Contracts (California Bar Exam) Proven Success: Real
Questions + Verified A+ Answers!!
Two rules related to applicable law correct answers All-or-nothing rule and predominant
purpose rule.
Valid agreement correct answers A legally enforceable contract is created through the process
of mutual assent (i.e., offer and acceptance) and consideration, provided no valid defense to
contract exists.
Merchant correct answers A person who REGULARLY DEALS in the type of goods
involved in the transaction or otherwise by his occupation HOLDS HIMSELF OUT as
having KNOWLEDGE or SKILL peculiar to the practices or goods involved in the
transaction. Also any BUSINESSPERSON when the transaction is of a COMMERCIAL
nature.
Offer (definition) correct answers Objective manifestation of willingness to enter into an
agreement that creates the power of acceptance in the offeree.
What must an offer include to be valid? correct answers CL - essential terms: have parties,
subject matter, price, quantity.
UCC - only essential term is quantity. A K is formed when both parties intend to contract and
there is a reasonably certain basis for giving a remedy.
Limits on option contracts correct answers Require consideration to be enforceable.
UCC firm offer rule correct answers Offer irrevocable (for reasonable time but no more than
90 days) if offeror is a merchant, and assurances are made in authenticated writing that offer
will remain open.
Acceptance (definition) correct answers Objective manifestation by the offeree to be bound
by the terms of the offeror.
Acceptance and mailbox rule correct answers Acceptance is effective when sent.
Acceptance, then rejection: acceptance governs unless oferee detrimentally relies on offer.
Rejection, then acceptance: mailbox rule doesn't apply; whichever oferee receives first
governs.
When is a revocation effective? correct answers Upon receipt.
What is the effect of a conditional acceptance under the CL? correct answers Terminates the
offer and acts as a counteroffer.
How does the UCC approach an acceptance with additional or different terms? correct
answers DEFINITE AND SEASONABLE EXPRESSION of acceptance or written
confirmation that is sent w/in reasonable time is acceptance.
, If 1 or both parties isn't a merchant: additional terms treated as proposal and must be
accepted.
If both parties are merchants:
-Additional terms: terms of acceptance govern unless (1) new terms MATERIALLY ALTER
deal; (2) initial offer expressly LIMITED ACCEPTANCE to its terms; or (3) offeror
OBJECTED w/in reasonable time.
In either case - different terms: most jdx apply knock-out rule, under which different terms in
offer and acceptance nullify each other.
Preexisting duty rule and exception correct answers A promise to give something that is
already owed does not have consideration. However, a 3P's promise contingent upon
performance of another party's contractual obligation is sufficient consideration.
CL rule on modification correct answers Modifications must be supported by consideration.
BUT agreements to modify still enforceable if (1) rescission of existing K and entering into
new K; (2) unforeseen difficulties arise and one party agrees to compensate other party for
them; or (3) new obligations arise on both sides.
At what moment is the original K discharged for accord and satisfaction? correct answers
When satisfaction is complete.
Promissory estoppel reqs correct answers Promise is binding if (1) promisor should
reasonably expect it to INDUCE ACTION on part of the promisee or 3P; (2) promise DOES
induce such action; and (3) INJUSTICE can only be avoided by enforcement of the promise.
Misunderstanding correct answers (1) parties use a MATERIAL TERM that is open to two or
more reasonable interpretations; (2) each side attaches a DIFFERENT MEANING to the
term; (3) neither party KNOWS, or should know, of the confusion.
Effect of infancy, insanity, and intoxication on K formation correct answers Infancy - other
side need not know. K is voidable by minor.
Insanity - if adjudicated mentally incompetent, purported K is void. If not, K is voidable if
personal can't understand nature and consequences of her actions and other side knows this.
Intoxication - K is voidable if person unable to understand nature and consequences of the
transaction and other party knows of intoxication.
Mutual mistake correct answers Adversely affected party may rescind if (1) MISTAKE OF
FACT, existing at time deal is made; (2) mistake relates to BASIC ASSUMPTION of K and
has material impact on deal; and (3) impacted party didn't ASSUME RISK of mistake.
Unilateral mistake correct answers Adversely affected party may rescind if (1) MISTAKE OF
FACT, existing at time deal is made; (2) mistake relates to BASIC ASSUMPTION of K and
has material impact on deal; (3) impacted party didn't ASSUME RISK of mistake; (4) either
(a) enforcement would be UNCONSCIONABLE, OR (b) other side KNEW of, had reason to
know of, or caused the mistake; and (5) ABSENCE OF SERIOUS PREJUDICE to other
party if rescission is granted.
Questions + Verified A+ Answers!!
Two rules related to applicable law correct answers All-or-nothing rule and predominant
purpose rule.
Valid agreement correct answers A legally enforceable contract is created through the process
of mutual assent (i.e., offer and acceptance) and consideration, provided no valid defense to
contract exists.
Merchant correct answers A person who REGULARLY DEALS in the type of goods
involved in the transaction or otherwise by his occupation HOLDS HIMSELF OUT as
having KNOWLEDGE or SKILL peculiar to the practices or goods involved in the
transaction. Also any BUSINESSPERSON when the transaction is of a COMMERCIAL
nature.
Offer (definition) correct answers Objective manifestation of willingness to enter into an
agreement that creates the power of acceptance in the offeree.
What must an offer include to be valid? correct answers CL - essential terms: have parties,
subject matter, price, quantity.
UCC - only essential term is quantity. A K is formed when both parties intend to contract and
there is a reasonably certain basis for giving a remedy.
Limits on option contracts correct answers Require consideration to be enforceable.
UCC firm offer rule correct answers Offer irrevocable (for reasonable time but no more than
90 days) if offeror is a merchant, and assurances are made in authenticated writing that offer
will remain open.
Acceptance (definition) correct answers Objective manifestation by the offeree to be bound
by the terms of the offeror.
Acceptance and mailbox rule correct answers Acceptance is effective when sent.
Acceptance, then rejection: acceptance governs unless oferee detrimentally relies on offer.
Rejection, then acceptance: mailbox rule doesn't apply; whichever oferee receives first
governs.
When is a revocation effective? correct answers Upon receipt.
What is the effect of a conditional acceptance under the CL? correct answers Terminates the
offer and acts as a counteroffer.
How does the UCC approach an acceptance with additional or different terms? correct
answers DEFINITE AND SEASONABLE EXPRESSION of acceptance or written
confirmation that is sent w/in reasonable time is acceptance.
, If 1 or both parties isn't a merchant: additional terms treated as proposal and must be
accepted.
If both parties are merchants:
-Additional terms: terms of acceptance govern unless (1) new terms MATERIALLY ALTER
deal; (2) initial offer expressly LIMITED ACCEPTANCE to its terms; or (3) offeror
OBJECTED w/in reasonable time.
In either case - different terms: most jdx apply knock-out rule, under which different terms in
offer and acceptance nullify each other.
Preexisting duty rule and exception correct answers A promise to give something that is
already owed does not have consideration. However, a 3P's promise contingent upon
performance of another party's contractual obligation is sufficient consideration.
CL rule on modification correct answers Modifications must be supported by consideration.
BUT agreements to modify still enforceable if (1) rescission of existing K and entering into
new K; (2) unforeseen difficulties arise and one party agrees to compensate other party for
them; or (3) new obligations arise on both sides.
At what moment is the original K discharged for accord and satisfaction? correct answers
When satisfaction is complete.
Promissory estoppel reqs correct answers Promise is binding if (1) promisor should
reasonably expect it to INDUCE ACTION on part of the promisee or 3P; (2) promise DOES
induce such action; and (3) INJUSTICE can only be avoided by enforcement of the promise.
Misunderstanding correct answers (1) parties use a MATERIAL TERM that is open to two or
more reasonable interpretations; (2) each side attaches a DIFFERENT MEANING to the
term; (3) neither party KNOWS, or should know, of the confusion.
Effect of infancy, insanity, and intoxication on K formation correct answers Infancy - other
side need not know. K is voidable by minor.
Insanity - if adjudicated mentally incompetent, purported K is void. If not, K is voidable if
personal can't understand nature and consequences of her actions and other side knows this.
Intoxication - K is voidable if person unable to understand nature and consequences of the
transaction and other party knows of intoxication.
Mutual mistake correct answers Adversely affected party may rescind if (1) MISTAKE OF
FACT, existing at time deal is made; (2) mistake relates to BASIC ASSUMPTION of K and
has material impact on deal; and (3) impacted party didn't ASSUME RISK of mistake.
Unilateral mistake correct answers Adversely affected party may rescind if (1) MISTAKE OF
FACT, existing at time deal is made; (2) mistake relates to BASIC ASSUMPTION of K and
has material impact on deal; (3) impacted party didn't ASSUME RISK of mistake; (4) either
(a) enforcement would be UNCONSCIONABLE, OR (b) other side KNEW of, had reason to
know of, or caused the mistake; and (5) ABSENCE OF SERIOUS PREJUDICE to other
party if rescission is granted.
