Jed,who Lived on Cape Breton Island,needed Money for a Trip

question 119

Multiple Choice

Jed,who lived on Cape Breton Island,needed money for a trip to France.He decided to sell his electric guitar.On Monday,October 29,he called the owner of a music store in Halifax and offered to sell his Fender Stratocaster guitar for $400,the offer to be open until Friday noon,November 2.Jed told the store owner to send a letter of acceptance since he (Jed) would be away for a few days.The store owner examined his inventory and mailed a letter of acceptance on Thursday,November 1.When Jed returned home on Saturday,November 3,the letter had not yet arrived,so that afternoon he sold the guitar to a music teacher in his town.The store owner in Halifax sued for breach of contract.Which of the following is true?

• A) Sending a letter by mail was not a reasonable method of acceptance.
• B) The offer lapsed before the store owner accepted.
• C) The offer was revoked before the store owner accepted.
• D) The letter of acceptance was effective when it was received, and by then Jed had sold it, so there was no contract.
• E) The acceptance was effective before the offer lapsed, so there was a contract between Jed and the store owner.

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Definitions:

Promissory Note

A financial document in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.

Accrued Interest

The interest that has accumulated on a debt over a period of time but has not yet been paid.

Promissory Note

A financial instrument containing a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Net Credit Sales

The total value of sales made on credit minus any returns or allowances.