The Big Book Store Just Received a Shipment of 100

question 130

Multiple Choice

The Big Book Store just received a shipment of 100 copies of Contemporary Business Law: Principles and Cases at a wholesale price.The store contacted the local university to see if it was interested in purchasing the book.The book store faxed an offer asking for $5,000.00 for the 100 books.Due to a poor-quality fax transmission the last three zeros were not visible,so it appeared that the 100 books were on sale for $500.The university accepted the offer,received the books,and deposited $500 in the store's bank account.Upon receiving its bank statement,the store realized the error and decided to take action against the university.Will it succeed?

• A)Yes,the inadequacy of the consideration would render the transaction unenforceable because the court would consider "adequacy of consideration" in this situation.
• B)No,the store has lost on the deal because offer and acceptance both took place.
• C)Neither side would be held to the contract because it would be ruled invalid.It will be renegotiated and the store will pay a penalty for breach of contract.
• D)No,the store cannot take action,but None of these is true.
• E)Yes,the store can take action,but None of these is true.

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Definitions:

Dividends

Payments made by a corporation to its shareholders from its profits or reserves, usually in the form of cash or additional shares.

Recognized Gain

An increase in the value of an asset that has been sold or deemed to have increased in value officially on financial statements.

Selling Price

The amount for which a product or service is sold, not necessarily equal to the cost or intrinsic value of the item.

Carrying Value

The book value of an asset or liability on a company's balance sheet, calculated as the original cost minus depreciation or amortization.