Mutual Assent: Offer & Acceptance - Next Generation Bar Exam

1. Under the mailbox rule, when is an acceptance effective?

   When it is dispatched by a reasonable means. The acceptance is effective even if it is delayed or lost, unless the offer provides otherwise.

2. Until when may an offeror revoke an ordinary offer?

   At any time before acceptance. A promise to keep the offer open does not bar revocation unless it is supported by consideration or another rule makes it binding.

3. An offeree replies to an offer to sell for $10,000, 'Would you consider $9,000?' What is the effect on the original offer?

   The offer remains open, because a mere inquiry is not a counteroffer. An inquiry about different terms that does not reject the offer leaves the power of acceptance intact.

4. What is an offer?

   A manifestation of willingness to bargain that justifies the offeree in understanding its assent will conclude the deal. The offer creates a power of acceptance in the offeree.

5. What is the effect on the original offer when the offeree makes a counteroffer?

   It terminates the original offer. Under the common-law mirror-image rule, a reply that changes the terms is a rejection and a new offer.

6. Under the objective theory of contracts, what determines whether a party assented?

   The party's outward words and conduct, as a reasonable person would understand them. Undisclosed intentions, including a secret intent to joke, do not control.

7. How are advertisements generally classified?

   As invitations to deal, not offers. An advertisement is an offer when it is clear, definite, and explicit and leaves nothing open, such as 'first come, first served.'

8. When an offer invites acceptance only by performance, what does the offeree's beginning of performance create?

   An option contract that makes the offer irrevocable while performance is completed. Mere preparation to perform does not create the option.

9. When is a revocation effective?

   When the offeree receives it, or acquires reliable information that the offeror has acted inconsistently with the offer. Information that the offeror sold the subject matter to someone else is an indirect revocation.

10. When is an acceptance under an option contract effective?

    When the offeror receives it. The mailbox rule does not apply because the optionee needs no protection against revocation.

11. Under what circumstance does an offeree's silence operate as acceptance?

    When previous dealings make it reasonable that the offeree should notify the offeror if it does not intend to accept. Silence also accepts when the offeree takes offered services with reason to know compensation is expected.

12. When an offeree sends a rejection and then an acceptance, when is the acceptance effective?

    Only if it reaches the offeror before the rejection. Otherwise the acceptance operates only as a counteroffer.

13. What is the effect of the offeror's death on a revocable offer?

    It terminates the offer, even if the offeree does not know of the death. An option contract supported by consideration survives the offeror's death.

14. When does an offer made in a face-to-face conversation ordinarily lapse?

    At the end of the conversation. Other offers lapse at the time stated or, if none, after a reasonable time.

Study these flashcards