BUL 4421 REVISION EXAM 2025/2026 QUESTIONS AND
ANSWERS RATED A+
✔✔under detrimental reliance, once significant partial performance has begun -
✔✔offeror must give offeree a reasonable amount of time to complete performance
before revocation can take place
✔✔Rejection - ✔✔Regardless of anything, once the offeree rejects it, it is terminated.
✔✔Counteroffer - ✔✔i. An offer made by an offeree to his offeror relating to the same
matter as the original and proposing a substituted bargain differing from that proposed
in the original offer.
ii. A counteroffer terminates the original offer and the offeree becomes the offeror.
✔✔Death or incapacity of the offeror - ✔✔terms immediately if offeror dies or loses legal
capacity, even if offeree is unaware
✔✔exception to death or incapacity of offeror - ✔✔parties had entered into an options
contract; admin of estate or guardian must hold offer open until expiration in accordance
with options contract
✔✔Destruction or subsequent illegality of the subject matter - ✔✔If the subject matter of
the offer is destroyed or becomes illegal, the offer immediately terminates.
-Ex: House for sale burns down.
✔✔Lapse of time - ✔✔i. If the offer states it will be held open for only a certain time, it
terminates when that time expires.
ii. In absence, offer will expire after reasonable amount of time.
✔✔Authorized Means of Acceptance - ✔✔means by which offer can be accepted
✔✔when auth means of acceptance are stated in contract = - ✔✔express authorization;
no other means of acceptance is valid
✔✔if no means of acceptance is specified - ✔✔any reasonable means is allowed;
courts will determine by observing circumstances and communication of offer
✔✔Unauthorized Means of Acceptance - ✔✔offer acceptance through invalid means
✔✔effect of Unauthorized Means of Acceptance - ✔✔i. no contract formed until
authorized means of acceptance used
✔✔unilateral exception to Unauthorized Means of Acceptance - ✔✔only performance
by the offeree constitutes a valid acceptance.
,✔✔III. CHAPTER 15: Consideration - ✔✔III. CHAPTER 15: Consideration
✔✔Consideration - ✔✔*What a person receives in return for performing a contract
obligation.*
✔✔Types of consideration (4): - ✔✔1. A *benefit* to the promise
2. A *detriment* to the promisor
Ex: Punch the promisor in the face
3. A *promise to do* something
Ex: Face to face promise
4. A *promise to refrain* from doing something
Ex: Promise to *not* punch the promisor in the face.
✔✔Adequacy of consideration - ✔✔The court doesn't help you if you made a bad deal
(paid $500 for a $100 TV).
✔✔Exception to Adequacy of consideration - ✔✔if the court believes fraud or undue
influence occurred, the court may look at adequacy of consideration.
✔✔Illusory Promise - ✔✔i. Is not a promise at all
ii. This promise is not consideration
Ex: Shawn offers to sell Molly his skis for $300, and Molly responds "I'll look at them in
the morning, and if I like them, I'll pay you."
✔✔Enforcement of Promise - ✔✔For a court to *enforce* a promise, both parties must
provide valid consideration, consideration by one party only is insufficient to support
this:
✔✔Preexisting Duty Rule - ✔✔i. Performance of a duty you are *obligated* to do under
the law is not consideration.
ii. Performance of an *existing contractual duty* is not good consideration.
✔✔Types of Partial Payment of a Debt (2): - ✔✔i. Liquidated debt
ii. Unliquidated debt
✔✔Liquidated debt - ✔✔*No dispute that money is owed or how much* - debtor must
pay the full amount even if agree to lesser sum.
✔✔Unliquidated debt - ✔✔The parties either *disagree about whether money is owed or
dispute the amount* - the parties can settle for less than the full amount if they *enter
into an accord and satisfaction.*
✔✔Accord & Satisfaction (used for Unliquidated debt) - ✔✔Settling to pay an
unliquidated debt for less than the full amount (requires 3 things).
, ✔✔3 Requirements for Accord & Satisfaction: - ✔✔1. The debt is unliquidated
2. The creditor agrees to accept less than it is owed as full payment.
3. The debtor pays the amount they have agreed on
✔✔"accord" = - ✔✔new agreement to pay less than creditor claims is owed
✔✔"satisfaction" = - ✔✔debtor's payment of a reduced amount
✔✔under accord and satisfaction, the debt is - ✔✔fully discharged
✔✔failure to pay under accord and satisfaction - ✔✔creditor can sue for full amount of
original debt
✔✔IV. CHAPTER 16: Capacity and Legality - ✔✔IV. CHAPTER 16: Capacity and
Legality
✔✔The third required element of a legally binding contract - ✔✔Capacity
✔✔Capacity - ✔✔the mental ability to understand his or her rights and obligations under
a contract and therefore presumable to comply with the terms
✔✔incapacity or incompetence - ✔✔mental or physical defect that prevents natural
person from being able to enter into a legally binding contract
✔✔two types of incapacity - ✔✔no capacity and limited capacity
✔✔no capacity - ✔✔complete inability to enter into contracts
✔✔limited capacity - ✔✔ability to form only voidable contracts (minors, insane persons,
convicts, etc.)
✔✔minors - ✔✔persons under 18 unless emancipated
✔✔(t or f) emancipated minors have full legal capacity to enter into contracts - ✔✔true
✔✔Emancipation - ✔✔This occurs when a minor's parents or legal guardians give up
their right to exercise legal control over the minor, typically when the minor moves out of
the parents' house and begins supporting himself or herself.
✔✔(t or f) a married minor is not considered emancipated - ✔✔false; married minor =
emancipated
ANSWERS RATED A+
✔✔under detrimental reliance, once significant partial performance has begun -
✔✔offeror must give offeree a reasonable amount of time to complete performance
before revocation can take place
✔✔Rejection - ✔✔Regardless of anything, once the offeree rejects it, it is terminated.
✔✔Counteroffer - ✔✔i. An offer made by an offeree to his offeror relating to the same
matter as the original and proposing a substituted bargain differing from that proposed
in the original offer.
ii. A counteroffer terminates the original offer and the offeree becomes the offeror.
✔✔Death or incapacity of the offeror - ✔✔terms immediately if offeror dies or loses legal
capacity, even if offeree is unaware
✔✔exception to death or incapacity of offeror - ✔✔parties had entered into an options
contract; admin of estate or guardian must hold offer open until expiration in accordance
with options contract
✔✔Destruction or subsequent illegality of the subject matter - ✔✔If the subject matter of
the offer is destroyed or becomes illegal, the offer immediately terminates.
-Ex: House for sale burns down.
✔✔Lapse of time - ✔✔i. If the offer states it will be held open for only a certain time, it
terminates when that time expires.
ii. In absence, offer will expire after reasonable amount of time.
✔✔Authorized Means of Acceptance - ✔✔means by which offer can be accepted
✔✔when auth means of acceptance are stated in contract = - ✔✔express authorization;
no other means of acceptance is valid
✔✔if no means of acceptance is specified - ✔✔any reasonable means is allowed;
courts will determine by observing circumstances and communication of offer
✔✔Unauthorized Means of Acceptance - ✔✔offer acceptance through invalid means
✔✔effect of Unauthorized Means of Acceptance - ✔✔i. no contract formed until
authorized means of acceptance used
✔✔unilateral exception to Unauthorized Means of Acceptance - ✔✔only performance
by the offeree constitutes a valid acceptance.
,✔✔III. CHAPTER 15: Consideration - ✔✔III. CHAPTER 15: Consideration
✔✔Consideration - ✔✔*What a person receives in return for performing a contract
obligation.*
✔✔Types of consideration (4): - ✔✔1. A *benefit* to the promise
2. A *detriment* to the promisor
Ex: Punch the promisor in the face
3. A *promise to do* something
Ex: Face to face promise
4. A *promise to refrain* from doing something
Ex: Promise to *not* punch the promisor in the face.
✔✔Adequacy of consideration - ✔✔The court doesn't help you if you made a bad deal
(paid $500 for a $100 TV).
✔✔Exception to Adequacy of consideration - ✔✔if the court believes fraud or undue
influence occurred, the court may look at adequacy of consideration.
✔✔Illusory Promise - ✔✔i. Is not a promise at all
ii. This promise is not consideration
Ex: Shawn offers to sell Molly his skis for $300, and Molly responds "I'll look at them in
the morning, and if I like them, I'll pay you."
✔✔Enforcement of Promise - ✔✔For a court to *enforce* a promise, both parties must
provide valid consideration, consideration by one party only is insufficient to support
this:
✔✔Preexisting Duty Rule - ✔✔i. Performance of a duty you are *obligated* to do under
the law is not consideration.
ii. Performance of an *existing contractual duty* is not good consideration.
✔✔Types of Partial Payment of a Debt (2): - ✔✔i. Liquidated debt
ii. Unliquidated debt
✔✔Liquidated debt - ✔✔*No dispute that money is owed or how much* - debtor must
pay the full amount even if agree to lesser sum.
✔✔Unliquidated debt - ✔✔The parties either *disagree about whether money is owed or
dispute the amount* - the parties can settle for less than the full amount if they *enter
into an accord and satisfaction.*
✔✔Accord & Satisfaction (used for Unliquidated debt) - ✔✔Settling to pay an
unliquidated debt for less than the full amount (requires 3 things).
, ✔✔3 Requirements for Accord & Satisfaction: - ✔✔1. The debt is unliquidated
2. The creditor agrees to accept less than it is owed as full payment.
3. The debtor pays the amount they have agreed on
✔✔"accord" = - ✔✔new agreement to pay less than creditor claims is owed
✔✔"satisfaction" = - ✔✔debtor's payment of a reduced amount
✔✔under accord and satisfaction, the debt is - ✔✔fully discharged
✔✔failure to pay under accord and satisfaction - ✔✔creditor can sue for full amount of
original debt
✔✔IV. CHAPTER 16: Capacity and Legality - ✔✔IV. CHAPTER 16: Capacity and
Legality
✔✔The third required element of a legally binding contract - ✔✔Capacity
✔✔Capacity - ✔✔the mental ability to understand his or her rights and obligations under
a contract and therefore presumable to comply with the terms
✔✔incapacity or incompetence - ✔✔mental or physical defect that prevents natural
person from being able to enter into a legally binding contract
✔✔two types of incapacity - ✔✔no capacity and limited capacity
✔✔no capacity - ✔✔complete inability to enter into contracts
✔✔limited capacity - ✔✔ability to form only voidable contracts (minors, insane persons,
convicts, etc.)
✔✔minors - ✔✔persons under 18 unless emancipated
✔✔(t or f) emancipated minors have full legal capacity to enter into contracts - ✔✔true
✔✔Emancipation - ✔✔This occurs when a minor's parents or legal guardians give up
their right to exercise legal control over the minor, typically when the minor moves out of
the parents' house and begins supporting himself or herself.
✔✔(t or f) a married minor is not considered emancipated - ✔✔false; married minor =
emancipated
