Contracts and Sales Multistate Bar Practice Exam

When is a rejection of an offer considered effective?

1. Immediately upon sending it

2. When the offeree decides to reject it

3. When received by the offeror

4. Before the offer expiration date

The correct answer is: When received by the offeror

An effective rejection of an offer occurs when it is actually received by the offeror. The fundamental principle here is that communication of a rejection must reach the offeror to be considered valid. This means that until the offeror is made aware of the offeree’s decision to reject the offer, the offer remains open and valid. This principle is built on the idea that parties need to clearly understand the status of the negotiations. Therefore, if the offeree sends a rejection but the offeror has not yet received it, the offer is still considered to be in effect. It is not enough for the offeree to merely communicate their intention to reject; that communication must be received by the offeror to have any legal consequences. In contrast, merely deciding to reject the offer does not hold any legal significance unless that decision is communicated. Similarly, sending a rejection does not make it effective until it is received; therefore, the point before the expiration date is irrelevant to when a rejection is recognized legally. Understanding these nuances is crucial for navigating contracts and knowing when offers and rejections take effect in the realm of contract law.