JD-Next Practice Exam: Questions with
Answers and Explanations
SECTION 1: CONTRACTS – FORMATION &
OFFER/ACCEPTANCE
Q1. On Monday, Seller offers in writing to sell Buyer a vintage car for $20,000,
stating "this offer will remain open until Friday." On Tuesday, Buyer calls Seller
and says, "I'll give you $18,000." Seller says nothing. On Wednesday, Buyer
changes his mind and calls Seller saying, "I accept your original offer of $20,000."
Is there a contract?
• A) Yes, because the original offer was irrevocable until Friday
• B) Yes, because Buyer's $18,000 proposal was not a rejection but a mere
inquiry
• C) No, because Buyer's $18,000 counteroffer terminated the original offer
• D) No, because the offer was not in a signed writing
✅ Answer: C
,Rationale: Under common law, a counteroffer operates as a rejection of the original
offer and terminates it. Buyer's statement "I'll give you $18,000" is a counteroffer, not a
mere inquiry. The original offer was not an option contract (no consideration given to
keep it open), so Seller was free to revoke or let it be terminated by counteroffer. Seller's
silence does not constitute acceptance of the counteroffer .
Q2. A retailer advertises a new laptop for $299 in a newspaper circular. The ad
states "limited supply, first come first served." A customer arrives at the store at
opening time, but the retailer has sold out. The customer sues for breach of
contract. What is the likely outcome?
• A) The customer wins because advertisements are offers
• B) The customer wins because the ad specified "first come first served"
• C) The retailer wins because advertisements are generally invitations to
make an offer, not offers
• D) The retailer wins because the customer did not pay consideration
✅ Answer: C
Rationale: Generally, advertisements are invitations to bargain, not offers. An exception
exists for ads that are clear, definite, and leave nothing open for negotiation (e.g.,
reward offers). Here, the ad specified limited supply, indicating it was not an offer to all
but an invitation for customers to make offers .
Q3. Seller offers to sell Buyer 100 shares of stock for $50/share. Buyer responds, "I
accept, but payment will be made in 60 days." Seller does not respond. Is there a
contract?
, • A) Yes, because Buyer's response was a definite acceptance
• B) Yes, under the UCC because the additional term is not material
• C) No, because Buyer's response added a term and thus is a counteroffer at
common law
• D) No, because the offer was not in writing
✅ Answer: C
Rationale: Under the common law (applicable to stock sale, not goods under UCC), the
mirror image rule requires acceptance to exactly match the offer. Any additional or
different term makes the response a counteroffer and rejects the original offer. Here,
adding a 60-day payment term is a counteroffer, and Seller's silence is not acceptance .
Q4. When can an offer be withdrawn?
• A) At any time before acceptance
• B) Only if the offeror gives consideration
• C) Only if the offeror revokes in writing
• D) Never, once the offer is made
✅ Answer: A
Rationale: An offer can be withdrawn at any time before acceptance, provided the
offeror communicates the revocation to the offeree before the offeree accepts. An offer
is not binding until accepted .
SECTION 2: CONTRACTS – CAPACITY & CONSIDERATION
Answers and Explanations
SECTION 1: CONTRACTS – FORMATION &
OFFER/ACCEPTANCE
Q1. On Monday, Seller offers in writing to sell Buyer a vintage car for $20,000,
stating "this offer will remain open until Friday." On Tuesday, Buyer calls Seller
and says, "I'll give you $18,000." Seller says nothing. On Wednesday, Buyer
changes his mind and calls Seller saying, "I accept your original offer of $20,000."
Is there a contract?
• A) Yes, because the original offer was irrevocable until Friday
• B) Yes, because Buyer's $18,000 proposal was not a rejection but a mere
inquiry
• C) No, because Buyer's $18,000 counteroffer terminated the original offer
• D) No, because the offer was not in a signed writing
✅ Answer: C
,Rationale: Under common law, a counteroffer operates as a rejection of the original
offer and terminates it. Buyer's statement "I'll give you $18,000" is a counteroffer, not a
mere inquiry. The original offer was not an option contract (no consideration given to
keep it open), so Seller was free to revoke or let it be terminated by counteroffer. Seller's
silence does not constitute acceptance of the counteroffer .
Q2. A retailer advertises a new laptop for $299 in a newspaper circular. The ad
states "limited supply, first come first served." A customer arrives at the store at
opening time, but the retailer has sold out. The customer sues for breach of
contract. What is the likely outcome?
• A) The customer wins because advertisements are offers
• B) The customer wins because the ad specified "first come first served"
• C) The retailer wins because advertisements are generally invitations to
make an offer, not offers
• D) The retailer wins because the customer did not pay consideration
✅ Answer: C
Rationale: Generally, advertisements are invitations to bargain, not offers. An exception
exists for ads that are clear, definite, and leave nothing open for negotiation (e.g.,
reward offers). Here, the ad specified limited supply, indicating it was not an offer to all
but an invitation for customers to make offers .
Q3. Seller offers to sell Buyer 100 shares of stock for $50/share. Buyer responds, "I
accept, but payment will be made in 60 days." Seller does not respond. Is there a
contract?
, • A) Yes, because Buyer's response was a definite acceptance
• B) Yes, under the UCC because the additional term is not material
• C) No, because Buyer's response added a term and thus is a counteroffer at
common law
• D) No, because the offer was not in writing
✅ Answer: C
Rationale: Under the common law (applicable to stock sale, not goods under UCC), the
mirror image rule requires acceptance to exactly match the offer. Any additional or
different term makes the response a counteroffer and rejects the original offer. Here,
adding a 60-day payment term is a counteroffer, and Seller's silence is not acceptance .
Q4. When can an offer be withdrawn?
• A) At any time before acceptance
• B) Only if the offeror gives consideration
• C) Only if the offeror revokes in writing
• D) Never, once the offer is made
✅ Answer: A
Rationale: An offer can be withdrawn at any time before acceptance, provided the
offeror communicates the revocation to the offeree before the offeree accepts. An offer
is not binding until accepted .
SECTION 2: CONTRACTS – CAPACITY & CONSIDERATION
