NE Bar Contracts 1 — Questions and Answers
Question 1: Under the common law, which of the following is required for a valid contract to be formed?
- Offer, acceptance, and consideration (Correct answer)
- Offer, acceptance, and a writing
- Offer, consideration, and good faith
- Acceptance, consideration, and mutual mistake
Correct answer: Offer, acceptance, and consideration
Common law requires offer, acceptance, and consideration as the three essential elements of a binding contract.
Question 2: A merchant offers to sell goods and promises to keep the offer open for 30 days without requiring consideration. Under the UCC, this offer is:
- Revocable because no consideration was given
- Irrevocable for up to 90 days under the firm offer rule (Correct answer)
- Void because merchants cannot make options
- Irrevocable only if the offeree also signs the writing
Correct answer: Irrevocable for up to 90 days under the firm offer rule
UCC § 2-205 provides that a signed written offer by a merchant to buy or sell goods, with assurance it will be held open, is irrevocable for up to 90 days without consideration.
Question 3: An offeree mails an acceptance on Monday. The offeror mails a revocation on Tuesday, which arrives Wednesday. The acceptance arrives Thursday. Is there a contract?
- No, because the revocation arrived before the acceptance
- No, because the acceptance arrived after the revocation was sent
- Yes, because the acceptance was effective when mailed on Monday (Correct answer)
- Yes, but only if the offeree can prove the mailing
Correct answer: Yes, because the acceptance was effective when mailed on Monday
Under the mailbox rule, an acceptance is effective upon dispatch (mailing), so the contract was formed Monday before the revocation was even sent.
Question 4: Paula promises to pay Dan $500 in exchange for Dan's promise to paint her fence. Dan never paints the fence. What type of contract was this?
- Unilateral contract
- Bilateral contract (Correct answer)
- Implied-in-fact contract
- Quasi-contract
Correct answer: Bilateral contract
A bilateral contract involves an exchange of mutual promises, which is what occurred here—Paula promised money in exchange for Dan's promise to paint.
Question 5: Which of the following best describes promissory estoppel?
- A substitute for consideration when a party reasonably relies to their detriment on a promise (Correct answer)
- A doctrine that voids contracts made under economic duress
- A rule requiring all promises to be in writing to be enforceable
- A defense available when both parties made a mutual mistake
Correct answer: A substitute for consideration when a party reasonably relies to their detriment on a promise
Promissory estoppel allows enforcement of a promise without consideration when the promisee reasonably relied on it to their detriment and injustice can only be avoided by enforcement.
Question 6: A contract for the sale of real property that is not in writing is generally:
- Voidable at either party's option
- Void and unenforceable under the Statute of Frauds (Correct answer)
- Valid if the parties acted in good faith
- Enforceable if consideration was paid
Correct answer: Void and unenforceable under the Statute of Frauds
The Statute of Frauds requires contracts for the sale of real property to be in writing and signed by the party to be charged; without a writing they are unenforceable.
Question 7: Under the UCC, the battle of the forms rule applies when:
- Both parties to a sale of goods are merchants and their forms contain different terms (Correct answer)
- A consumer and a merchant exchange offer and acceptance with different terms
- Parties negotiate orally and then submit conflicting written confirmations
- Two parties disagree over the price of services to be rendered
Correct answer: Both parties to a sale of goods are merchants and their forms contain different terms
UCC § 2-207 governs the battle of the forms, applying its 'between merchants' rule to additional or different terms when both parties are merchants.
NE Bar Contracts 1
Under the common law, which of the following is required for a valid contract to be formed?