The Rule Requiring Franchisors to Make Full Presale Disclosures to Prospective

question 103

Multiple Choice

The rule requiring franchisors to make full presale disclosures to prospective franchisees is called the:

• A) interstate franchise rule.
• B) Federal Trade Commission franchise rule.
• C) federal disclosure rule.
• D) justice disclosure rule.
• E) intrastate franchise rule.

Recognize the specifics and exceptions related to methods and timing of acceptance under different legal standards.

Distinguish between bilateral and unilateral contracts in terms of offer acceptance requirements.

Identify legal standings on whether silence or actions unrelated to the offer can signify acceptance.

Comprehend the legal power of the original offeree in accepting an offer and creating a contract.

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Definitions:

Marginal Costs

The increase in expense associated with manufacturing an additional unit of a product or service.

Moral Hazard

A situation in which one party engages in risky behavior or fails to act in good faith because the negative consequences are borne by another party.

Coase Theorem

An economic theory that suggests that if trade in an externality is possible and there are no transaction costs, parties can negotiate solutions to conflict that lead to an efficient outcome regardless of the initial allocation of property.

Externalities

Economic side effects or by-products that affect an uninvolved third party; can be positive or negative.