Subject Guide
Contracts
Contracts is the area of law that governs legally enforceable promises: how agreements are formed, when they are enforceable, what duties they create, and what remedies follow when a party fails to perform. It draws on common-law rules for most agreements and on UCC Article 2 for the sale of goods.
What Contracts covers
Contracts covers the full life cycle of an enforceable agreement: how a deal is formed through offer, acceptance, and consideration; what defenses can make a contract void, voidable, or unenforceable; how performance obligations are measured, excused, or discharged; and what a court awards when a party breaches. On the bar exam it is tested on both the MBE (multiple choice, where Contracts and Sales is one of the largest question categories) and in MEE-style essays, and it is a core 1L course. A central skill is choosing the governing law: the common law and Restatement (Second) of Contracts apply to services and real estate, while UCC Article 2 applies to the sale of goods and changes key rules on formation, modification, and warranties. Mastery means spotting which body of law controls, then applying the right rule precisely.
Key topics
- Formation
- A contract is formed by mutual assent—an offer and a matching acceptance—supported by consideration, with the objective theory measuring intent by outward conduct rather than secret intent.
- Consideration
- Consideration requires a bargained-for exchange in which each party incurs a legal detriment or confers a legal benefit, and a promise lacking it may still be enforced through promissory estoppel where reliance was reasonable and foreseeable.
- Breach
- A breach occurs when a party fails to perform a contractual duty without legal excuse, and a material breach (substantial failure of performance) discharges the non-breaching party's remaining duties, while a minor breach gives only a claim for damages.
- Remedies
- The default remedy for breach is expectation damages that put the non-breaching party in the position full performance would have, subject to limits of foreseeability, certainty, causation, and the duty to mitigate, with specific performance available when damages are inadequate.
- Defenses
- Even a formed agreement may be unenforceable due to defenses such as lack of capacity, mutual mistake, misrepresentation or fraud, duress, undue influence, unconscionability, illegality, or failure to satisfy the Statute of Frauds writing requirement.
- UCC Article 2
- UCC Article 2 governs contracts for the sale of goods and modifies common-law rules: under the battle of the forms (2-207) a definite acceptance can form a contract even with additional terms, which between merchants become part of the deal unless they materially alter it, the offer limits acceptance, or they are seasonably objected to; it also enforces good-faith modifications without new consideration and implies warranties of merchantability and fitness.
- Performance & Discharge
- Performance duties can be conditioned, satisfied by substantial performance under the common law or the perfect tender rule under Article 2, and discharged by events such as impossibility, impracticability, frustration of purpose, accord and satisfaction, novation, or rescission.
- Third-Party Rights
- Parties outside the original contract may acquire enforceable rights when an intended third-party beneficiary's rights vest, when contractual rights are validly assigned, or when duties are delegated, though the delegating party generally remains liable.
Practice Contracts with LawCoach
LawCoach helps you turn Contracts knowledge into exam points. You can drill MBE-style multiple-choice questions across all eight core topics to find where your rule recall breaks down, write MEE-style essays on formation, remedies, UCC sales, and the rest under realistic conditions, and practice MPT-style performance tasks. Paid essay answers are graded by a five-specialist reviewer panel—covering issue-spotting, rule accuracy, application and analysis, structure and exam strategy, and counterargument and calibration—plus a synthesizer that ties the feedback together, while free essays receive a three-reviewer panel. As you practice, LawCoach tracks your weak subjects and topics and builds a study plan that points you toward the doctrines costing you the most points, so each session moves you closer to exam-ready. It is an educational study tool, not legal advice, and AI feedback can contain inaccuracies.
Frequently asked questions
- When does the UCC apply instead of the common law?
- UCC Article 2 applies to contracts for the sale of goods—movable, tangible items—while the common law and the Restatement (Second) of Contracts govern contracts for services, real estate, and intangibles. For mixed contracts involving both goods and services, most courts apply the predominant-purpose test, using whichever element is the contract's main thrust. Identifying the governing law first is essential because Article 2 changes rules on acceptance, modification, and warranties.
- What is the difference between a material breach and a minor breach?
- A material breach is a failure of performance significant enough to defeat the contract's essential purpose, and it discharges the non-breaching party's remaining duties while allowing a suit for total breach. A minor breach is a slight deviation where the breaching party has substantially performed; it entitles the other party only to damages, and that party must still perform. Whether a breach is material turns on factors such as the extent the injured party loses the expected benefit and the likelihood of cure.
- How are damages measured for breach of contract?
- The standard measure is expectation damages, which aim to put the non-breaching party in the financial position it would have occupied had the contract been fully performed. Recovery is limited by foreseeability (damages must have been foreseeable at formation, per Hadley v. Baxendale), reasonable certainty, causation, and a duty to mitigate avoidable losses. Where money damages are inadequate—such as for unique goods or real estate—a court may order specific performance instead.
- What is consideration and when is a promise enforceable without it?
- Consideration is a bargained-for exchange in which each party gives up something of legal value, and it is generally required for a promise to be enforceable. A promise unsupported by consideration may still be enforced under promissory estoppel when the promisor should reasonably expect the promise to induce reliance, the promisee actually relies to its detriment, and injustice can be avoided only by enforcement. Past consideration and a pre-existing legal duty generally do not count as valid consideration.
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