MBE Contracts & Sales Exam Questions
and Answers
1. A 16-year-old entered into a written agreement to buy a car from a
dealership.
He made a small down payment and took out a loan from the
dealership for the remainder of the purchase price. The deal was
fair in every respect,
and the same as the car dealership would give any other
customer. After the sale was finalized, the salesman's supervisor
reviewed the contract, and upon researching the matter further,
discovered that the boy was only 16. He told the salesperson to call the
boy and cancel the contract, which he did. In a breach of contract
action brought on behalf of the boy, the court held for the boy. What
was the reason?
A. The contract is one for necessities.
B. The contract cannot be disaffirmed because of the boy's part
performance.
C. The contract is not voidable because the terms were fair.
D. The dealer did not have the right to void the contract. Correct Answer:
Correct answer is D.
Explanation Correct Answer: The issue here is the kid's minority status. RULE Correct Answer: can
contract with a minor, but once minor becomes 18, can say nvm or can agree to the K. In other words,
the K is VOIDABLE not void. The K is only voidable by the minor.
Therefore, the dealer could not void the K, only the kid could.
2. A restaurant owner entered into a valid, written contract with
an artist to paint a mural on one of the walls in the restaurant for
$10,000. After the artist completed 30 percent of the mural, she
told the owner that she had run into financial trouble, and
demanded a payment of at least $2,500 from the owner to continue
the job. The owner refused to pay the artist anything, and the artist
left. If both parties sue for breach of contract, what is the likely
,MBE Contracts & Sales Exam Questions
and Answers
outcome?
A. Each party can recover any damages because both parties are in
breach.
B. Only the owner can recover any damages because only the
artist is in breach.
C. Only the artist can recover any damages because only the
owner is in breach.
D. Neither party can recover any damages because neither is in breach.
Correct Answer: Correct answer is B.
,MBE Contracts & Sales Exam Questions
and Answers
Explanation Correct Answer: the artist is the breaching party here. Therefore, only the owner can recover.
3. Homeowner met w contractor re Correct Answer: remodeling
homeowner's kitchen. Con- tractor told the homeowner that he
would charge $9,000-$10,000 for work, but that he would get back
to her with final price. Contractor had a voicemail from
homeowner, saying that she would pay $9,000 for the work .
Contractor left voicemail saying he would do the work for $9,500,
which the homeowner received. The next day contractor tried to call
homeowner to say changed his mind. He left voicemail that $9,000
ok and would start next day unless heard otherwise. Contractor
showed up at homeowner's house, ready to begin. What best
describes the relationship between the parties?
A. A contract was formed when the contractor left the final voicemail.
B. A contract was formed when the homeowner received the final
voicemail.
C. A contract was formed when the contractor showed up to begin
work on the kitchen.
D. There is no contract between the parties. Correct Answer: Correct answer
is D.
Explanation Correct Answer: the $9500 was a counterotter and rejection that terminated the contractor's
power of acceptance. Although he changed his mind and ottered $9000 and this mirrored the
homeowner's o.g., otter, this otter now ott the table due to the counterotter/rejection. Therefore, the
$9500 was an otter that was never accepted, and there was no contract.
4. Store and farmer contracted for 1,200 bottles of Grade A maple
syrup, de-
livered over year in twelve installments of 100 bottles, delivered
on or before last day of each month, beginning January, ending
December. January to March farmer delivered three conforming
shipments. April Correct Answer: on the last day of month, farmer
,MBE Contracts & Sales Exam Questions
and Answers
delivered 97 bottles. Store rejected, and said K canceled. Which of
the following is a correct statement?
A. The store's rejection of the 97 bottles of Grade A maple syrup and
cancella- tion of the contract were proper.
B.The store's rejection of the 97 bottles of Grade A maple syrup was
proper, but the store's cancellation of the contract was improper.
and Answers
1. A 16-year-old entered into a written agreement to buy a car from a
dealership.
He made a small down payment and took out a loan from the
dealership for the remainder of the purchase price. The deal was
fair in every respect,
and the same as the car dealership would give any other
customer. After the sale was finalized, the salesman's supervisor
reviewed the contract, and upon researching the matter further,
discovered that the boy was only 16. He told the salesperson to call the
boy and cancel the contract, which he did. In a breach of contract
action brought on behalf of the boy, the court held for the boy. What
was the reason?
A. The contract is one for necessities.
B. The contract cannot be disaffirmed because of the boy's part
performance.
C. The contract is not voidable because the terms were fair.
D. The dealer did not have the right to void the contract. Correct Answer:
Correct answer is D.
Explanation Correct Answer: The issue here is the kid's minority status. RULE Correct Answer: can
contract with a minor, but once minor becomes 18, can say nvm or can agree to the K. In other words,
the K is VOIDABLE not void. The K is only voidable by the minor.
Therefore, the dealer could not void the K, only the kid could.
2. A restaurant owner entered into a valid, written contract with
an artist to paint a mural on one of the walls in the restaurant for
$10,000. After the artist completed 30 percent of the mural, she
told the owner that she had run into financial trouble, and
demanded a payment of at least $2,500 from the owner to continue
the job. The owner refused to pay the artist anything, and the artist
left. If both parties sue for breach of contract, what is the likely
,MBE Contracts & Sales Exam Questions
and Answers
outcome?
A. Each party can recover any damages because both parties are in
breach.
B. Only the owner can recover any damages because only the
artist is in breach.
C. Only the artist can recover any damages because only the
owner is in breach.
D. Neither party can recover any damages because neither is in breach.
Correct Answer: Correct answer is B.
,MBE Contracts & Sales Exam Questions
and Answers
Explanation Correct Answer: the artist is the breaching party here. Therefore, only the owner can recover.
3. Homeowner met w contractor re Correct Answer: remodeling
homeowner's kitchen. Con- tractor told the homeowner that he
would charge $9,000-$10,000 for work, but that he would get back
to her with final price. Contractor had a voicemail from
homeowner, saying that she would pay $9,000 for the work .
Contractor left voicemail saying he would do the work for $9,500,
which the homeowner received. The next day contractor tried to call
homeowner to say changed his mind. He left voicemail that $9,000
ok and would start next day unless heard otherwise. Contractor
showed up at homeowner's house, ready to begin. What best
describes the relationship between the parties?
A. A contract was formed when the contractor left the final voicemail.
B. A contract was formed when the homeowner received the final
voicemail.
C. A contract was formed when the contractor showed up to begin
work on the kitchen.
D. There is no contract between the parties. Correct Answer: Correct answer
is D.
Explanation Correct Answer: the $9500 was a counterotter and rejection that terminated the contractor's
power of acceptance. Although he changed his mind and ottered $9000 and this mirrored the
homeowner's o.g., otter, this otter now ott the table due to the counterotter/rejection. Therefore, the
$9500 was an otter that was never accepted, and there was no contract.
4. Store and farmer contracted for 1,200 bottles of Grade A maple
syrup, de-
livered over year in twelve installments of 100 bottles, delivered
on or before last day of each month, beginning January, ending
December. January to March farmer delivered three conforming
shipments. April Correct Answer: on the last day of month, farmer
,MBE Contracts & Sales Exam Questions
and Answers
delivered 97 bottles. Store rejected, and said K canceled. Which of
the following is a correct statement?
A. The store's rejection of the 97 bottles of Grade A maple syrup and
cancella- tion of the contract were proper.
B.The store's rejection of the 97 bottles of Grade A maple syrup was
proper, but the store's cancellation of the contract was improper.
