California Bar Examination Contracts and Sales (UCC Article 2) Syllabus

Contracts and Sales (UCC Article 2) syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Contracts and Sales (UCC Article 2) in California Bar Examination, not a summary of it.

1. 1

   Contract Formation

   4 topics

   • Mutual Assent
     • Offer and definiteness of terms
     • Termination of the power of acceptance
     • Acceptance and the mailbox rule
     • UCC battle of the forms under 2-207
   • Consideration and Substitutes
     • Bargained-for exchange and legal detriment
     • Promissory estoppel
     • Past consideration and pre-existing duty
   • Defenses to Formation
     • Capacity, mistake, and misrepresentation
     • Duress and undue influence
     • Unconscionability and illegality
   • Statute of Frauds
2. 2

   Contract Terms and Interpretation

   4 topics

   • Parol Evidence Rule
   • Rules of Interpretation and Trade Usage
   • Conditions Precedent, Concurrent, and Subsequent
   • Warranties Under the UCC
     • Express warranties
     • Implied warranty of merchantability
     • Implied warranty of fitness for a particular purpose
3. 3

   Performance, Breach, and Excuse

   5 topics

   • Substantial Performance and Material Breach
   • Perfect Tender Rule and Cure Under the UCC
   • Anticipatory Repudiation and Adequate Assurances
   • Excuse by Impossibility, Impracticability, and Frustration
   • Risk of Loss
4. 4

   Remedies and Third Parties

   6 topics

   • Expectation, Reliance, and Restitution Damages
   • Limitations on Damages
     • Foreseeability and certainty
     • Mitigation
     • Liquidated damages
   • UCC Buyer and Seller Remedies
     • Cover and market price differential
     • Right to reject and revoke acceptance
   • Specific Performance and Equitable Remedies
   • Third-Party Beneficiaries
   • Assignment of Rights and Delegation of Duties

Contracts and Sales (UCC Article 2) flashcards for California Bar Examination

21 of 66 cards from the Contracts and Sales (UCC Article 2) deck — real questions with worked answers.

1. What are the two required elements of mutual assent (a valid offer and acceptance)?

   A manifestation of mutual assent requires (1) a valid offer and (2) a valid acceptance, judged by the objective theory of contracts (a reasonable person's understanding of the parties' outward expressions, not secret intent).

2. What three things must an offer demonstrate to create a power of acceptance?

   (1) An objective intent to be bound, (2) definite and certain essential terms, and (3) communication to an identified offeree. Under common law, price, parties, subject matter, and quantity are generally essential; under the UCC, only quantity is truly essential (gaps can be filled).

3. Under the common law mirror image rule, what makes a purported acceptance ineffective?

   Any acceptance that adds, varies, or qualifies the offer's terms is not an acceptance but a rejection and counteroffer. The acceptance must mirror the offer exactly.

4. How does UCC 2-207 (the battle of the forms) treat additional terms between merchants?

   A definite acceptance forms a contract even with additional/different terms. Between merchants, additional terms become part of the contract unless: (1) the offer expressly limits acceptance to its terms, (2) the additional terms materially alter the deal, or (3) the offeror objects within a reasonable time.

5. List four ways an offer can be terminated before acceptance.

   (1) Revocation by the offeror (effective on receipt, before acceptance); (2) rejection or counteroffer by the offeree; (3) lapse of time; and (4) death or incapacity of either party, or destruction/illegality of the subject matter.

6. What four devices make an offer irrevocable?

   (1) An option contract (offer held open for consideration); (2) a UCC firm offer; (3) detrimental reliance by the offeree (promissory estoppel); and (4) partial performance of an offer for a unilateral contract.

7. State the requirements of a UCC 2-205 firm offer.

   An offer is irrevocable if (1) made by a merchant, (2) in a signed writing, that (3) gives assurance it will be held open. No consideration is needed. It is irrevocable for the time stated, or a reasonable time, but never more than 3 months.

8. When is acceptance effective under the mailbox rule, and what are its key exceptions?

   Acceptance is effective upon dispatch (when sent). Exceptions: the rule does not apply to option contracts (acceptance effective on receipt), to revocations/rejections (effective on receipt), or where the offer specifies otherwise. If a rejection is sent first, whichever arrives first controls.

9. Define consideration and identify its two components.

   Consideration is a bargained-for exchange of legal value. It requires (1) a bargained-for exchange and (2) legal detriment (a promise or performance, or forbearance from a legal right). Each party's promise must induce the other's.

10. Why is past consideration generally insufficient, and what is the modern exception?

    Past consideration is not bargained-for, so it cannot support a new promise. Modern/material-benefit exception: a promise made in recognition of a past benefit received is enforceable to the extent necessary to prevent injustice (not for a gift).

11. Explain the pre-existing duty rule and the common law vs. UCC approach to contract modification.

    A promise to do what one is already legally bound to do is not consideration. Common law requires new consideration to modify a contract (unless unforeseen difficulties). The UCC requires NO new consideration to modify; good faith suffices.

12. Name three substitutes for consideration that can make a promise enforceable.

    (1) Promissory estoppel (detrimental reliance), (2) a promise to pay a debt barred by the statute of limitations (in a signed writing), and (3) a UCC firm offer. Moral obligation/material benefit may also apply in some jurisdictions.

13. State the elements of promissory estoppel.

    (1) A promise the promisor should reasonably expect to induce reliance, (2) actual and reasonable detrimental reliance by the promisee, and (3) injustice can be avoided only by enforcement. Recovery may be limited to the reliance interest.

14. Distinguish void, voidable, and unenforceable contracts.

    Void = no legal effect from the start (e.g., illegality). Voidable = one party may elect to disaffirm or ratify (e.g., infancy, fraud, duress). Unenforceable = otherwise valid but barred from enforcement by a defense (e.g., Statute of Frauds, SOL).

15. Compare mutual mistake and unilateral mistake as defenses to formation.

    Mutual mistake: both parties err on a basic assumption materially affecting the exchange — voidable by the adversely affected party (unless he bore the risk). Unilateral mistake: only one party errs — generally NOT a defense unless the other party knew/had reason to know of the mistake, or enforcement would be unconscionable.

16. Distinguish fraud in the factum from fraudulent misrepresentation (fraud in the inducement).

    Fraud in the factum (execution): deception about the nature of the document itself, so there is no assent — contract is VOID. Fraud in the inducement: misrepresentation that induces assent to a contract the party understands — contract is VOIDABLE by the deceived party.

17. What are the elements of duress and undue influence as formation defenses?

    Duress: an improper threat that leaves the victim no reasonable alternative, inducing assent (physical duress = void; economic duress = voidable). Undue influence: unfair persuasion of a party under domination or in a relationship of trust, making the contract voidable.

18. Distinguish procedural and substantive unconscionability.

    Procedural unconscionability concerns unfair bargaining (hidden terms, absence of meaningful choice, adhesion). Substantive unconscionability concerns oppressive/one-sided terms. Most courts require some of both, judged at the time of formation; the court may refuse to enforce or strike the clause.

19. Which contracts fall within the Statute of Frauds (the MY LEGS categories)?

    Marriage (consideration of marriage), contracts that cannot be performed within one Year, Land interests, Executor promises to pay estate debts personally, Goods of $500 or more (UCC), and Suretyship (promises to answer for another's debt).

20. What does the Statute of Frauds require for a writing, and who must sign it?

    A writing (or set of writings) reasonably identifying the subject matter, indicating a contract was made, and stating essential terms, signed by the party to be charged (the party against whom enforcement is sought). Under the UCC, quantity is the one essential term.

21. List the principal exceptions that satisfy or take a sale-of-goods contract out of the Statute of Frauds.

    (1) Goods specially manufactured (not resaleable) once seller substantially begins; (2) admission in pleadings/testimony (up to the quantity admitted); (3) payment made/accepted or goods received/accepted (to that extent); and (4) the merchant's confirmatory memo rule.

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