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Question 1
Sol is an avid classical music fan and he attends the symphony whenever he can. He also has a large collection of instruments actually used by famous musicians. David has been the symphony's harp player for many years and he is widely recognized as the best harpist is the world. Sol would like nothing more than to add David's harp to his collection of instruments. On April 1st, Sol calls David and offers to buy the harp for $10,000. Sol tells David that he will leave the offer open for two weeks. On April 16th, Sol buys a cello, previously owned by Yo Yo Ma, for $15,000. On April 17th, David calls Sol to accept Sol's offer. However, since Sol had spent so much money the day before, he tells David that he can no longer buy the harp. David sues Sol for breach of contract, arguing that his acceptance of Sol's offer created a binding agreement between them. David will win this case.
Correct
Incorrect!
Correct If an offer states that it will be held open for a certain period of time, the offeree's power of acceptance automatically expires at the end of that period. Here, Sol clearly stated that the offer would be held open for two weeks. That means that, since the offer was made on April 1st, the offer would be held open until April 14th and, after the 14th, David's power to accept the offer would automatically lapse. David did not accept Sol's offer until April 17th, three days after his power to accept had lapsed. Therefore, David's acceptance was invalid, it did not create a binding agreement between him and Sol and FALSE is the correct answer.
Incorrect! If an offer states that it will be held open for a certain period of time, the offeree's power of acceptance automatically expires at the end of that period. Here, Sol clearly stated that the offer would be held open for two weeks. That means that, since the offer was made on April 1st, the offer would be held open until April 14th and, after the 14th, David's power to accept the offer would automatically lapse. David did not accept Sol's offer until April 17th, three days after his power to accept had lapsed. Therefore, David's acceptance was invalid, it did not create a binding agreement between him and Sol and FALSE is the correct answer.
Question 2
Sol is an avid classical music fan and he attends the symphony whenever he can. He also has a large collection of instruments actually used by famous musicians. David has been the symphony's harp player for many years and he is widely recognized as the best harpist is the world. Sol would like nothing more than to add David's harp to his collection of instruments. On April 1st, Sol writes David a letter offering to buy the harp for $10,000. Sol tells David that he will leave the offer open for two weeks and that David should call him if he is interested in selling the harp. David receives the letter on April 5th. On April 16th, Sol buys a cello, previously owned by Yo Yo Ma, for $15,000. On April 17th, David calls Sol to accept Sol's offer. However, since Sol had spent so much money the day before, he tells David that he can no longer buy the harp. David sues Sol for breach of contract, arguing that his acceptance of Sol's offer created a binding agreement between them. David will win this case.
Correct If an offer states that it will be held open for a certain period of time, the offeree's power of acceptance automatically expires at the end of that period. Here, Sol clearly stated that the offer would be held open for two weeks. However, Sol's offer was conveyed in a letter and the general rule is that the stated time period for acceptance does not begin until the offeree receives the letter. That being the case, the two week period that David had to accept Sol's offer began on April 5th and did not lapse until April 19th. Therefore, David's acceptance on April 17th was valid, it created a binding contract between himself and Sol and TRUE is the correct answer.
Incorrect! If an offer states that it will be held open for a certain period of time, the offeree's power of acceptance automatically expires at the end of that period. Here, Sol clearly stated that the offer would be held open for two weeks. However, Sol's offer was conveyed in a letter and the general rule is that the stated time period for acceptance does not begin until the offeree receives the letter. That being the case, the two week period that David had to accept Sol's offer began on April 5th and did not lapse until April 19th. Therefore, David's acceptance on April 17th was valid, it created a binding contract between himself and Sol and TRUE is the correct answer.
Correct
Incorrect!
Question 3
Sol is an avid classical music fan and he attends the symphony whenever he can. He also has a large collection of instruments actually used by famous musicians. David has been the symphony's harp player for many years and he is widely recognized as the best harpist is the world. Sol would like nothing more than to add David's harp to his collection of instruments. On April 1st, Sol calls David and offers to buy the harp for $10,000. Sol tells David to think about the offer and get back to him if he is interested. On April 16th, Sol buys a cello, previously owned by Yo Yo Ma, for $15,000. On April 27th, David calls Sol to accept Sol's offer. However, since Sol had spent so much money on the cello, he tells David that he can no longer buy the harp. David sues Sol for breach of contract, arguing that his acceptance of Sol's offer created a binding agreement between them. David will win this case.
Correct
Incorrect!
Correct If an offer states that it will be held open for a certain period of time, the offeree's power of acceptance automatically expires at the end of that period. However, if an offer does not specify a specific time period for which it will be held open, the offeree's power of acceptance expires after a reasonable amount of time. Here, David did not respond to Sol's offer for twenty seven days and it is safe to say that this represented an unreasonable amount of time between offer and acceptance. That being the case, David's acceptance is invalid and FALSE is the correct answer.
Incorrect! If an offer states that it will be held open for a certain period of time, the offeree's power of acceptance automatically expires at the end of that period. However, if an offer does not specify a specific time period for which it will be held open, the offeree's power of acceptance expires after a reasonable amount of time. Here, David did not respond to Sol's offer for twenty seven days and it is safe to say that this represented an unreasonable amount of time between offer and acceptance. That being the case, David's acceptance is invalid and FALSE is the correct answer.
Question 4
On April 1st, Sol calls David and offers to buy his harp for $10,000. Sol tells David that he will leave the offer open for one month. On April 5th, David calls Sol and tells him that he is not interested in selling the harp. On April 16th, Sol buys a cello, previously owned by Yo Yo Ma, for $15,000. On April 17th, David calls Sol to accept Sol's offer. However, since Sol had spent so much money the day before, he tells David that he can no longer buy the harp. David sues Sol for breach of contract, arguing that his acceptance of Sol's offer created a binding agreement between them. David will win this case.
Correct
Incorrect!
Correct The offeree's right of acceptance will be terminated if he rejects the offer. Here, David clearly rejected Sol's offer. Therefore, his power of acceptance has been terminated. Further, if the offeree rejects the offer, his power of acceptance is terminated even if the power of acceptance would not have otherwise lapsed. That being the case, David's right to accept the offer was terminated as soon as he rejected it, even though Sol would have kept the offer open for another three weeks.
Incorrect! The offeree's right of acceptance will be terminated if he rejects the offer. Here, David clearly rejected Sol's offer. Therefore, his power of acceptance has been terminated. Further, if the offeree rejects the offer, his power of acceptance is terminated even if the power of acceptance would not have otherwise lapsed. That being the case, David's right to accept the offer was terminated as soon as he rejected it, even though Sol would have kept the offer open for another three weeks.
Question 5
On April 1st, Sol calls David and offers to buy his harp for $10,000. On April 5th, David calls Sol and tells him that he will sell the harp for $12,000. On April 6th, Sol buys a cello, previously owned by Yo Yo Ma, for $15,000. On April 7th, David calls Sol to accept Sol's offer of $10,000. However, since Sol had spent so much money the day before, he tells David that he can no longer buy the harp. David sues Sol for breach of contract, arguing that his acceptance of Sol's offer created a binding agreement between them. David will win this case.
Correct
Incorrect!
Correct The offeree's right of acceptance can be terminated by a counteroffer. Here, David made a counteroffer to Sol which terminated David's right to accept Sol's original offer. Therefore, David's acceptance of Sol's original offer is invalid and FALSE is the correct answer.
Incorrect! The offeree's right of acceptance can be terminated by a counteroffer. Here, David made a counteroffer to Sol which terminated David's right to accept Sol's original offer. Therefore, David's acceptance of Sol's original offer is invalid and FALSE is the correct answer.
Question 6
On April 1st, Sol calls David and offers to buy his harp for $10,000. On April 5th, David calls Sol and tells him that he will sell the harp for $12,000. On April 7th, Sol calls David and agrees to pay $12,000 for the harp. However, two days later, when David tries to deliver the harp, Sol tells David that he no longer wants to buy it. David sues Sol for breach of contract, arguing that Sol's acceptance of the terms of David's counteroffer created a binding agreement between them. David will win this case.
Correct Although a counteroffer terminates the original offeree's right of acceptance, it creates a right of acceptance in the original offeror because a counteroffer is considered an offer that the offeree has made to the offeror. Therefore, David's counteroffer terminated his right to accept Sol's offer of $10,000 to buy the harp but it created the right for Sol to accept David's (counter)offer to sell the harp for $12,000. When Sol accepted David's (counter)offer, he concluded a binding contract. That being the case, Sol has breached the contract by refusing to buy the harp and TRUE is the correct answer.
Incorrect! Although a counteroffer terminates the original offeree's right of acceptance, it creates a right of acceptance in the original offeror because a counteroffer is considered an offer that the offeree has made to the offeror. Therefore, David's counteroffer terminated his right to accept Sol's offer of $10,000 to buy the harp but it created the right for Sol to accept David's (counter)offer to sell the harp for $12,000. When Sol accepted David's (counter)offer, he concluded a binding contract. That being the case, Sol has breached the contract by refusing to buy the harp and TRUE is the correct answer.
Correct
Incorrect!
Question 7
On April 1st, Sol calls David and offers to buy his harp for $10,000. On April 5th, David calls Sol and says "I will sell the harp to you for $10,000 but I was really hoping to get $12,000 for it. Let me know if there is any way you can improve your offer." On April 7th, Sol brings $10,000 to David's dressing room to pay for the harp but David refuses to sell it. Sol sues David for breach of contract, arguing that David accepted his offer of $10,000 for the harp and that there is a binding agreement between them. Sol will win this case.
Correct An offeree's power of acceptance is not terminated by an inquiry concerning the offer or by a request for different terms. Here, all David did was make an inquiry as to whether or not Sol could improve on his offer of $10,000. In fact, by saying what he did, David has actually accepted Sol's offer and created a binding contract between them. Therefore, David is in breach because he has refused to sell the harp to Sol and TRUE is the correct answer.
Incorrect! An offeree's power of acceptance is not terminated by an inquiry concerning the offer or by a request for different terms. Here, all David did was make an inquiry as to whether or not Sol could improve on his offer of $10,000. In fact, by saying what he did, David has actually accepted Sol's offer and created a binding contract between them. Therefore, David is in breach because he has refused to sell the harp to Sol and TRUE is the correct answer.
Correct
Incorrect!
Question 8
On April 1st, Sol calls David and offers to buy his harp for $10,000. Sol promises to keep the offer open for two weeks and, in return, David promises to pay Sol $10 to keep the offer open. On April 5th, David calls Sol and tells him that he will sell the harp for $12,000. On April 7th, David calls Sol and accepts Sol's offer to buy the harp for $10,000. However, Sol tells David that he no longer wants to buy it and is therefore withdrawing the offer. David sues Sol for breach of contract, arguing that his acceptance of the terms of Sol's offer created a binding agreement between them. David will win this case.
Correct Where the parties to an agreement have an option contract, so that the offeree pays the offeror to keep the offer open for a certain period of time, a counteroffer made during the option period does not terminate the offeree's power of acceptance because the offeree has the contractual right to have the offer held open during its term. Here, Sol and David had an option contract. That being the case, David's initial counteroffer did not terminate his power of acceptance and his subsequent acceptance of Sol's offer is valid. Therefore, Sol is in breach for not buying the harp, and TRUE is the correct answer.
Incorrect! Where the parties to an agreement have an option contract, so that the offeree pays the offeror to keep the offer open for a certain period of time, a counteroffer made during the option period does not terminate the offeree's power of acceptance because the offeree has the contractual right to have the offer held open during its term. Here, Sol and David had an option contract. That being the case, David's initial counteroffer did not terminate his power of acceptance and his subsequent acceptance of Sol's offer is valid. Therefore, Sol is in breach for not buying the harp, and TRUE is the correct answer.
Correct
Incorrect!
Question 9
On April 1st, Sol calls David and offers to buy his harp for $10,000. On April 5th, David calls Sol and says "I will sell the harp to you for $10,000 but only if you reimburse what I have to pay to ship the harp to you." On April 7th, David ships the harp to Sol. A few days later, David gets the harp back in the mail. Enclosed with the harp is a note from Sol saying that Sol has changed his mind and no longer wants to buy the harp. David sues Sol for breach of contract, arguing that David accepted Sol's offer of $10,000 for the harp and that there is a binding agreement between them. David will win this case.
Correct
Incorrect!
Correct The right to accept an offer can be terminated by a conditional or qualified acceptance, which is an acceptance that adds to, or changes, the terms of the original offer (this is essentially a counteroffer). Here, David made a conditional acceptance when he insisted that Sol pay for the shipping charges. Therefore, David's acceptance was invalid, Sol was under no obligation to accept the harp from David and FALSE is the correct answer.
Incorrect! The right to accept an offer can be terminated by a conditional or qualified acceptance, which is an acceptance that adds to, or changes, the terms of the original offer (this is essentially a counteroffer). Here, David made a conditional acceptance when he insisted that Sol pay for the shipping charges. Therefore, David's acceptance was invalid, Sol was under no obligation to accept the harp from David and FALSE is the correct answer.
Question 10
On April 1st, Sol makes a written offer to David to buy his harp for $10,000. On April 3rd, Sol writes David another letter revoking the offer. David receives the offer in the mail on April 6th and immediately writes Sol a letter accepting the offer. David puts the letter of acceptance in the mail on the same day, April 6th. On April 9th, David receives Sol's letter of revocation. Two days later, David tries to deliver the harp to Sol but Sol refuses to accept it. David sues Sol, arguing that he validly accepted Sol's offer and therefore, they have a binding contract. David will win this case:
Correct In this case, Sol and David have a binding contract. As we said earlier, acceptance of an offer is effective upon dispatch. In other words, David's acceptance of Sol's offer becomes effective as soon as he puts his letter of acceptance in the mail. However, a revocation of an offer does not become effective until the offeree receives it so that David's acceptance was valid on April 6th while Sol's revocation only became valid on April 9th. Because David had already accepted Sol's offer by the time the revocation became valid, David and Sol have a valid contract and TRUE is the correct answer.
Incorrect! In this case, Sol and David have a binding contract. As we said earlier, acceptance of an offer is effective upon dispatch. In other words, David's acceptance of Sol's offer becomes effective as soon as he puts his letter of acceptance in the mail. However, a revocation of an offer does not become effective until the offeree receives it so that David's acceptance was valid on April 6th while Sol's revocation only became valid on April 9th. Because David had already accepted Sol's offer by the time the revocation became valid, David and Sol have a valid contract and TRUE is the correct answer.
Correct
Incorrect!
Question 11
The symphony has just finished a performance at Carnegie Hall. The performance featured a lengthy solo by David, who was playing a special hand held harp crafted specially for this performance. Unfortunately, the harp goes missing after the performance. David looks all over for the instrument but it is nowhere to be found. David places an add in the New York Times, offering a reward of $1,000 to anybody who finds and returns the harp to him. A few days later, David, having given up hope of ever getting the harp back, publishes, in the Times, a revocation of his reward offer. About a week later, Sol finds the harp in a dumpster in the back of Carnegie Hall. Remembering that he had seen an add offering a reward for the harp's return, Sol immediately makes his way over to the symphony's rehearsal site. Sol, who is not aware that David published a retraction of the reward offer, returns the harp and demands the $1,000. When David refuses to pay Sol, Sol sues David for breach of contract. Sol will win this case:
Correct
Incorrect!
Correct Usually, a revocation must be communicated by the offeror to the offeree. One exception to this rule involves offers made to the public. An offer made to the public, like a reward can be revoked by publishing the revocation in the same fashion that the offer was published. This kind of publication terminates the power of acceptance, even for those people who might have seen the offer but did not see the revocation. Therefore, David's revocation of the reward offer was valid, even though Sol did not see it, and David is under no obligation to pay Sol the $1,000. That being the case, FALSE is the correct answer.
Incorrect! Usually, a revocation must be communicated by the offeror to the offeree. One exception to this rule involves offers made to the public. An offer made to the public, like a reward can be revoked by publishing the revocation in the same fashion that the offer was published. This kind of publication terminates the power of acceptance, even for those people who might have seen the offer but did not see the revocation. Therefore, David's revocation of the reward offer was valid, even though Sol did not see it, and David is under no obligation to pay Sol the $1,000. That being the case, FALSE is the correct answer.
Question 12
On April 1st, David offers to sell Sol his harp for $10,000 and tells Sol that the offer will be kept open for two weeks. On April 12th, David sells the harp to Sam for $11,000. Sol immediately withdraws $10,000 from his bank account and tries to buy the harp from David. David informs Sol that he has sold the harp to Sam. Sol sues David, arguing that he has validly accepted David's offer so that David is now in breach of the binding agreement they have. David will win this case:
Correct Usually, a revocation must be communicated by the offeror to the offeree. One exception to this rule involves indirect revocations. An offer is considered revoked, even if there is no direct communication between the offeror and the offeree, if the offeree receives reliable information that the offeror has taken action showing that he has changed his mind. Here, Sol received reliable information that David has revoked his offer to sell the harp by selling the harp to Sam. Therefore, Sol's right of acceptance has been validly terminated. As such, David is under no obligation to sell the harp to Sol and TRUE is the correct answer.
Incorrect! Usually, a revocation must be communicated by the offeror to the offeree. One exception to this rule involves indirect revocations. An offer is considered revoked, even if there is no direct communication between the offeror and the offeree, if the offeree receives reliable information that the offeror has taken action showing that he has changed his mind. Here, Sol received reliable information that David has revoked his offer to sell the harp by selling the harp to Sam. Therefore, Sol's right of acceptance has been validly terminated. As such, David is under no obligation to sell the harp to Sol and TRUE is the correct answer.
Correct
Incorrect!
Question 13
On April 1st, Sol calls David and offers to buy his harp for $10,000. Sol promises to keep the offer open for two weeks and, in return, David promises to pay Sol a nickle to keep the offer open. On April 5th, Sol calls David and tells him that he is retracting the offer because he no longer wants to buy the harp. On April 7th, David calls Sol and accepts Sol's offer to buy the harp for $10,000. Sol refuses to buy the harp. David sues Sol for breach of contract, arguing that his acceptance of the terms of Sol's offer created a binding agreement between them. Sol argues that David did not accept the offer until after Sol had withdrawn it, which he had the right to do because David had only given nominal consideration to keep the offer open. David will win this case.
Correct A firm offer becomes irrevocable even if the offeree only gives nominal consideration in exchange for a promise to leave the offer open. Therefore, Sol had no right to withdraw his offer before the two week period had lapsed. That being the case, the offer was still valid when David accepted it, Sol is in breach of the contract and TRUE is the correct answer.
Incorrect! A firm offer becomes irrevocable even if the offeree only gives nominal consideration in exchange for a promise to leave the offer open. Therefore, Sol had no right to withdraw his offer before the two week period had lapsed. That being the case, the offer was still valid when David accepted it, Sol is in breach of the contract and TRUE is the correct answer.
Correct
Incorrect!
Question 14
Harpers, Inc. has received news that the symphony is going to commission a new ten-foot oak and gold harp to be built for their upcoming world tour. The symphony has asked that all bids be submitted by April 30th at 5:00 PM. Harpers begins preparing its bid and, in doing so, they ask various artisans to give them sub-bids for doing the gilding for the harp. On April 1st, Gilders, Inc. gives Harpers a written bid to do the gilding work for $5,000 and says that the bid will be held open for acceptance by Harpers until May 5th. Harpers uses Gilders' bid in making up their overall bid. On April 30th, Harpers submits its bid to the symphony. When the symphony reviews the bids on April 31st, Harpers' bid is the lowest and they are immediately awarded the contract. At 10:00 AM the next day, before Harpers has formally accepted Gilders' sub-bid, Gilders contacts Harpers and tries to revoke its sub-bid. Harpers sues Gilders but Gilders argues that they revoked their bid before Harpers accepted it. Gilders will win this case:
Correct
Incorrect!
Correct Even if consideration is not given in exchange for a promise to hold an offer open, a firm offer is irrevocable if the offeror should have reasonably foreseen that the offeree would rely on the offer before accepting it and the offeree actually does rely on the offer. Here, Gilders should have reasonably foreseen that Harpers would rely on Gilders' sub-bid in making up the overall bid. Therefore, Gilders' promise to hold the sub-bid open until May 5th is irrevocable and FALSE is the correct answer.
Incorrect! Even if consideration is not given in exchange for a promise to hold an offer open, a firm offer is irrevocable if the offeror should have reasonably foreseen that the offeree would rely on the offer before accepting it and the offeree actually does rely on the offer. Here, Gilders should have reasonably foreseen that Harpers would rely on Gilders' sub-bid in making up the overall bid. Therefore, Gilders' promise to hold the sub-bid open until May 5th is irrevocable and FALSE is the correct answer.
Question 15
Sol is an avid classical music fan and for his birthday, Sol's daughter, Michelle, hires David, the harpist for the symphony, to give her father and his friends a private concert. Michelle promises to pay David $5,000 if David gives a one hour performance. David arrives at Sol's house and begins to play. David has not finished playing the first line on his sheet music when Michelle interrupts him and tells him that she is withdrawing her offer and will not pay David the $5,000. David sues Michelle for breach of contract. Michelle argues that she should not have to pay the $5,000 because David had only just started playing when she withdrew her offer. Michelle will win this case:
Correct
Incorrect!
Correct Under the modern rule, an offer for a unilateral contract cannot be revoked once performance has begun unless performance is not completed within a reasonable time. Here, David had already begun his performance and therefore, even though he had only just begun performing, Michelle's offer was irrevocable. That being the case, Michelle is in breach and FALSE is the correct answer.
Incorrect! Under the modern rule, an offer for a unilateral contract cannot be revoked once performance has begun unless performance is not completed within a reasonable time. Here, David had already begun his performance and therefore, even though he had only just begun performing, Michelle's offer was irrevocable. That being the case, Michelle is in breach and FALSE is the correct answer.
Question 16
Sol is an avid classical music fan and for his birthday, Sol's daughter, Michelle, hires David, the harpist for the symphony, to give her father and his friends a private concert. Michelle promises to pay David $5,000 if David gives a one hour performance. David arrives at Sol's house and begins preparing for the concert. While David is tuning his harp, Michelle interrupts him and tells him that she is withdrawing her offer and will not pay David the $5,000. David sues Michelle for breach of contract. Michelle argues that she should not have to pay the $5,000 because David was still preparing for the concert when she withdrew her offer. Michelle will win this case:
Correct Under the modern rule, an offer for a unilateral contract cannot be revoked once performance has begun unless performance is not completed within a reasonable time. However, if the offeree has only begun preparing to perform but has not yet started performance, the offeror can revoke the offer. Here, David had not yet started his performance. He was still only preparing to perform when Michelle revoked her offer. That being the case, the revocation was valid, Michelle is not in breach of the contract and TRUE is the correct answer.
Incorrect! Under the modern rule, an offer for a unilateral contract cannot be revoked once performance has begun unless performance is not completed within a reasonable time. However, if the offeree has only begun preparing to perform but has not yet started performance, the offeror can revoke the offer. Here, David had not yet started his performance. He was still only preparing to perform when Michelle revoked her offer. That being the case, the revocation was valid, Michelle is not in breach of the contract and TRUE is the correct answer.
Correct
Incorrect!
Question 17
On April 1st, Sol sends David an offer to buy David's harp for $5,000. The offer states that it will be held open until April 15th. On April 8th, Sol is stabbed while walking down the street and dies of his injuries the next day. On April 12th, David, unaware of Sol's death, mails an acceptance of Sol's offer. Sol's estate informs David that they will not be buying the harp. David sues for breach of contract, arguing that he accepted the offer before the time for acceptance had lapsed. David will win this case:
Correct
Incorrect!
Correct An offeree's power of acceptance can be terminated by operation of law through either the death or incapacity of the offeror or as the result of a changed circumstance. An offeree's power of acceptance is terminated by the offeror's death or incapacity whether or not the offeree knows of the death or incapacity. That being the case, David's acceptance is ineffective because his power of acceptance was terminated by Sol's death. Therefore, Sol's estate is not in breach and FALSE is the correct answer.
Incorrect! An offeree's power of acceptance can be terminated by operation of law through either the death or incapacity of the offeror or as the result of a changed circumstance. An offeree's power of acceptance is terminated by the offeror's death or incapacity whether or not the offeree knows of the death or incapacity. That being the case, David's acceptance is ineffective because his power of acceptance was terminated by Sol's death. Therefore, Sol's estate is not in breach and FALSE is the correct answer.
Question 18
On April 1st, Sol sends David an offer to buy David's harp for $5,000. The offer states that it will be held open until April 15th and David gives Sol $5 in exchange for keeping the offer open. On April 8th, Sol is stabbed while walking down the street and dies of his injuries two days later. On April 12th, David, unaware of Sol's death, mails an acceptance of Sol's offer. Sol's estate informs David that they will not be buying the harp. David sues for breach of contract, arguing that he accepted the offer before the time for acceptance had lapsed. David will win this case:
Correct An offeree's power of acceptance can be terminated by operation of law through either the death or incapacity of the offeror or as the result of a changed circumstance. However, the death or incapacity of the offeror does not terminate the offeree's power of acceptance under an option contract, at least where individual performance by the decedent was not part of the proposed contract. Here, David had a valid option contract with Sol because he gave consideration for Sol's promise to keep the offer open. Further, individual performance on Sol's part was not required (his estate can buy the harp just as easily as Sol could have). That being the case, Sol's death did not terminate David's right of acceptance, the estate is in breach for not buying the harp and TRUE is the correct answer.
Incorrect! An offeree's power of acceptance can be terminated by operation of law through either the death or incapacity of the offeror or as the result of a changed circumstance. However, the death or incapacity of the offeror does not terminate the offeree's power of acceptance under an option contract, at least where individual performance by the decedent was not part of the proposed contract. Here, David had a valid option contract with Sol because he gave consideration for Sol's promise to keep the offer open. Further, individual performance on Sol's part was not required (his estate can buy the harp just as easily as Sol could have). That being the case, Sol's death did not terminate David's right of acceptance, the estate is in breach for not buying the harp and TRUE is the correct answer.