Commercial Law Contracts – Academic
Year 2026/2027 – Comprehensive
Examination
ACTUAL QUESTIONS
Domain 1: Contract Formation and Mutual Assent
Question 1. Which of the following is required for mutual assent in contract
formation under the common law?
A. A written document signed by both parties
B. A manifestation of mutual assent to the exchange through offer and acceptance
C. Payment of consideration before any agreement
D. Approval by a court
Correct Answer: B
Rationale: Mutual assent is established by an offer that manifests willingness to
enter a bargain and an acceptance that manifests assent to the terms of the offer.
The Restatement (Second) of Contracts emphasizes objective manifestation of
assent.
Question 2. An offer is terminated by which of the following events?
A. The offeree's silence in all circumstances
B. Revocation by the offeror communicated to the offeree before acceptance
C. The offeror's change of mind that is not communicated
D. The passage of one day regardless of the offer's terms
Correct Answer: B
Rationale: An offer may be revoked by the offeror at any time before acceptance,
provided the revocation is communicated to the offeree. Certain irrevocable offers
(option contracts, firm offers under the UCC) are exceptions.
Question 3. Under the Uniform Commercial Code, a firm offer by a
merchant:
A. Requires consideration to be irrevocable
B. Is irrevocable without consideration if it is in a signed writing that gives
assurance it will be held open
C. May never remain open for more than three days
,D. Applies only to real estate transactions
Correct Answer: B
Rationale: UCC § 2-205 provides that a signed written offer by a merchant to buy
or sell goods that gives assurance it will be held open is not revocable for lack of
consideration during the stated time (or a reasonable time if none is stated, not to
exceed three months).
Question 4. Which of the following statements best describes the mirror-image
rule under the common law?
A. An acceptance may vary the terms of the offer and still form a contract
B. An acceptance must match the terms of the offer exactly; any deviation
constitutes a counteroffer
C. The rule applies only to contracts for the sale of goods
D. Silence always operates as acceptance
Correct Answer: B
Rationale: Under the common-law mirror-image rule, an acceptance that varies the
terms of the offer is treated as a counteroffer rather than an acceptance. The UCC
modifies this rule for contracts for the sale of goods.
Question 5. What is the legal effect of a counteroffer?
A. It accepts the original offer and creates a contract
B. It terminates the original offer and creates a new offer
C. It has no effect on the original offer
D. It automatically revokes the original offer after 10 days
Correct Answer: B
Rationale: A counteroffer operates as a rejection of the original offer and
terminates it, while simultaneously creating a new offer that the original offeror
may accept or reject.
Question 6. Under the common law, when does an acceptance become
effective?
A. Upon dispatch, if the offer is for a bilateral contract
B. Upon receipt by the offeror, if the offer is for a unilateral contract
C. Upon dispatch, if the offer is for a unilateral contract
D. Upon receipt by the offeree
Correct Answer: A
Rationale: The mailbox rule provides that an acceptance is generally effective upon
,dispatch (mailing) if the offer is for a bilateral contract, unless the offer provides
otherwise. For unilateral contracts, acceptance occurs only upon full performance.
Question 7. Which of the following is an example of an invitation to treat
rather than an offer?
A. A specific proposal to sell a car for $5,000
B. A newspaper advertisement listing a price for a television
C. A signed purchase order for 100 widgets
D. A verbal promise to pay $100 for a lost dog
Correct Answer: B
Rationale: Advertisements, catalogs, and price lists are generally considered
invitations to treat (invitations to make an offer) rather than binding offers, unless
they are clear, definite, and explicit, leaving nothing open to negotiation.
Question 8. What is required for an offer to be considered definite under the
UCC?
A. All terms must be explicitly stated
B. The quantity term must be stated, but other terms may be filled in by the court
C. The price must be fixed and definite
D. The time and place of delivery must be specified
Correct Answer: B
Rationale: Under the UCC, an offer for the sale of goods is sufficiently definite if it
states the quantity term. Other terms, such as price, time, and place of delivery, can
be filled in by the courts using reasonable standards.
Question 9. A revokes an offer to sell his car to B. B had already mailed an
acceptance before receiving the revocation. Under the mailbox rule, is there a
contract?
A. No, because the revocation was effective upon mailing
B. Yes, because the acceptance was effective upon dispatch
C. No, because B had not received the revocation
D. Yes, but only if A received the acceptance
Correct Answer: B
Rationale: Under the mailbox rule, acceptance is effective upon dispatch. Because
B dispatched the acceptance before receiving the revocation, a valid contract was
formed.
Question 10. Which of the following terminates an offer by operation of law?
A. Revocation by the offeror
, B. Rejection by the offeree
C. Death or incapacity of the offeror
D. Counteroffer by the offeree
Correct Answer: C
Rationale: An offer is terminated by operation of law upon the death or incapacity
of the offeror, or by the destruction of the subject matter, or by supervening
illegality.
Question 11. Under the UCC, what is the effect of additional terms in an
acceptance between merchants?
A. They are always considered counteroffers
B. They become part of the contract unless they materially alter the contract, or the
offer expressly limits acceptance to its terms, or the offeror objects within a
reasonable time
C. They are never part of the contract
D. They must be accepted by the offeror in writing
Correct Answer: B
Rationale: UCC § 2-207 (the "battle of the forms") provides that additional terms
in an acceptance between merchants become part of the contract unless they
materially alter it, the offer limits acceptance, or the offeror objects.
Question 12. What is an option contract?
A. A contract that is voidable at the option of the buyer
B. A distinct contract in which the offeror agrees to keep an offer open for a
specified period in exchange for consideration
C. A contract that can be terminated at will
D. A contract that requires no consideration
Correct Answer: B
Rationale: An option contract is a separate contract where the offeror receives
consideration (e.g., money) in exchange for a promise to keep the original offer
open for a specific period of time.
Question 13. Under the common law, acceptance of a unilateral contract
occurs when:
A. The offeree promises to perform
B. The offeree begins performance
C. The offeree completes performance
D. The offeree mails an acceptance letter
Year 2026/2027 – Comprehensive
Examination
ACTUAL QUESTIONS
Domain 1: Contract Formation and Mutual Assent
Question 1. Which of the following is required for mutual assent in contract
formation under the common law?
A. A written document signed by both parties
B. A manifestation of mutual assent to the exchange through offer and acceptance
C. Payment of consideration before any agreement
D. Approval by a court
Correct Answer: B
Rationale: Mutual assent is established by an offer that manifests willingness to
enter a bargain and an acceptance that manifests assent to the terms of the offer.
The Restatement (Second) of Contracts emphasizes objective manifestation of
assent.
Question 2. An offer is terminated by which of the following events?
A. The offeree's silence in all circumstances
B. Revocation by the offeror communicated to the offeree before acceptance
C. The offeror's change of mind that is not communicated
D. The passage of one day regardless of the offer's terms
Correct Answer: B
Rationale: An offer may be revoked by the offeror at any time before acceptance,
provided the revocation is communicated to the offeree. Certain irrevocable offers
(option contracts, firm offers under the UCC) are exceptions.
Question 3. Under the Uniform Commercial Code, a firm offer by a
merchant:
A. Requires consideration to be irrevocable
B. Is irrevocable without consideration if it is in a signed writing that gives
assurance it will be held open
C. May never remain open for more than three days
,D. Applies only to real estate transactions
Correct Answer: B
Rationale: UCC § 2-205 provides that a signed written offer by a merchant to buy
or sell goods that gives assurance it will be held open is not revocable for lack of
consideration during the stated time (or a reasonable time if none is stated, not to
exceed three months).
Question 4. Which of the following statements best describes the mirror-image
rule under the common law?
A. An acceptance may vary the terms of the offer and still form a contract
B. An acceptance must match the terms of the offer exactly; any deviation
constitutes a counteroffer
C. The rule applies only to contracts for the sale of goods
D. Silence always operates as acceptance
Correct Answer: B
Rationale: Under the common-law mirror-image rule, an acceptance that varies the
terms of the offer is treated as a counteroffer rather than an acceptance. The UCC
modifies this rule for contracts for the sale of goods.
Question 5. What is the legal effect of a counteroffer?
A. It accepts the original offer and creates a contract
B. It terminates the original offer and creates a new offer
C. It has no effect on the original offer
D. It automatically revokes the original offer after 10 days
Correct Answer: B
Rationale: A counteroffer operates as a rejection of the original offer and
terminates it, while simultaneously creating a new offer that the original offeror
may accept or reject.
Question 6. Under the common law, when does an acceptance become
effective?
A. Upon dispatch, if the offer is for a bilateral contract
B. Upon receipt by the offeror, if the offer is for a unilateral contract
C. Upon dispatch, if the offer is for a unilateral contract
D. Upon receipt by the offeree
Correct Answer: A
Rationale: The mailbox rule provides that an acceptance is generally effective upon
,dispatch (mailing) if the offer is for a bilateral contract, unless the offer provides
otherwise. For unilateral contracts, acceptance occurs only upon full performance.
Question 7. Which of the following is an example of an invitation to treat
rather than an offer?
A. A specific proposal to sell a car for $5,000
B. A newspaper advertisement listing a price for a television
C. A signed purchase order for 100 widgets
D. A verbal promise to pay $100 for a lost dog
Correct Answer: B
Rationale: Advertisements, catalogs, and price lists are generally considered
invitations to treat (invitations to make an offer) rather than binding offers, unless
they are clear, definite, and explicit, leaving nothing open to negotiation.
Question 8. What is required for an offer to be considered definite under the
UCC?
A. All terms must be explicitly stated
B. The quantity term must be stated, but other terms may be filled in by the court
C. The price must be fixed and definite
D. The time and place of delivery must be specified
Correct Answer: B
Rationale: Under the UCC, an offer for the sale of goods is sufficiently definite if it
states the quantity term. Other terms, such as price, time, and place of delivery, can
be filled in by the courts using reasonable standards.
Question 9. A revokes an offer to sell his car to B. B had already mailed an
acceptance before receiving the revocation. Under the mailbox rule, is there a
contract?
A. No, because the revocation was effective upon mailing
B. Yes, because the acceptance was effective upon dispatch
C. No, because B had not received the revocation
D. Yes, but only if A received the acceptance
Correct Answer: B
Rationale: Under the mailbox rule, acceptance is effective upon dispatch. Because
B dispatched the acceptance before receiving the revocation, a valid contract was
formed.
Question 10. Which of the following terminates an offer by operation of law?
A. Revocation by the offeror
, B. Rejection by the offeree
C. Death or incapacity of the offeror
D. Counteroffer by the offeree
Correct Answer: C
Rationale: An offer is terminated by operation of law upon the death or incapacity
of the offeror, or by the destruction of the subject matter, or by supervening
illegality.
Question 11. Under the UCC, what is the effect of additional terms in an
acceptance between merchants?
A. They are always considered counteroffers
B. They become part of the contract unless they materially alter the contract, or the
offer expressly limits acceptance to its terms, or the offeror objects within a
reasonable time
C. They are never part of the contract
D. They must be accepted by the offeror in writing
Correct Answer: B
Rationale: UCC § 2-207 (the "battle of the forms") provides that additional terms
in an acceptance between merchants become part of the contract unless they
materially alter it, the offer limits acceptance, or the offeror objects.
Question 12. What is an option contract?
A. A contract that is voidable at the option of the buyer
B. A distinct contract in which the offeror agrees to keep an offer open for a
specified period in exchange for consideration
C. A contract that can be terminated at will
D. A contract that requires no consideration
Correct Answer: B
Rationale: An option contract is a separate contract where the offeror receives
consideration (e.g., money) in exchange for a promise to keep the original offer
open for a specific period of time.
Question 13. Under the common law, acceptance of a unilateral contract
occurs when:
A. The offeree promises to perform
B. The offeree begins performance
C. The offeree completes performance
D. The offeree mails an acceptance letter
