acct352exam_2

acct352exam_2 - Multiple Choice (2 points each) 1. Winkie...

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Multiple Choice (2 points each) 1. Winkie wants to start a new business, “Winkie’s Wonderful Water Ice,” so she enters a contract with Fred to buy all the business assets of “Fred’s Frozen Freezes” (water ice machines, freezers, scoops, etc.). The contract may not be enforceable if it was formed as a result of a. a mutual mistake. b. Winkie’s intent to make a profit. c. Fred’s intent to make a profit. d. either party’s intent to make a joke. 2. The vice president of International Sales Corporation is negotiating with a representative of Global Distribution, Inc., regarding a business deal. Under the objective theory of contracts, the vice president’s words and conduct during contract negotiations are held to mean whatever a. the vice president intended them to mean. b. a reasonable person in the vice president’s position would think they meant. c. a reasonable person in the representative’s position would think they meant. d. the representative subjectively thought they meant. 3. Jerry puts up a poster that advertises a reward for the return of a mountain bike that was stolen from the bike rack at Trabant Student Center. This is a. an offer in a bilateral contract. b. an offer in a unilateral contract. c. not an offer because it does not invite the performance of an act that will demonstrate the offer was accepted. d. not an offer because it is not directed to a specific individual known to Jerry. 4. Eve files a lawsuit against Satan, Inc. under the doctrine of promissory estoppel. Among other things, Eve must show that a. Eve justifiably refused to fulfill a promise by Satan, Inc. b. Eve justifiably relied on Satan’s promise to her detriment. c. Satan made Eve a promise that induced her to maintain her position. d. none of the above. 5. In 2005, Greg offers to sell an old Martin HD-28 guitar to Valerie for $10,000. He tells her, “It’s old…at least 50 years old. My father bought it new.” It is in pristine condition and its Brazilian Rosewood back and sides and Spruce top produce that classic Martin sound. Valerie is sure that it is a rare “pre-war herringbone HD-28” (made prior to WWII, before 1940), which is worth up to $30,000 in this condition. She immediately accepts and takes it home with pride. The next day, after having the instrument evaluated by an expert, Valerie learns that it is, in fact, a 1949 Martin HD-28; still an excellent guitar, worthy of the envy of her friends, but not a “pre-war” instrument. It is worth about $10,000. When Greg refuses to respond to her complaints, she sues him for the return of her money, and is ready to return the guitar. What is the result? a. Valerie will win because the contract was based upon a bilateral mistake. b.
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acct352exam_2 - Multiple Choice (2 points each) 1. Winkie...

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