MBE - FINAL STUDY SET
1. On August 1, a realtor mailed a written offer to a developer for the sale of a large tract of
land. The offer included the following terms:
This offer expires on September 1, if the offeree has not caused an acceptance to be
received by the offeror on or before that date.
Early on September 1, the developer sent a written acceptance by messenger but the
messenger company negligently withheld delivery to the realtor until September 2. On
September 4, the realtor entered into a contract for sale of the tract to another buyer but did
not inform the developer of the transaction. When the developer contacted the realtor a few
days later, the realtor said there was no contract between them.
What is the most accurate statement regarding the relationship between the parties?
A. No contract between the realtor and the developer arose on September 2.
B. A contract would have arisen if a letter of acceptance were mailed on September 1.
C. The realtor's silence constituted an acceptance of the developer's written message on
September 2.
D. A voidable contract arose on September 1.
ANSWER: A. No contract between the realtor and the developer arose on September 2.
No contract arose on September 2 because the realtor's offer expired on September 1, when
the realtor did not receive the developer's acceptance. If a period of acceptance is stated in
an offer, the offeree must accept within that period to create a contract. Failure to timely
accept terminates the power of acceptance in the offeree (i.e., a late acceptance will not be
effective and will not create a contract). Under the mailbox rule, an acceptance generally is
effective upon dispatch (i.e., the acceptance creates a contract at the moment it is mailed or
given to the delivery company). However, the mailbox rule does not apply where the offer
states that acceptance will not be effective until received. In the latter case, acceptance is
effective only upon receipt. Here, the realtor's offer specifically stated that the acceptance
must be received by September 1 to be effective. Thus, the realtor opted out of the mailbox
rule, and no contract was created by delivery of the acceptance on September 2. Note that
the developer will not be able to successfully argue that the acceptance was valid since the
late delivery was the messenger company's fault. This would be a valid argument if the
mailbox rule applied here, because the acceptance would have been effective on September
1, when the message was given to the messenger company. However, by opting out of the
mailbox rule, the realtor put the burden of any negligence in delivery on the developer. Thus,
there was no valid acceptance.
(B) is incorrect because of the requirement that acceptance be received by September 1.
This requirement obviates the general "mailbox rule," so that the mere mailing of a letter (or
sending of a message) does not operate as an effective acceptance.
,(C) is incorrect because the realtor was not obligated to respond in any way to the message
received on September 2. Once the specified time passed without receipt of acceptance, the
offer (as well as the developer's power of acceptance) was terminated. Thus, receipt of the
message on September 2 created neither a contract nor an obligation on the part of the
realtor to respond to the message.
(D) is incorrect because no contract, voidable or otherwise, arose on September 1. As
explained above, there could be no contract because acceptance of the offer was not
received as specified by the offer. Also, the facts do not indicate circumstances under which
a contract is usually held to be voidable. A voidable contract is a contract that one or both
parties may elect to avoid (e.g., contracts of infants). The facts of this question provide no
basis for concluding that any contract that might have arisen between these parties would be
voidable.
2. A homeowner offered a landscape gardener $1,000 to trim and reshape the bushes on
her property if the gardener could finish the job before her garden party on June 1. The
gardener told the homeowner that he would get back to her after he had checked his
calendar. The next day, the gardener phoned the homeowner, who was not at home, and left
a message on her voicemail that he had the time, but could not do the job for less than
$1,200. The gardener did not hear from the homeowner for several days.
As June 1 drew closer, the gardener phoned the homeowner again and left another
message on her voicemail stating that "I'll do the job for $1,000, this weekend, unless that
would be inconvenient." The homeowner replayed the second message just as she was
leaving town on a business trip and did not contact the gardener. That weekend,
unbeknownst to the homeowner, the gardener took his tools to the homeowner's house and
trimmed and reshaped the bushes to the homeowner's specifications. When the homeowner
returned from her trip several days later, the gardener presented her with a handwritten
invoice for $1,000.
If the homeowner refuses to pay the gardener, and the latter brings an action solely for
breach of contract to recover the $1,000 contract amount, who will likely prevail?
A. The gardener, because the homeowner knew of the gardener's plans to do the
landscaping job over the weekend in question, putting the burden on the homeowner to call
off the job if she did not want the gardener to perform.
B. The gardener, because this was a unilateral contract, the terms of which the gardener
accepted by performing his duties under the contract.
C. The homeowner, because she revoked her offer when she ignored the gardener's
subsequent phone calls agreeing to do the job at the original price.
D. The homeowner, because she did not accept the gardener's offer to do the landscaping
job for $1,000.
ANSWER: D. The homeowner, because she did not accept the gardener's offer to do the
landscaping job for $1,000.
,The homeowner will likely prevail on the breach of contract claim because she did not enter
into a contract with the gardener. To form a contract, there must be a valid offer and
acceptance. The homeowner made an offer, but the gardener rejected the offer the next day
with his first phone call. Once an offer is rejected, the offeree's power of acceptance is
destroyed. Thus, the gardener's second call was not an acceptance, but rather a
counteroffer. The homeowner did nothing to accept the gardener's counteroffer, and this is
not the type of case where silence will be deemed to be an acceptance (e.g., where the
parties have so agreed or where that has been their course of dealing). Thus, there was no
acceptance and no contract to breach.
(A) is incorrect because an offeree cannot be forced to speak under penalty of having
silence treated as an acceptance. If an offeree silently takes offered benefits, the courts will
often find acceptance, especially if prior dealings between the parties, or trade practices
known to both parties, create a commercially reasonable expectation by the offeror that
silence represents an acceptance; in such cases, the offeree is under a duty to notify the
offeror if she does not intend to accept. As discussed above, the gardener rejected the initial
offer and made a counteroffer, putting the homeowner in the position of offeree. The
homeowner's silence cannot be construed as acceptance absent a showingof prior dealings
between the parties or trade practices known to both. Moreover, the gardener's last phone
call to the homeowner was somewhat ambiguous, and the homeowner could argue that she
did not know with certainty that the gardener would still perform the job after getting no
response. Further, she was not home that weekend and, therefore, did not stand idly by and
knowingly accept the gardener's work.
(B) is incorrect because this was not a unilateral contract. A unilateral contract exists only
when an offeror makes acceptance possible only by performing a stipulated act, whereas a
bilateral contract contemplates an exchange of promises. Here, the homeowner asked the
gardener whether he would perform an act and expected a reply from the gardener; indeed,
the gardener told the homeowner that he would telephone her with his answer the next day,
which he did (in effect, rejecting the offer). Thus, this was not a unilateral contract that could
properly be accepted through performance.
(C) is incorrect because the gardener's power of acceptance was destroyed when he
rejected the homeowner's offer, as discussed above, and once that occurred, the offer was
gone and could not be revoked.
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3. A young man was planning a ski trip to Colorado to celebrate his graduation from
business school. Because he had a problem with drugs in his late teens, his father was
afraid that he would relapse when he got to Colorado, where marijuana is legal.
Consequently, his father told him, "If you refrain from smoking marijuana during your trip to
Colorado, I will give you $5,000 as a down payment on that car you are planning to buy."
The young man said nothing but was pleased by the offer because he needed the money
and had no plans to smoke marijuana in any case. The young man went to Colorado and did
not smoke marijuana there. Three weeks into the trip, and a week before he was due to go
home, his father died suddenly of a heart attack, prompting him to cut his trip short and
return home. If the young man seeks payment of the $5,000 from his father's estate, will he
likely prevail?
(A) No, because he remained silent following his father's offer and, thus, did not make a valid
acceptance of the offer.
(B) No, because his father's offer to pay was terminated upon his death.
(C) Yes, because he has performed under a valid contract, and thus his father's estate must
now perform.
(D) Yes, because he changed his position for the worse in reliance on his father's promise,
and thus the executor is estopped from denying that the contract existed.
ANSWER: (C) Yes, because he has performed under a valid contract, and thus his father's
estate must now perform.
The young man will prevail because he has performed under a valid contract. The parties
entered into a valid unilateral contract: The father offered to give his son $5,000 if he did not
smoke marijuana during his trip to Colorado; the son accepted by giving up something that
he had a legal right to do under Colorado law. Thus, there was consideration on both sides.
Because the young man performed his duties under the contract by refraining from smoking
marijuana while in Colorado, the father's estate is bound to perform its duties and pay the
young man.
(A) is incorrect because a unilateral contract such as this one is accepted by performance
rather than by a promise.
(B) is incorrect because an offer will not be terminated by the death of the offeror if the
offeror's power to revoke is limited by law, such as in the case of a valid unilateral contract.
Here, the young man had begun performance (by refraining from smoking marijuana),
making the offer irrevocable during the time he was given to complete performance.
(D) is incorrect because it contemplates promissory estoppel, a remedy that is relied on to
make a promise enforceable when it would otherwise be unenforceable because of
insufficient consideration. Because there was sufficient consideration between the young
man and his father, as discussed above, a promissory estoppel argument would not be
appropriate here.
1. On August 1, a realtor mailed a written offer to a developer for the sale of a large tract of
land. The offer included the following terms:
This offer expires on September 1, if the offeree has not caused an acceptance to be
received by the offeror on or before that date.
Early on September 1, the developer sent a written acceptance by messenger but the
messenger company negligently withheld delivery to the realtor until September 2. On
September 4, the realtor entered into a contract for sale of the tract to another buyer but did
not inform the developer of the transaction. When the developer contacted the realtor a few
days later, the realtor said there was no contract between them.
What is the most accurate statement regarding the relationship between the parties?
A. No contract between the realtor and the developer arose on September 2.
B. A contract would have arisen if a letter of acceptance were mailed on September 1.
C. The realtor's silence constituted an acceptance of the developer's written message on
September 2.
D. A voidable contract arose on September 1.
ANSWER: A. No contract between the realtor and the developer arose on September 2.
No contract arose on September 2 because the realtor's offer expired on September 1, when
the realtor did not receive the developer's acceptance. If a period of acceptance is stated in
an offer, the offeree must accept within that period to create a contract. Failure to timely
accept terminates the power of acceptance in the offeree (i.e., a late acceptance will not be
effective and will not create a contract). Under the mailbox rule, an acceptance generally is
effective upon dispatch (i.e., the acceptance creates a contract at the moment it is mailed or
given to the delivery company). However, the mailbox rule does not apply where the offer
states that acceptance will not be effective until received. In the latter case, acceptance is
effective only upon receipt. Here, the realtor's offer specifically stated that the acceptance
must be received by September 1 to be effective. Thus, the realtor opted out of the mailbox
rule, and no contract was created by delivery of the acceptance on September 2. Note that
the developer will not be able to successfully argue that the acceptance was valid since the
late delivery was the messenger company's fault. This would be a valid argument if the
mailbox rule applied here, because the acceptance would have been effective on September
1, when the message was given to the messenger company. However, by opting out of the
mailbox rule, the realtor put the burden of any negligence in delivery on the developer. Thus,
there was no valid acceptance.
(B) is incorrect because of the requirement that acceptance be received by September 1.
This requirement obviates the general "mailbox rule," so that the mere mailing of a letter (or
sending of a message) does not operate as an effective acceptance.
,(C) is incorrect because the realtor was not obligated to respond in any way to the message
received on September 2. Once the specified time passed without receipt of acceptance, the
offer (as well as the developer's power of acceptance) was terminated. Thus, receipt of the
message on September 2 created neither a contract nor an obligation on the part of the
realtor to respond to the message.
(D) is incorrect because no contract, voidable or otherwise, arose on September 1. As
explained above, there could be no contract because acceptance of the offer was not
received as specified by the offer. Also, the facts do not indicate circumstances under which
a contract is usually held to be voidable. A voidable contract is a contract that one or both
parties may elect to avoid (e.g., contracts of infants). The facts of this question provide no
basis for concluding that any contract that might have arisen between these parties would be
voidable.
2. A homeowner offered a landscape gardener $1,000 to trim and reshape the bushes on
her property if the gardener could finish the job before her garden party on June 1. The
gardener told the homeowner that he would get back to her after he had checked his
calendar. The next day, the gardener phoned the homeowner, who was not at home, and left
a message on her voicemail that he had the time, but could not do the job for less than
$1,200. The gardener did not hear from the homeowner for several days.
As June 1 drew closer, the gardener phoned the homeowner again and left another
message on her voicemail stating that "I'll do the job for $1,000, this weekend, unless that
would be inconvenient." The homeowner replayed the second message just as she was
leaving town on a business trip and did not contact the gardener. That weekend,
unbeknownst to the homeowner, the gardener took his tools to the homeowner's house and
trimmed and reshaped the bushes to the homeowner's specifications. When the homeowner
returned from her trip several days later, the gardener presented her with a handwritten
invoice for $1,000.
If the homeowner refuses to pay the gardener, and the latter brings an action solely for
breach of contract to recover the $1,000 contract amount, who will likely prevail?
A. The gardener, because the homeowner knew of the gardener's plans to do the
landscaping job over the weekend in question, putting the burden on the homeowner to call
off the job if she did not want the gardener to perform.
B. The gardener, because this was a unilateral contract, the terms of which the gardener
accepted by performing his duties under the contract.
C. The homeowner, because she revoked her offer when she ignored the gardener's
subsequent phone calls agreeing to do the job at the original price.
D. The homeowner, because she did not accept the gardener's offer to do the landscaping
job for $1,000.
ANSWER: D. The homeowner, because she did not accept the gardener's offer to do the
landscaping job for $1,000.
,The homeowner will likely prevail on the breach of contract claim because she did not enter
into a contract with the gardener. To form a contract, there must be a valid offer and
acceptance. The homeowner made an offer, but the gardener rejected the offer the next day
with his first phone call. Once an offer is rejected, the offeree's power of acceptance is
destroyed. Thus, the gardener's second call was not an acceptance, but rather a
counteroffer. The homeowner did nothing to accept the gardener's counteroffer, and this is
not the type of case where silence will be deemed to be an acceptance (e.g., where the
parties have so agreed or where that has been their course of dealing). Thus, there was no
acceptance and no contract to breach.
(A) is incorrect because an offeree cannot be forced to speak under penalty of having
silence treated as an acceptance. If an offeree silently takes offered benefits, the courts will
often find acceptance, especially if prior dealings between the parties, or trade practices
known to both parties, create a commercially reasonable expectation by the offeror that
silence represents an acceptance; in such cases, the offeree is under a duty to notify the
offeror if she does not intend to accept. As discussed above, the gardener rejected the initial
offer and made a counteroffer, putting the homeowner in the position of offeree. The
homeowner's silence cannot be construed as acceptance absent a showingof prior dealings
between the parties or trade practices known to both. Moreover, the gardener's last phone
call to the homeowner was somewhat ambiguous, and the homeowner could argue that she
did not know with certainty that the gardener would still perform the job after getting no
response. Further, she was not home that weekend and, therefore, did not stand idly by and
knowingly accept the gardener's work.
(B) is incorrect because this was not a unilateral contract. A unilateral contract exists only
when an offeror makes acceptance possible only by performing a stipulated act, whereas a
bilateral contract contemplates an exchange of promises. Here, the homeowner asked the
gardener whether he would perform an act and expected a reply from the gardener; indeed,
the gardener told the homeowner that he would telephone her with his answer the next day,
which he did (in effect, rejecting the offer). Thus, this was not a unilateral contract that could
properly be accepted through performance.
(C) is incorrect because the gardener's power of acceptance was destroyed when he
rejected the homeowner's offer, as discussed above, and once that occurred, the offer was
gone and could not be revoked.
Brainpower
Read More
Previous
Play
Next
Rewind 10 seconds
Move forward 10 seconds
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0:00
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3. A young man was planning a ski trip to Colorado to celebrate his graduation from
business school. Because he had a problem with drugs in his late teens, his father was
afraid that he would relapse when he got to Colorado, where marijuana is legal.
Consequently, his father told him, "If you refrain from smoking marijuana during your trip to
Colorado, I will give you $5,000 as a down payment on that car you are planning to buy."
The young man said nothing but was pleased by the offer because he needed the money
and had no plans to smoke marijuana in any case. The young man went to Colorado and did
not smoke marijuana there. Three weeks into the trip, and a week before he was due to go
home, his father died suddenly of a heart attack, prompting him to cut his trip short and
return home. If the young man seeks payment of the $5,000 from his father's estate, will he
likely prevail?
(A) No, because he remained silent following his father's offer and, thus, did not make a valid
acceptance of the offer.
(B) No, because his father's offer to pay was terminated upon his death.
(C) Yes, because he has performed under a valid contract, and thus his father's estate must
now perform.
(D) Yes, because he changed his position for the worse in reliance on his father's promise,
and thus the executor is estopped from denying that the contract existed.
ANSWER: (C) Yes, because he has performed under a valid contract, and thus his father's
estate must now perform.
The young man will prevail because he has performed under a valid contract. The parties
entered into a valid unilateral contract: The father offered to give his son $5,000 if he did not
smoke marijuana during his trip to Colorado; the son accepted by giving up something that
he had a legal right to do under Colorado law. Thus, there was consideration on both sides.
Because the young man performed his duties under the contract by refraining from smoking
marijuana while in Colorado, the father's estate is bound to perform its duties and pay the
young man.
(A) is incorrect because a unilateral contract such as this one is accepted by performance
rather than by a promise.
(B) is incorrect because an offer will not be terminated by the death of the offeror if the
offeror's power to revoke is limited by law, such as in the case of a valid unilateral contract.
Here, the young man had begun performance (by refraining from smoking marijuana),
making the offer irrevocable during the time he was given to complete performance.
(D) is incorrect because it contemplates promissory estoppel, a remedy that is relied on to
make a promise enforceable when it would otherwise be unenforceable because of
insufficient consideration. Because there was sufficient consideration between the young
man and his father, as discussed above, a promissory estoppel argument would not be
appropriate here.
