UBE Offer and Acceptance
Last updated: May 2, 2026
Offer and Acceptance questions are one of the highest-leverage areas to study for the UBE. This guide breaks down the rule, the elements you need to recognize, the named traps that catch most students, and a memory aid that scales to test day. Read it once, then practice the same sub-topic adaptively in the app.
The rule
A contract requires mutual assent, formed by an offer and an acceptance. Under the Restatement (Second) of Contracts §§ 24, 50, an offer is a manifestation of willingness to enter into a bargain, made in such a way that the offeree is justified in understanding that her assent will conclude the deal; acceptance is a manifestation of assent to the terms made by the offeree in the manner invited by the offer. The common law requires a 'mirror image' acceptance — any variance is a counteroffer (Restatement § 59). For sale-of-goods contracts, UCC § 2-207 displaces the mirror-image rule: an additional or different term in a definite acceptance still forms a contract, with the new term's fate determined by whether the parties are merchants and whether the term materially alters the deal.
Elements breakdown
Offer
A present, definite manifestation of willingness to contract that creates a power of acceptance in the offeree.
- Manifestation of present commitment
- Definite and certain essential terms
- Communicated to identified offeree
- Reasonable offeree would understand assent closes deal
Common examples:
- Signed price quote naming buyer, goods, quantity, and delivery date
- Reward offer to public for return of property
- Email stating 'I will sell you Blackacre for $300,000, response needed by Friday'
Preliminary Negotiations and Advertisements
Statements that invite offers but are not themselves offers because they lack present commitment or definiteness.
- Invitation to deal, not commitment
- Indefinite quantity, price, or offeree
- Reasonable person would expect further negotiation
Common examples:
- Newspaper ads ('available while supplies last')
- Price lists and catalogs
- 'I'm asking $50,000 for the car' (statement of price, not offer)
Termination of the Power of Acceptance
Events that end the offeree's ability to accept and bind the offeror.
- Lapse after stated or reasonable time
- Revocation by offeror communicated before acceptance
- Rejection or counteroffer by offeree
- Death or incapacity of either party
- Destruction of subject matter or supervening illegality
Irrevocable Offers
Offers the offeror cannot revoke during the holding-open period despite the general rule that offers are freely revocable.
- Option contract supported by consideration
- UCC § 2-205 firm offer: signed writing by merchant, assurance held open, max 3 months
- Promissory estoppel where offeree foreseeably and detrimentally relies
- Beginning performance of unilateral contract per Restatement § 45
Acceptance — Common Law
Manifestation of assent to the offer's terms, in the manner invited, by a person with the power of acceptance.
- By offeree with notice of offer
- Mirror-image of offered terms
- Made in manner and medium invited or reasonable
- Communicated to offeror (or per mailbox rule, dispatched)
Acceptance Under UCC § 2-207 (Battle of the Forms)
For sale-of-goods, a definite expression of acceptance operates as acceptance even if it states additional or different terms, unless acceptance is expressly conditional on assent to the new terms.
- Definite and seasonable expression of acceptance
- Not expressly conditional on offeror's assent to new terms
- Between merchants: additional terms become part of contract unless offer limits acceptance, term materially alters, or offeror objects within reasonable time
- Different terms: majority 'knockout rule' cancels conflicting terms, gap-filled by Code
Mailbox Rule
Acceptance by an authorized means is effective on dispatch, not receipt; revocations, rejections, and counteroffers are effective on receipt.
- Acceptance dispatched by reasonable medium
- Properly addressed and posted
- Offeree had power of acceptance at dispatch
- Inapplicable to option contracts (acceptance effective on receipt)
Acceptance by Performance or Conduct
Acceptance manifested by starting performance (bilateral) or completing performance (unilateral).
- Bilateral offer: beginning performance accepts and binds both parties
- Unilateral offer: only completion accepts; beginning performance makes offer irrevocable for reasonable time (Rest. § 45)
- Silence accepts only if prior dealings or offeree takes benefit knowing terms are conditioned on acceptance
- UCC § 2-206: shipment of conforming or nonconforming goods accepts unless seller seasonably notifies of accommodation
Common patterns and traps
The Goods-vs-Services Trigger
Every offer-and-acceptance question hides a threshold choice-of-law question. The bar tests it by burying a service or real estate transaction in commercial-sounding language, or by writing a goods deal that looks like a services contract. Misclassify the deal and you apply the wrong acceptance rule and pick the wrong answer. For mixed contracts, apply the predominant-purpose test (Restatement-style approach used on the bar).
A choice that says 'No contract, because the acknowledgment added a new arbitration clause' is correct under common law but wrong under UCC § 2-207, where the contract forms and the clause's fate is a separate question.
The Counteroffer Kill-Switch
At common law, any response that varies the offer is a rejection plus a counteroffer, and the original offer's power of acceptance is destroyed. Examiners love to write a 'qualified acceptance' and then have the offeree recant and try to accept the original; that retraction is itself a fresh offer that the original offeror is free to ignore. Watch for words like 'I accept, but…' or 'I'll take it if…'
A choice reasoning 'the offer was still open because Liu changed her mind quickly' applies a non-existent rule — rejections terminate the power of acceptance instantly, regardless of speed of retraction.
The Firm-Offer / Option Confusion
Common-law options require consideration (or a recital of consideration plus actual exchange under Restatement § 87). UCC § 2-205 firm offers require none — only a signed writing by a merchant offering goods with assurance the offer will be held open, capped at three months. Examiners write a fact pattern with no consideration and ask whether the offer is revocable; the right answer turns on whether goods are involved and whether the offeror is a merchant.
A choice saying 'the offer is revocable because Reyes received no consideration for keeping it open' is wrong if Reyes is a merchant signing a goods offer — § 2-205 holds it open without consideration.
The Mailbox-Rule Misfire
Acceptance is effective on dispatch only if (1) the offeree had a power of acceptance at dispatch, (2) the medium was reasonable or invited, and (3) it isn't an option contract. Bar traps include: the offeree dispatches an acceptance after sending a rejection, dispatches via a method not invited by the offer, or dispatches in response to an option contract. The mailbox rule does not apply to options — acceptance there must be received within the option period.
A choice answering 'yes, the contract formed when the acceptance was mailed' is wrong when the underlying offer was a paid option, because option-contract acceptances are effective only on receipt.
The § 2-207 Battle of the Forms
Under UCC § 2-207(1), a definite expression of acceptance forms a contract even with additional or different terms unless made expressly conditional on assent to those terms. Under § 2-207(2), between merchants, additional terms become part of the contract unless the offer limited acceptance to its terms, the new term materially alters the deal, or the offeror objects within a reasonable time. Different (conflicting) terms most jurisdictions handle via the 'knockout rule.' If forms diverge but parties perform anyway, § 2-207(3) forms a contract on terms the writings agree on plus Code gap-fillers.
A choice saying 'no contract because the acknowledgment included additional indemnity language' applies common-law mirror-image to a goods deal — under the Code, the contract formed and only the indemnity term's status is in question.
How it works
Start every offer-and-acceptance question by asking two diagnostic questions in order. First: is this a sale of goods? If yes, UCC Article 2 governs and § 2-207 displaces mirror-image; if no, common law applies and any variance kills the offer. Second: at the moment of the disputed communication, did the offeree still have a power of acceptance, or had it terminated by lapse, revocation, rejection, counteroffer, death, or destruction? Imagine Reyes emails Liu, 'I'll sell you my 2019 sedan for $14,000, reply by Tuesday.' On Monday Liu writes, 'I accept — please throw in the snow tires.' Under common law that's a counteroffer (mirror-image violation), and Liu's later 'never mind, I accept the original' is a fresh offer Reyes can ignore. But if Reyes were a car dealer selling new inventory under a signed firm offer, UCC § 2-205 would hold the offer open and § 2-207 would treat the snow-tire request as a proposed addition to a formed contract.
Worked examples
Is Patel bound to sell at $48 per unit?
- A No, because offers are freely revocable until accepted, and Patel revoked before Liu's acceptance.
- B No, because Liu provided no consideration to keep the offer open for 60 days.
- C Yes, because Patel's email was a UCC § 2-205 firm offer that could not be revoked during the stated period. ✓ Correct
- D Yes, because under the mailbox rule Liu's acceptance was effective when Patel sent its revocation.
Why C is correct: This is a sale of goods (industrial valves) between a buyer and a merchant seller, so UCC Article 2 governs. UCC § 2-205 makes a signed writing by a merchant containing an assurance that an offer will be held open irrevocable for the time stated, capped at three months — no consideration is required. Patel's electronically signed email containing a 60-day open period satisfies every element, so the attempted revocation on day 20 was ineffective and Liu's acceptance formed a binding contract at $48.
Why each wrong choice fails:
- A: This recites the common-law general rule of free revocability but ignores UCC § 2-205, which is the controlling exception when a merchant signs a written assurance for goods. Default rules yield to controlling Code provisions on the bar. (The Firm-Offer / Option Confusion)
- B: Consideration is required for a common-law option contract, not for a UCC firm offer. Confusing the two doctrines is the most common student error on this fact pattern, and § 2-205 was drafted specifically to dispense with the consideration requirement for merchant goods offers. (The Firm-Offer / Option Confusion)
- D: The mailbox rule makes acceptance effective on dispatch, but here Liu accepted after Patel's revocation was sent — the timing helps Patel, not Liu. Liu wins because § 2-205 made the revocation legally ineffective, not because of mailbox-rule timing. (The Mailbox-Rule Misfire)
Is Garcia entitled to the $500?
- A Yes, because Reyes received the benefit of the bargain when the dog was returned.
- B Yes, because the offer of a reward is a unilateral contract that is accepted by performance.
- C No, because Garcia's act of returning the dog was not given in response to the offer. ✓ Correct
- D No, because reward offers are mere advertisements and not offers capable of acceptance.
Why C is correct: Acceptance requires that the offeree know of the offer at the time of performance — you cannot accept an offer you've never heard of. Restatement (Second) § 51 states that an offeree who renders the requested performance without knowledge of the offer cannot recover the reward. Garcia returned the dog as a neighborly act without knowledge of Reyes's bulletin-board offer, so no contract was formed.
Why each wrong choice fails:
- A: Receipt of benefit alone does not create contractual liability — that's quasi-contract reasoning, and quasi-contract is unavailable for officiously conferred benefits or where the recipient never bargained for the act. Garcia's voluntary return of a neighbor's dog is the textbook officious benefit. (The Counteroffer Kill-Switch)
- B: The statement that reward offers are unilateral contracts accepted by performance is doctrinally correct, but it skips the threshold requirement: the offeree must know of the offer. The right rule misapplied to the facts is a classic close-mimic distractor.
- D: Reward offers are not advertisements — they are classic unilateral offers that courts uniformly enforce when the offeree performs with knowledge. This choice misstates black-letter law and would lose every essay grader. (The Goods-vs-Services Trigger)
Is the arbitration clause part of the contract?
- A No, because Patel's acknowledgment added a term not in Liu's offer, making it a counteroffer that Liu never accepted.
- B No, because an arbitration clause materially alters the contract and does not become part of the agreement between merchants under UCC § 2-207(2). ✓ Correct
- C Yes, because Liu accepted the additional term by failing to object after receiving the acknowledgment.
- D Yes, because Patel's shipment of conforming goods constituted acceptance of its own terms under UCC § 2-206.
Why B is correct: This is a sale of goods, so UCC § 2-207 displaces the mirror-image rule. Patel's acknowledgment is a definite expression of acceptance not made expressly conditional on assent to its new terms, so a contract formed under § 2-207(1). Under § 2-207(2), between merchants, additional terms become part of the contract unless they materially alter it. Arbitration clauses are widely held to materially alter the deal because they strip the right to a judicial forum and jury trial, so the clause drops out under the majority approach.
Why each wrong choice fails:
- A: This applies the common-law mirror-image rule to a goods contract, which is exactly what § 2-207 was enacted to abolish. The bar tests this trap on nearly every battle-of-the-forms question. (The Goods-vs-Services Trigger)
- C: Silence does not equal acceptance of an additional term that materially alters the contract. The merchant rule lets non-material additions slide in by default, but material alterations require affirmative agreement; failure to object is irrelevant once the term is classified as material. (The § 2-207 Battle of the Forms)
- D: UCC § 2-206 governs how an offer for goods may be accepted (by promise or by shipment), not whether additional terms in an acknowledgment become part of the contract. That second question is § 2-207's exclusive territory, so this answer cites the wrong Code section. (The § 2-207 Battle of the Forms)
Memory aid
MOLDS — terminates an offer: Mistake/Death, Offeror revocation, Lapse, Destruction/illegality, rejectionS/counteroffer. For § 2-207 between merchants, ask MOM: did the Offer limit acceptance, does the new term Materially alter, did the Offeror Object within a reasonable time? If any 'yes,' the new term drops out.
Key distinction
The single most important cut is goods vs. services (or goods vs. real estate). UCC § 2-207 is the bar examiners' favorite trap: a buyer's purchase order and seller's acknowledgment with conflicting boilerplate forms a contract under the Code but would form none under common law. Pre-test every fact pattern: 'movable goods at the time of identification' triggers Article 2; everything else (services, real estate, employment, intangibles) stays under common-law mirror image.
Summary
Mutual assent requires a definite offer creating a power of acceptance plus a manifestation of assent in the manner invited; common law demands a mirror image, while UCC § 2-207 forms the contract first and sorts out divergent terms second.
Practice offer and acceptance adaptively
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Start your free 7-day trialFrequently asked questions
What is offer and acceptance on the UBE?
A contract requires mutual assent, formed by an offer and an acceptance. Under the Restatement (Second) of Contracts §§ 24, 50, an offer is a manifestation of willingness to enter into a bargain, made in such a way that the offeree is justified in understanding that her assent will conclude the deal; acceptance is a manifestation of assent to the terms made by the offeree in the manner invited by the offer. The common law requires a 'mirror image' acceptance — any variance is a counteroffer (Restatement § 59). For sale-of-goods contracts, UCC § 2-207 displaces the mirror-image rule: an additional or different term in a definite acceptance still forms a contract, with the new term's fate determined by whether the parties are merchants and whether the term materially alters the deal.
How do I practice offer and acceptance questions?
The fastest way to improve on offer and acceptance is targeted, adaptive practice — working questions that focus on your specific weak spots within this sub-topic, getting immediate feedback, and revisiting items you missed on a spaced-repetition schedule. Neureto's adaptive engine does this automatically across the UBE; start a free 7-day trial to see your sub-topic mastery climb in real time.
What's the most important distinction to remember for offer and acceptance?
The single most important cut is goods vs. services (or goods vs. real estate). UCC § 2-207 is the bar examiners' favorite trap: a buyer's purchase order and seller's acknowledgment with conflicting boilerplate forms a contract under the Code but would form none under common law. Pre-test every fact pattern: 'movable goods at the time of identification' triggers Article 2; everything else (services, real estate, employment, intangibles) stays under common-law mirror image.
Is there a memory aid for offer and acceptance questions?
MOLDS — terminates an offer: Mistake/Death, Offeror revocation, Lapse, Destruction/illegality, rejectionS/counteroffer. For § 2-207 between merchants, ask MOM: did the Offer limit acceptance, does the new term Materially alter, did the Offeror Object within a reasonable time? If any 'yes,' the new term drops out.
What's a common trap on offer and acceptance questions?
Applying mirror-image rule to a sale-of-goods question
What's a common trap on offer and acceptance questions?
Treating an advertisement or price quote as an offer
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