Contracts and Sales Multistate Bar Practice Exam

When may a buyer opt to pay with a check under contract law?

1. Only if the seller agrees to it

2. When the seller has previously accepted a check

3. Only when the payment is for services rather than goods

4. Checks must be accepted and cashed immediately

The correct answer is: Only if the seller agrees to it

A buyer may opt to pay with a check under contract law when the seller agrees to it. This is because payment methods in a transaction are subject to the agreement between the parties involved. A seller is not obliged to accept a check as payment unless there is a mutual understanding or agreement that allows for such payment. Acceptance of checks can vary between buyers and sellers based on their prior dealings and the specific agreements reached regarding payment methods. In many transactions, parties have the freedom to negotiate their payment terms, which includes determining acceptable forms of payment. If the seller does not consent to accept a check, then the buyer cannot use this payment method, regardless of any other circumstances. The other options do not accurately reflect the principles of contract law regarding payments. While prior acceptance of checks could imply future acceptance in some contexts, it does not automatically grant the buyer the right to pay by check in all instances unless explicitly agreed upon again. Additionally, the nature of the transaction, whether for services or goods, does not dictate the payment method, and checks do not need to be cashed immediately; rather, the seller has the discretion to accept the check as payment under the terms they agree upon.