Barbri Contracts Exam Questions With 100%
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On April 10, the owner of a small farm mailed a letter to a new resident of the area who
had expressed an interest in buying the farm. In this letter, the farm owner offered to sell
the farm to the resident for $100,000. The offer expressly stated that the offer expires on
June 1, "if acceptance by the offeree has not been received by the offeror on or before that
date."
On the morning of June 1, the resident sent a written acceptance to the farm owner by
messenger. However, through negligence of the messenger company, the acceptance was
not delivered to the farm owner until June 2. On June 4, the farm owner entered into a
contract to sell the farm to another buyer for more money but did not inform the resident
of the transaction. When the resident followed up by phone on June 10, the farm owner
told him that he had sold the farm to another buyer.
Which of the following is the most correct statement?
There is NO contract between the farm owner and the resident. The offer expressly stated that
acceptance must be received on or before June 1 for it to be effective. Thus, placing the
acceptance in the mail or with a carrier on June 1 does not count as the date of acceptance--it is
only effective once received (this is an exception to the mailbox rule).
On November 5, an electronics store owner realized that his stock of 15 copies of the most
popular video game of the holiday shopping season would not last until the first of the next
month. Seeing an advertisement from the manufacturer of the game in a trade journal
listing its price at $3,000 per hundred, with delivery one week from order, the store owner
e-mailed to the manufacturer an order for 100 copies of the game at $3,000 per hundred.
There were no further communications between the store owner and the manufacturer. By
November 25, the store owner realized that the manufacturer was not going to deliver any
of the video games. He thus was forced to obtain additional stock by purchasing from a
middleman at a cost of $4,000 per hundred. The store owner brings an action for breach of
,contract against the manufacturer.
Who will prevail?
The manufacturer, because it never accepted the offer contained in the store owner's e-mail.
On July 1, a cattle rancher offered to sell his ranch to a dairy farmer for $150,000. The
dairy farmer paid the cattle rancher $1,000 to hold the offer open for a period of 30 days.
On July 10, the dairy farmer wrote to the cattle rancher, telling him that he could not pay
more than $100,000 for the ranch, and that if he would not agree to accept that amount, he
would not go through with the deal. The dairy farmer received no reply from the cattle
rancher.
On July 29, the dairy farmer mailed a letter to the cattle rancher telling him that he
accepted his offer to sell the ranch and enclosed a check for $150,000. The cattle rancher
received this letter on August 1.
Has a contract been formed between the parties for the sale of the ranch?
No, because the cattle rancher did not receive the dairy farmer's acceptance within 30 days. The
mailbox rule does NOT apply to an option K, which requires that the acceptance be received
before the offer expires, nor does it apply to offers that specify that acceptance must be received
by a certain date. R2K 63(b) cmt. f.
On December 6, the owner of an electronics store sent a written request to a computer
manufacturer asking for the price of a certain laptop computer. The manufacturer sent a
written reply with a catalog listing the prices and descriptions of all of his available
computers. The letter stated that the terms of sale were cash within 30 days of delivery. On
December 14, by return letter, the store owner ordered the computer, enclosing a check for
$4,000, the listed price. Immediately on receipt of the order and check, the manufacturer
informed the store owner that there had been a pricing mistake in the catalog, which
should have quoted the price as $4,300 for that computer. The store owner refused to pay
the additional $300, arguing that his order of December 14 in which the $4,000 check was
enclosed was a proper acceptance of the manufacturer's offer.
In a suit for damages, will the manufacturer prevail?
,No, because the store owner's December 14 letter was a proper acceptance of the manufacturer's
offer. This is a unilateral mistake, which does not prevent the formation of a K. However, if the
nonmistaken party (the owner) knew or had reason to know of the mistake made by the other
party, the contract is voidable by the mistaken party. As is the case with mutual mistake, for the
contract to be voidable, the mistake must have a material effect on the agreed upon exchange and
the mistaken party must not have borne the risk of the mistake. Materiality is determined by the
overall impact
on both parties.
A general contractor who wished to bid on a construction project solicited bids from a
variety of subcontractors. Four electrical subcontractors submitted bids to the contractor
in the amounts of $75,000, $85,000, $90,000, and $95,000, respectively.
As he was making out his company's bid, which was higher than he wanted it to be, the
contractor called the low bidder on the electrical work and told him, "We won't be able to
do it with your present bid, but if you can shave off $5,000, I'm sure that the numbers will
be there for us to get that project." The low bidder told the contractor that he could not
lower his bid, adding that the bid he submitted was based on a $15,000 error, and he could
not do the job for less than $90,000. The contractor lost the construction job and
subsequently sued the low bidder.
For what is the low bidder is liable?
Nothing, because the low bidder rejected the contractor's counteroffer.
On April 1, a music store owner offered to sell a rare piano to his best customer, a concert
pianist, for $100,000. The following day, the pianist, who performs around the world with
two of the several pianos he has purchased from the store, wrote to the store owner: "I
have decided to purchase the piano. A check for $100,000 is enclosed. I am leaving in one
week for Canada. I will be gone for one month and will pick up the piano when I return. I
will pay you to store the piano in your air-conditioned warehouse." One week later, the
pianist left for Canada without hearing from the music store owner.
What does the letter that the pianist wrote to the store owner constitute?
An acceptance, and the store owner must store the piano but is entitled to the reasonable value of
that service.
, On February 1, the owner of a bowling alley read in a magazine an ad from a major
manufacturer of bowling balls offering sets of 40 balls in various weights and drilled in
various sizes for $10 per ball. The owner immediately filled out the order form included in
the ad for the 40 balls and deposited it, properly stamped and addressed, into the mail. On
February 2, the bowling alley owner received in the mail a letter from the manufacturer,
sent out as part of its advertising campaign, stating in relevant part that it will sell the
bowling alley owner 40 bowling balls at $10 per ball. A day later, on February 3, the
manufacturer received the bowling alley owner's order. On February 4, the balls were
shipped.
On what day did an enforceable contract arise?
February 4, the day the balls were shipped.
A bulk retailer of accessories for musical instruments placed an advertisement in a trade
magazine popular with those in the music business, offering for sale 50-count boxes of a
particular type of mouthpiece for use with the French horn, minimum purchase 10 boxes,
at $100 per box. In response to the advertisement, the owner of a large store that sold brass
and woodwind instruments in its shop and over the Internet sent a written order to the
bulk retailer for 12 boxes (50-count) of the mouthpiece. In his letter that accompanied the
order, the store owner stated that he would send the bulk retailer his payment of $1,200
upon delivery. The letter also said that the mouthpieces must fit onto three specified models
of French horn.
The day after receiving the written order and letter from the store owner, the bulk retailer
shipped 12 boxes (50-count) of the mouthpiece to him. Accompanying the invoice on the
boxes was a letter from the bulk retailer stating that the mouthpieces are compatible with
two of the models of French horn, but that the retailer makes no warranties as to the
compatibility of the mouthpieces with any other model of French horn. Shortly after
accepting shipment of the boxes, the store owner realized that the mouthpieces did not fit
onto the third model of French horn that it had specified and instituted an action against
the bulk retailer.
Which of the following statements would offer the strongest support in favor of the store
owner's position?
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On April 10, the owner of a small farm mailed a letter to a new resident of the area who
had expressed an interest in buying the farm. In this letter, the farm owner offered to sell
the farm to the resident for $100,000. The offer expressly stated that the offer expires on
June 1, "if acceptance by the offeree has not been received by the offeror on or before that
date."
On the morning of June 1, the resident sent a written acceptance to the farm owner by
messenger. However, through negligence of the messenger company, the acceptance was
not delivered to the farm owner until June 2. On June 4, the farm owner entered into a
contract to sell the farm to another buyer for more money but did not inform the resident
of the transaction. When the resident followed up by phone on June 10, the farm owner
told him that he had sold the farm to another buyer.
Which of the following is the most correct statement?
There is NO contract between the farm owner and the resident. The offer expressly stated that
acceptance must be received on or before June 1 for it to be effective. Thus, placing the
acceptance in the mail or with a carrier on June 1 does not count as the date of acceptance--it is
only effective once received (this is an exception to the mailbox rule).
On November 5, an electronics store owner realized that his stock of 15 copies of the most
popular video game of the holiday shopping season would not last until the first of the next
month. Seeing an advertisement from the manufacturer of the game in a trade journal
listing its price at $3,000 per hundred, with delivery one week from order, the store owner
e-mailed to the manufacturer an order for 100 copies of the game at $3,000 per hundred.
There were no further communications between the store owner and the manufacturer. By
November 25, the store owner realized that the manufacturer was not going to deliver any
of the video games. He thus was forced to obtain additional stock by purchasing from a
middleman at a cost of $4,000 per hundred. The store owner brings an action for breach of
,contract against the manufacturer.
Who will prevail?
The manufacturer, because it never accepted the offer contained in the store owner's e-mail.
On July 1, a cattle rancher offered to sell his ranch to a dairy farmer for $150,000. The
dairy farmer paid the cattle rancher $1,000 to hold the offer open for a period of 30 days.
On July 10, the dairy farmer wrote to the cattle rancher, telling him that he could not pay
more than $100,000 for the ranch, and that if he would not agree to accept that amount, he
would not go through with the deal. The dairy farmer received no reply from the cattle
rancher.
On July 29, the dairy farmer mailed a letter to the cattle rancher telling him that he
accepted his offer to sell the ranch and enclosed a check for $150,000. The cattle rancher
received this letter on August 1.
Has a contract been formed between the parties for the sale of the ranch?
No, because the cattle rancher did not receive the dairy farmer's acceptance within 30 days. The
mailbox rule does NOT apply to an option K, which requires that the acceptance be received
before the offer expires, nor does it apply to offers that specify that acceptance must be received
by a certain date. R2K 63(b) cmt. f.
On December 6, the owner of an electronics store sent a written request to a computer
manufacturer asking for the price of a certain laptop computer. The manufacturer sent a
written reply with a catalog listing the prices and descriptions of all of his available
computers. The letter stated that the terms of sale were cash within 30 days of delivery. On
December 14, by return letter, the store owner ordered the computer, enclosing a check for
$4,000, the listed price. Immediately on receipt of the order and check, the manufacturer
informed the store owner that there had been a pricing mistake in the catalog, which
should have quoted the price as $4,300 for that computer. The store owner refused to pay
the additional $300, arguing that his order of December 14 in which the $4,000 check was
enclosed was a proper acceptance of the manufacturer's offer.
In a suit for damages, will the manufacturer prevail?
,No, because the store owner's December 14 letter was a proper acceptance of the manufacturer's
offer. This is a unilateral mistake, which does not prevent the formation of a K. However, if the
nonmistaken party (the owner) knew or had reason to know of the mistake made by the other
party, the contract is voidable by the mistaken party. As is the case with mutual mistake, for the
contract to be voidable, the mistake must have a material effect on the agreed upon exchange and
the mistaken party must not have borne the risk of the mistake. Materiality is determined by the
overall impact
on both parties.
A general contractor who wished to bid on a construction project solicited bids from a
variety of subcontractors. Four electrical subcontractors submitted bids to the contractor
in the amounts of $75,000, $85,000, $90,000, and $95,000, respectively.
As he was making out his company's bid, which was higher than he wanted it to be, the
contractor called the low bidder on the electrical work and told him, "We won't be able to
do it with your present bid, but if you can shave off $5,000, I'm sure that the numbers will
be there for us to get that project." The low bidder told the contractor that he could not
lower his bid, adding that the bid he submitted was based on a $15,000 error, and he could
not do the job for less than $90,000. The contractor lost the construction job and
subsequently sued the low bidder.
For what is the low bidder is liable?
Nothing, because the low bidder rejected the contractor's counteroffer.
On April 1, a music store owner offered to sell a rare piano to his best customer, a concert
pianist, for $100,000. The following day, the pianist, who performs around the world with
two of the several pianos he has purchased from the store, wrote to the store owner: "I
have decided to purchase the piano. A check for $100,000 is enclosed. I am leaving in one
week for Canada. I will be gone for one month and will pick up the piano when I return. I
will pay you to store the piano in your air-conditioned warehouse." One week later, the
pianist left for Canada without hearing from the music store owner.
What does the letter that the pianist wrote to the store owner constitute?
An acceptance, and the store owner must store the piano but is entitled to the reasonable value of
that service.
, On February 1, the owner of a bowling alley read in a magazine an ad from a major
manufacturer of bowling balls offering sets of 40 balls in various weights and drilled in
various sizes for $10 per ball. The owner immediately filled out the order form included in
the ad for the 40 balls and deposited it, properly stamped and addressed, into the mail. On
February 2, the bowling alley owner received in the mail a letter from the manufacturer,
sent out as part of its advertising campaign, stating in relevant part that it will sell the
bowling alley owner 40 bowling balls at $10 per ball. A day later, on February 3, the
manufacturer received the bowling alley owner's order. On February 4, the balls were
shipped.
On what day did an enforceable contract arise?
February 4, the day the balls were shipped.
A bulk retailer of accessories for musical instruments placed an advertisement in a trade
magazine popular with those in the music business, offering for sale 50-count boxes of a
particular type of mouthpiece for use with the French horn, minimum purchase 10 boxes,
at $100 per box. In response to the advertisement, the owner of a large store that sold brass
and woodwind instruments in its shop and over the Internet sent a written order to the
bulk retailer for 12 boxes (50-count) of the mouthpiece. In his letter that accompanied the
order, the store owner stated that he would send the bulk retailer his payment of $1,200
upon delivery. The letter also said that the mouthpieces must fit onto three specified models
of French horn.
The day after receiving the written order and letter from the store owner, the bulk retailer
shipped 12 boxes (50-count) of the mouthpiece to him. Accompanying the invoice on the
boxes was a letter from the bulk retailer stating that the mouthpieces are compatible with
two of the models of French horn, but that the retailer makes no warranties as to the
compatibility of the mouthpieces with any other model of French horn. Shortly after
accepting shipment of the boxes, the store owner realized that the mouthpieces did not fit
onto the third model of French horn that it had specified and instituted an action against
the bulk retailer.
Which of the following statements would offer the strongest support in favor of the store
owner's position?
