Unit 2: Contracts

Answer: A — The correct answer is A because when Alex responded to Tom's offer with a different price, he made a counteroffer, which rejected Tom's original offer. Since Tom never accepted this counteroffer, there was no contract formed between them. Option B is incorrect because Tom's statement that he would think about it does not constitute an acceptance. Option C is incorrect because a counteroffer is not an acceptance; it is an offer made in response to an offer. Option D is incorrect because silence or failure to reject an offer does not constitute acceptance.

Answer: D — Tom's actions of sending a contract with the terms of the sale, including the $18,000 price, demonstrate his intention to accept Alex's counteroffer, even though he did not explicitly state it. This is an example of implied acceptance, as Tom's conduct implies acceptance of the terms. Option A is incorrect because there is no explicit statement of acceptance. Option B is incorrect because Tom's actions do not imply rejection. Option C is incorrect because Tom's actions are not a new offer, but rather an acceptance of Alex's counteroffer.

Answer: A — Alex's counteroffer terminated Tom's original offer because a counteroffer is a type of rejection that also includes a new offer. By making a counteroffer, Alex rejected Tom's original offer and made a new offer to Tom. Tom's failure to respond to Alex's counteroffer does not revive his original offer. Options B and C are incorrect because Alex's counteroffer was not an acceptance, but rather a rejection and a new offer. Option D is incorrect because Tom's original offer was terminated by Alex's counteroffer.

Answer: C — Tom's initial offer to sell the car for $20,000 was met with Alex's counteroffer to buy the car for $18,000. When Tom said he would 'think about it', he neither accepted nor rejected Alex's counteroffer. The next day, when Tom called Alex to say he accepted the $18,000 offer, he was accepting Alex's counteroffer, thus forming a contract for $18,000. Options A, B, and D are incorrect because they misinterpret the nature of the exchange between Tom and Alex, specifically regarding the timing and nature of the acceptance and counteroffer.

Answer: C — Tom's actions of sending a contract with the changed price can be considered an implied acceptance because his conduct implies that he agrees to the terms of the contract. It is not an express acceptance (A) because Tom does not explicitly state his acceptance. It is not a rejection (B) because Tom's actions indicate that he is moving forward with the sale. It is not a conditional acceptance (D) because there is no indication that Tom's acceptance is dependent on further conditions being met.