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1. Which of the following is INCORRECT? (a) Many hundreds of people can be parties to a single contract. (b) A company can make a contract. (c) Most contracts do not have to be in writing. (d) A contract is the same as an agreement. 2. Which of the following are NOT requirements of a contract? (a) Agreement. (b) Consideration. (c) Offer. (d) Intention. 3. Which is the most common remedy for breach of contract? (a) Damages. (b) Injunction. (c) Fine. (d) Imprisonment. 4. Which of the following statements is correct? (a) Intention to make a contract is only necessary for social agreements. (b) Intention to make a business contract is not necessary because all business agreements are taken seriously. (c) An offer will become stale after a reasonable time and terminate. (d) To create agreement it is always necessary to find an offer and an acceptance.

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5. Which of the following statements is correct: (a) An offer may be accepted even if it is ambiguous (b) An offer can be accepted after it has been rejected provided the offeror has agreed to keep it open for a period and that period had not expired at the time of acceptance. (c) Damages are calculated to put the innocent party in the same position as if the contract had not been broken. (d) If there is an option to keep an offer open for a period of time, a counter-offer does not put an end to the offer

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6. Consider the following facts: John is a keen golfer and enters a competition at the Erewhon Golf Club (although he is not a member and has not been to Erewhon before). He signs a form agreeing to the rules of the competition which are shown to him but which he does not read. One of the rules states that if he gets a “hole in one” he must buy lunch for all people who are playing with him on that particular hole. As it happens he does get a “hole in one” and Joe and Maureen expect him to pay for their lunch because they were playing with him at the time. Before play commenced John had never met Joe and Maureen before. Joe and Maureen had both signed the rules. Joe had read the rules but Maureen had not. Does John have a contract with Maureen and Joe requiring him to buy their lunch? (a) Maureen and Joe both have a contract even though there is no offer and acceptance because they all obviously agreed to follow the rules. (b) Maureen does not have a contract because she had not read the rules. (c) Joe does not have a contract because John had not read the rules. (d) There is no contract because they all signed the rules under duress because the Club would not have let them enter the competition if they had not signed up.

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7. An advertisement says: "The company desire to obtain the services of some good man who will manage and superintend the business". John applies for the job but does not get it. In fact, nobody gets appointed. (a) The advertisement is merely supplying information (b)

The advertisement is a puff

(c)

The advertisement is an offer

8. Which of the following statements is correct: (a) An offer and an acceptance may be made by the conduct of the parties when the offeree or the offeror (as the case may be) knows of the conduct; (b) In a supermarket setting, the owner of the supermarket is making an offer by putting products on shelves where they can be selected by the shoppers; (c) An “invitation to treat” is where the owner of the supermarket offers a treat such as “two for the price of one” (d) If I want my car advertised at a certain price but the newspaper gets the price wrong, I must sell for the advertised price if someone agrees to pay that price.

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9. What is the main reason why an advertisement for sale of goods would normally be an invitation to treat? a) Because advertisements are usually ‘puffs’ and are not meant to be taken seriously b) Because it would be like the display of goods in a shop window and, on the authority of Fisher v Bell that would always be an invitation to treat. c) Because there would be a limited supply and, if an offer, the advertiser would have contracted with every person agreeing to the ad’s terms 10. Andy who is 16 goes to his local dairy on Monday morning to buy a packet of cigarettes. He always gets his cigarettes on a Monday morning so the shopkeeper has them ready on the counter. Andy says: “Good morning”, hands over the cash and leaves with the packet of cigarettes. Which of the following is the most accurate answer to the question whether there is a contract? a) Yes because the shopkeeper made him an offer by having the cigarettes on the counter and Andy accepted by paying the price b) No because no one said anything about an offer or an acceptance c) No. Having the cigarettes on the counter was an invitation to treat. By paying the price Andy was making an offer and the shopkeeper never accepted it d) No because Andy is a minor.

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11. Which of the following statements is incorrect: (a) An offer may be revoked by conduct of the offeror provided the offeree observes that conduct or gets to know of it through a reliable source; (b) An offer is revoked when the offeree communicates rejection of the offer; (c)

If an offeree promises to keep an offer open for a particular period of time, the offeree has all that time to accept the offer no matter what;

(d) If the offeree is not given a particular time to accept the offer, the offer expires after a reasonable time in the circumstances. 12.Ned is interested in buying a car but he needs time to consider the offer of the vendor, Barbara. On Monday, he offers Barbara $100 to keep the offer open until 5pm Friday on the condition that if he accepts the offer $100 will be deducted from the price (the “option”). Barbara agrees. On Wednesday, Barbara reconsiders and offers to return the $100 to Ned. Ned declines to accept the $100. What is the legal position if Ned wants to accept the offer on Friday before the deadline? a) Ned cannot exercise the option because there has been no consideration given for it. b) The option is not enforceable because it relates to the transfer of title of property and must be in writing. c) The option has all the necessary requirements of a contract that requires the offer to remain open for a definite period. Barbara’s attempt to withdraw the offer is ineffective. d) The option is not enforceable because the option has been withdrawn. CONTINUED

13. Adam offers to sell his boat to Ivan for $12,000. The offer is made on Friday, with a promise to keep the offer open until Monday at 9am. On Saturday afternoon, Ivan has found out from the local harbour master that Adam sold the boat to Michael on Saturday morning. What are Ivan's options? a) Nothing, the revocation of the offer has occurred provided the harbour master is a reliable source of information (which we can assume he is). b) Ivan should immediately contact Adam to accept his offer c) Ivan should take legal action and bring an action of breach of contract because Adam broke his promise to keep his offer open until Monday at 9am a) Ivan should seek an order for specific performance. 14. Adam offers to sell his boat to Ivan for $12,000. The offer is made on Friday, with a promise to keep the offer open until Monday at 9am. This agreement is in the form of a deed. On Saturday afternoon, Ivan has found out from the local harbour master that Adam sold the boat to Michael on Saturday morning. What are Ivan's options? a) Nothing, the revocation of the offer has occurred provided the harbour master is a reliable source of information (which we can assume he is). b) Ivan could immediately contact Adam to accept his offer c) Ivan should take legal action and bring an action of breach of contract because Adam broke his promise to keep his offer open until Monday at 9am b) Ivan should seek an order for specific performance.

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15. Gordon goes to his weekly meeting of the “Red Headed League”. After dinner it is traditional to move to the lounge and relax with a glass of whiskey. Towards the end of the evening he announces to the half dozen members present his intention to produce a calendar photo. He then says: I will give a case of whiskey to each of you if you agree to be on the calendar. Laura finds out about this from her husband later that evening and the next day says to Gordon: “I’ve got red hair and I’ll be in the photo. Where can I collect my case of whiskey?” Which of the following best describes why Laura does not have a contract? a) Because Gordon’s statement is only an invitation to treat and he does not accept her offer b) Because the agreement is illegal on the grounds that it discriminates in favour of people with red hair c) Because the members had had a fair bit to drink by the time Gordon made his statement d) Because Gordon’s offer was not addressed to Laura. 16. Jack gave Jill 14 days to accept his offer to sell her his house. After 3 days he changes his mind and sends her a letter saying he will still sell her the house but he wants an additional $23,000 for it. On the 4th day she rings to say she accepts the offer. Jack’s letter does not reach her until the 5th day. Which of the following is the best analysis of the legal situation? a) Jill cannot accept Jack’s first offer because she gave no consideration for him to keep the offer open b) Jill cannot accept Jack’s first offer because it was revoked when his letter was sent (i.e. the Postal Rule) c) Jill can accept Jack’s first offer because she accepted it before the revocation letter was communicated to her d) Jill cannot accept Jack’s first offer or his amended offer.

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17. Jack gave Jill 14 days to accept his offer to sell her his house. After 3 days Jill rings him to say she does not accept his offer. On the 4th day Jill changes her mind and posts a letter accepting the offer. The letter arrives on the 7th day. Which of the following is the best analysis of the legal situation? a) Jill has a contract because her letter of acceptance was sent before the 14 days expired (i.e. the Postal Rule) b) Jill does not have a contract because the Postal Rule does not apply to this situation as an acceptance by post would not be fast enough and would be contrary to the parties’ intention c) Jill has a contract because, although Jack revoked his offer, he made no objection to her change of mind and did not get in touch with her on receiving her letter of acceptance. d) Jill has no contract because she rejected Jack’s offer and he did not renew it.

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18. Jill has 5000 shares in a company listed on the stock market. The company’s principal line of business is petroleum. The world’s biggest source of oil is in the countries of Tutujalara and Guatalajara and that part of the world is politically volatile with many events occurring there which could cause a big reduction or increase in the world’s supply of oil. Jill offers Jack her 5000 shares at $300 per share and she does this by sending him an email. Jack sends her his acceptance by posting her a letter but it does not arrive at his office until 3 days later. In the meantime, because of political developments in Tutujalara and Guatalajara, the shares have gone up in price by $50 each so Jill phones Jack to tell him her offer is revoked. Which of the following is the best analysis of the legal situation? a) Jack does not have a contract because the Postal Rule does not apply as the parties intention, viewed objectively, was that a faster means of acceptance be used b) Jill cannot revoke her offer because it has already been accepted c) Jill can revoke her offer because the Postal Rule can never apply if the offer is made by email d) There is no contract because the parties could not have predicted the events in Tutujalara and Guatalajara.

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19 Mrs Gledhill sees the following advertisement in the paper: “Neutroglycerin – THE WONDER DRUG Made from extract of the recently discovered lichen only to be found in the highest Andes, this simple pill cures: Headache, fever, back pain, lethargy, most forms of cancer, heart complaints, joint pain and many other illnesses too numerous to list. When taken on the full moon it will make you irresistable to the opposite sex. Available by post only and without prescription. $10 for 5 pills.” Is this advertisement most likely to be: a) An invitation to treat b) An offer c) A puff d) A statement of intention ________________

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