Multistate Bar Examination (MBE) Contracts Syllabus

Contracts syllabus — full chapter and topic list

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

1. 1

   Formation of Contracts

   4 topics

   • Mutual Assent: Offer and Acceptance
     • Objective theory of contracts
     • Offer vs. invitation to deal
     • Methods and timing of acceptance; mailbox rule
     • Termination of the power of acceptance
   • Consideration
     • Bargained-for exchange and legal detriment
     • Pre-existing duty rule
     • Past consideration and illusory promises
   • Promissory Estoppel and Consideration Substitutes
     • Detrimental reliance
     • Moral obligation in limited circumstances
   • Defenses to Formation
     • Mistake: mutual and unilateral
     • Misrepresentation, fraud, and nondisclosure
     • Duress and undue influence
     • Unconscionability and illegality
     • Capacity: infancy and mental incapacity
2. 2

   Governing Law and the UCC Sale of Goods

   4 topics

   • Common Law vs. UCC Article 2 Scope
     • Predominant purpose test for mixed contracts
     • Definition of goods and merchants
   • UCC Formation Rules
     • Firm offers under 2-205
     • Battle of the forms under 2-207
     • Gap fillers and open terms
   • Statute of Frauds
     • Contracts within the statute
     • Writing and signature requirements
     • Exceptions: part performance, admissions, merchant confirmation
   • Parol Evidence Rule
     • Integration: complete vs. partial
     • Exceptions and admissible extrinsic evidence
3. 3

   Performance, Conditions, and Discharge

   3 topics

   • Conditions
     • Express, implied, and constructive conditions
     • Conditions precedent and subsequent
     • Excuse of conditions: waiver and estoppel
   • Performance Standards
     • Substantial performance at common law
     • Perfect tender rule under the UCC
     • Cure and right to inspect
   • Discharge of Duties
     • Impossibility, impracticability, and frustration of purpose
     • Rescission, accord and satisfaction, novation
     • Modification at common law and under the UCC
4. 4

   Breach and Remedies

   4 topics

   • Breach and Anticipatory Repudiation
     • Material vs. minor breach
     • Anticipatory repudiation and retraction
     • Adequate assurances of performance
   • Expectation, Reliance, and Restitution Damages
     • Measuring expectation damages
     • Consequential and incidental damages
     • Limitations: foreseeability, certainty, mitigation
   • UCC Remedies
     • Seller's remedies and resale
     • Buyer's remedies, cover, and market price
   • Equitable Remedies and Liquidated Damages
     • Specific performance and injunctions
     • Enforceability of liquidated damages clauses
5. 5

   Third-Party Rights

   3 topics

   • Third-Party Beneficiaries
     • Intended vs. incidental beneficiaries
     • Vesting of beneficiary rights
   • Assignment of Rights
     • Valid assignments and limitations
     • Rights of the assignee against the obligor
   • Delegation of Duties
     • Delegable vs. nondelegable duties
     • Liability of delegator and delegate
6. 6

   Warranties in the Sale of Goods

   3 topics

   • Express Warranties
     • Affirmations of fact, descriptions, and samples
   • Implied Warranties
     • Merchantability
     • Fitness for a particular purpose
   • Disclaimers and Limitations
     • Disclaiming implied warranties
     • Limiting remedies and failure of essential purpose

Contracts flashcards for Multistate Bar Examination (MBE)

18 of 73 cards from the Contracts deck — real questions with worked answers.

1. What three elements are required to form a valid contract?

   (1) Mutual assent (a valid offer and a valid acceptance), (2) consideration (or a recognized substitute), and (3) no valid defenses to formation.

2. What is an offer, and what does it create?

   An offer is a manifestation of present willingness to enter a bargain, made so as to justify another in understanding that their assent will conclude the deal. It creates a power of acceptance in the offeree.

3. Are advertisements generally offers? What is the exception?

   Generally no—ads are invitations to deal. Exception: an ad can be an offer if it is specific, limits who can accept, and leaves nothing open for negotiation (e.g., 'first come, first served, one coat $1').

4. List the ways an offer can be terminated.

   Lapse of time, revocation by offeror (effective on receipt), rejection or counteroffer by offeree, death/incapacity of either party, and destruction of the subject matter or supervening illegality.

5. When is an offer's revocation effective, and what is the mailbox rule exception?

   Revocation is effective upon receipt by the offeree. Unlike acceptance, revocation is NOT effective on dispatch; the mailbox rule does not apply to revocations.

6. Name four situations in which an offer is irrevocable.

   (1) Option contract (consideration paid to keep offer open), (2) UCC firm offer, (3) detrimental reliance/part performance of a unilateral contract, and (4) statutory or merchant firm offers.

7. What is a UCC firm offer and its requirements?

   Under UCC 2-205, a merchant's signed written promise to keep an offer open is irrevocable without consideration for the stated time, or a reasonable time, not to exceed 90 days.

8. How may an offer be accepted under the common law unless otherwise specified?

   By any reasonable means and manner. Acceptance is effective upon dispatch (mailbox rule) if a reasonable medium is used.

9. How is a unilateral contract accepted, and may it be revoked once performance starts?

   A unilateral contract is accepted by completing the requested performance. Once the offeree begins performance, the offer becomes temporarily irrevocable, giving a reasonable time to complete; mere preparation does not lock in the offer.

10. State the mailbox rule and its main limitations.

    Acceptance is effective when dispatched (mailed). It does not apply to: option contracts (effective on receipt), when an offer says receipt is required, or where a rejection is sent first—then whichever arrives first controls.

11. Under the common law mirror image rule, what is the effect of an acceptance that adds new terms?

    It is not an acceptance but a counteroffer (and a rejection of the original offer). The terms must mirror the offer exactly.

12. Define consideration.

    A bargained-for exchange of legal value—each party incurs a legal detriment (does or promises something they are not legally bound to do, or forbears something they are legally entitled to do) sought by the other in exchange for the promise.

13. What is the pre-existing duty rule at common law, and how can a modification be supported?

    A promise to do what one is already legally obligated to do is not consideration. A modification needs new consideration—unless there are unforeseen difficulties, a third party promises, or the duty is varied; under UCC, good-faith modifications need no new consideration.

14. Is past consideration valid consideration?

    No. Something already given or performed before the promise was made is not bargained-for and cannot serve as consideration. (Some courts enforce a new promise based on a past benefit under the material-benefit rule.)

15. Is the adequacy of consideration examined by courts?

    No—courts require legal sufficiency (legal detriment), not economic adequacy. Even nominal or grossly disproportionate value suffices unless it is a sham or token meant to disguise a gift.

16. What is an illusory promise and why does it fail as consideration?

    A promise that leaves performance entirely to the promisor's discretion (e.g., 'I'll buy if I want to'). It fails because the promisor is not actually bound, so there is no detriment/bargained exchange.

17. State the elements of promissory estoppel.

    (1) A promise the promisor should reasonably expect to induce action or forbearance, (2) the promise does induce such reliance, and (3) injustice can be avoided only by enforcement. Recovery may be limited to reliance damages.

18. Name the major consideration substitutes that can make a promise enforceable.

    Promissory estoppel (detrimental reliance), a written promise to pay a debt barred by the statute of limitations, a promise to pay a discharged debt, the UCC firm offer, and (in some courts) moral obligation/material benefit.

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