Chapter 8: How to Conquer Contracts on the California Bar Exam

Contracts on the California Bar Exam

Contracts is regularly tested on the California Bar Exam. Fortunately, California law is virtually never tested, so you can apply the same law you learn for the MBE to the California Bar Exam essays.

Here, we give you some insight into how Contracts is tested on the California Bar Exam and how to approach a Contracts essay on the exam.

Contracts on the California Bar Exam

1. First, know how Contracts is tested.

As noted above, you can apply general MBE law to Contracts essay questions.

Contracts is usually tested on its own but has also been combined with other subjects Contracts is most frequently combined with Remedies and has also been combined with Professional Responsibility and Real Property.

2. Introduce topics correctly.

To maximize your points, it is good to have a standard introduction when you see a Contracts essay on the California Bar Exam.

For example, be sure to discuss the following points in your introduction:

• First, discuss whether Article 2 of the UCC or the common law applies. Article 2 applies to contracts for the sale of goods. Common law applies to all other contracts.

• Next, briefly discuss contract formation (offer, acceptance, and consideration), even if it is not a primary issue. Although you do not want to spend pages on this unless it is a primary issue raised by the facts, briefly addressing contract formation will make your answer complete.

3. Be aware of the highly tested topics.

Unsurprisingly, some Contracts topics are tested more than others. (We have a nice overview of these in our California Bar Exam One-Sheets.)

Here are a few of the highly tested Contracts topics on the essay portion of the California Bar Exam:

• Contract formation (offer, acceptance, and consideration)
  • Offer: An offer is a manifestation of intent to enter into a contract. An offer generally identifies the parties and contains a price and quantity.
  • Acceptance: Acceptance is effective as soon as the acceptance is out of the offeree’s possession (the mailbox rule). Thus, an acceptance sent through the mail is effective when it is sent. There are exceptions (e.g., an acceptance of an option contract is effective upon receipt; and if a rejection is mailed and then an acceptance is mailed, whichever is received first is effective).

• • Consideration: the promisee must suffer a legal detriment or the parties must have a bargained-for exchange of promises.

• The parol evidence rule: The parol evidence rule is an issue when a party is trying to add a term from preliminary negotiations (or a contemporaneous oral term) to a final (integrated) written agreement. If the writing is a complete integration, no terms will be admitted. If it is a partial integration, consistent terms will be admitted.

• Performance duties under common law and the UCC: Under common law, a party is required to “substantially perform” for the other party’s duty to perform to arise (unless there is an express condition, in which case exact performance is required).

• • Under the UCC, pursuant to the perfect-tender rule, the seller must deliver perfect goods. If goods fail to conform to the contract in any way, the buyer can reject all of them, accept all of them, or accept however many commercial unit(s) he wants and reject the rest. Note that the perfect-tender rule does not apply to every transaction under the UCC (e.g., it does not apply to installment contracts.)

• Anticipatory repudiation vs. prospective inability to perform:
  • An anticipatory repudiation occurs when there is an unequivocal manifestation by one party to the other that the party cannot or will not perform its obligations under the contract and this statement is made before the repudiating party’s performance is due. If one party anticipatorily repudiates in an executory contract (meaning that there are duties left on both sides), the other party can: (1) sue immediately, (2) suspend performance and wait to sue, (3) treat the contract as discharged, or (4) urge the other party to perform.

• • Prospective inability to perform occurs when a party has reasonable grounds for insecurity that the other party is unable or unwilling to perform. This is merely having doubts. The insecure party may demand adequate assurance of performance from the other party.

By being familiar with the most highly tested topics, you will maximize your chance of receiving the most points if Contracts is tested!

4. Practice! 

The best way to prepare Contracts issues for the California Bar Exam is to practice Contracts essays. This will acquaint with the highly tested issues and allow you to see how these issues are tested on the California Bar Exam. You will feel more confident and comfortable walking into the California Bar Exam if you have some practice under your belt!

Here are a few essay questions with student answers that we recommend you practice to get exposed to some highly tested topics in Contracts essay questions:

• February 2021 Contracts essay (combined with Remedies): this essay covers the UCC, contract formation, Statute of Frauds, perfect-tender rule, warranties, and damages (see essay question #2 on the exam).
• February 2020 Contracts essay: this essay covers common law, contract formation, consideration, the parol evidence rule, and specific performance (see essay question #3 on the exam).
• July 2018 Contracts essay: this essay covers the UCC, anticipatory repudiation vs. prospective inability to perform, waiver of a condition, contract modification, demand for adequate assurances, and damages (see essay question #1 on the exam).
• February 2016 Contracts essay: this essay covers the UCC, contract formation, disclaimer of warranties, the perfect-tender rule, and damages (see essay question #6 on the exam).
• July 2013 Contracts essay: this essay covers common law, contract formation, consideration, the parol evidence rule, the Statute of Frauds, contract breaches, contract defenses, damages, and specific performance (see essay question #4 on the exam).

Good luck studying for the California Bar Exam!

Go to the next topic, Chapter 9: Corporations.

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