Bar Exam (Uniform) Quiz: Offer And Acceptance

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Offer And AcceptanceQuestion 1 of 20

A developer offered in a signed writing to purchase a parcel of land from a landowner for $500,000. The offer stated, “This offer will remain open until May 1.” On April 15, the developer learned from a mutual friend, a highly reliable real estate broker, that the landowner had just sold the same parcel of land to a different buyer for $550,000. On April 16, the developer, not having received any direct communication from the landowner, delivered a written acceptance of the original offer to the landowner.

Was a valid contract formed between the developer and the landowner? Select one.

Yes, because the landowner did not directly communicate a revocation to the developer before the acceptance was delivered.

Yes, because the offer was a firm offer and could not be revoked before May 1.

No, because the developer received reliable information that the landowner had taken action inconsistent with the offer, which terminated the offer.

No, because the landowner's sale to another party was a rejection of the developer's offer.

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Bar Exam (Uniform) Quiz

Bar Exam (Uniform) Quiz: Offer And Acceptance

Practice Offer And Acceptance in Bar Exam (Uniform) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Offer And Acceptance, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Uniform).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Was a valid contract formed between the developer and the landowner? Select one.

Yes, because the landowner did not directly communicate a revocation to the developer before the acceptance was delivered.
Yes, because the offer was a firm offer and could not be revoked before May 1.
No, because the developer received reliable information that the landowner had taken action inconsistent with the offer, which terminated the offer. (correct answer)
No, because the landowner's sale to another party was a rejection of the developer's offer.

Explanation: An offer can be terminated by an indirect revocation. This occurs when the offeror takes definite action inconsistent with an intention to enter into the proposed contract, and the offeree acquires reliable information of this action. Here, the landowner sold the property to someone else, which is inconsistent with selling it to the developer. The developer learned of this from a reliable source. This information terminated the developer's power of acceptance. Therefore, the subsequent attempt to accept was ineffective. (A) is incorrect because direct communication is not required for a revocation to be effective; indirect revocation is sufficient. (B) is incorrect because the concept of a "firm offer" being irrevocable without consideration is a UCC rule applicable only to the sale of goods by a merchant, not to real estate contracts under common law. This offer was a standard revocable offer. (D) is incorrect because a sale to a third party is not a rejection of the offer; it is an act that, if learned of by the offeree, constitutes a revocation.

Question 2

You represent a client who owns a vineyard. On April 1, the client offered to sell her entire upcoming harvest of grapes to a winery for a fixed price. The offer was made in a signed letter and stated, "This offer is firm and will be held open for your acceptance until May 1." On April 20, due to a favorable weather forecast predicting a larger-than-expected harvest, your client realized she could get a much better price on the open market. She called the winery and stated that she was revoking the offer. On April 22, the winery, ignoring the phone call, sent a letter to your client accepting the April 1 offer.

What is the most likely legal status of the transaction between your client and the winery? Select one.

No contract was formed because your client validly revoked the offer before the winery accepted it.
A contract was formed because the winery accepted the offer before the May 1 deadline.
No contract was formed because an offer to sell goods for a price over $500 must include a quantity term to be enforceable.
A contract was formed because your client's offer was an irrevocable firm offer under the UCC. (correct answer)

Explanation: The transaction involves the sale of goods (grapes), so the UCC applies. Your client is a merchant with respect to grapes. UCC § 2-205 provides for a "firm offer," which is an offer by a merchant to buy or sell goods in a signed writing that, by its terms, gives assurance that it will be held open. Such an offer is not revocable for lack of consideration during the time stated. Your client's offer met all these requirements: it was from a merchant, in a signed writing, for the sale of goods, and gave assurance it would be held open. Therefore, the offer was irrevocable until May 1, and the attempted revocation on April 20 was ineffective. The winery's acceptance on April 22 formed a valid contract. (A) is incorrect because the offer was irrevocable under the firm offer rule. (B) is correct that a contract was formed, but (D) provides the more precise legal reason why the revocation was ineffective. (C) is incorrect because the offer did contain a quantity term: the "entire upcoming harvest." This is a valid requirements/output contract quantity term under the UCC.

Question 3

A painting contractor sent a proposal to a homeowner to paint the exterior of her house for $8,000. The proposal was silent as to the method of acceptance. The homeowner called the contractor and left a voicemail saying, "I got your proposal. The price seems fair. I will be out of town for the next two weeks, but if I don't hear anything from you by then, I will assume we have a deal and you can start work on the 15th of next month." The contractor listened to the voicemail but never responded. When the contractor did not show up on the 15th, the homeowner sued for breach of contract.

Is the homeowner likely to prevail? Select one.

Yes, because the homeowner reasonably specified that silence would constitute acceptance, and the contractor remained silent.
Yes, because the parties' prior dealings established that silence would be a valid method of acceptance.
No, because silence generally cannot constitute acceptance, and no exceptions apply here. (correct answer)
No, because the contractor never subjectively intended to accept the homeowner's terms.

Explanation: Generally, silence does not operate as an acceptance of an offer. An exception exists where the offeree, by remaining silent, intends to accept the offer. However, the offeror (here, the homeowner in her counter-proposal) cannot unilaterally impose a duty on the offeree (the contractor) to speak to avoid being bound. The homeowner's voicemail attempted to do just that. Since the contractor did not respond and there is no indication of prior dealings or other circumstances that would make silence a valid acceptance, no contract was formed. The contractor's silence was just silence. (A) is incorrect because an offeror cannot force an offeree to be bound by silence. (B) is incorrect because the facts provide no evidence of prior dealings between the parties. (D) is incorrect because while the contractor's subjective intent is relevant, the objective theory of contracts focuses on outward manifestations. The dispositive issue is not the contractor's unstated intent but the legal rule that silence, in this context, is not an objective manifestation of assent.

Question 4

A professional services firm held extensive negotiations with a prospective employee for a high-level management position. After several rounds of talks, the firm's president sent the candidate a detailed letter outlining the salary, benefits, start date, and job responsibilities. The final sentence of the letter read, "We are excited about the possibility of you joining our team and anticipate formalizing this with our standard employment contract shortly." Before the candidate could reply, the firm hired someone else for the position.

Which of the following statements best describes the legal significance of the firm's letter? Select one.

The letter was a valid offer, which created a power of acceptance in the candidate.
The letter was a preliminary negotiation, and did not constitute an offer because it indicated a future formal contract was required. (correct answer)
The letter was an offer for a unilateral contract that could only be accepted by the candidate starting work.
The letter was an irrevocable offer because the extensive negotiations demonstrated serious intent.

Explanation: An offer must be a manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. Language that indicates a future, formal writing is contemplated may show that the communication is not intended to be a final offer. The phrase "anticipate formalizing this with our standard employment contract" strongly suggests that the letter was part of the ongoing negotiations and that the parties did not intend to be bound until the formal contract was executed. Therefore, the letter is best characterized as a preliminary negotiation or an invitation to make an offer, not a binding offer itself. (A) is incorrect because the language about a future formal contract negates the present intent to be bound necessary for an offer. (C) is incorrect because nothing in the letter suggests acceptance could only be by performance; it was for a standard employment relationship, which is typically bilateral. (D) is incorrect because even serious intent during negotiations does not make a communication an irrevocable offer. Irrevocability requires consideration (an option contract) or, under the UCC, a firm offer.

Question 5

An auctioneer was conducting an auction for a valuable painting. The auction was advertised "without reserve." A bidder made an initial bid of $10,000. After several rounds of bidding, the highest bid reached $50,000. Just as the auctioneer was about to bring the hammer down, she noticed that the painting's owner, who was in the audience, was frantically shaking his head, indicating he did not want to sell at that price. The auctioneer then announced, "I withdraw the painting from the auction." The $50,000 bidder claims a contract was formed.

Was the auctioneer permitted to withdraw the painting after bidding had occurred? Select one.

Yes, because a bid at an auction is merely an offer, and the fall of the hammer is the acceptance.
No, because in an auction without reserve, the auctioneer cannot withdraw the item after a bid has been made. (correct answer)
Yes, because the owner, as the principal, has the right to instruct his agent, the auctioneer, to withdraw the item at any time.
No, because the highest bidder's offer was automatically accepted once it was clear no higher bids were forthcoming.

Explanation: Auctions are subject to special rules under contract law, often codified in the UCC for goods. The key distinction is between auctions "with reserve" and "without reserve." In a standard auction with reserve, the auctioneer may withdraw the goods at any time until she announces completion of the sale. However, in an auction "without reserve," once the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time. Here, the auction was explicitly "without reserve," and bids were made. Therefore, the auctioneer was not permitted to withdraw the painting, and a contract was formed with the highest bidder when the bidding period ended. (A) states the rule for an auction with reserve, which does not apply here. (C) is incorrect because the owner's instruction cannot override the legal rule governing auctions without reserve, to which he agreed by advertising it as such. (D) is incorrect because acceptance is still signified by the fall of the hammer or another customary announcement, but the auctioneer's ability to refuse to complete the sale is what is constrained.

Question 6

A homeowner, planning a large party, contacted a catering company by email, stating, "I am interested in your services for an event on October 31. Please send me a quote for providing food and service for 100 guests." The caterer replied with a detailed menu and a price of $10,000, adding, "This offer is good for seven days." Three days later, before the homeowner had responded, the caterer discovered a scheduling conflict and emailed the homeowner, "Must withdraw my prior offer due to an unforeseen conflict." The homeowner, who had not yet seen the caterer's withdrawal email, immediately replied to the original offer email, "I accept your offer of $10,000."

Is there an enforceable contract between the homeowner and the caterer? Select one.

Yes, because the caterer's offer was an irrevocable firm offer under the UCC.
Yes, because the homeowner accepted the offer before receiving the caterer's revocation, thus forming a contract under the mailbox rule.
No, because the caterer's revocation was effective when sent, terminating the offer before the homeowner's acceptance.
No, because a revocation is effective upon receipt, and the facts do not indicate which email was received first. (correct answer)

Explanation: A contract is formed upon acceptance of an offer. An offer can be revoked any time before acceptance, but a revocation is effective only when received by the offeree. An acceptance is generally effective when sent under the mailbox rule. Here, both a revocation and an acceptance were sent, but the timing of receipt is unclear. If the homeowner received the revocation before sending the acceptance, no contract was formed. If the homeowner sent the acceptance before receiving the revocation, a contract was formed. Because the facts are silent as to the timing of receipt, the outcome is uncertain. Therefore, (D) correctly identifies that the timing of receipt is the dispositive issue. (A) is incorrect because the UCC applies to the sale of goods, not services like catering. This is a common law contract. (B) is incorrect because while the mailbox rule makes acceptance effective upon dispatch, revocations are effective upon receipt. The question is whether the acceptance was dispatched before the revocation was received. (C) is incorrect because a revocation is effective upon receipt by the offeree, not when it is sent.

Question 7

A company that manufactures custom widgets sent a price quote to a buyer, a merchant, offering to sell 1,000 widgets for $10 each, for delivery in 30 days. The buyer responded with a purchase order form that stated it was an acceptance of the offer for 1,000 widgets at $10 each. However, the buyer's form also included a pre-printed clause stating that "any disputes arising from this contract shall be resolved by binding arbitration." The manufacturer saw the clause but shipped the widgets without objection. A dispute later arose concerning the quality of the widgets.

Is the arbitration clause a part of the contract between the manufacturer and the buyer? Select one.

Yes, because shipping the goods constituted an acceptance of the buyer's counteroffer, including all of its terms.
No, because under the common law mirror image rule, the buyer's form was a counteroffer that was never expressly accepted.
Yes, because both parties are merchants, and the additional term did not materially alter the contract and was not objected to. (correct answer)
No, because a term requiring binding arbitration is always considered a material alteration of the original offer.

Explanation: This contract is for the sale of goods between merchants, so it is governed by UCC Article 2. Specifically, UCC § 2-207 (the "battle of the forms") applies. Under § 2-207(2), when both parties are merchants, additional terms in an acceptance become part of the contract unless: (a) the offer expressly limits acceptance to its terms; (b) the new terms materially alter the contract; or (c) notification of objection to the terms is given within a reasonable time. Most jurisdictions do not consider an arbitration clause a per se material alteration. Since the manufacturer did not object and the offer did not limit acceptance to its terms, the arbitration clause became part of the contract. (A) is incorrect because under the UCC, the buyer's form is treated as an acceptance with an additional term, not a counteroffer, since it did not make acceptance conditional on assent to the new term. (B) is incorrect because the UCC rejects the common law mirror image rule for contracts involving the sale of goods. (D) is incorrect because an arbitration clause is not automatically considered a material alteration; this depends on the jurisdiction and industry customs, but it is generally not treated as such.

Question 8

What is the most likely legal status of the transaction between your client and the winery? Select one.

No contract was formed because your client validly revoked the offer before the winery accepted it.
A contract was formed because the winery accepted the offer before the May 1 deadline.
No contract was formed because an offer to sell goods for a price over $500 must include a quantity term to be enforceable.
A contract was formed because your client's offer was an irrevocable firm offer under the UCC. (correct answer)

Question 9

An eccentric millionaire published a notice in a local newspaper: "I will pay $10,000 to the first person who successfully swims across the treacherous strait between our city and the nearby island, starting on July 4 at 9:00 a.m." A professional swimmer read the notice, purchased a specialized wetsuit and support boat, and arrived at the designated starting point on July 4. As the swimmer dove into the water and began the swim, the millionaire, standing on the shore with a megaphone, shouted, "The offer is revoked! I've changed my mind!" The swimmer heard the revocation but continued her swim and successfully reached the island.

Is the swimmer entitled to the $10,000? Select one.

No, because the millionaire validly revoked the offer before the swimmer completed performance.
No, because the swimmer never communicated her intent to accept the offer before beginning performance.
Yes, because the offer for a unilateral contract became irrevocable once the swimmer began performance. (correct answer)
Yes, because the swimmer's purchase of equipment constituted detrimental reliance, making the offer irrevocable under promissory estoppel.

Explanation: The millionaire's notice was an offer for a unilateral contract, which could be accepted only by full performance. Under modern contract law (Restatement (Second) of Contracts § 45), once an offeree begins performance of a unilateral contract, the offer becomes irrevocable, creating an option contract. The offeror's duty to pay is conditional on the offeree's completion of performance. Here, the swimmer began performance by diving in and starting the swim. At that point, the millionaire's power to revoke was suspended. Since the swimmer completed performance, the millionaire is obligated to pay. (A) is incorrect because the power to revoke was terminated once performance began. (B) is incorrect because an offer for a unilateral contract does not require notice of intent to accept; the performance itself is the acceptance. (D) is incorrect because while reliance is a factor, the more direct rule is that beginning performance, not just preparing for it (like buying equipment), makes the offer irrevocable. Beginning the swim is performance, whereas buying the wetsuit was mere preparation.

Question 10

A homeowner's rare dog went missing. The homeowner placed posters around town offering a $1,000 reward for the dog's safe return. A man who lived in a neighboring town found the dog wandering near his home. Unaware of the reward offer, he checked the dog's tags, found the homeowner's address, and returned the dog. The next day, the man saw one of the reward posters for the first time and contacted the homeowner to claim the $1,000.

Is the homeowner legally obligated to pay the man the reward? Select one.

Yes, because returning the dog constituted performance that accepted the homeowner's offer.
No, because the man did not know about the offer when he returned the dog. (correct answer)
Yes, because the homeowner received the benefit of her bargain and would be unjustly enriched otherwise.
No, because the man was already under a pre-existing legal duty to return lost property to its owner.

Explanation: To form a valid contract, there must be mutual assent. In the context of an offer for a unilateral contract, such as a reward offer, the offeree must know of the offer in order to accept it by performing the requested act. The performance must be in response to the offer. Here, the man returned the dog without any knowledge of the reward. Because he was unaware of the offer, his act of returning the dog could not have been an acceptance of it. Therefore, no contract was formed, and the homeowner is not obligated to pay. (A) is incorrect because performance only constitutes acceptance if it is done with knowledge of the offer. (C) describes the principle of restitution or quasi-contract, which might apply in other contexts but does not create a contractual right to the specific reward offered. The man acted as a volunteer. (D) is incorrect because while there may be a general moral or slight legal duty regarding found property, it does not rise to the level of a pre-existing contractual or statutory duty that would invalidate acceptance for lack of consideration.

Question 11

Is there an enforceable contract between the homeowner and the caterer? Select one.

Yes, because the caterer's offer was an irrevocable firm offer under the UCC.
Yes, because the homeowner accepted the offer before receiving the caterer's revocation, thus forming a contract under the mailbox rule.
No, because the caterer's revocation was effective when sent, terminating the offer before the homeowner's acceptance.
No, because a revocation is effective upon receipt, and the facts do not indicate which email was received first. (correct answer)

Question 12

A wholesaler sent a catalog of electronic goods to a retailer. The retailer faxed an order to the wholesaler for "100 units of the Model X smartphone for prompt shipment." The Model X had recently been discontinued and replaced by the Model X-Plus. The wholesaler, being out of Model X units, immediately shipped 100 units of the more expensive Model X-Plus. The shipment was accompanied by a note that read: "Model X is discontinued. Shipping new Model X-Plus as an accommodation. You may accept these at the original Model X price or reject the shipment."

What is the legal effect of the wholesaler's shipment of the Model X-Plus phones? Select one.

The shipment is an acceptance of the retailer's offer and a simultaneous breach of contract.
The shipment is a counteroffer, which the retailer can accept by keeping the phones or reject by returning them. (correct answer)
The shipment is a rejection of the retailer's offer, and no contract was formed.
The shipment is an acceptance of the retailer's offer, forming a contract for 100 Model X phones.

Explanation: This contract is for the sale of goods, so the UCC applies. UCC § 2-206(1)(b) states that an order to buy goods for prompt shipment invites acceptance either by a promise to ship or by the prompt shipment of conforming or non-conforming goods. However, the shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation. Here, the wholesaler shipped non-conforming goods (Model X-Plus instead of Model X) but included a notice that it was an accommodation. This action prevents the shipment from being an acceptance and breach; instead, it operates as a counteroffer. The retailer is free to accept the counteroffer (by keeping the phones) or reject it. (A) is incorrect because the notice of accommodation prevents the shipment from being an acceptance and breach. (C) is incorrect because while it's not an acceptance, it's more precisely characterized as a counteroffer. (D) is incorrect because the wholesaler did not ship the goods specified in the offer.

Question 13

A farmer offered to sell her antique tractor to her neighbor for $5,000. The neighbor said he needed to think about it. The farmer, wanting to be fair, promised she would not sell the tractor to anyone else for one week. This promise was made orally. Three days later, the farmer was offered $6,000 for the tractor by a collector and sold it immediately. The neighbor learned of the sale and, before the week was up, contacted the farmer to accept the $5,000 offer.

Does the neighbor have a valid claim for breach of contract against the farmer? Select one.

Yes, because the farmer breached her promise to keep the offer open for one week.
No, because the farmer's promise to keep the offer open was not supported by consideration and was therefore not a binding option. (correct answer)
Yes, because the neighbor detrimentally relied on the promise by forgoing other opportunities, creating an option via promissory estoppel.
No, because the sale of the tractor to the collector was an effective indirect revocation of the offer to the neighbor.

Explanation: An offer is freely revocable by the offeror until it is accepted, unless it is an option contract or a UCC firm offer. For an option contract to be binding under common law, the promise to keep the offer open must be supported by consideration. Here, the farmer promised to keep the offer open for a week, but the neighbor gave no consideration in exchange for this promise. Therefore, the promise was not a binding option, and the farmer retained the power to revoke the offer at any time. The sale to the collector acted as a revocation. The neighbor's subsequent attempt to accept was ineffective. (A) is incorrect because the promise was unenforceable as it lacked consideration. (C) is incorrect because the facts do not state any specific detrimental reliance by the neighbor. (D) is correct that the sale acted as a revocation, but (B) provides the more fundamental reason why the farmer was legally entitled to revoke the offer—the lack of a binding option.

Question 14

A university sent a letter to an applicant offering her a full scholarship. The letter stated, "To accept this scholarship, you must sign the enclosed form and return it by mail so that we receive it no later than April 1." The applicant signed the form and mailed it on March 25. Due to an error by the postal service, the letter was delayed in transit and did not arrive at the university's admissions office until April 3.

Was the university's offer validly accepted? Select one.

Yes, because the acceptance was effective when mailed on March 25 under the mailbox rule.
No, because the offer expressly required that the acceptance be received by a certain date to be effective. (correct answer)
Yes, because the delay was caused by the postal service, a risk that the university assumed by specifying mail as the means of acceptance.
No, because the offer lapsed on April 1 when the university had not received the acceptance.

Explanation: The mailbox rule, which makes an acceptance effective upon dispatch, is a default rule that can be altered by the terms of the offer. An offeror is the master of the offer and can specify the manner and timing of acceptance. Here, the university's offer explicitly stated that the acceptance had to be received by April 1. This language displaced the mailbox rule and made receipt of the acceptance a condition of a valid contract. Because the university received the acceptance on April 3, after the deadline, the acceptance was ineffective and no contract was formed. (A) is incorrect because the offer's specific terms overrode the default mailbox rule. (C) is incorrect because the offeror specifically placed the risk of delay on the offeree by requiring receipt by a certain date. (D) is essentially correct that the offer lapsed, but (B) provides the more precise legal reason why the attempted acceptance was invalid.

Question 15

Is the swimmer entitled to the $10,000? Select one.

No, because the millionaire validly revoked the offer before the swimmer completed performance.
No, because the swimmer never communicated her intent to accept the offer before beginning performance.
Yes, because the offer for a unilateral contract became irrevocable once the swimmer began performance. (correct answer)
Yes, because the swimmer's purchase of equipment constituted detrimental reliance, making the offer irrevocable under promissory estoppel.

Question 16

A city solicited bids for a construction project. The solicitation documents stated that all bids would be irrevocable for 60 days after the bid opening. A construction company submitted the lowest bid. One day after the bids were opened, the company's owner discovered a major clerical error in the bid, understating the cost by $200,000. The owner immediately notified the city of the mistake and attempted to withdraw the bid.

What is the most likely legal effect of the construction company's attempt to withdraw its bid? Select one.

The withdrawal is effective because the city had not yet formally accepted the bid.
The withdrawal is ineffective because the bid was an irrevocable option contract for 60 days.
The withdrawal is likely effective if the mistake was non-negligent, material, and the city can be returned to the status quo. (correct answer)
The withdrawal is ineffective because bids submitted to government entities are always irrevocable by statute.

Explanation: This question involves a unilateral mistake in the formation of a contract, specifically in the bidding process. A bidder may be permitted to withdraw a bid based on a unilateral mistake if: (1) the mistake is of a material fact; (2) the mistake was not the result of negligence or violation of a legal duty; (3) enforcement of the contract would be unconscionable; and (4) the other party can be placed in the status quo (i.e., they have not yet relied on the bid). Here, the error was large and material, and the city was notified immediately, likely before it had taken any action in reliance on the bid (like awarding the contract). Thus, a court would likely permit rescission of the bid. (A) is incorrect because bids in this context are typically treated as irrevocable for the stated period to prevent bidders from withdrawing if they are simply unhappy about being the low bidder. (B) is incorrect because while the bid is treated as an option, the doctrine of unilateral mistake provides a basis for relief from that option. (D) is an overstatement; while often true, the primary mechanism for analysis here is the common law doctrine of mistake.

Question 17

Was a valid contract formed between the developer and the landowner? Select one.

Yes, because the landowner did not directly communicate a revocation to the developer before the acceptance was delivered.
Yes, because the offer was a firm offer and could not be revoked before May 1.
No, because the developer received reliable information that the landowner had taken action inconsistent with the offer, which terminated the offer. (correct answer)
No, because the landowner's sale to another party was a rejection of the developer's offer.

Question 18

Was the university's offer validly accepted? Select one.

Yes, because the acceptance was effective when mailed on March 25 under the mailbox rule.
No, because the offer expressly required that the acceptance be received by a certain date to be effective. (correct answer)
Yes, because the delay was caused by the postal service, a risk that the university assumed by specifying mail as the means of acceptance.
No, because the offer lapsed on April 1 when the university had not received the acceptance.

Question 19

Which of the following statements best describes the legal significance of the firm's letter? Select one.

The letter was a valid offer, which created a power of acceptance in the candidate.
The letter was a preliminary negotiation, and did not constitute an offer because it indicated a future formal contract was required. (correct answer)
The letter was an offer for a unilateral contract that could only be accepted by the candidate starting work.
The letter was an irrevocable offer because the extensive negotiations demonstrated serious intent.

Question 20

You are representing a software company that received a purchase order from a large corporation for a 100-user license for its flagship product. The purchase order specified a price of $50,000. Your client responded with its own standard order acknowledgment form, which confirmed the product, quantity, and price, but also contained a clause on the back limiting your client’s liability for any software defects to the purchase price paid. The corporation accepted delivery of the software and paid the $50,000. Later, a defect in the software caused the corporation to lose $200,000 in business data.

Assuming both parties are merchants, is the limitation of liability clause likely part of their contract? Select one.

No, because the corporation never expressly agreed to the limitation of liability clause.
Yes, because the corporation accepted the software, which constituted acceptance of all terms in the order acknowledgment.
No, because a clause significantly limiting liability is considered a material alteration to the contract under UCC § 2-207. (correct answer)
Yes, because the UCC permits parties to a contract for the sale of goods to limit consequential damages.

Explanation: This transaction for a software license is often treated as a sale of goods under the UCC. Both parties are merchants. Under UCC § 2-207, additional terms in an acceptance become part of the contract unless they materially alter it. A term that significantly limits a party's liability for breach, especially for consequential damages, is almost always considered a material alteration. Because the corporation's purchase order (the offer) did not contain this term, your client's inclusion of it in the acknowledgment form (the acceptance) was an additional term that materially altered the offer. Therefore, it did not become part of the contract without the corporation's express assent. (A) is true but (C) provides the more specific legal reason under the UCC. (B) is incorrect because under § 2-207, conduct by both parties (like shipping and accepting goods) can form a contract, but the terms will be those on which the writings agree, with conflicting or material additional terms knocked out. (D) is a correct statement of law (UCC § 2-719 allows for limitation of remedies), but it doesn't address the issue of contract formation and whether this specific term became part of this specific contract under § 2-207.