Contracts and Sales on the Multistate Essay Exam: Highly Tested Topics and Tips

Contracts and Sales on the Multistate Essay Exam: Highly Tested Topics and Tips

Contracts and Sales is regularly tested on the MEE. It is tested, on average, a little more than once a year. Here, we tell you tips for approaching Contracts and Sales on the MEE and we reveal some of the highly tested issues in Contracts and Sales questions.

Contracts and Sales on the Multistate Essay Exam

1. First, be aware of how Contracts and Sales is tested

Contracts and Sales is tested, on average, once or twice a year. In the past, common law principles tended to be tested more frequently than Article 2 of the Uniform Commercial Code (UCC) sale of goods issues, but Article 2 has been tested more recently. So, either is fair game on the MEE.

Contracts tends to be tested by itself on the MEE.

2. Be aware of the highly tested Contracts and Sales issues

The examiners tend to test several of the same issues in Contracts and Sales MEE questions. You can maximize your score by being aware of these highly tested issues. (We have a nice summary of these in our MEE One-Sheets if you want to see all of them and have them all in one place.)

Some of the highly tested Contracts and Sales Multistate Essay Exam issues include:

Which law applies? UCC Article 2 versus common law

Because UCC Article 2 has appeared more recently on the MEE, it is good to know when Article 2 applies. Article 2 applies to transactions in goods. Goods are things that are moveable at the time of identification to the contract. An entire issue in the February 2018 exam was whether Article 2 or common law applied, so if you have trouble with Article 2 vs. common law, review that MEE!

Contract formation

Contract formation is heavily tested on the MEE. Here are some principles that are tested:

• Offer and acceptance: The offeror makes an offer when the offeror communicates to the offeree a statement of willingness to enter into a bargain so that the offeree understands that his assent to the bargain is invited and will conclude it. The terms of an offer need to be reasonably certain (e.g., as to parties, subject matter, price, etc.). Note that the mirror-image rule applies at common law so any acceptance must mirror the offer. Look out for an acceptance that is actually a counteroffer (e.g., it does not mirror the terms of the offer), or an acceptance that is sent after the offer already lapsed or was revoked. The UCC does not have the mirror-image rule, so the parties may have a contract even if the acceptance terms differ from the offer terms.

• Consideration: Consideration is a “bargained-for exchange.” Under common law, consideration is needed to modify a contract. Under the UCC, only good faith is needed to modify a contract.

• Bilateral versus unilateral contracts: A bilateral contract may be accepted by promising to perform or beginning performance. A unilateral contract may only be accepted by full performance. Note that an option contract is created when the offeree begins performance on a unilateral contract. The offeror must keep the offer open for a reasonable time to allow the offeree to complete performance.

Performance obligations

Performance obligations differ under common law and UCC Article 2. Under common law, a party must substantially perform its contractual obligations in order to demand performance (usually payment) from the other party. UCC Article 2, however, requires perfect tender unless the parties have an installment contract.

Damages

Damages is one of the most heavily tested topics on Contracts and Sales MEE questions.

• Expectation damages: the loss of the value of the breaching party’s performance + incidental damages + consequential damages – expenses saved.

• Incidental damages: damages that are related to avoiding the loss caused by the breach (e.g., trying to find a replacement service).
• Consequential damages: damages that a reasonable party would have foreseen at the time of contracting.
• General Contracts and Sales damages principles:  Punitive damages are not recoverable under contract law. (A plaintiff should file a tort action if he seeks punitive damages.) Damages must be established with reasonable certainty. A party must try to mitigate damages when possible and cannot collect damages that he could have otherwise reasonably mitigated.

3. Create a visual timeline

Contracts and Sales is a tricky subject. If you struggle with Contracts and Sales, try making a visual timeline. We recommend you start with the basics and keep adding to it. Because Contracts and Sales issues tend to be linear, it is easy to organize events along a timeline. This can make issue-spotting, comprehension, and memorization easier.

Start with a basic outline

• Determine which law applies: UCC Article 2 or common law?
• Contract formation (offer, acceptance, consideration) and defenses to formation (e.g., incapacity)
• Performance obligations (under UCC Article 2 versus common law) and defenses (e.g., impossibility)
• Damages
• Issues involving assignment, delegation, and third-party beneficiaries

Add appropriate vocabulary

Next, add appropriate vocabulary terms. Be sure to bold and emphasize these terms in your MEE answer. Some terms you want to use are:

• Offer
• Acceptance
• Consideration (bargained-for exchange)
• Revocation of offer
• Firm offer
• Option contract
• Expectation damages, restitution, mitigation
• Rejection of goods vs. revocation of acceptance of goods
• Perfect-tender rule

• Express condition vs. constructive condition
• Anticipatory repudiation vs. prospective inability to perform

A timeline of when a contract is formed, how it must be performed, and what happened if it is breached is helpful when trying to understand this vocabulary. For example, you will see the event “revocation“ twice. One occurs at the contract formation stage when an offeror revokes his offer. An offeror can generally revoke his offer any time before acceptance, absent some exceptions. The other time revocation can occur is at the time performance is rendered under Article 2. A buyer can revoke his acceptance of goods in certain circumstances (e.g., the defect substantially impairs the value to him, among other requirements). So, one revocation occurs before a contract is even formed because the offer had not even been accepted. The other revocation occurs well after contract formation—not only has the offer been accepted, but performance has been completed and there is a problem with the goods sent.

Revocation of offer (occurring before contract formation)

Revocation of acceptance (occurring after contract formation)

Further, it is helpful to know that some issues will only come up in certain circumstances. For example, the parol evidence rule is only going to be an issue if you have a final written agreement (or something that is arguably a final written agreement). So, there is no point in discussing the parol evidence rule unless you see an arguably final written agreement.

4. Be familiar with UCC Article 2 rules versus common law rules

The UCC Article 2 rules are often different than common law rules and the application of one body of rules often will lead to a different result than the application of the other. Since both UCC Article 2 and common law are regularly tested, you need to be very aware of these distinctions.

5. Practice! 

Practice is critical if you want to master Contracts and Sales on the MEE. As an added bonus, you may also see your MBE score improve if you practice writing answers to Contracts and Sales essays.

Here, we have provided some links to free Contracts and Sales MEE questions and NCBE point sheets. (If you would like to purchase a book of Contracts and Sales MEE questions and NCBE point sheets, check out our MEE books here. You can also see some additional exams on the NCBE website for free here.)

• July 2022 Contracts and Sales MEE: this MEE covers parol evidence rule, interpretation of terms, and the enforceability of a covenant not to compete.
• February 2022 Contracts and Sales MEE: this MEE covers Statute of Frauds, confirmatory memo exception; interpreting the terms—gap filler (delivery), course of dealing; and expectation damages.
• July 2015 Contracts and Sales MEE: this MEE covers the Statute of Frauds, damages, and anticipatory repudiation.
• July 2014 Contracts and Sales MEE: this MEE covers contract modification.
• July 2013 Contracts and Sales MEE: this MEE covers Article 2 and the Statute of Frauds.
• February 2013 Contracts and Sales MEE: this MEE covers Article 2 and anticipatory repudiation.

Go to the next topic, Criminal Law and Procedure.

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