Contracts and Sales Multistate Bar Practice Exam

How can acceptance of a bilateral contract occur?

1. By sending a written letter of intent

2. By performing the action requested by the offeror

3. By making a counter-offer that matches the original offer

4. Only through a formal agreement signed by both parties

The correct answer is: By performing the action requested by the offeror

In the context of a bilateral contract, acceptance can occur through the performance of the action requested by the offeror. A bilateral contract involves mutually exchanged promises, where one party makes a promise in exchange for a promise from the other party. When the offeree performs the requested action, it constitutes acceptance of the offer, thereby creating a binding agreement. For instance, if a person offers to pay someone $100 to paint their fence, the act of the person painting the fence serves as acceptance of that offer. Once the fence is painted, both parties are obligated under the terms of the contract. The other options do not adequately represent how acceptance works in a bilateral contract. Sending a written letter of intent does not inherently signify acceptance; it might indicate an intent to enter negotiations. Making a counter-offer modifies the terms of the original offer, which instead of accepting, effectively rejects the initial proposal. Finally, while formal agreements are important in certain contexts, a bilateral contract can be formed through acceptance of an offer via performance rather than requiring a signed document.