Question

Which of the following is true with regard to the offer and acceptance necessary to form a contract?

A) An ad in the newspaper that reads "Best offer in town! A new 2012 Honda Civic for only $15 999!" is considered an offer.
B) If a seller offers to sell for $100 and the buyer makes a counter-offer of $90 that is rejected by the seller, the buyer can accept the original offer of $100 and bind the seller in contract.
C) A purchased option that states "This offer to be open until noon tomorrow" prohibits the offeror from revoking the offer before that time.
D) A person can accept an offer after it has lapsed.
E) Where the acceptance is effective is not an important factor in determining the place of contract.

Answer 1

An ad in the newspaper is considered an offer. A counter-offer rejects the original offer. A purchased option prohibits the offeror from revoking the offer before a specified time.

Step-by-step explanation:

The correct answer is:

A) An ad in the newspaper that reads "Best offer in town! A new 2012 Honda Civic for only $15 999!" is considered an offer.

1. An offer is a definite and explicit expression of willingness to enter into a contract on specified terms that is communicated to the offeree. In this case, the ad in the newspaper is an offer because it contains a specific price and details of the car being sold.
2. If a seller offers to sell for $100 and the buyer makes a counter-offer of $90 that is rejected by the seller, the buyer cannot accept the original offer of $100 and bind the seller in contract. Once the counter-offer is made, the original offer is no longer valid.
3. C) A purchased option that states "This offer to be open until noon tomorrow" prohibits the offeror from revoking the offer before that time.
4. A purchased option is a contract where the offeror promises to keep the offer open for a specified period of time in exchange for consideration. Once the option is purchased, the offeror cannot revoke the offer until the specified time has passed.