Contracts and Sales Multistate Bar Practice Exam

Under what condition can an offer be revoked indirectly?

1. If the offeree receives incorrect information about the offer

2. If the offeree hears about the offer from a credible source

3. If the original offer is rescinded

4. If the offeree has already accepted the offer

The correct answer is: If the offeree hears about the offer from a credible source

An offer can be revoked indirectly when the offeree learns of the revocation through a credible source. This means that if an offeree hears about a revocation from a reliable third party, it can effectively convey that the offer is no longer valid. The key element here is that the information comes from a credible source, which suggests that the revocation is both serious and credible enough for the offeree to take notice. This principle is rooted in the notion that while direct communication is the clearest way to revoke an offer, indirect communication through credible sources can also inform the offeree about the state of the offer. It protects the integrity of the contractual process by ensuring that the offeree is aware of important changes regarding their potential agreement. In contrast, receiving incorrect information about the offer does not establish a valid basis for revocation because it must be correct and verifiable for the revocation to be effective. An original offer cannot influence its revocation once it's rescinded; revocation would not hinge on the original offer’s validity. Furthermore, if an offeree has already accepted the offer, the offer is no longer open to revocation, since acceptance creates a binding contract and the parties are then obligated to perform according to the terms of their agreement