Most Tested MBE Contracts Topics | BarPrepPlay

Overview

This page ranks the contracts issues that repeatedly decide MBE performance so your review time goes to formation, UCC crossover, remedies, and classic exam traps first.

1. Offer & Acceptance

Very High frequency

OFFER: Manifestation of willingness to enter bargain, creating power of acceptance. Ads usually invitations unless specific (reward, first-come). TERMINATION: Rejection, counteroffer, lapse, revocation (effective on receipt), death. FIRM OFFER (UCC): Merchant's signed written offer to keep open is irrevocable up to 3 months without consideration. OPTION: Irrevocable if supported by consideration. ACCEPTANCE: Mirror image (CL) vs battle of forms (UCC 2-207). MAILBOX RULE: Acceptance effective on dispatch; rejection/revocation effective on receipt. Doesn't apply to options or if offer says otherwise.

HYPO: Seller offers to sell goods for $5,000. Buyer mails acceptance Monday. Seller mails revocation Monday (before receiving acceptance). Buyer receives revocation Tuesday. Seller receives acceptance Wednesday. Contract? ANALYSIS: Apply MAILBOX RULE. Acceptance is effective when DISPATCHED (Monday). Revocation is effective when RECEIVED (Tuesday). Acceptance was effective BEFORE revocation was received. RESULT: Contract formed Monday when acceptance was mailed. Seller's revocation came too late.

• Exam shortcut: Mailbox rule; firm offers; revocation

Section sources

2. UCC vs Common Law

Very High frequency

UCC Article 2 applies to sale of GOODS (movable tangible property). Common law applies to services, real estate, employment. MIXED CONTRACTS: Use predominant purpose test. KEY DIFFERENCES: Formation - UCC allows open terms, CL requires definiteness. Modification - UCC needs no consideration, CL does. Battle of forms - UCC 2-207 additional terms become part between merchants, CL mirror image. SOF - UCC $500+, CL $500+ isn't the trigger. Perfect tender (UCC) vs substantial performance (CL). Warranties - UCC has implied merchantability/fitness. Always identify which governs first!

HYPO: Dentist contracts with Dental Supply Co to buy dental chair ($8,000) with installation ($2,000). Chair has defect. Which law applies? ANALYSIS: Mixed goods/services - apply PREDOMINANT PURPOSE test. Goods: $8,000 (80%). Services: $2,000 (20%). Primary purpose is obtaining the CHAIR. Installation is incidental to acquiring the product. RESULT: UCC applies. This matters because: UCC perfect tender rule allows rejection for ANY defect. Implied warranty of merchantability attaches. Dentist has stronger remedies.

• Exam shortcut: Goods = UCC; Services = common law

Section sources

3. Statute of Frauds

Very High frequency

Requires WRITING signed by party to be charged for: MY LEGS - Marriage, Year+ to perform, Land, Executor promises, Guaranty/surety, Sale of goods $500+ (UCC). EXCEPTIONS: Part performance (land - 2 of 3: possession, payment, improvements). UCC: Specially manufactured goods, admission, part payment/delivery. Promissory estoppel in some jurisdictions. MERCHANT CONFIRMATION: Between merchants, written confirmation binds recipient unless objection within 10 days. Writing need not be formal - can be multiple documents. Must contain essential terms and signature (any authentication).

HYPO: Oral agreement to sell car for $4,000. Buyer pays $1,000 deposit, takes possession. Seller later refuses to complete sale. Seller claims Statute of Frauds defense. ANALYSIS: Sale of goods $500+ requires writing. But UCC exception: Part payment ($1,000) or part delivery (possession) satisfies SOF to extent of payment/delivery. Here, buyer paid $1,000 AND took possession of the whole car. RESULT: SOF satisfied by part performance. Contract enforceable for the entire car.

• Exam shortcut: MY LEGS + UCC $500+ goods

Section sources

4. Consideration

High frequency

BARGAINED-FOR EXCHANGE: Promise induces detriment and detriment induces promise. PAST CONSIDERATION is no consideration (service already performed). PREEXISTING DUTY: Doing what you're already obligated to do is not consideration (CL). UCC modification needs no consideration. ILLUSORY: "I'll buy if I want" = no consideration. SATISFACTION CLAUSES: Honest dissatisfaction OK for subjective; reasonable dissatisfaction for objective. PROMISSORY ESTOPPEL substitute: Promise + foreseeable reliance + injustice. Moral obligation can support new promise for prior benefit received (minority view).

HYPO: Contractor agrees to build house for $200,000. Halfway through, Contractor demands extra $30,000 or will stop. Owner agrees. Later, Owner refuses to pay extra. Enforceable? ANALYSIS: Common law preexisting duty rule - Contractor was already obligated to build the house. Promising to do what you're already obligated to do is NOT consideration for the extra $30,000. No new detriment. RESULT: Modification UNENFORCEABLE under common law. Note: UCC would be different (no consideration needed for good faith modification).

• Exam shortcut: Bargained-for exchange; past consideration fails

Section sources

5. Parol Evidence Rule

High frequency

Bars evidence of PRIOR or CONTEMPORANEOUS agreements that contradict a FINAL written agreement. COMPLETE integration: Bars all prior terms (contradictory AND consistent). PARTIAL integration: Only bars contradictions. EXCEPTIONS (always admissible): (1) Formation defects (fraud, duress, mistake, lack of consideration); (2) Condition precedent to contract taking effect; (3) Subsequent modifications; (4) Collateral agreements on separate consideration; (5) Ambiguity/interpretation; (6) Course of dealing, usage of trade. UCC more liberal - allows consistent additional terms.

HYPO: Written contract says Buyer will purchase "all widgets needed" at $10 each. Buyer claims Seller orally promised 30-day credit terms before signing. Contract is silent on payment terms. Admissible? ANALYSIS: Is written contract complete integration? If yes, bars all prior terms. If partial integration, bars only contradictions. Credit terms don't CONTRADICT anything in writing - they supplement it. Also, prior terms about payment could be considered COLLATERAL to sale terms. RESULT: Likely ADMISSIBLE as supplemental term or collateral agreement (unless contract has merger clause).

• Exam shortcut: Bars contradictions if final; allows supplements if partial

Section sources

Primary law and source anchors

• UCC Section 2-201 The Statute of Frauds for goods priced at $500 or more, including merchant-confirmation mechanics.
• UCC Section 2-207 Formation and additional-term rules for battle-of-the-forms disputes between merchants.
• Restatement (Second) of Contracts Section 24 Core definition of an offer and the power of acceptance.

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