Contracts is a core subject on the MBE, where it accounts for 25 scored questions, and it is a frequent MEE topic, often paired with a sale of goods. The first decision on almost every question is which body of law governs: the common law for services and land, or UCC Article 2 for goods. From there the analysis runs through formation, consideration or its substitutes, defenses, interpretation and the parol evidence rule, performance and conditions, breach, and remedies. A question that looks like a formation issue often turns out to be a modification or Statute of Frauds issue instead, so check both before committing to an answer. Use the Contracts outline for late review. Pay particular attention to the places where the common law and the UCC give different answers, such as the mirror-image rule, modification and the statute of frauds, because those are the differences examiners test.
An offer is an objective manifestation of present commitment with reasonably certain terms communicated to an identified or objectively identifiable offeree.
Elements and checkpoints
Objective commitment
Sufficiently definite terms
Communication
Offeree power of acceptance
Exam trap
Advertisements are usually invitations to negotiate unless clear, definite, and leaving nothing open.
Application example
‘One coat, first person at 9 a.m., $100’ can be an offer; ‘coats from $100’ usually is not.
Acceptance must comply with the invited method; unless an exception applies, acceptance by an authorized noninstantaneous means is effective on dispatch.
Elements and checkpoints
Unequivocal acceptance
Authorized method
Timely dispatch
No option-contract or receipt exception
Exam trap
An option-contract acceptance is generally effective upon receipt, not dispatch.
Application example
A properly mailed acceptance ordinarily forms a contract before a later-received revocation.
Consideration requires a bargained-for legal detriment or benefit; courts ordinarily do not evaluate adequacy, but past consideration and illusory promises do not qualify.
Elements and checkpoints
Bargain
Legal value
Mutual inducement
No illusory reservation
Exam trap
A promise to perform a preexisting legal duty is generally not new consideration under common law.
Application example
A promise to pay more for the same construction work needs an exception or new consideration.
A contract is voidable when both parties were mistaken about a basic assumption, the mistake materially affects the exchange, and the adversely affected party did not bear the risk.
Elements and checkpoints
Existing fact
Shared mistake
Basic assumption
Material effect
Risk not allocated
Exam trap
A mistaken prediction about future market value ordinarily is not a mistake of existing fact.
Application example
Both parties’ erroneous belief that a specific animal was infertile can support avoidance if risk was not assigned.
A final integrated writing bars prior or contemporaneous agreements that contradict it and, if complete, consistent additional terms, subject to recognized exceptions.
Elements and checkpoints
Final writing
Timing of outside term
Complete or partial integration
Exception such as interpretation, defense, or condition precedent
Exam trap
The rule does not bar evidence of later modifications.
Application example
Evidence that fraud induced the agreement may be admitted despite an integration clause.
Substantial performance ordinarily triggers the other party’s duty subject to damages; a material breach may suspend performance, and an uncured material breach can become total.
Elements and checkpoints
Extent of performance
Benefit deprivation
Adequacy of compensation
Forfeiture
Likelihood of cure
Good faith
Exam trap
The UCC perfect-tender rule does not govern common-law service or construction contracts.
Application example
A minor, repairable deviation in a completed house often supports damages rather than total nonpayment.
A clear, unequivocal preperformance refusal permits the nonbreaching party to treat the contract as breached, suspend performance, and seek remedies, subject to retraction rules.
Elements and checkpoints
Executory duties remain
Unequivocal repudiation
Retraction before material change or reliance
Adequate assurance rules when applicable
Exam trap
Reasonable insecurity alone is not necessarily repudiation, though the UCC may permit a demand for assurance.
Application example
‘I will not deliver at any price’ is repudiation; ‘delivery may be difficult’ generally is not.
Expectation damages put the injured party in the position performance would have created, limited by causation, foreseeability, reasonable certainty, mitigation, and the ban on economic waste.
Elements and checkpoints
Loss in value plus incidental and consequential loss
Less avoided cost and loss
Foreseeability
Certainty
Mitigation
Exam trap
Punitive damages ordinarily are unavailable for an ordinary contract breach.
Application example
Detailed precontract notice of a resale may make proven lost profit foreseeable.
Contract rights are generally assignable unless prohibited or materially changing the obligor’s risk; duties are generally delegable unless personal or prohibited, but delegation does not release the delegator absent novation.
Elements and checkpoints
Identify right or duty
Check prohibition and material change
Notice and defenses
Delegator remains liable absent novation
Exam trap
An assignment of ‘the contract’ may both assign rights and delegate duties.
Application example
A famous portrait commission cannot ordinarily be delegated to an unknown painter without consent.
The course separately measures retrieval, discrimination, fact application, writing, integrated judgment, and timed completion so memorization is never mistaken for readiness.
STAGE 1
Learn
Read the full outline, rule boundaries, and worked application.
Contracts questions on the sale of goods are governed by the Uniform Commercial Code, whose official text and drafting history the Uniform Law Commission keeps. Uniform Commercial Code (Uniform Law Commission) ↗