Common Law Contracts California Bar Exam Outline

CONTRACTS

1. Which law governs? If CL…

2. Formation of Contract

   1. Offer – requires (1) an expression of a promise, undertaking or commitment to enter a contract, (2) certainty and definiteness of terms, and (3) communication to an identified offeree.

      1. Is the offer still alive?

         1. Lapse of time

         2. Rejection by offeree (counter; conditional acceptance; additional terms)

         3. Revocation by offeror (unless option w/ consideration or detrimental reliance)

   2. Acceptance – mirror image rule – manifestation of assent to the terms of an offer in a manner prescribed or authorized in the offer

      1. Bilateral – full performance, start performance, promise, mailed acceptance

      2. Unilateral – full performance

   3. Consideration – must exist on both sides of the K

      1. Bargained for legal detriment

      2. Or promissory estoppel: promise, reasonable, detrimental and foreseeable reliance, enforcement necessary to avoid injustice

   4. No defenses

      1. Statute of frauds – by statute, certain agreements must be evidenced by a writing and signed by the party to be charged. Satisfied by:

         1. Service Ks → full performance

         2. Real estate → partial performance if full or part payment; possession and/or improvements

         3. Writing → all material terms + signature of party to be bound

      2. Mistake / Ambiguity

      3. Illegality / Incapacity

      4. Unconscionability / Fraud / Duress

3. Contract Terms

   1. Parol Evidence Rule: where parties express their agreement in a final writing, other written or oral expressions, made prior to or contemporaneously with the writing, are inadmissible to vary the terms of the writing.

   2. Modification → need consideration, must be in writing if modified K falls under SoF

   3. Interpretation of terms, look to: course of performance / course of dealing / custom and usage

4. Third Parties

   1. Third party beneficiaries

   2. Assignment/Delegation

5. Performance

   1. Conditions

      1. Type – precedent, concurrent or subsequent AND express, implied or constructive

      2. Excused – anticipatory repudiation, impossibility, impracticability, waiver

      3. Satisfaction – question of fact

   2. Discharge of Duty?

      1. Impossibility/Impracticability – Unanticipated or extraordinary event

      2. Frustration of purpose – K has become valueless by virtue of some intervening event

      3. Anticipatory repudiation

      4. Mutual rescission

      5. Modification / Novation / Accord & satisfaction

6. Breach – material or minor?

   1. Did the obligee gain the substantial benefit of her bargain despite defective performance?

7. Remedies

   1. Compensatory damages – standard measure is based on an expectation interest

      1. Must be certain in their nature and not speculative

      2. Duty to mitigate

   2. Consequential damages – foreseeable to a reasonable person at the time of formation

   3. Quasi K: where K fails, the non-breaching party may recover in quasi-contract to prevent unjust enrichment to the parties (put D in the same position, had the K never occurred)

   4. Promissory Estoppel: reliance interest (put P in the same position, had the K never occurred)

   5. Specific performance: where damages are inadequate (e.g. real estate)