Bar Exam Drills

Question 1

A metal mistake occurs when the parties to a contract:

Answer 1

are both mistaken about the same material fact within their contract

Question 2

What are the three excuses to performance?

Answer 2

(1) impossibility
(2) frustration of purpose
(3) impracticability

Question 3

Acceptance:

Answer 3

the offeree must communicate acceptance of the offer terms, and acceptance can be express, by conduct, or by manner stated in offer

Question 4

Mailbox Rule:

Answer 4

acceptive of an offer is effective upon dispatch of the letter of acceptance

Question 5

Mailbox rule does not apply to:

Answer 5

rejections (only valid upon receipt by the offeror)

Question 6

Mutual Mistakes: both parties are under a common faulty assumption concerning present facts and requires - (a) ____ and (b) ___.

Answer 6

(a) both parties made an assumption of material fact
(b) disadvantaged party did not bear the risk of the mistake

Question 7

Impracticability:

Answer 7

performance excused where unforeseen difficulties caused a party’s performance to be prohibitively expensive or otherwise extremely burdensome

Question 8

Impracticability requires:

Answer 8

(a) impracticability was unforeseen
(b) risk not assumed by parties
(c) burden far beyond what parties would anticipate

Question 9

A unilateral contract is a type of contract where:

Answer 9

one party (the offeror) makes a promise in exchange for the performance of a specific act by another party (the offeree)

Question 10

The key aspects of unilateral contracts are:

Answer 10

(1) offeror makes a promise to act or pay upon the performance of a requested act by the offeree

(2) offeree is not obligated to perform the requested act, but if they do, the offeror must fulfill the promised obligation

(3) contract becomes binding only when the offeree performs the requested acts, not through a mutual exchange of promises

(4) offeror can revoke the offer at any time before the offeree begins performance, but not after

Question 11

Common examples of unilateral contracts include:

Answer 11

• reward offers (for finding a lost item or providing information)
• sales promotions and contests (prizes for achieving sales targets)
• insurance contracts (insurer promises payment upon occurrence of an insured event
• performance bonuses (employer promises bonus for meeting performance criteria)

Question 12

Offer:

Answer 12

(a) a manifestation of a present intent enter into a contract, (b) with definite and certain terms, and (c) communicated to an identified offeree who has the power to accept and believes acceptance will create a contract

Question 13

Public Offers: (ads, catalogs, price quotes)

Answer 13

are invitations for offers except where there is a promises to specific offerrees (“first come, first serve”; “only one can win”)

Question 14

Unilateral Contract:

Answer 14

the offer invites acceptance only by complete performance, not by a return promise; and once offeree begins performance, offer cannot be revoked

Question 15

A revocation of offer is the:

Answer 15

withdrawal of a previous offer to engage in some sort of legally binding contract

Question 16

Revocation of offer is used by:

Answer 16

the offering party to formally cancel the offer before the other party has accepted it

Question 17

The offering party must ____ before they accept the offer, but once the revocation has been communicated the offer it pertains to is ____.

Answer 17

(a) communicate the revocation to the other party
(b) no longer considered valid and cannot legally be accepted

Question 18

Revocation goes into effect as soon as:

Answer 18

it has been communicated to the relevant party

Question 19

Termination of Offer:

Answer 19

unambiguous statement by offeror to offeree, or unambiguous conduct indicating unwillingness to contract that offeree is aware of

Question 20

Termination of Offer - Lapse of Time:

Answer 20

offer must be accepted within a specified time stated or within a reasonable time if no time stated, starting from when the offer is received

Question 21

Three exceptions to the statue of fraud rule pertaining to contracts of suretyship:

Answer 21

(1) if the third person makes the promise to the debtor instead of to the creditor, the promise does not have to be in writing

(2) if the third person promises to be primarily responsible for the debt, the promise is outside the statue

(3) even if the third person makes the promise to the creditor and promises only to be responsible for the debt if the debtor defaults, an oral promise will be enforceable if the third person’s main purpose for making the promise is for his own benefit

Question 22

Consideration:

Answer 22

is a bargained-for-exchange between the parties (promise for performance, promise for promise)

Question 23

Settlement of Claims: A party’s agreement not to enforce a claim is valid consideration for settlement purposes if:

Answer 23

(a) the claim or defense is valid or subject to a good-faith dispute as to the facts or law

or

(b) the party believes that the claim or defense may be valid, regardless of the other party’s belief

Question 24

Past or Moral Consideration:

Answer 24

a promise in exchange for something already given or already performed will not satisfy the bargain requirements

Question 25

Exception to past or moral consideration (enforceable):

Answer 25

written promise to pay a debt that has expired past the statute of limitation

Question 26

Incapacity (minors):

Answer 26

a party under 18 is a minor who is incapable of contracting

Question 27

Incapacity (minors): modern view

Answer 27

minors can enter in contact, but it is voidable at their option

Question 28

Ratification (minors):

Answer 28

at 18, a minor can expressly or impliedly ratify a contract previously entered into during infancy and bind themselves to obligations; silence does not ratify

Question 29

Illusory Promise:

Answer 29

promise to perform is left the discretion of the promising party (performances is at their discretion and is thus not a true promise)

Question 30

Pre-Existing Duty Rule:

Answer 30

if a party already owes a duty to perform, that performance cannot be used as consideration for another promise

Question 31

Pre-Existing Duty Rule (exception):

Answer 31

duty is pre-existing only if it is owed directly to the original promise, and therefore a promise to perform the same duty is valid consideration as long as the duty is not already owed to the new promisee

Question 32

UCC Firm Offer:

Answer 32

an offer by a merchant in a signed writing to keep an offer open during the time stated, no consideration is required (if more than 3 months, consideration is required, also irrevocable

Question 33

Unilateral Contract:

Answer 33

offer seeking performance in return for a promise

Question 34

In a unilateral contract, offeror only bound when ____, but the offeree is never bound to finish, but once offeree begins performing, ____.

Answer 34

(a) performance is completed
(b) the offer may not be revoked

Question 35

Option Contract:

Answer 35

a distinct contract in itself between the parties that provides that the offeror will leave an offer open for a specified time in exchange for consideration, is irrevocable

Question 36

Termination of Offer - Revocation: offeror may revoke an offer at any time, but the offer must be: (a) ____ and (b) ____

Answer 36

(a) revoked before acceptance
(b) the revocation must be communicated to the offeree directly or indirectly

Question 37

Indirect Revocation:

Answer 37

(a) offeror takes action that inconsistent with offer
(b) offeree learns of the action from a reliable source

Question 38

Accord and Satisfaction:

Answer 38

new, mutual agreement between the parties where one party (obligee: person who is owed performance) agree to accept a substituted performance from the other party (obligor: person who must perform) instead of the originally agreed upon performance, or by acceptance of check marked “paid in full”

Question 39

Trade Usage, Course of Dealings, and Course of Performance:

Answer 39

used to fill gaps and resolve ambiguities of contacts and are admissible to fill gaps or explain terms, but inadmissible to contradict express terms

Question 40

Interpreting Ambiguous Language: the objective meaning of the contract language trumps a party’s subjective means, except: (a) ____ or (b)

Answer 40

(a) when one party has reason to know of the other party’s subjective meaning and they are thus bound by that meaning

(b) both parties have the same subjective meaning of the term, which is different from the objective meaning, then the parties are bound by that term

Question 41

A condition precedent is ____.

Answer 41

an event or state of affairs that is required before something else will occur

Question 42

Restitutionary Damages:

Answer 42

the value of the benefit(s) conferred upon the other party to the agreement

Question 43

Limitation - Restitutionary Damages:

Answer 43

restitutionary damages are not available when the aggrieved party has fully performed

Question 44

Substantive Unconscionability:

Answer 44

the contract unreasonably favors on party

Question 45

Establishing a course of performance is often used to ____.

Answer 45

aid in interpreting contracts, particularly with gap filling

Question 46

Course of performance is often the best evidence of ____.

Answer 46

what parties intended since it calls for looking at how both parties have performed up to the present time under the particular contract at issue

Question 47

Condition precedents may be waived by ____.

Answer 47

the party that makes the condition

Question 48

Express Conditions:

Answer 48

are conditions appearing within the four corners of the contract which are primary source for determining performance

Question 49

Aware of the other party’s subjective meaning - and is thus ____.

Answer 49

bound by that meaning

Question 50

If the offer does not specify the length time it is to remain open, then it ends ____.

Answer 50

after the passage of a reasonable period of time

Question 51

An offer can end in various ways:

Answer 51

(a) time lapse
(b) death of parties
(c) conditions not met
(d) rejection/ counteroffer by the offeree
(e) revocation by the offeror

Question 52

Under common law, a party to a contract needs new consideration (something of legal value) to ____.

Answer 52

modify a contract

Question 53

Seller’s Acceptance: UCC under the UCC, a seller can accept a buyer’s offer by:

Answer 53

(a) promising to ship the goods in conformity with the terms of the offer

(b) prompt shipment of the goods in conformity of offer terms

(c) ship non-conforming goods (exception: if sent as accommodation, it is a counter-offer)

Question 54

Perfect Tender Rule:

Answer 54

UCC terms of a contract are enforced exactly in that every contract term is treated as an express condition

Question 55

The seller is in breach if the goods fail to conform to the contract and the buyer can:

Answer 55

(1) reject the goods
(2) accept the goods
(3) accept in part and reject in part

Question 56

Perfect Tender Rule - Accepting Non-Conforming Goods: if accepted, buyer must:

Answer 56

(a) pay contract price for those goods
(b) may also seek damages for non-conformity after notifying seller of non-conformity
(c) can revoke previous acceptance

Question 57

UCC - Buyer can revoke previous acceptance if:

Answer 57

(a) non-conformity substantially impairs contract

(b) (i) buyer was unaware of non-conformity
(ii) seller assured non-conformity would be cured but was not

Question 58

Promissory Estoppel (Reliance): allows for a promisee to enforce a gratuitous promise (promise not supported by consideration) if:

Answer 58

(a) there was a promise
(b) that promisee would foreseeable rely on
(c) promises actually relied on the promise
(d) injustice without enforcement

Question 59

Implied in Fact Contract:

Answer 59

is a form of an implied contract formed by non-verbal conduct, rather than by explicit words

Question 60

A completely integrated agreement under the parol evidence rule will:

Answer 60

bar all other evidence which contradicts what is in the written agreement or even supplements the agreement