Contracts and Sales Multistate Bar Practice Exam

Under what condition is a revocation of an offer deemed effective?

1. After the offeree rejects the offer

2. When received by the offeree

3. Immediately upon announcement to the public

4. When sent by mail

The correct answer is: When received by the offeree

The revocation of an offer is deemed effective when it is received by the offeree. This principle is rooted in the objective theory of contracts, which states that the actions and communications of the parties must be clearly understood by both sides. In the context of revocation, it is important that the offeree is actually made aware of the revocation for it to take effect. If the revocation is communicated to the offeree and they acknowledge it, the offer is considered revoked and cannot be accepted thereafter. This aligns with general contract law principles which emphasize the necessity of clear communication regarding the status of offers and acceptances. In contrast, while a rejection by the offeree does serve to terminate the offer, it does not equate to the revocation by the offeror being effective; therefore, that option does not properly define the condition for an effective revocation. Announcing a revocation to the public does not ensure that the specific offeree is made aware, hence it won't be effective unless received directly by them. Lastly, sending a revocation by mail does not constitute effective revocation until it is received, making those options less accurate.