CAS Bar CAS Multistate Bar Examination (MBE) 2 — Questions and Answers
Question 1: A buyer and seller enter a contract for the sale of a house. The contract contains no express condition regarding financing. The buyer cannot obtain a mortgage loan and refuses to close. Which of the following best describes the buyer's legal position?
- The buyer is excused because financing is an implied condition.
- The buyer is in breach because inability to finance does not excuse performance. (Correct answer)
- The buyer may rescind based on mutual mistake.
- The buyer is excused under the doctrine of commercial impracticability.
Correct answer: The buyer is in breach because inability to finance does not excuse performance.
Without an express financing contingency, inability to obtain a mortgage does not excuse a buyer's performance, making the buyer liable for breach.
Question 2: Under the MBE, which of the following is NOT a recognized method of accepting an offer?
- Performance of the requested act in a unilateral contract.
- A promise to perform in a bilateral contract.
- Silence, when the offeree has a duty to speak based on prior dealings.
- Rejection of the offer followed by a counter-proposal accepted by the original offeror. (Correct answer)
Correct answer: Rejection of the offer followed by a counter-proposal accepted by the original offeror.
A rejection terminates the original offer; a counter-proposal is a new offer, and acceptance of that counter creates a new contract, not acceptance of the original offer.
Question 3: A landlord leases commercial property for five years. Two years into the lease, the city condemns 40% of the property for a public road. The tenant stops paying rent. Which is the most accurate statement?
- The lease terminates automatically upon any condemnation.
- The tenant owes full rent because partial condemnation does not terminate the lease.
- The tenant owes reduced rent proportionate to the loss of use.
- The tenant is excused from rent only if the condemned portion was the primary purpose of the lease. (Correct answer)
Correct answer: The tenant is excused from rent only if the condemned portion was the primary purpose of the lease.
In most jurisdictions, a partial condemnation terminates the lease and excuses the tenant only if the condemned portion destroys the essential purpose of the tenancy.
Question 4: Under the common law Statute of Frauds, which of the following contracts does NOT need to be in writing to be enforceable?
- A contract for the sale of land.
- A contract that cannot be performed within one year of its making.
- A contract for the sale of goods worth $500 or more.
- A contract to pay another's debt that can be fully performed within six months. (Correct answer)
Correct answer: A contract to pay another's debt that can be fully performed within six months.
The suretyship provision of the Statute of Frauds applies to promises to pay another's debt, but if the promise can be performed within a year and is otherwise not within another Statute of Frauds provision, it need not be written—however, this answer is the least clearly required to be in writing among these choices.
Question 5: A testator devises Blackacre 'to A for life, then to A's children who survive A.' At the testator's death, A has two children. One child predeceases A without issue. When A dies, who takes Blackacre?
- Only the surviving child of A. (Correct answer)
- Both children's estates share equally.
- The estate of A's predeceased child and the surviving child share equally.
- The testator's residuary estate.
Correct answer: Only the surviving child of A.
Because the remainder is contingent on surviving A, only the child who actually survives A takes; the predeceased child's share lapses.
Question 6: Under the MBE rules of Real Property, an easement appurtenant passes with the dominant tenement even if the deed conveying the dominant tenement does not mention the easement. This is because:
- Easements are personal rights that transfer only by express assignment.
- The easement runs with the land as a benefit to the dominant estate. (Correct answer)
- Recording the easement is required for it to bind subsequent owners.
- A grantee takes only the rights expressly conveyed in the deed.
Correct answer: The easement runs with the land as a benefit to the dominant estate.
An easement appurtenant is a property right that benefits the dominant estate and automatically passes with it upon conveyance, even without express mention.
Question 7: Under the Rule Against Perpetuities, which interest is MOST likely to be void?
- A remainder to 'B if B survives the life tenant.'
- A springing executory interest to 'A's first child to reach age 21.' (Correct answer)
- A fee simple absolute conveyed to A immediately.
- A remainder contingent on the life tenant's death.
Correct answer: A springing executory interest to 'A's first child to reach age 21.'
A springing executory interest conditioned on reaching age 21 could vest more than 21 years after all current lives in being, potentially violating the Rule Against Perpetuities.
CAS Bar CAS Multistate Bar Examination (MBE) 2
A buyer and seller enter a contract for the sale of a house.
The contract contains no express condition regarding financing.
The buyer cannot obtain a mortgage loan and refuses to close.
Which of the following best describes the buyer's legal position?