Multiple Choice Questions
1. Rebecca, in Honolulu, faxes a job offer to Spike, in Pittsburgh, saying, “We can pay you $55,000 per
year, starting June 1.” Spike faxes a reply, saying, “Thank you! I accept your generous offer, though
I will also need $3,000 in relocation money. See you June 1. Can’t wait!” On June 1 Spike arrives, to
find that his position is filled by Gus. He sues Rebecca.
(a) Spike wins $55,000.
(b) Spike wins $58,000.
(c) Spike wins $3,000.
(d) Spike wins restitution.
(e) Spike wins nothing.
Answer: E. Spike wins nothing. Although he used the phrase, “I accept,” he included a counteroffer,
which is a rejection of Rebecca's offer. She has no obligation to him.
2. Arturo hires Kate to work in his new sporting goods store. “Look,” he explains, “I can only pay you
$9.00 an hour. But if business is good a year from now, and you’re still here, I’m sure I can pay you
a healthy bonus.” Four months later Arturo terminates Kate. She sues.
(a) Kate will win her job back, plus the year’s pay and the bonus.
(b) Kate will win the year’s pay and the bonus.
(c) Kate will win only the bonus.
(d) Kate will win only her job back.
(e) Kate will win nothing.
Answer: E. Kate will win nothing. The only thing Arturo obligated himself to do was to pay $9.00
an hour while Kate worked. He did not promise her a year's employment. The statement about the
bonus was too indefinite to be enforceable: there is no way to measure whether “business is good” or
what a “healthy” bonus is.
3. Manny offers to sell Gina his TV for $100 on January 1. On January 2, Gina writes out a letter of
acceptance. On January 3, Gina drops the letter in a mailbox. On January 4, a postal worker gets the
letter out of the mailbox and takes it to the post office. On January 5, the letter arrives in Manny's
mailbox. When (if ever) was a contract formed?
(a) January 2
(b) January 3
(c) January 4
(d) January 5
(e) None of the above – a contract has not been formed.
Answer: B. A contract was formed on January 3, when Gina mailed the letter.
4. Frank, an accountant, says to Missy, "I'll sell you my laptop for $100." Missy asks, "Will you give me
until tomorrow to make up my mind?" "Sure," Frank replies. Which of the following is true?
(a) Frank cannot revoke his offer, no matter what.
(b) Frank cannot revoke his offer only if Missy pays him to keep the offer open until tomorrow.
(c) Frank can revoke his offer no matter what, because he is not a merchant.
(d) Frank can revoke his offer no matter what, because he did not promise Missy anything in writing.
Answer: B. Frank may choose to keep the offer open, but he is not required to unless Missy pays for
an options contract.
5. Which of the following amounts to an offer?
(a) Ed says to Carmen, "I offer to sell you my pen for $1."
(b) Ed says to Carmen, "I'll sell you my pen for $1."
(c) Ed writes, "I'll sell you my pen for $1," and gives the note to Carmen.
(d) All of the above
(e) A and C only.
Answer: D. All of the versions of the offer are valid.