Contracts Exam Checklist

Use a fixed sequence, because contracts doctrine is chronological and grading rubrics track that chronology. Governing law, then formation, then defenses, then terms, then performance and breach, then excuse, then remedies. Third-party beneficiary, assignment, and delegation issues get bolted on wherever a stranger to the deal shows up.

The sequence matters substantively, not just organizationally. You cannot decide whether the mirror image rule or UCC § 2-207 applies until you know whether goods are involved. You cannot measure damages until you know which promise was breached and whether the breach was material. Writing out of order is the single most common way strong students lose structure points.

One caveat: if a question is explicitly limited ("Discuss only Buyer's remedies"), obey the call. Spotting formation issues in a remedies-only question earns nothing and costs minutes.

UCC Article 2 applies to transactions in goods — movable things identified at the time of contracting. Everything else (services, real estate, employment, construction, intellectual property licenses in most states) runs on common law, which on your exam means the Restatement (Second) of Contracts. Say which one applies in one sentence at the top and cite the specific rule you are using throughout.

For hybrid contracts, most courts use the predominant purpose test from Bonebrake v. Cox: look at the language of the deal, the nature of the supplier's business, and the relative dollar value of goods versus services. A minority of courts apply the UCC only to the goods portion (the gravamen test). Say which approach you are using and, if the facts are close, argue both.

Then check merchant status. Several rules turn on it: the firm offer rule of § 2-205, the confirmatory-memo exception to the statute of frauds in § 2-201(2), the additional-terms rules of § 2-207(2), and the implied warranty of merchantability under § 2-314.

Mutual assent is objective. Ask what a reasonable person in the offeree's position would have understood — Lucy v. Zehmer is the canonical illustration that secret intent is irrelevant. Then walk offer, termination, acceptance, consideration.

For offers, check definiteness (common law demands more; UCC § 2-204(3) tolerates open terms including price under § 2-305 if the parties intended to be bound), whether an advertisement or price quote is merely an invitation, and whether the offeree had reason to know the offer was a joke or preliminary negotiation. For termination, run revocation, rejection, counteroffer, lapse, death or incapacity, and destruction of the subject matter. Then check whether the power to revoke was limited: an option supported by consideration, a merchant's firm offer under § 2-205, part performance of a unilateral offer under Restatement § 45, or reliance by a subcontractor under § 87(2) and Drennan v. Star Paving.

For acceptance, identify the mailbox rule and its exceptions (option contracts accept on receipt), acceptance by performance versus promise, and silence as acceptance only where prior dealings or the offeree's exercise of dominion make it reasonable. If the writings differ, that is a § 2-207 problem under the UCC and a mirror image/last shot problem at common law — do not blur them.

Screen fast and only develop the ones with facts. Statute of frauds first: marriage, suretyship, one-year, land, and goods of $500 or more under § 2-201. If it applies, check the writing requirement, signature by the party to be charged, and the exceptions — part performance, full performance, judicial admission, the merchant confirmatory memo, specially manufactured goods, and reliance under Restatement § 139.

Then capacity (infancy, mental incapacity, intoxication), duress and undue influence, misrepresentation (fraudulent, material, or innocent — and whether reliance was justified), mistake, unconscionability, and illegality or public policy. Mutual mistake under Restatement § 152 requires a basic assumption, material effect, and that the adversely affected party did not bear the risk under § 154; Sherwood v. Walker is the classic barren-cow example. Unilateral mistake under § 153 additionally requires unconscionability or the other party's knowledge or fault.

Unconscionability under § 2-302 and Restatement § 208 has two prongs — procedural (unfair surprise, absence of meaningful choice) and substantive (oppressive terms) — and Williams v. Walker-Thomas is the standard cite. Most courts require some of both. Adhesion contracts and boilerplate implicate Restatement § 211.

Parol evidence comes first because it decides what evidence you may use. Ask whether the writing is integrated, whether it is partially or completely integrated (a merger clause is strong but not always conclusive; some courts look to the four corners, others to all the circumstances under Corbin's approach), and whether the offered evidence contradicts, supplements, or explains. Prior and contemporaneous oral agreements are excluded to the extent they contradict a final writing; consistent additional terms come in only against a partial integration. Subsequent modifications are never barred by the rule.

Then remember the standing exceptions: evidence offered to show fraud, duress, mistake, lack of consideration, a condition precedent to effectiveness, or to interpret an ambiguous term. Under UCC § 2-202, course of performance, course of dealing, and usage of trade come in even against a complete integration to explain or supplement.

Finally, supply the implied terms: good faith and fair dealing (Restatement § 205; UCC § 1-304), and warranties — title under § 2-312, express warranty under § 2-313, merchantability under § 2-314, fitness for a particular purpose under § 2-315, plus disclaimer and limitation-of-remedy analysis under §§ 2-316 and 2-719.

Distinguish conditions from promises. A condition that fails means no duty ever arose; a promise that fails means breach. Look for express conditions (strictly construed, but subject to waiver, estoppel, and forfeiture relief) and constructive conditions of exchange. Under Article 2, the perfect tender rule of § 2-601 lets a buyer reject for any nonconformity in a single-delivery contract, subject to the seller's right to cure under § 2-508 and to the stricter substantial impairment standard for revocation of acceptance (§ 2-608) and installment contracts (§ 2-612).

At common law, apply the substantial performance doctrine and the Restatement § 241 materiality factors — deprivation of expected benefit, adequacy of compensation, forfeiture, likelihood of cure, and good faith. Jacob & Youngs v. Kent is the reliable illustration. Material breach suspends the other party's performance; total breach (material plus lapse of a reasonable cure period) discharges it and permits suit for all damages.

Anticipatory repudiation requires a clear, unequivocal refusal (Restatement § 250; UCC § 2-610); a party with reasonable grounds for insecurity may demand adequate assurance under § 2-609 and treat a failure to respond within a reasonable time as repudiation. For excuse, run impossibility, impracticability (Restatement § 261; UCC § 2-615: an unforeseen contingency, a basic assumption, and no assumption of the risk — Taylor v. Caldwell), and frustration of purpose (§ 265; Krell v. Henry). Increased cost alone almost never suffices. Also check rescission, accord and satisfaction, novation, and release.

Lead with the expectation interest: put the nonbreaching party where performance would have. State the formula, then subtract avoided costs. Under Article 2 this means § 2-712 cover, § 2-713 market price minus contract price, § 2-714 damages for accepted nonconforming goods, and §§ 2-706 and 2-708 for sellers, including lost-volume recovery. Add incidental and consequential damages under § 2-715.

Then run the four limits in order: foreseeability (Hadley v. Baxendale; Restatement § 351), certainty (§ 352), mitigation (§ 350), and causation. In construction cases, flag cost of completion versus diminution in value and the economic waste problem — Jacob & Youngs and Peevyhouse are the paired authorities. Check any liquidated damages clause against § 356: reasonable in light of anticipated or actual loss, with damages difficult to estimate; otherwise it is an unenforceable penalty.

Close with alternatives: reliance damages when expectation is too uncertain (§ 349), restitution for unjust enrichment including recovery by a breaching party for benefits conferred (§ 371), specific performance for land or unique goods (§ 2-716) where damages are inadequate and terms are definite, and rescission or reformation for mistake. If the promise is unenforceable, argue promissory estoppel with reliance-measured relief — Hoffman v. Red Owl.