- What is your client's strongest argument that the subcontractor is bound to their bid? Select one.
Answer: The subcontractor is bound under a theory of promissory estoppel because your client relied on the bid.
The correct answer is C. In the construction bidding context, a general contractor's reliance on a subcontractor's bid can make the bid irrevocable under the doctrine of promissory estoppel (or detrimental reliance). The subcontractor should have reasonably expected the general contractor to rely on the bid in submitting the master bid, the general contractor did in fact rely on it, and injustice can be avoided only by enforcing the promise. A is incorrect because construction contracts are generally for services, not goods, so the UCC's firm offer rule does not apply. B is incorrect because using a subcontractor's bid in a master bid is not equivalent to acceptance of the bid; the general contractor is not bound to the subcontractor until there is a formal acceptance. D describes a defense to formation (unilateral mistake), but the primary basis for enforcing the subcontractor's bid here is promissory estoppel.
- Is there a contract, and if so, does it include the December 1 delivery date? Select one.
Answer: Yes, a contract was formed when the furniture maker deposited the check, and the delivery date is included.
The correct answer is A. The client's response contained both an acceptance and an additional term (delivery date). While this could be viewed as a counteroffer under the mirror image rule, the furniture maker's conduct of depositing the check and beginning work constituted acceptance of the client's terms. By depositing a check that was explicitly tied to modified terms in the accompanying note, the furniture maker manifested assent to those terms. The act of cashing a check with conditions attached is generally viewed as acceptance of those conditions. B is incorrect because the furniture maker's conduct shows acceptance of the delivery term. C and D are incorrect because depositing the check is a clear manifestation of acceptance, not mere silence.
- Is there a valid contract between the law firm and the graduate? Select one.
Answer: Yes, because the graduate's email on October 10 was a mere inquiry and did not terminate the offer.
The correct answer is C. The key issue is whether the graduate's October 10 email was a counteroffer or a mere inquiry. Phrasing a request in the form of a question, such as 'Would you be willing to consider...?' is generally interpreted as a mere inquiry exploring the possibility of different terms, not a rejection of the original offer. Because it was a mere inquiry, the original offer remained open, and the graduate's clear acceptance on October 14, which was before the October 15 deadline, formed a contract. A is incorrect because the precatory language used indicates an inquiry, not a counteroffer. B is incorrect because the firm's silence has no legal effect on the status of the outstanding offer. D is incorrect because the offer was revocable; stating an expiration date does not, by itself, create an option contract without consideration.
- Did the restaurant's response form a binding contract? Select one.
Answer: Yes, because the restaurant provided a definite expression of acceptance, and the additional term became part of the contract.
The correct answer is C. This is a sale of goods between merchants, governed by UCC § 2-207. The restaurant's response was a definite and seasonable expression of acceptance, forming a contract. The new term (temperature-controlled trucks) is an additional term. Between merchants, such terms are included unless the offer limits acceptance to its terms, the new term materially alters the contract, or objection is made. A requirement for temperature-controlled shipping, especially if it is industry standard, is unlikely to be a material alteration. Therefore, the term is included in the contract. A is incorrect because the mirror image rule does not apply to sales of goods. B is incorrect because a term reflecting standard industry practice is generally not considered a material alteration. D is incorrect because a firm offer can still be rejected or be subject to the rules of UCC § 2-207; its primary effect is to make the offer irrevocable for a time.
- Did the student effectively accept the university's offer? Select one.
Answer: No, because the offeror is the master of the offer and specified that acceptance must be received by the deadline.
This question tests your understanding of contract formation, specifically the rules governing acceptance of offers. When analyzing acceptance problems, focus on whether the offeror specified particular terms for how acceptance must be communicated.
The correct answer is A because the university explicitly stated that acceptance must be "received by the admissions office no later than May 1." This language creates a receipt rule rather than a dispatch rule. As the master of the offer, the university had the right to specify the exact terms of acceptance, including requiring actual receipt by a deadline rather than just timely mailing.
Let's examine why the other options are incorrect:
B is wrong because while transmission risk sometimes falls on the offeror, this principle doesn't apply when the offeror has explicitly required receipt by a certain date. The university shifted this risk by using clear "received by" language.
C incorrectly applies the mailbox rule. The mailbox rule (acceptance effective upon dispatch) is the default rule, but it doesn't override explicit contrary instructions from the offeror. When an offer specifically requires receipt rather than just mailing, the mailbox rule is displaced.
D presents a tempting distractor but misses the point. The student's choice of delivery method isn't the issue—even if the student had used overnight delivery that was delayed, the result would be the same. The controlling factor is the university's "received by" requirement.
Study tip: Always look for specific language about receipt versus dispatch in offer terms. Words like "received by" or "must arrive by" override the default mailbox rule and create a receipt requirement.
- What is the legal status of the developer's attempt to purchase the land? Select one.
Answer: A contract was formed on July 8 when the developer dispatched the acceptance.
The correct answer is A. The developer paid consideration ($100) to keep the offer open, creating a valid option contract. Under the mailbox rule, an acceptance is generally effective upon dispatch. Here, the acceptance was dispatched on July 8, forming the contract at that time. The subsequent rejection sent on July 9 cannot undo an acceptance that has already taken effect. The fact that the rejection was received first is irrelevant because the contract had already been formed when the acceptance was dispatched. B and C are incorrect because a properly dispatched acceptance cannot be undone by a subsequent rejection. D is incorrect because acceptance was effective on dispatch (July 8), not receipt (July 10).
- Is there a contract between the accountant and the business owner? Select one.
Answer: Yes, because the business owner had a duty to reject the offer due to their prior course of dealing.
Contract formation questions involving silence as acceptance require you to understand when the general rule against silence has exceptions. Typically, an offeree's silence cannot constitute acceptance, but courts recognize specific circumstances where silence becomes legally significant.
Here, the key factor is the parties' established course of dealing over three years. When parties have consistently treated silence as acceptance in their prior business relationship, this creates a reasonable expectation that silence will continue to have the same meaning. The business owner's pattern of accepting identical offers through silence establishes a duty to speak up if they intended to reject this offer. Their continued silence, given this history, reasonably indicates acceptance.
Looking at the wrong answers: (A) states the general rule but ignores the important exception for established courses of dealing between parties. While silence normally cannot accept an offer, this rule has recognized exceptions. (C) is partially correct that offerors generally cannot impose speaking duties on offerees, but it overlooks that the parties' own conduct over three years created this duty—the accountant didn't unilaterally impose it. (D) focuses on the accountant's reliance, but the contract formation doesn't depend on whether preliminary work actually began; it depends on whether silence constituted acceptance given their history.
When you see silence-as-acceptance questions, always look for prior dealings between the same parties. The general rule against silence has exceptions, and established business relationships where silence previously meant acceptance is the most common exception you'll encounter on contract law questions.
- Was the homeowner's revocation effective? Select one.
Answer: Yes, because the offer specified acceptance only by performance, and mere preparation does not constitute the beginning of performance.
The correct answer is D. The offer specified acceptance by performance (a unilateral contract). In a unilateral contract, an option contract is created once the offeree begins performance, making the offer irrevocable. However, mere preparation to perform, such as purchasing supplies, is not considered the beginning of performance. Because the painter had only prepared to perform, he had not yet begun performance. Therefore, the homeowner was free to revoke the offer. A is incorrect because purchasing paint is preparation, not the start of performance itself. B is incorrect because while detrimental reliance can make an offer irrevocable under promissory estoppel, the reliance here (purchasing paint) is part of the preparation for the bargained-for performance, not a separate basis for an option contract in this context. C is incorrect because if performance had begun, the homeowner could not have revoked.
- Is the retailer liable for the interest charge? Select one.
Answer: Yes, because the interest clause is a standard additional term that does not materially alter the contract.
The correct answer is D. This is a UCC § 2-207 'battle of the forms' problem between two merchants. The mill's acknowledgment was an acceptance. The interest charge is an additional term. Between merchants, it becomes part of the contract unless the offer limited acceptance to its terms, the term materially alters the contract, or the offeror objects. A standard interest charge on overdue invoices is a common commercial term and is generally not considered a material alteration that would cause surprise or hardship. Therefore, it becomes part of the contract. A is incorrect because a party is generally bound by the terms of a contract they receive, regardless of whether they read them. B is incorrect because this type of clause is typically not considered a material alteration. C is incorrect because acceptance of the goods forms a contract under § 2-207(3), but the terms are determined by § 2-207(2), not by a 'last shot' acceptance of all terms.
- Is the arbitration clause part of the contract between the parties? Select one.
Answer: Yes, because the arbitration clause is an additional term that does not materially alter the contract.
The correct answer is D. This transaction is for the sale of goods between merchants, so UCC § 2-207 applies. The supplier's acknowledgment form was a definite and seasonable expression of acceptance, so it operated as an acceptance, not a counteroffer. The arbitration clause is an additional term. Between merchants, additional terms become part of the contract unless (a) the offer expressly limits acceptance to its terms, (b) the new term materially alters the contract, or (c) notification of objection is given. Most jurisdictions do not consider an arbitration clause to be a material alteration per se. Since the software company did not object, the term is included. A is incorrect because the 'knockout rule' applies to 'different' terms, not 'additional' terms. B is incorrect because under UCC § 2-207, an acceptance can include new terms. C is incorrect because the supplier's form was an acceptance, not a counteroffer, as it was not expressly conditioned on assent to the new term.
- Has the buyer effectively accepted the landowner's offer? Select one.
Answer: No, because the landowner's statement to the developer constituted an act inconsistent with the offer, which the buyer learned of.
When you encounter offer and acceptance questions, focus on whether the offeror has revoked the offer before acceptance occurs. Revocation can happen through direct communication or through the offeree's knowledge of acts inconsistent with the offer.
Here, the landowner made a valid offer on September 1. However, when the buyer overheard the landowner telling the developer "The deal is done, the property is yours," this constituted an act inconsistent with keeping the original offer open. The buyer reasonably interpreted this as the landowner selling the property to someone else, which would make the original offer impossible to fulfill. Under contract law, when an offeree learns of the offeror's inconsistent acts that effectively revoke the offer, the offer terminates even without direct communication.
Answer A is incorrect because revocation doesn't require direct communication—learning of inconsistent acts is sufficient. The buyer did receive notice of revocation through overhearing the landowner's statement.
Answer C misses the point entirely. While offers without time limits remain open for a reasonable time, this offer was revoked before the buyer's acceptance, making the timing issue irrelevant.
Answer D is wrong because the landowner's statement was sufficiently definite. Telling someone "the deal is done, the property is yours" clearly indicates the property has been sold to that person, making it impossible to honor other offers.
Study tip: Remember that revocation can occur indirectly. If an offeree learns the offeror has taken action inconsistent with the offer (like selling to someone else), the offer is effectively revoked, even without direct notice.
- Is the employee entitled to the $10,000 bonus? Select one.
Answer: Yes, because the offer was for a unilateral contract, and it became irrevocable once the employee began performance.
The correct answer is C. The bonus offer was for a unilateral contract, which could be accepted only by completing the performance (obtaining the certification). Under the modern view, once an offeree begins performance in a unilateral contract, the offeror cannot revoke the offer. Here, the employee began performance by studying and paying the exam fee after seeing the offer. Therefore, the corporation's power to revoke was suspended, and the employee is entitled to the bonus upon completing performance. A is incorrect because the offer became irrevocable once performance began. B is incorrect because the employee's pre-existing intention is irrelevant as long as she knew of the offer and was motivated in part by it when performing. D is incorrect because the revocation of a general offer to the public or a large group can be made by the same means used to make the offer (here, the internal website), and it is effective even if a particular offeree does not see it. However, the revocation was ineffective for the separate reason that performance had already begun.
- Does the neighbor have a valid claim for breach of contract against the farmer? Select one.
Answer: Yes, because the farmer's signed writing created a firm offer that could not be revoked for 14 days.
The correct answer is C. The transaction involves the sale of goods (a tractor), and the farmer is a merchant. Under UCC § 2-205, an offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated. This is a 'firm offer.' The farmer's signed note constituted a firm offer, making it irrevocable for the stated 14 days. The farmer's sale to another party was a breach of that promise, and the neighbor's subsequent acceptance within the 14-day period formed a contract. A is incorrect because under the UCC firm offer rule, consideration is not required. B is incorrect because an irrevocable offer cannot be revoked, either directly or indirectly. D is correct that the neighbor accepted before receiving notice, but the key reason a contract was formed is that the offer was irrevocable under the firm offer rule.
- When was a contract formed between the consultant and the company? Select one.
Answer: When the consultant began performing the marketing services, accepting the company's counteroffer.
The correct answer is B. This is a contract for services, so the common law mirror image rule applies. The company's email, which added a payment term (monthly installments), was not a mirror image of the offer. Therefore, it was a counteroffer, not an acceptance. This counteroffer terminated the consultant's original offer and created a new power of acceptance in the consultant. The consultant accepted this counteroffer not by words, but by conduct: beginning to perform the services outlined in the proposal. This conduct manifested assent to the terms of the counteroffer, including the monthly payment schedule. A is incorrect because under the mirror image rule, any deviation creates a counteroffer. C is incorrect because the acceptance occurred when performance began, not when payment was received. D is incorrect because a contract was formed by the counteroffer and its acceptance by performance.
- Is there an enforceable contract between the homeowner and the plumber? Select one.
Answer: Yes, because the plumber's prompt commencement of performance was a reasonable mode of acceptance under the circumstances.
The correct answer is D. Where an offer is ambiguous as to whether it seeks acceptance by promise or performance, the offeree can accept by either. Here, the urgency suggests acceptance by performance is reasonable. While the homeowner requested a text, this is best interpreted as a request for notification, not as the exclusive means of acceptance. Under both the Restatement and the UCC, an offeree can accept by any reasonable means unless the offer unambiguously states otherwise. Given the emergency, the plumber's decision to immediately begin performance was a reasonable mode of acceptance. A is incorrect because the request for a text was not clearly an exclusive means of acceptance. B is incorrect because a contract was formed when the plumber began performance, so the attempted revocation was too late. C is also plausible, but D is better because it correctly identifies that either promise or performance was a valid method of acceptance, and starting work constituted acceptance.
- Is there an enforceable contract between the manufacturer and the supplier? Select one.
Answer: Yes, because the acceptance was communicated to the manufacturer before the rejection was received, thereby forming a contract.
The correct answer is C. Under the mailbox rule, an acceptance is typically effective upon dispatch. However, when a party sends a rejection and then an acceptance, the rule is that whichever communication is received first is effective. Here, the supplier's acceptance was communicated by phone and received by the manufacturer on Wednesday, before the mailed rejection was received on Thursday. Therefore, a contract was formed on Wednesday. A is incorrect because the mailbox rule does not apply to a rejection in this context; the rejection is effective only upon receipt. B is incorrect because a firm offer is irrevocable for the stated period without any action from the offeree. D is partially correct that the offer was irrevocable, but it does not correctly identify the reason why the acceptance was effective despite the previously mailed rejection.
- Was the engineer's email a valid acceptance? Select one.
Answer: Yes, because the statement about remote work was merely a comment on the terms, not a condition of acceptance.
Contract acceptance questions test whether a response constitutes a valid acceptance or creates a counteroffer. The key distinction lies in whether the responder is conditioning their acceptance on new or modified terms, or simply commenting on terms they believe were already agreed upon.
The engineer's email represents a valid acceptance because the remote work statement functions as a comment on previously discussed terms rather than a new condition. The engineer used language indicating an assumption about existing understanding ("as we discussed"), suggesting they believed remote work was already part of the offer terms from their interview conversations. This differs from conditioning acceptance on a new demand.
Option A is incorrect because the remote work statement wasn't conditional—the engineer didn't say "I accept if I can work remotely" but rather assumed it was already understood. Option C fails because this wasn't introducing a new term but referencing prior discussions, even if those discussions were preliminary. The engineer reasonably believed they were clarifying existing understandings. Option D misses the point entirely—the order of statements doesn't determine validity; rather, it's whether the acceptance is unconditional regarding the actual offer terms.
The company's withdrawal was premature because reasonable parties could interpret the engineer's response as accepting the written offer while noting assumptions about previously discussed possibilities. The hiring manager had indeed mentioned remote work, giving the engineer grounds for their assumption.
Watch for acceptance questions that hinge on whether someone is adding conditions versus clarifying understood terms. Context from prior negotiations matters in determining a response's legal effect.
- Was a contract for the sale of the painting formed? Select one.
Answer: Yes, because the collector's acceptance was effective when dispatched on Tuesday.
This question tests your understanding of contract formation timing, specifically when acceptances become effective under the mailbox rule. When you see questions about offer and acceptance timing, focus on whether the mailbox rule applies and any exceptions to it.
Under the mailbox rule, an acceptance is generally effective when properly dispatched (sent), not when received by the offeror. Here, the collector mailed an unconditional acceptance on Tuesday. Since the original offer didn't specify a required means of acceptance, mail was a reasonable method (especially given that the offer itself came by mail). This means the acceptance was effective Tuesday when dispatched, forming the contract before the gallery's attempted revocation on Wednesday.
Looking at the wrong answers: Choice B is incorrect because mail was reasonable here—the gallery used mail for its offer, making mail an appropriate response method. Choice C misapplies the timing rules; while the gallery did attempt to revoke before receiving the acceptance, the contract was already formed when the acceptance was dispatched Tuesday. Choice D uses incorrect terminology—offers don't become "irrevocable" when acceptances are dispatched; rather, the contract is formed at that moment, making any subsequent revocation ineffective.
Choice A correctly identifies that the acceptance was effective when dispatched on Tuesday, creating a binding contract before the attempted revocation.
Study tip: Remember that the mailbox rule protects offerees by making acceptances effective upon dispatch. However, revocations are only effective when received. This timing difference often creates the fact pattern for exam questions—always check whether acceptance was dispatched before revocation was received.
- Has the enthusiast formed a contract with the owner? Select one.
Answer: No, because the enthusiast's counteroffer of $78,000 terminated the owner's offer of $80,000.
The correct answer is D. The owner's email stating, 'I can't sell it for less than $80,000,' constituted a counteroffer, which terminated the enthusiast's original $75,000 offer. This new offer of $80,000 created a power of acceptance in the enthusiast. However, the enthusiast then responded, 'The most I can go is $78,000.' This was a new counteroffer, which operated as a rejection of the owner's $80,000 offer and terminated it. Therefore, when the enthusiast later tried to accept the $80,000 price, there was no offer left to accept. A is incorrect because the enthusiast's own counteroffer terminated the $80,000 offer. B is incorrect because revocation is irrelevant when the offer has already been terminated by a counteroffer. C is incorrect because the owner's statement, made in direct response to an offer, was specific enough to be considered a counteroffer.
- Was the collector's revocation of the offer effective? Select one.
Answer: Yes, because the library's purported acceptance was conditional and therefore not a valid acceptance.
The correct answer is D. An acceptance must be unequivocal and unconditional. The library's response stated that its acceptance was 'conditional on the approval' of a board. This makes the acceptance conditional, meaning it is not a valid acceptance at all. It does not bind the library, so it cannot bind the offeror. Because no contract was formed, the collector was free to revoke the offer at any time before a valid acceptance occurred. A is incorrect because the acceptance was conditional. B is incorrect because an internal policy does not change the legal effect of making an acceptance conditional on a future event. C is plausible, as a conditional acceptance can be treated as a counteroffer, but D is more precise. The key effect is that it's not an acceptance, which leaves the offeror free to revoke.
