Section 1 Contracts
Section 2 Federal Securities Acts
Section 3 Secured Transactions
Section 4 Bankruptcy
Section 5 Debtor-Creditor Relationships
Section 6 Agency
Section 7 Regulation of Employment
Section 8 Business Structure
Section 9 Professional and Legal Responsibilities
Section 10 Individual taxation
Section 11 Corporate Taxation
Section 12 Partnership Taxation
Section 13 Transactions in Property
Section 14 Gift and Estate Tax, Trusts And Exempt Organizations, Other Taxation Topics

1.2.4 Counteroffers


A counteroffer constitutes a rejection coupled with a new offer. The offeree and offeror change places. Example:  I offer to sell my car to you for $5,000. You offer to pay $4,500. You become the new offeror and I become the offeree.

A change in major terms is a counteroffer.

Example: I offer to sell you my computer for $1,000 cash.  You agree to the price but offer to pay it in quarterly instalments.

Late acceptance also constitutes a counteroffer.

Example: I offer to sell you something for $100 and specify that I must receive your answer by 5:00 P.M. tomorrow.  I receive your acceptance a day late.  It becomes my choice whether or not to sell the item to you for the stipulated price.

Termination of Offers

1. Lapse of time may terminate an offer.
2. Death or insanity of the offeror terminates most offers.
3. Bankruptcy or insolvency of either party terminates an offer.
4. Illegality terminates an offer.
Example: I offer to pay you $10,000 to build a garage for me. I then find out that the city will not approve the construction.
5. Destruction of the subject matter terminates an offer.

These are quite typical questions. Question 2 is interesting in that it contains a sequence of events and quite a bit of extraneous information.  If you trust these notes, you get the right answer. 

Remember that you are provided with a “note board” if you find it advantageous to make some notes before selecting an answer. 

Question 3 illustrates how to use the process of elimination to narrow down your choices. Is there a contract? If not, your answer has to be either a. or b. Since there is no reference in these notes to “unauthorized method”, the answer is b.

You can see from these few sample questions that many won’t take more than a minute to answer.

Please watch the following video and answer the question at the end

Section 1 Q 2