AK Bar Alaska Contracts and Commercial Law 1 — Questions and Answers
Question 1: Under the common law, which element is NOT required for valid contract formation?
- Offer
- Acceptance
- Consideration
- Writing (Correct answer)
Correct answer: Writing
Common law contracts require offer, acceptance, and consideration; a writing is generally not required unless the Statute of Frauds applies.
Question 2: Under the UCC, a merchant's firm offer in writing is irrevocable for up to how long without consideration?
- 30 days
- 60 days
- 3 months (Correct answer)
- 6 months
Correct answer: 3 months
Under UCC § 2-205, a merchant's firm offer in writing is irrevocable for the stated period or a reasonable time, but not exceeding 3 months.
Question 3: The 'mailbox rule' provides that an acceptance is effective when:
- Received by the offeror
- Sent by the offeree (Correct answer)
- The offeror reads it
- Both parties have signed the document
Correct answer: Sent by the offeree
Under the mailbox rule, an acceptance is effective upon dispatch (when sent), not upon receipt by the offeror.
Question 4: Which of the following is an example of illusory consideration?
- A promise to pay $100 for services rendered
- A promise to act only 'if I feel like it' (Correct answer)
- A promise to forbear a legal right
- Past services performed at someone's request
Correct answer: A promise to act only 'if I feel like it'
A promise conditioned entirely on the promisor's whim ('if I feel like it') is illusory because it does not actually bind the promisor to any performance.
Question 5: Under Alaska law, which of the following contracts must be in writing under the Statute of Frauds?
- A contract for sale of goods worth $400
- A contract to complete services within 30 days
- A contract for the sale of real property (Correct answer)
- A personal services contract lasting 10 months
Correct answer: A contract for the sale of real property
The Statute of Frauds requires contracts for the sale of real property to be in writing and signed by the party to be charged to be enforceable.
Question 6: An offeree's response that changes a material term of the original offer is best characterized as:
- A valid acceptance with a proposed modification
- A counteroffer that terminates the original offer (Correct answer)
- A conditional acceptance binding both parties
- A mere request for information
Correct answer: A counteroffer that terminates the original offer
Under the common law mirror image rule, a response that changes a material term of the offer is a counteroffer, which terminates the original offer and substitutes a new one.
Question 7: Which of the following best describes 'promissory estoppel' as a basis for enforcing a promise?
- A substitute for consideration when a promise induces detrimental reliance (Correct answer)
- A type of fraud used to void a contract
- A method to extend the Statute of Frauds period
- A defense available only to merchants under the UCC
Correct answer: A substitute for consideration when a promise induces detrimental reliance
Promissory estoppel enforces a promise without consideration when the promisor should reasonably expect reliance, the promisee detrimentally relies, and injustice can only be avoided through enforcement.
AK Bar Alaska Contracts and Commercial Law 1
Under the common law, which element is NOT required for valid contract formation?