Contract Law Formation Quiz

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Questions and Answers

What happens if you change your mind about receiving goods?

You are obligated to keep them.

You can only keep them if you pay for them.

You can put them back without obligation. (correct)

You must return them and pay a fee.

Why are advertisements generally considered invitations to treat?

Because stock availability can change. (correct)

Because they require negotiations.

Because they are legally binding contracts.

Because they contain detailed offers.

In what scenario will an advertisement be treated as an offer?

When it includes a price list.

When it offers a reward under specific conditions. (correct)

When it is broadcast during prime time.

When it has a limited time frame.

What type of contract involves one party making a promise without requiring a reciprocal promise?

Unilateral contract Signup and view all the answers

What is a characteristic of unilateral contracts?

Acceptance requires performance of a specified act. Signup and view all the answers

What is the significance of the case Carlill v Carbolic Smoke Ball Company?

It demonstrates how advertisements can be legally binding. Signup and view all the answers

Which term best describes advertisements that contain promises to pay for specific actions?

Unilateral contracts Signup and view all the answers

Why is it important to understand the difference between unilateral and bilateral contracts?

It influences the rights and obligations of both parties. Signup and view all the answers

What defines a unilateral contract?

A promise in return for an act Signup and view all the answers

Which of the following is NOT a method of terminating an offer?

Acceptance Signup and view all the answers

When does acceptance of an offer become binding in relation to the postal rule?

When the acceptance letter is posted Signup and view all the answers

In a bilateral contract, which of the following statements is true?

Both parties must perform their obligations Signup and view all the answers

What must be true for an offer to be accepted?

It must contain all material terms Signup and view all the answers

What happens if a client sends an acceptance letter late, after the offer has expired?

No contract is formed because the offer has lapsed Signup and view all the answers

If an offer is made and later revoked, when must the revocation be communicated?

Before the offer has been accepted Signup and view all the answers

How does a counter-offer affect the original offer?

It terminates the original offer Signup and view all the answers

When does acceptance occur in a unilateral contract?

When the promisee completes the required act Signup and view all the answers

How can an offeror effectively communicate revocation of an offer?

When the revocation notice should have been read by the offeree Signup and view all the answers

What does partial performance of a unilateral contract imply?

The offer remains binding until completion of the act Signup and view all the answers

What is the general rule regarding revocation of an offer?

An offer can be revoked anytime before acceptance Signup and view all the answers

In the given example, when would the offer of £100 be considered revoked?

At any point before they complete their walk Signup and view all the answers

What is implied once an offeree begins to perform the act in a unilateral contract?

There is an implied promise not to revoke the offer Signup and view all the answers

What does the case, The Brimnes, establish regarding electronic communication?

Revocation is effective when it should have been read Signup and view all the answers

What can be considered consideration in the context of an offer?

A nominal payment like £1 Signup and view all the answers

What factor does NOT help determine whether parties have reached complete agreement on a deal?

Whether the arrangement has been communicated through electronic means Signup and view all the answers

In what scenario might a vague agreement still be considered binding?

When the contract has been partly performed Signup and view all the answers

What is an essential component for the formation of a contract?

Consideration Signup and view all the answers

Which of the following is TRUE about provisional agreements?

They can operate until a final contract is signed Signup and view all the answers

Which condition is necessary for a contract to be legally binding?

There must be a clear intention to create legal relations Signup and view all the answers

What is indicated by an agreement specifying a price as 'market price prevailing at the date of delivery'?

Legally binding contract despite uncertainty Signup and view all the answers

In which situation would an agreement be too vague to constitute a contract?

When price terms are not specified in detail Signup and view all the answers

What factor is NOT relevant when judging the context of an agreement?

Personal opinions about the contract Signup and view all the answers

What is the significance of the Carbolic Smoke Ball company depositing £1,000 in a bank account?

It demonstrated the company's commitment to the offer, encouraging customers to buy the smoke ball. Signup and view all the answers

In the context of auctions, what does the 'invitation to treat' refer to?

The auctioneer's request for potential buyers to submit bids on the item(s) being auctioned. Signup and view all the answers

What is the primary legal consequence of an auction being advertised as 'without reserve'?

The auctioneer is obligated to sell the item(s) to the highest bidder, regardless of the price. Signup and view all the answers

What is the key difference between advertising a product and making an offer?

Advertising simply informs the public about a product, while an offer is a promise to sell. Signup and view all the answers

What type of contract was formed between Mrs. Carlill and the Carbolic Smoke Ball company?

Unilateral contract Signup and view all the answers

What is the legal effect of a reserve price in an auction?

It allows the auctioneer to withdraw the item from the auction if the reserve price is not met. Signup and view all the answers

Which of the following statements accurately reflects the legal position of the auctioneer in the case of Barry v Davies?

The auctioneer was legally obligated to sell the machines to the highest bidder, as the auction was advertised as 'without reserve'. Signup and view all the answers

What does the phrase 'in other words they would be sold to whoever made the highest bid (however much that might be)' imply about the machines in the auction?

The machines were not subject to a reserve price, allowing for a potentially low sale price. Signup and view all the answers

What would a reasonable person assume was the intended asking price for the motorcycle, based on the information provided?

£5,000 Signup and view all the answers

What legal terminology is used for preliminary statements like "I am thinking of selling my car. I have been told that £7,000 would be a realistic asking price. Would you be interested in buying it?"

Invitation to treat Signup and view all the answers

Which of the following statements accurately describes the legal principle behind Faheem's situation regarding the motorcycle?

Faheem is bound to sell the motorcycle for £5,000 because his text message constituted a binding offer, even though it was an error. Signup and view all the answers

What does the text suggest about the legal principle of an offer being addressed to a specific person?

An offer can be addressed to a specific individual, a group of people, or even the entire world. Signup and view all the answers

What is the key difference between an offer and an invitation to treat?

An offer is legally binding, while an invitation to treat is not. Signup and view all the answers

Where is a contract typically concluded in a supermarket?

At the checkout counter. Signup and view all the answers

Which of the following examples would be considered an invitation to treat?

A store advertising "All items 50% off!". Signup and view all the answers

What is the primary principle illustrated in the example of goods on display in a supermarket?

The shopper does not create a binding contract simply by placing goods in their trolley. Signup and view all the answers

Study Notes

Part 1: Formation

This part of the document focuses solely on the formation of agreements.
A contract requires an offer, acceptance, and intention to create legal relations.
Offers, invitations to treat, acceptance. Termination of offers. Certainty and completeness.

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Description

Test your understanding of the formation of agreements in contract law. This quiz covers essential elements such as offers, acceptance, invitations to treat, and the termination of offers. Ensure you're familiar with the concepts of certainty and completeness.