CLA/CP Exam Contract Formation and Enforcement 3 — Questions and Answers
Question 1: An offeror states the offer is 'open for 30 days.' Under common law, the offeror revokes after 10 days. What is the result?
- The revocation is effective because offers are generally revocable (Correct answer)
- The revocation is invalid because the offeror promised to keep it open
- The offer automatically converts to a firm offer
- The offeree can sue for breach immediately
Correct answer: The revocation is effective because offers are generally revocable
Under common law, an offeror may revoke at any time before acceptance even if a time period was promised, unless consideration was paid for an option contract.
Question 2: Which of the following best describes an illusory promise?
- A promise that leaves performance entirely to the promisor's discretion (Correct answer)
- A promise made under duress
- A promise conditioned on an uncertain future event
- A promise made without a formal writing
Correct answer: A promise that leaves performance entirely to the promisor's discretion
An illusory promise imposes no actual obligation because the promisor retains complete discretion over whether to perform, making it insufficient as consideration.
Question 3: Contracts for the sale of real estate, contracts that cannot be performed within one year, and contracts to pay another's debt are all subject to which requirement?
- The Statute of Frauds (Correct answer)
- The parol evidence rule
- The doctrine of unconscionability
- The mirror image rule
Correct answer: The Statute of Frauds
The Statute of Frauds requires these specific categories of contracts to be evidenced by a signed writing to be enforceable.
Question 4: Party A enters a contract under threat of physical harm. The contract is:
- Voidable at the option of Party A (Correct answer)
- Void ab initio
- Valid and fully enforceable
- Unenforceable only if Party A disaffirms within a reasonable time
Correct answer: Voidable at the option of Party A
A contract formed under duress is voidable, meaning the coerced party may elect to affirm or avoid the contract.
Question 5: Under the mailbox rule, an acceptance sent by mail is effective:
- When it is dispatched (placed in the mail) (Correct answer)
- When it is received by the offeror
- When it is postmarked by the post office
- When the offeror reads it
Correct answer: When it is dispatched (placed in the mail)
The mailbox rule makes acceptance effective upon dispatch, meaning the contract is formed the moment the acceptance is properly mailed.
Question 6: A minor enters a contract for a luxury sports car. The minor later seeks to disaffirm. The merchant may:
- Recover the reasonable value of necessaries provided to the minor (Correct answer)
- Enforce the contract fully because the minor signed voluntarily
- Sue for consequential damages caused by the disaffirmance
- Require the minor's parents to assume the contract
Correct answer: Recover the reasonable value of necessaries provided to the minor
While minors may disaffirm most contracts, they remain liable for the reasonable value of necessaries, though a luxury car does not qualify as a necessary.
Question 7: Which of the following scenarios most clearly involves a unilateral contract?
- A company offers a $500 reward to anyone who returns a lost dog (Correct answer)
- Two businesses agree to exchange goods and payment by a set date
- A contractor promises to build a garage in exchange for payment
- An employer promises a bonus if annual targets are met in writing
Correct answer: A company offers a $500 reward to anyone who returns a lost dog
A unilateral contract is formed by a promise exchanged for an act; the reward offer invites acceptance by performance (returning the dog), not a promise.
CLA/CP Exam Contract Formation and Enforcement 3
An offeror states the offer is 'open for 30 days.' Under common law, the offeror revokes after 10 days.
What is the result?