MBE Tip of the Day: Contracts and Sales
Welcome to our MBE tip of the day series. This “MBE tip of the day” post focuses on contracts and sales.
You will see 25 scored contracts and sales MBE questions on the Multistate Bar Exam. In this post, we will review a contracts and sales question together. Note that we have posted several MBE tips (which you can find links to at the bottom of this post) that focus on a specific multiple-choice question that many students answer incorrectly. If you can master these questions, it could increase your MBE score by that many points if you see any of these issues tested again (which, by the way, you will!). These posts of MBE tips and tricks will not only cover substantive law but also strategy. So each “MBE tip of the day” post covers one highly-tested area of substantive law as well as an important MBE strategy. You also can these posts directly to your inbox for the upcoming administration at the bottom of this page.
MBE Tip of the Day Instructions:
Do your best to answer this contracts and sales MBE question (before even looking at the answer choices and before looking at the answer below!) Ask yourself: What is the subject? What is the legal issue, rule, and analysis? What is the conclusion? Try to answer these beginning questions before even reading the answer choices. Then, uncover the answer as well as read more about our MBE tip of the day.
Show the MBE Question...
Contracts and Sales MBE Question
A woman and a piano teacher entered into a contract whereby the teacher would give the woman piano lessons once a week for three months and the woman would pay the teacher an hourly rate. The contract contained the following provision: “The parties agree that neither will assign the contract.”
The piano teacher’s sister was in need of money. The piano teacher reached a written agreement with the sister to assign the piano teacher’s right to collect the money from the woman to the sister.
Which of the following is a true statement?
(A) The piano teacher’s assignment is invalid and the piano teacher breached the contract with the woman.
(B) The piano teacher breached the contract with the woman, but the assignment will still be effective.
(C) The piano teacher’s assignment is valid as long as the woman gave permission for the piano teacher to do so.
(D) The piano teacher’s assignment is valid and the sister will be able to sue the woman if she does not pay.
Legal Rule and Analysis:
Choose an answer choice that most closely matches your conclusion and explain why the others are incorrect:
Show the Answer to the MBE Question...
Answer to the Contracts and Sales MBE Question
Subject: Contracts and Sales
Legal Issue: Assignment and delegation
Legal Rule and Analysis: Parties can contract to prohibit an assignment or a delegation. The words used in the contract are very important. If a contract says merely that a party “cannot assign the contract,” then this will be construed as prohibiting a delegation of duties only. In order to prohibit an assignment of rights, the contract would need to be explicit in prohibiting this. If the contract does not explicitly prohibit the assignment of rights, then an assignment of rights by a party will be valid. So, the permission of the other party is not necessary. When the rights on a contract have been assigned, the assignee can sue the obligor if they fail to perform as promised.
In this case, the contract between the woman and the piano teacher included a provision that states “the parties agree that neither will assign the contract.” Since this provision does not explicitly prohibit the assignment of rights, it will be construed as merely prohibiting the delegation of duties. The piano teacher wants to assign the right to collect the woman’s money to the sister. This would not be prohibited by the contract since it is a clear assignment of only the piano teacher’s right (to collect money) as opposed to duties. The woman does not have to give her permission for this assignment to be valid. The sister will be allowed to sue the woman for the agreed-upon fee if she does not pay.
Conclusion: The piano teacher’s assignment is valid and the sister will be able to sue the woman if she does not pay on the contract between her and the piano teacher.
Look at the answer choices provided. Choose an answer choice that matches your conclusion. Review the other answer choices provided.
The answer choice (D) is correct. (A) is incorrect because the contract did not prohibit the assignment of rights, merely the delegation of duties. (B) is incorrect because it is describing a situation in which the contract does prohibit the assignment of rights but the assignment can still be valid. In order for an assignment of rights to be invalid, the contract must state that the parties cannot assign their rights and either (a) it must state that an assignment will render the contract void or (b) the assignee has notice of the clause. If the contract prohibits the assignment of rights but neither (a) nor (b) are met, then the assignment would still be valid but the assignor will be in breach. Since this contract does not explicitly prohibit the assignment of rights, this situation is not relevant. Finally, (C) is incorrect because the obligor does not need to give permission for an assignment to be valid.
MBE Tip: Pay attention to quoted language! When the fact pattern quotes the language of the contract or dialogue between the parties, this generally means the precise words used will be important to answering the question. The Examiners are including the exact language for a reason! Thus, when you come across quoted language, make sure you read it very carefully and think about all of the implications of exactly what was stated!
Show Summary of the Two Key Takeaway Points for the Day
Key Takeaways and MBE Tips From Prior Posts
Takeaway for the Law: When a contract merely prohibits the assignment of the contract alone, this will be construed as prohibiting a delegation of duties, and an assignment or rights will still be valid.
MBE Tip: Pay attention to quoted language!
If you would like to see “MBE tip of the day” posts from prior days, please check out all of our past MBE tip of the day archives here! We have several of them and we list them by subject!
Looking for additional MBE help? If you are looking for MBE help, read our 10 expert MBE tips here. Check out our step-by-step guide to improving your MBE score, please review this post for an overview of tips. If you would like to have the next MBE tip emailed to you when we come out with another one, please fill out the form below.
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