Bar Exam (Next Generation) Quiz: Mutual Assent Offer And Acceptance
20 questions · exam conditions
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Mutual Assent Offer And AcceptanceQuestion 1 of 20

A said to B, 'If you walk across the Brooklyn Bridge, I'll give you $100.' Without saying anything, B started across the bridge. When B was one-third of the way across, A shouted, 'I revoke!' B continued across and then demanded $100. A refused.

Is B entitled to $100?

No, because B did not communicate acceptance before completing the walk, and A revoked before completion.
Yes, because B's part performance made the offer irrevocable, and his completion formed a unilateral contract.
No, because B's beginning to walk was merely preparation and did not make the offer irrevocable.
Yes, because B accepted by beginning to walk, forming a bilateral contract at that point.
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Bar Exam (Next Generation) Quiz

Bar Exam (Next Generation) Quiz: Mutual Assent Offer And Acceptance

Practice Mutual Assent Offer And Acceptance in Bar Exam (Next Generation) 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 Mutual Assent Offer And Acceptance, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Next Generation).

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

A said to B, 'If you walk across the Brooklyn Bridge, I'll give you $100.' Without saying anything, B started across the bridge. When B was one-third of the way across, A shouted, 'I revoke!' B continued across and then demanded $100. A refused.

Is B entitled to $100?

  1. No, because B did not communicate acceptance before completing the walk, and A revoked before completion.
  2. Yes, because B's part performance made the offer irrevocable, and his completion formed a unilateral contract. (correct answer)
  3. No, because B's beginning to walk was merely preparation and did not make the offer irrevocable.
  4. Yes, because B accepted by beginning to walk, forming a bilateral contract at that point.
Explanation: Whenever you see an offer like "If you walk across the bridge, I'll give you $100,” recognize it as an offer for a unilateral contract: acceptance happens only by completing the requested act. The key twist here is what happens when the offeree starts performing before the offeror revokes. Under modern contract law, once B began walking across the bridge, that part performance created a kind of option contract. A’s power to revoke was suspended, so A’s shout “I revoke!” was ineffective. B then finished the requested act, completing acceptance and forming a unilateral contract. Therefore, B is entitled to $100. The first wrong answer claims B lost because he didn't communicate acceptance before completing. That confuses bilateral with unilateral contract: no advance notice of acceptance is required when the offer explicitly asks for an act. The third wrong answer dismisses B's walking as "merely preparation," but walking across the bridge is the very act requested—not like buying supplies or taking preliminary steps. The fourth wrong answer says B formed a bilateral contract by beginning to walk. That is incorrect because A did not ask for a promise; he asked for performance, so B's start could not create mutual promises. Your study tip: on bar-exam contract questions, immediately ask whether the offer requests a promise or an act. If it requests an act, remember that beginning performance locks in the offeror's ability to revoke, even though acceptance only occurs upon completion.

Question 2

O wrote to B offering to sell a lakeside lot for $200,000, with closing on June 1. B replied by email: 'I accept your offer. Would you consider moving the closing to July 1? Please let me know.' O did not respond and instead sold the lot to C. B sued O for breach.

Was a contract formed between O and B?

  1. No, because B's reply proposed a different closing date and therefore was a counteroffer.
  2. No, because B's acceptance was conditioned on O's agreement to a July 1 closing.
  3. Yes, because O's failure to respond to B's request was an acceptance of the July 1 closing date.
  4. Yes, because B accepted O's offer and merely asked whether O would consider a different closing date. (correct answer)
Explanation: Whenever you see a question about acceptance and the mirror image rule, your first task is to separate a true counteroffer from a mere inquiry. A counteroffer rejects the original offer and proposes new terms, whereas a mere inquiry is just a question or a suggestion that does not interfere with an otherwise clear acceptance. Here, B's email begins with the unmistakable statement, "I accept your offer." That is an unequivocal, unconditional acceptance of O's terms—price and property—which immediately forms a contract. The follow-up sentence, "Would you consider moving the closing to July 1?" is not a condition or a demand; it's a request for a modification after acceptance. Because B's acceptance was not made conditional on O's agreement, the contract exists on O's original terms, with a June 1 closing. O's silence on B's request means the request simply fails; the original terms stand. Now examine the wrong answers. The first claims the reply was a counteroffer because it proposed a different closing date. That is the classic trap—a counteroffer must be a definite, material change that rejects the original offer, not a polite inquiry. The second claims acceptance was conditioned on O's agreement to July 1. That misreads the language: "Would you consider" is not the same as "I accept only if." The third answer gets the contract right but for the wrong reason—it says O's silence accepted the July 1 date. Silence generally does not constitute acceptance, and even if it did, that would just modify the contract, not create it. For the exam, always look for magic words: "I accept" creates a contract unless the acceptance is expressly conditional (e.g., "I accept if..."). A request for a different term is just a suggestion, not a rejection.

Question 3

Plumber A knocked on B's door and said, 'I'm here to repair the leak under your sink. The charge is $150.' B, who had not called a plumber, opened the door, nodded at A, and pointed A toward the kitchen. A repaired the leak. B later refused to pay, saying he had never agreed to anything.

Is B obligated to pay A?

  1. No, because B never expressly accepted A's offer in words or in writing.
  2. Yes, because B's conduct in nodding and directing A to the kitchen objectively manifested assent to A's offered terms. (correct answer)
  3. No, because B did not request A's services and A was a volunteer.
  4. Yes, because B's silence after A stated the price was an acceptance of A's offer.
Explanation: When you see a contract question with an offer and a response, focus on objective manifestation of assent—not on the person's unspoken thoughts. Contract formation can happen through words, writing, or conduct. The key question is whether a reasonable person would understand B's behavior as agreeing to A's terms. Here, A made a definite offer: repair the leak for $150. B did not say, “No,” nor did he say, “Yes”; instead, he nodded and pointed A to the kitchen. A reasonable person would read that conduct as an invitation to proceed on the stated terms—an acceptance by conduct. An implied-in-fact contract arose, so B must pay the promised $150. The first wrong answer—"never expressly accepted in words or in writing"—mistakenly demands a formal expression; but acceptance need not be verbal or written, and conduct can suffice. The third wrong answer—"B did not request A's services and A was a volunteer"—fails because B's nod and direction were a manifestation of consent; A was not officiously interfering but acting in response to B's indicated welcome. The fourth wrong answer—"B's silence after A stated the price was an acceptance"—misuses the doctrine of silence; silence alone usually does not constitute acceptance, and there is no need to rely on it here because B did something more: he nodded and directed A. Study tip: on the bar exam, whenever acceptance is disputed, ask whether a reasonable person would view the offeree's words or conduct as assent. If yes, a contract exists regardless of subjective intent or lack of formal words.

Question 4

Owner said to Builder, 'If you construct the garage shown on these plans and finish it by September 1, I will pay you $80,000.' Builder bought materials and, on August 1, began excavating the foundation. On August 2, Owner mailed a letter revoking the offer. Builder received it on August 3 and stopped working. Builder then sued Owner.

Which of the following is the most accurate statement about the parties' rights?

  1. Beginning performance created an option contract, so Owner's revocation was ineffective; Builder cannot recover damages for Owner's failure to pay unless and until he completes the garage in accordance with the offer. (correct answer)
  2. Builder's beginning performance formed a bilateral contract immediately, so Owner's revocation was a breach and Builder may recover damages even though he stopped work.
  3. Because a unilateral offer can be accepted only by complete performance, Owner could revoke at any time before completion, and Builder's excavation was mere preparation giving him no rights.
  4. Because Builder did not notify Owner that he had begun performance, the offer remained revocable, and Owner's revocation terminated Builder's power to complete the garage.
Explanation: Whenever you see an offer phrased as "if you do X, I will pay Y," you are dealing with a unilateral contract, accepted only by complete performance. The critical nuance here is the doctrine of part performance. Under Restatement § 45, Builder's excavation is not acceptance, but it does create an option contract. That means Owner's August 2 letter is ineffective—he cannot revoke once performance has begun. However, Builder's right to the $80,000 is strictly conditional on completing the garage. Because he stopped work, he has not fulfilled that condition, and he cannot sue for damages for Owner's "failure to pay," since payment simply isn't due yet. Now consider the traps. The choice claiming that "beginning performance formed a bilateral contract immediately" is wrong because there was no mutual exchange of promises—Builder made no promise, he merely acted. The choice stating Owner "could revoke at any time before completion" because excavation was mere preparation is also wrong: buying materials might be preparation, but excavating the foundation is part performance, which triggers the option contract. Finally, the choice asserting Builder's failure to notify Owner left the offer revocable is incorrect—the option contract arises from the act itself, not from giving notice. On exam day, remember this pattern: part performance of a unilateral offer creates an option contract, but the offeree must still finish the job to collect the reward. Preparation gives no rights; actual performance does.

Question 5

Buyer, a chemical manufacturer, emailed Seller, a solvent distributor, a purchase order for 1,000 gallons of solvent at $5 per gallon. Seller immediately emailed an acknowledgment stating: 'We accept your order, but only on the condition that you agree to binding arbitration in Houston for any dispute arising from this sale. If you do not assent, notify us at once.' Buyer received the email, did not respond, and later accepted delivery of the solvent and paid the invoiced price. A dispute has now arisen.

Which of the following is the most accurate statement about whether Buyer and Seller have a contract and whether the arbitration term is part of it?

  1. No contract exists because Buyer never assented to the arbitration condition and Seller's acceptance was conditional on that term.
  2. A contract exists, but the arbitration term is not part of it; the terms are those on which the writings agreed plus UCC gap-fillers. (correct answer)
  3. A contract exists, and the arbitration term is part of it because Buyer's acceptance of the goods manifested assent to Seller's counteroffer.
  4. A contract exists, and the arbitration term is part of it because Seller's acknowledgment was a definite expression of acceptance and Buyer did not object.
Explanation: Whenever you see a sale-of-goods exchange with an acceptance that adds new terms, think UCC 2-207 battle of the forms. Seller's acknowledgment added arbitration and made it a condition, saying Buyer must "notify us at once" if he did not assent. That made the acknowledgment expressly conditional, so it did not operate as a plain acceptance under 2-207(1); it was effectively a counteroffer. But Buyer then accepted delivery and paid, so the parties' conduct recognizes a contract under 2-207(3). That contract consists only of the terms the writings agreed on—1,000 gallons at $5 per gallon—plus UCC gap-fillers. The arbitration term was never agreed to, so it is not part of the contract. The "no contract exists" choice is tempting because Buyer never expressly assented to the counteroffer, but it ignores 2-207(3): conduct can create a contract even without a written assent. The choice saying Buyer's acceptance of the goods manifested assent to the arbitration counteroffer is wrong because taking delivery and paying does not mean Buyer agreed to hidden boilerplate. The choice saying the arbitration term is included because Seller's acknowledgment was a definite expression of acceptance and Buyer did not object also fails: the acknowledgment was expressly conditional, not a final acceptance, and silence did not assent to arbitration. On the exam, separate two questions: Is there a contract? And what are its terms? UCC 2-207 often says yes to the first but no to unagreed added terms.

Question 6

A department store published this newspaper advertisement: "Saturday only: one mink coat, regularly $1,500, first come, first served, $100. Store opens at 9:00 a.m." On Saturday, Tamika was first through the door at 9:00, tendered $100, and demanded the coat. The store refused to sell, saying the ad was only an invitation to negotiate. Tamika sued.

Which statement is correct?

  1. The store prevails, because advertisements are ordinarily invitations to make offers, and this ad did not create an offer.
  2. The store prevails, because Tamika accepted the alleged offer without first communicating her acceptance to the store.
  3. Tamika prevails, because the ad was sufficiently definite and explicit to constitute an offer, and her being first to tender the price accepted it. (correct answer)
  4. Tamika prevails only for reliance damages, because the ad created an agreement to negotiate the sale in good faith.
Explanation: This is a contracts question about when an advertisement becomes a true offer. You should ask: does the ad use definite, explicit terms that invite a specific performance, or is it just a general invitation to shop? The general rule is that ads are invitations to negotiate, but there is an important exception. Here, the store's ad is the exception. It promises "one mink coat," a specific price of $100, a specific date, and a concrete method of acceptance: “first come, first served.” Those terms are sufficiently definite and explicit to create an offer. Tamika performed that exact act by being first through the door and tendering $100. Because the offer invited acceptance by performance, she did not need to communicate acceptance in advance; showing up first and tendering the price completed the contract. Therefore, Tamika prevails. The choice saying the store prevails because ads are ordinarily invitations misses the point: the ordinary rule is overcome by this ad's specificity. The choice saying Tamika had to communicate acceptance first confuses bilateral and unilateral acceptance—where the offer demands an act, performance itself is acceptance. Finally, the idea that the ad only created an agreement to negotiate is wrong: the ad's definite terms and "first come, first served" language show a present intent to be bound, not merely a promise to bargain later. On the exam, when you see an advertisement question, look for quantity, price, and a clearly specified mode of acceptance. Those transform a nonbinding ad into an enforceable offer.

Question 7

The owner of a jewelry store placed an advertisement in a local newspaper: 'I will pay $1,000 for information leading to the arrest and conviction of the person who stole the Crown Diamond.' Before the ad ran, B, a private citizen, had independently begun investigating the theft. B gave the police information that led to an arrest and conviction. B had not seen or heard of the reward at the time he gave the information. After the conviction, B saw the advertisement and claimed the $1,000.

Is B entitled to the reward?

  1. Yes, because the reward offer invited acceptance by performance and B performed the requested act.
  2. Yes, because the newspaper advertisement made the reward a public offer that any person could accept by performing the act.
  3. No, because B did not know of the reward when he supplied the information, so he never accepted the offer. (correct answer)
  4. No, because B acted from a civic motive rather than in response to the reward, so there was no meeting of the minds.
Explanation: Whenever you see a reward offer, you are dealing with a unilateral contract. The key is not just performance, but knowledge of the offer. To accept a unilateral offer, the offeree must know it exists at the time of performance. Here, B gave the police information before ever seeing the ad. Without knowledge of the reward, B had no intent to accept the offer—an offer creates a power of acceptance, but that power is only exercised when the offeree acts in response to it. Since B was unaware, he never accepted, and no contract formed. The correct answer is no, because B did not know of the reward when he supplied the information. Now, look at the wrong answers. The choice saying "Yes, because the reward offer invited acceptance by performance and B performed the requested act" is a classic trap: it correctly identifies this as a unilateral contract, but it omits the critical requirement of knowledge. Similarly, the choice saying "Yes, because the newspaper advertisement made the reward a public offer that any person could accept" is also a trap—a public offer is open to anyone, but the offeree still must be aware of it to accept. Finally, the choice saying "No, because B acted from a civic motive rather than in response to the reward" points to the wrong reason. Motive is irrelevant; if B had known about the reward and still acted for civic reasons, he would be entitled to it. The failure is lack of knowledge, not lack of purity of motive. For your exam, remember: when a reward is involved, check for knowledge first. If the offeree didn't know about the reward, there's no acceptance, regardless of whether they performed the exact act requested.

Question 8

Green was sitting on his porch when a roofing crew arrived, set up ladders, and began tearing off his roof. Green had not hired them, but he watched them work for several minutes without saying anything, then went inside and let them finish. The roofing company sent Green an invoice for $18,000. Green refused to pay, saying he never agreed to the work.

Is Green liable to the roofing company?

  1. No, because a contract cannot be inferred from silence and Green made no promise to pay.
  2. No, because the roofing company was an unsolicited volunteer and Green's mere failure to object was not acceptance.
  3. Yes, because Green's knowing acceptance of the roofing services with an opportunity to reject them manifested assent to pay their reasonable value. (correct answer)
  4. Yes, but only in quasi-contract, because there was no mutual assent for an actual contract.
Explanation: Whenever you see a dispute about paying for unrequested work, separate implied-in-fact contracts (assent shown by conduct), quasi-contracts (recovery without assent, to prevent unjust enrichment), and silence as acceptance. Here, Green watched a roofing crew begin stripping his roof, said nothing, went inside, and let them finish. That is not mere passive silence: a contract implied in fact arises when a person knowingly accepts services with a reasonable opportunity to reject them, knowing they are not gratuitous. Green accepted the benefit, never objected, and did not treat the work as a gift, so he is liable for the reasonable value of the roofing services. The "no" choices overlook this conduct. "Silence alone cannot create a contract" is true, but silence plus affirmative acceptance of a known benefit is enough; and an "unsolicited volunteer" generally cannot force payment, but that defense fails when the recipient knowingly accepts the benefit with a chance to reject. The "only quasi-contract" choice is also wrong: quasi-contract liability is imposed without any mutual assent, whereas here assent can be inferred from Green's conduct—an implied-in-fact contract, not merely a restitution remedy. Tip: on bar questions, if the recipient knew about the services, could have refused them, and accepted the benefit anyway, the law will imply a promise to pay.

Question 9

After a hit-and-run accident, a neighborhood association posted a notice offering $5,000 to anyone who provides information leading to the arrest and conviction of the driver. Frieda, a private citizen, read the notice. She later recognized the driver from a photo and called the police with his name and address. At trial she testified that she called only because she believed it was her moral duty and that the reward had nothing to do with it. The driver was arrested and convicted. Frieda then claimed the reward.

Is Frieda entitled to the reward?

  1. Yes, because she knew of the offer and performed the requested act, and her motive in performing is irrelevant. (correct answer)
  2. Yes, because a reward offer is accepted by any member of the public who supplies the requested information, even if unaware of the reward.
  3. No, because she did not communicate an intention to accept the offer before supplying the information.
  4. No, because she supplied the information from a sense of moral duty rather than with the purpose of accepting the offer.
Explanation: Whenever you see a reward offer, remember it's a unilateral contract: the offeror promises to pay upon the offeree's completion of a specified act. The key is that acceptance occurs by performance, not by a promise to perform. Here, Frieda knew of the $5,000 offer, and she supplied the driver's name and address—the exact information requested—leading to arrest and conviction. Her subjective motive—whether moral duty or desire for reward—is irrelevant to contract formation; only her objective conduct matters. Because she had knowledge of the offer (a required element for unilateral acceptance) and performed the requested act, she accepted and is entitled to the reward. The choice saying she is entitled "even if unaware of the reward" is wrong: a reward offer cannot be accepted without knowledge of it; you can't accept an offer you don't know exists. The choice saying she needed to communicate an intention to accept before supplying information is also wrong—unilateral contracts are accepted by performance, and communication of intent is not required (unless the offer demands it). Finally, the choice saying she is not entitled because she acted from moral duty rather than to accept the offer flips the rule: motive is irrelevant, so this is the classic trap of confusing subjective intent with objective acceptance. Strategy tip: On reward questions, ask two things: (1) Did the person know of the offer? (2) Did they perform the requested act? If both are yes, motive never matters. Watch for the "unaware" distractor—that tests the knowledge requirement, not motive.

Question 10

On June 1, Seller mailed Buyer an offer to sell a tract of land for $50,000, asking Buyer to 'respond by return mail.' Buyer received the offer on June 2 and mailed an acceptance on June 3. On June 4, before Seller had received the acceptance, Seller mailed a letter revoking the offer. Buyer received the revocation on June 5. Seller refused to sell, and Buyer sued.

Which statement is most accurate?

  1. No contract was formed because Seller revoked the offer before receiving Buyer's acceptance.
  2. No contract was formed because Buyer's acceptance was not received before Seller mailed the revocation.
  3. No contract was formed, because the acceptance and the revocation crossed in the mail and are treated as contemporaneous.
  4. A contract was formed on June 3, when Buyer mailed the acceptance, so Seller's later revocation was ineffective. (correct answer)
Explanation: Whenever an offer contemplates a mail response—as Seller did by asking Buyer to "respond by return mail"—you are in mailbox-rule territory. The key distinction is that an acceptance by an authorized means is effective on dispatch, while a revocation is effective only on receipt. Here Buyer received the offer on June 2 and mailed an acceptance on June 3. Because mail was the authorized medium, Buyer's acceptance created a contract on June 3. When Seller mailed a revocation on June 4, there was no offer left to revoke; Seller's later receipt of the acceptance was irrelevant, and Buyer's receipt of the revocation on June 5 came too late. Thus, a contract was formed on June 3, and Seller's later revocation was ineffective. The suggestion that no contract was formed because Seller revoked before receiving Buyer's acceptance confuses thee receipt-based rule for revocations withthe dispatch-based rule for acceptances. Similarly, the claim that no contract formed because Buyer's acceptance was not received before Seller mailed the revocation treats both communications as effective on receipt/ dispatch in the wrong direction; acceptance had already become effective upon mailing. The "crossed in the mail and treated as contemporaneous" theory is simply not a rule—there is no doctrine that nullifies an acceptance merely because a revocation was also circulating; once the acceptance is dispatched, the offer is gone. Remember the timeline: mark when the offeree dispatches acceptance and when the offeree receives any revocation. If acceptance dispatch comes first, the contract exists.

Question 11

On March 1, Owen mailed Alba a signed written offer to sell his lakeside lot for $200,000, "open until April 1." Owen died on March 5. Alba, who did not know of Owen's death, mailed her acceptance on March 6, and it was delivered on March 8. Owen's executor refused to convey the lot.

Is Alba entitled to enforce a contract for the sale of the lot?

  1. Yes, because her acceptance was effective when mailed, before she had notice of Owen's death.
  2. Yes, because the offer expressly remained open until April 1, and death does not terminate an offer before the stated time expires.
  3. No, because an acceptance of an offer to sell land is not effective until it is received by the offeror or the offeror's estate.
  4. No, because Owen's death terminated Alba's power of acceptance before she mailed the acceptance, even though she lacked notice. (correct answer)
Explanation: Whenever you see an offer that says it will remain open for a set period, first ask: is there an option contract? A promise to keep an offer open is only binding if supported by consideration. Here, Owen's signed offer to sell the lot for $200,000, "open until April 1," was not an option because Alba gave no consideration to keep it open. Therefore, it was a revocable offer, and under common law, the offeror's death terminates the offeree's power of acceptance automatically—even if the offeree has no notice. Because Owen died on March 5, Alba's power of acceptance ended before she mailed her acceptance on March 6. So the correct result is no: Owen's death terminated the power of acceptance, despite Alba's ignorance. The choice that says "yes, because her acceptance was effective when mailed, before she had notice" misses the point—the mailbox rule makes acceptance effective on dispatch, but only if the power of acceptance still exists at dispatch. The choice that says "yes, because the offer expressly remained open until April 1" confuses a gratuitous promise with an option; death terminates non-option offers regardless of the stated expiration. The choice that says "no, because an acceptance to sell land is not effective until received" is wrong because the mailbox rule applies to land contracts too; that isn't the reason. The correct answer is the one recognizing that death terminated the offer before acceptance, even without notice. Study tip: On the bar exam, any time death or incapacity is mentioned, immediately check whether the offeree gave consideration for an option. If no consideration, the offer dies with the offeror.

Question 12

Harbor Plumbing emailed Valvetech asking for current pricing on Valvetech's Model 7 valve. Valvetech replied the same day: "We can quote you $14 per unit for Model 7 valves, with delivery within 30 days of order. Prices subject to change without notice." The reply did not mention quantity. Harbor immediately emailed back: "We accept your offer. Please ship 5,000 Model 7 valves at $14." The next day, Valvetech replied that its price had risen to $17 and that it would not ship at $14. Harbor sued for breach of contract.

Was a contract formed when Harbor sent its email?

  1. Yes, because Valvetech's reply stated a price and a delivery term, which made it definite enough to be accepted.
  2. Yes, because Harbor accepted before Valvetech gave notice of any change in its price.
  3. No, because Valvetech's quotation was not signed, and a contract for goods worth more than $500 must be in a signed writing.
  4. No, because the quotation was an invitation to deal, and Harbor's email was an offer that Valvetech never accepted. (correct answer)
Explanation: An offer is a manifestation of willingness to enter a bargain, made so that the other party is justified in understanding that its assent will conclude the deal. A price quotation sent in response to an inquiry ordinarily invites an order rather than making an offer, especially when it omits quantity and reserves the right to change prices. Valvetech's reply was a quotation; Harbor's "acceptance" was the offer, and Valvetech rejected it, so there was no contract. The definiteness answer treats a price and a delivery term as enough, ignoring the missing quantity and the express reservation, which signal that Valvetech did not intend to be bound by any order placed. The timing answer assumes the quotation was an offer and asks only whether it was revoked in time. The statute-of-frauds answer confuses formation with enforceability, and in any event an email can satisfy the writing requirement.

Question 13

Brightline Electronics ran a newspaper advertisement: "Saturday, 9 a.m. sharp. Three brand-new Lumen 65-inch televisions, regularly $1,400, just $250 each. First come, first served. Limit one per customer." Paul was first in line when the store opened at 9 a.m. He went to the counter and tendered $250 for one of the televisions. The manager refused, saying the sale was limited to members of the store's rewards program, a restriction that did not appear in the advertisement. Paul sued for breach of contract. The jurisdiction applies this rule: an advertisement is ordinarily an invitation to deal, but it is an offer if it is clear, definite, and explicit, leaving nothing open for negotiation, as where it specifies the item, the price, the quantity, and who may accept.

Did Paul and Brightline form a contract?

  1. No, because a newspaper advertisement is an invitation to deal, not an offer that a member of the public can accept.
  2. No, because an advertiser may limit who can accept its advertisement at any time before a sale is completed.
  3. Yes, because the advertisement was a definite offer, and Paul accepted by being first and tendering the price. (correct answer)
  4. No, because Paul did not sign a written purchase agreement, and a sale of goods requires a signed writing.
Explanation: Although advertisements are usually invitations to deal, an advertisement that is clear, definite, and explicit, leaving nothing open for negotiation, is an offer. Brightline's advertisement identified the item, the price, the quantity, and the method of selecting the buyers: first come, first served, one per customer. Paul was first and tendered the price, which accepted the offer and formed a contract. The general-rule answer ignores the exception the facts were built to trigger. The answer letting Brightline restrict the offer after Paul accepted misunderstands acceptance; an offeror may revoke or modify an offer before acceptance, but cannot add new conditions after the offeree has accepted by doing what the offer specified. The signed-writing answer is wrong because the price was $250, below the threshold at which the statute of frauds requires a writing, and it confuses enforceability with formation.

Question 14

Ollie wrote to Beth: "I offer to sell you my lakefront lot for $80,000. This offer will remain open until June 30." Beth gave nothing for the promise to keep the offer open. On June 10, Ollie telephoned Beth and said, "I've changed my mind. The offer for the lot is withdrawn." On June 12, Beth delivered a signed written acceptance to Ollie, and he refused to sell. The jurisdiction applies these rules: an offeree's power of acceptance ends when the offeree receives from the offeror a statement that the offeror no longer intends to make the contract; an offer is revocable before acceptance, even if it states that it will stay open, unless the offeror received consideration for keeping it open or another rule makes it irrevocable.

Did Beth's June 12 acceptance form a contract?

  1. Yes, because Ollie's written statement that the offer would remain open until June 30 bound him to keep it open.
  2. Yes, because an offer made in writing can be revoked only by a writing, and Ollie revoked by telephone.
  3. No, because Ollie revoked before Beth accepted, and his promise to hold the offer open lacked consideration. (correct answer)
  4. Yes, because a signed offer that states a period of irrevocability cannot be revoked during that period.
Explanation: An offer may be revoked at any time before acceptance, even if it says it will stay open, unless the offeror received consideration for that promise or another rule makes it irrevocable. Beth gave nothing for the promise, and the firm-offer rule for merchants applies only to sales of goods, not land. Ollie's telephone call on June 10 told Beth he no longer intended to sell, which ended her power of acceptance, so her June 12 acceptance came too late. The answer treating the stated period as binding ignores the consideration requirement. The writing answer invents a rule; revocation is effective when communicated, by any means. The signed-offer answer borrows the merchant firm-offer rule, which covers goods and requires a merchant, from a context in which it does not apply.

Question 15

On May 1, Sela offered in writing to sell Ana a painting for $6,000, stating that the offer would remain open for one week. Ana gave nothing for the promise. On May 3, without telling Ana, Sela sold and delivered the painting to Carl. On May 4, Ana's friend, a gallery employee who had personally processed the paperwork for the sale to Carl, told Ana that the painting had been sold to Carl. On May 5, Ana delivered a written acceptance to Sela. The jurisdiction applies this rule: an offeree's power of acceptance ends when the offeror takes definite action inconsistent with an intention to make the contract and the offeree acquires reliable information that the offeror has done so.

Did Ana's May 5 acceptance form a contract?

  1. Yes, because Sela never personally told Ana that the offer was revoked, and only the offeror can revoke an offer.
  2. No, because Sela sold the painting to Carl, and Ana learned of the sale from a reliable source before she accepted. (correct answer)
  3. Yes, because Sela promised in writing to keep the offer open for one week, and Ana accepted within that week.
  4. No, because Sela's sale of the painting to Carl on May 3 automatically ended the offer, whether or not Ana knew of it.
Explanation: An offer can be revoked indirectly when the offeror takes definite action inconsistent with making the contract and the offeree learns of it from a reliable source. Selling and delivering the painting to Carl was such an action, and Ana learned of it from someone who had processed the sale, a reliable source. Her power of acceptance ended on May 4, so her acceptance the next day was too late. The answer requiring personal notice from the offeror misses the indirect-revocation rule. The answer relying on the one-week promise overlooks that the promise was unsupported by consideration, so the offer remained revocable. The answer treating the sale itself as ending the offer reaches the right result for the wrong reason; had Ana not learned of the sale, her acceptance would have formed a contract, and Sela would have been in breach.

Question 16

Farah told Pete, a painter: "I'll pay you $5,000 if you paint my barn by September 1. I don't want a promise; I just want the barn painted." Pete said nothing in reply. The next day, he bought $800 of paint for the job at a store that accepts returns for a full refund. Before Pete arrived at the barn or did any work on it, Farah called and told him she had changed her mind and hired someone else. Pete returned the paint for a full refund and sued Farah. The jurisdiction applies this rule: when an offer invites acceptance only by performance, an option contract is created when the offeree begins the invited performance or tenders a beginning of it; preparations to perform are not a beginning of performance.

Was Farah's revocation effective?

  1. No, because Pete bought the paint in reliance on the offer, which created an option contract that Farah could not revoke.
  2. No, because an offer to enter a unilateral contract cannot be revoked once the offeree has decided to accept it.
  3. Yes, because buying refundable paint was preparation, not a beginning of the invited performance. (correct answer)
  4. Yes, because an offer to enter a unilateral contract may be revoked at any time before the performance is completed.
Explanation: An offer inviting acceptance only by performance becomes irrevocable, as an option contract, once the offeree begins or tenders the invited performance. Preparations to perform do not count. The invited performance was painting the barn; buying paint was preparation, and refundable preparation at that. Pete had not begun painting or tendered a beginning, so Farah's revocation was effective. The reliance answer treats preparation as a beginning of performance and ignores that the purchase was fully refundable. The answer barring revocation once the offeree decides to accept has no support; a mental decision is not acceptance or performance. The answer allowing revocation until completion reaches the right result for the wrong reason, because it misstates the rule; once Pete began painting, Farah could no longer have revoked.

Question 17

On March 1, Opal mailed Fred an offer to sell her used tractor for $18,000. Fred received the offer on March 3. On March 4, Opal changed her mind and mailed Fred a letter revoking the offer. On March 5, before receiving the revocation, Fred mailed a properly addressed and stamped letter accepting the offer. Fred received Opal's revocation on March 7, and Opal received Fred's acceptance on March 8. The jurisdiction applies these rules: an acceptance made by a reasonable means is effective when it is sent, even if it never arrives; a revocation is effective only when the offeree receives it.

When, if ever, was a contract formed?

  1. Never, because Opal mailed her revocation on March 4, before Fred mailed his acceptance on March 5.
  2. On March 8, when Opal received Fred's acceptance, because a contract is not formed until the offeror learns of the acceptance.
  3. On March 5, when Fred mailed his acceptance, because his acceptance took effect before Opal's revocation reached him. (correct answer)
  4. Never, because the revocation and the acceptance crossed in the mail, and neither could take effect until it was received.
Explanation: An acceptance sent by a reasonable means is effective when sent, while a revocation is effective only when received. Fred mailed his acceptance on March 5, and he did not receive the revocation until March 7. The acceptance took effect first, so a contract was formed on March 5, and the later-received revocation came too late. The answer treating the earlier-mailed revocation as controlling applies the dispatch rule to the revocation, which instead takes effect on receipt. The March 8 answer applies a receipt rule to the acceptance and ignores the mailbox rule. The crossing answer invents a rule that crossing communications cancel each other; each takes effect under its own timing rule, and here the acceptance won the race.

Question 18

On Monday, Raul mailed Sofia a letter rejecting her written offer to sell him 40 acres of farmland. On Tuesday, he changed his mind and mailed her a letter accepting the offer. Sofia received the rejection on Wednesday morning and, that afternoon, agreed to sell the land to someone else. She received Raul's acceptance on Thursday. The jurisdiction applies these rules: an acceptance is ordinarily effective when sent, and a rejection is effective only when received; but if the offeree sends a rejection and then sends an acceptance, the acceptance is effective only if the offeror receives it before receiving the rejection, and otherwise it operates only as a counteroffer.

Did Raul and Sofia form a contract?

  1. No, because Raul sent his rejection first, and his acceptance arrived after the rejection, so the acceptance operated only as a counteroffer. (correct answer)
  2. Yes, because Raul mailed his acceptance on Tuesday, and an acceptance is effective when sent.
  3. Yes, because Raul's rejection was not effective until Wednesday, and his acceptance had already been sent on Tuesday.
  4. No, because Raul's rejection became effective when he mailed it on Monday, ending his power to accept.
Explanation: When an offeree sends a rejection and then an acceptance, the acceptance does not take effect on dispatch. It is effective only if it reaches the offeror before the rejection; otherwise it is a counteroffer. Raul's rejection arrived Wednesday and his acceptance Thursday, so his acceptance was only a counteroffer, which Sofia did not accept. No contract formed. The dispatch answer applies the ordinary mailbox rule without the exception for an acceptance that follows a rejection, the error the item tests. The answer reasoning that the rejection was not yet effective when the acceptance was sent is true as far as it goes but ignores how the rule limits the later acceptance. The answer making the rejection effective on mailing reaches the right result for the wrong reason; rejections take effect on receipt, and had the acceptance arrived first, it would have formed a contract.

Question 19

For $500, Mill Supply gave Torres a written option to buy a used industrial lathe for $40,000, exercisable by written notice "no later than 5 p.m. on July 1." On June 28, Torres mailed a properly addressed and stamped letter exercising the option. Because of a postal delay, the letter reached Mill Supply on July 2. Mill Supply refused to sell. The jurisdiction applies these rules: an acceptance made by a reasonable means is ordinarily effective when it is sent; but an acceptance under an option contract is not effective until the offeror receives it.

Did Torres effectively exercise the option?

  1. Yes, because Torres mailed the letter on June 28, and an acceptance is effective when it is sent.
  2. No, because an acceptance under an option contract is effective only on receipt, and Mill Supply received it after the deadline. (correct answer)
  3. Yes, because the delay was caused by the postal service, not by Torres, so the risk of late delivery fell on Mill Supply.
  4. Yes, because Mill Supply received the notice within a reasonable time after the deadline, one day late.
Explanation: The mailbox rule protects an offeree who cannot know whether the offeror has revoked. An optionee needs no such protection, because the offer is irrevocable during the option period, so an acceptance under an option is effective only on receipt. The notice reached Mill Supply on July 2, after the deadline, so the option was not exercised. The dispatch answer applies the general mailbox rule without its exception for options. The postal-delay answer assigns the risk of delay to the optionor, but the rule places it on the optionee, who had to ensure the notice arrived in time. The reasonable-time answer substitutes a flexible standard for the stated deadline; an option must be exercised within its terms.

Question 20

Arden Mills ordered 200 industrial motors from Volt Corp. using a purchase order silent on remedies. Volt responded with an acknowledgment stating: "Our acceptance is expressly conditional on your assent to the additional terms on the reverse." One term limited Volt's liability to repair or replacement and excluded consequential damages. Arden never agreed to the terms, but Volt shipped the motors and Arden paid. Defective motors shut down Arden's production line, and Arden sued for its lost profits. The jurisdiction's commercial code provides: (1) a definite expression of acceptance operates as an acceptance even though it states additional terms, unless acceptance is expressly made conditional on assent to them; (3) conduct by both parties that recognizes a contract is enough to establish one even if their writings do not, and in that case the terms consist of those on which the writings agree, together with any supplementary terms supplied by the code. The code's default rules allow a buyer to recover consequential damages for breach.

Does Volt's limitation of remedies govern Arden's claim?

  1. No, because the contract was formed by conduct, so its terms are the agreed terms plus the code's default rules. (correct answer)
  2. Yes, because Arden accepted and paid for the motors after receiving Volt's form, which made Volt's terms part of the contract.
  3. No, because Volt's acceptance was expressly conditional, so no contract was ever formed between the parties.
  4. No, because Arden's purchase order was the offer, so its terms control, and Volt's terms were merely proposals.
Explanation: Because Volt made its acceptance expressly conditional on Arden's assent to Volt's terms, and Arden never assented, the writings did not form a contract. But both parties performed, Volt by shipping and Arden by paying, which recognized a contract under subsection (3). In that event the terms are those on which the writings agree plus the code's gap-fillers. The writings did not agree on remedies, so the code's default, allowing consequential damages, applies, and Volt's limitation is not part of the contract. The last-shot answer applies the common-law approach that subsection (3) replaces. The no-contract answer stops at the writings and ignores the conduct that established a contract. The first-shot answer gives the buyer's form priority, but under subsection (3) neither party's unmatched terms control; only agreed terms and gap-fillers do.