Contracts Intro

Lesson 0 of 0, 1m
Contracts Intro

Assessment Questions

Question 1

Which of the following general statements about contracts is not true?
a
Contracts questions on the bar typically test either formation of a contract or breach of a contract.
b
Defenses like the statute of frauds and duress raise issues about contract formation.
c
Whether one party is excused from performing its duties is an issue about contract formation.
d
The basic ingredients of a contract are mutual assent and consideration.
Explanation
The MBE divides its contracts questions roughly equally between issues related to formation and issues related to breach. When you see a question about whether a contract was formed, you want to think about the basic ingredients of a contract (which are mutual assent and consideration), as well as any defenses a party might raise to argue that the contract was improperly formed, like the statute of frauds or duress. When you see a question about breach, you should think about rules for interpreting a contract, the nature of the breach, excuses the breaching party might have for non-performance, and possible remedies. This course will tackle each of these topics in turn so you’ll have a mental checklist to follow for every question you encounter.

Question 2

Which of the following remedies is the primary one available in breach-of-contract cases?
a
Specific performance
b
Restitution
c
Consequential damages
d
Expectation damages
Explanation
Expectation damages are the default remedy in contract disputes, and they seek to put the non-breaching party in the same position she would have been in if the other party hadn’t breached. Other remedies we will discuss in this course include consequential damages, the equitable remedy of restitution, reliance damages, and liquidated damages. Specific performance may be available in some instances where the parties are contracting for something unique, like land or a one-of-a-kind work of art.

Contracts: legally enforceable promises

  1. Two kinds of contracts issues
    1. Issue 1: making contracts
      1. Basic ingredients: mutual assent + consideration
      2. Barriers to enforceability:
        1. Minority
        2. Incapacity
        3. Duress
        4. Undue influence (“duress light”)
        5. Mistake
        6. Misrepresentation
        7. Unconscionability
        8. Statute of frauds
      3. Framework for questions of contract formation: "We don't have a deal because…[see above]"
    2. Issue 2: breaking contracts
      1. Basic question: did somebody breach?
        1. Determining breach depends on how we interpret the contract
          1. E.g., are there any warranties or implied terms?
      2. If breach, then ask…
        1. What happens? Major or minor breach?
        2. Is there an excuse for non-performance?
      3. Primary remedy: expectation damages
      4. Possible remedy: consequential damages
      5. Other types of damages: reliance and restitution damages
      6. Alternative remedies: damages specified by contract and specific performance
    3. Recap: ask, “Is the contract enforceable?”
      1. If so, ask, “Do we have a breach?”
      2. If so, ask, “How do we make it right?”

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