Beware of Common Contracts Pitfalls | BarMax Exam Review

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When studying contracts for the essay portion of the bar exam, beware of common contracts pitfalls that could cause you to sink to failure.

You should begin a contracts question by determining the governing law. If the contract is a contract for services, the governing law is the common law. If the contract is a contract for goods, the UCC will govern.

Next, analyze the validity of the contract. A valid contract requires: (1) an offer, (2) an acceptance of the aforementioned offer, (3) consideration from each party, and (4) no defenses to formation. When discussing formation, break down the facts event-by-event.

Move through the facts and look for an offer. To be a valid offer, the offer must give the offeree the power to create a contract by accepting the offer. If an event does not give the offeree the ability to create a contract by accepting, then there is no offer.

Once you find an offer, determine if there is an acceptance of the aforementioned offer (i.e. the offeree's response to the offer). A valid acceptance requires unequivocal assent to the terms of an offer in the manner authorized by the offer.

For example:  Polly received a notice from a travel company that she had won a contest for a free vacation, but the notice required Polly to accept this offer by mailing back a form. Polly celebrated her good fortune by buying and drinking an expensive bottle of champagne, but she forgot to respond to the travel company's notice. Since Polly did not communicate her acceptance to the travel company, she did not clearly accept the offer, and, as such, there is no valid contract.

To establish the existence of a valid contract, keep discussing each event until you find an offer that is matched with an acceptance.

After you establish that a valid contract exists, you then want to discuss performance.  Performance deals with whether or not there has been a breach. A breach occurs when one party fails to perform after all conditions precedent to performance have been satisfied, the time to perform has arrived, and performance has not been discharged. If one party is required to act first, that party's obligations become the other party's condition precedent.

After discussing breach, determine whether the breach is minor or material. It is important to remember that the governing law (i.e. common law or the UCC) may affect the assessment of breach. For instance, under the UCC, there is the perfect tender rule, which states that a seller performs her obligation under a contract for the sale of goods upon delivering perfect tender.

BarMax's bar exam review courses will help you avoid the common contracts pitfalls with:

  • REAL contracts essay questions from prior bar exams for practice (each with 2 sample answers);
  • Substantive law lectures by law professors who attended Harvard Law School;
  • Contracts flashcards; and
  • Access to former bar graders, who provides detailed paragraph-by-paragraph annotated comments on practice contracts essays.
Updated on Aug 18, 2016