correct incorrect

No contract exists between A and B because, by analogy with the postal rule, B's email is communicated at the time it is sent and this precedes the time when B's faxed acceptance takes effect, namely, at 9am on 4 June. correct incorrect

No contract exists between A and B because A should have checked his emails at home before departing for his shop and B's email should be treated as having been communicated before his faxed acceptance takes effect at 9am on 4 June. correct incorrect

A contract exists between A and B because B's email has not been communicated when his faxed acceptance takes effect at 9am on 4 June. correct incorrect

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. To be effective, a revocation of offer must be made or authorised by the offeror.

True correct incorrect

False correct incorrect

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. Which one of the following statements most accurately describes the decision in Byrne & Co v Van Tienhoven & Co (1880) 5 CPD 344?

A telegraphed acceptance became effective when received by the offeror. correct incorrect

An offeree could not accept an offer after the offeror had posted a letter revoking the offer. correct incorrect

Revocation of an offer by post would only become effective when received by the offeree. correct incorrect

Once an offer was accepted, and assuming that a letter of confirmation followed the acceptance, any revocation of the offer became ineffective. correct incorrect

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. A sends an email to B offering to sell to B his Ford Focus car for £5,000 and clearly states that the offer will be open for a week. On the fifth day, A receives an offer from C to buy the same car for £5,500. A then emails B to say that he now wants £5,500 for the car. On the sixth day, B replies to A's second email purporting to accept the original offer of £5,000. Which one of the following statements is true?

There is no contract between A and B because A's second email has revoked the original offer to sell the car for £5,000. correct incorrect

There is a contract between A and B because A's second email is not an express revocation of the original offer and B can pick one of the two offers to accept. correct incorrect

There is a contract between A and B because A clearly states that the original offer is open for a week and thus cannot revoke it before that period expires. correct incorrect

There is a contract between A and B because B replies to A's second email and B's reply must be taken as an acceptance of A's second offer of £5,500. correct incorrect

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. The 'limited stocks' argument has been used by the courts to support the proposition that a request to make competitive bids is normally an invitation to treat.

True correct incorrect

False correct incorrect

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. Which one of the following statements relating to revocation of a unilateral offer is most likely to be true?

The offeror is entitled to revoke the unilateral offer at any time before completion of the performance of the act requested in the offer. correct incorrect

The offeror loses the power to revoke the unilateral offer once an offeree has commenced performance of the act requested in the offer, regardless of whether the offeror has notice of the fact that performance has commenced. correct incorrect

The offeror loses the power to revoke the unilateral offer once the offeror has notice that an offeree has commenced performance of the act requested in the offer. correct incorrect

The offeror has a general implied obligation not to revoke the unilateral offer once the offeror has notice that an offeree has commenced performance of the act requested in the offer. correct incorrect

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. A, while exploring B's supermarket online catalogue, finds an electronic games console for sale at a 'bargain price of £19'. B's website also states that there is only a 'limited supply' of the console at that price and that it is 'offered on a first-come-first-served basis'. The intended bargain price is, in fact, £109 but '0' was mistakenly omitted from the displayed price. A chooses the console and goes to the online checkout. Before he places the order, he is asked to tick the box 'I have read and agreed the terms and conditions' supplied in the website. There is a hyperlink to a separate page containing the terms and conditions. A ticks the box but does not bother to read the terms and conditions. One of the terms specifies that acceptance will not occur until goods are dispatched. Because A is among the first few people who place an order for the console, he instantly receives an automatic confirmation from B's website and his credit card is charged with £19. Subsequently, B refuses to deliver the console. Which of the following statements are likely to be true? [Please select all that apply.]

There is no binding contract for the sale of the console between A and B because A's online order amounts to an offer and this offer has not been accepted by B because B does not dispatch the goods. correct incorrect

There is a binding contract for the sale of the console between A and B because the online catalogue amounts to an offer and A has accepted this offer by placing the order. correct incorrect

There is a binding contract for the sale of the console between A and B because A's online order is an offer and the automatic confirmation of A's order amounts to an acceptance by B. correct incorrect

There is a unilateral contract between A and B, which is formed when A places his online order and B is liable in damages under that contract for refusing to dispatch the goods. correct incorrect