CONTRACTS EXAM WRITING FORMULA

Step 1: State the issue.

Step 2: Identify the rule, but don't waste time stating the rule.

Step 3: Summarize the elements of the rule that are easily satisfied by the facts.
(WARNING: avoid conclusory statements – provide analysis even for the obvious
answers)

Step 4: State the sticking point on which this issue turns - i.e., the ambiguity in the facts
that makes it a difficult question.

Step 5: Apply one or more of the four types of Analysis to the problem.
(1) Reasoning by analogy (cases we’ve read)
(2) Balancing of factors test
1. Consider all of the facts and circumstances
2. No one factor determines the outcome
3. Equity. This is the moralistic argument that we want to cure harms to an
injured party and deter bad behavior.
(3) Judicial tests (IF-THEN tests)
(4) Public policy argument
(a) Sometimes, you will be presented with a set of facts that on the surface are
identical or similar to case law. However, if you applied the rule in these
circumstances, the result would somehow be unjust. If that is the case,
then look to the policy of the rule. Why is the rule in existence? Have
judges used this rule for equity's sake, economic efficiency or because it
lends certainty to the process.
(b) Policy arguments are particularly useful in balancing tests.
(c) Common public policies:
i. Equity: this is the moralistic argument that we want to cure harms
to an injured party and deter bad behavior
ii. Economic Efficiency: this policy suggests that all rules be based on a
cost-benefit analysis. Society has to have some losses in order to
make gains. (e.g., efficient breach: breaching a K because it would
be more economically efficient to pay damages than to carry out
the K)
iii. Predictability: Is the rule fashioned in such a way that lends
certainty to the judicial process. Everyone knows that there is a
bright line rule. Cross over it and you’ve violated the rule. This sort
of rule also lends administrative efficiency (fewer litigations).

Step 6: Contrast conflicting authority.

Step 7: What are the defenses?

Step 8: Make a conclusion.

Step 9: Go to the next issue.

 COMMON LAW Ks - ISSUE CHECKLIST

(a) IS K FOR SALE OF GOODS? If yes  see UCC outline

(b) TYPE OF CONTRACT?
i. Express? (oral or written)
ii. Implied by conduct?
iii. Quasi-K? (remember, not really a K)
(c) IS THERE AN ENFORCEABLE CONTRACT?
i. MUTUAL ASSENT? (objective under the circumstances)
 Offer?
 Manifestation of intent?
 Reasonably certain terms?
 Manner of acceptance specified? (bilateral vs. unilateral)
 Did offer create an option K?
 Acceptance? (power of acceptance; mirror image; communication)
 Did offeree have the P/A?
 Acceptance before termination by revocation, rejection, counter-offer,
expiration, death/incapacity?
 Did offeree return a mirror image of the offer?
 Communicated to offeror?
 Does mailbox rule apply?
ii. CONSIDERATION?
 Bargained-for exchange?
 Benefit/detriment?
 Gratuitous promise?
 Nominal/sham consideration?
 Past performance?
 Pre-existing legal duty?
 Exception: “duty is doubtful or subject of honest dispute” - R2 §73
 K modification?
 Exception: “unforeseen difficulties” - R2 §89
 Illusory promise?
 Discretionary/Satisfaction clause? (implied obligation of good faith)
 Conditional promise?
 Implied obligation?
iii. DEFENSES TO FORMATION OF A CONTRACT?
 Absence of mutual assent?
 Absence of consideration?
 Did one party act in bad faith?
 Lack of capacity?
 Party under 18?
 Intoxicated party?
 Duress/coercion?
iv. DEFENSES TO ENFORCEMENT OF A CONTRACT?
 Statute of frauds
 Unconscionability? (tested at the time the K was made)
(d) PAROL EVIDENCE ISSUE?
i. Is a party attempting to admit extrinsic evidence?
ii. Is it the parties’ final written agreement? (four corners/contextual)
(e) UNCLEAR TERMS?
i. Indefiniteness? (no K if incurable uncertainty about material aspect)
ii. Vague, ambiguous, or omitted terms? (four corners/contextual)
 If yes  Does parol evidence rule bar admission?
iii. If admissible court will interpret, imply, or construe terms
 Source of meaning (UCC §2-208/R2 §203)
1. Express terms
2. Course of performance
3. Course of dealing
4. Usage of trade
(f) CONDITION?
i. WAS THERE A CONDITION TO A PARTY’S PERFORMANCE?
 Express (construed strictly)
 Implied (inferred from evidence of parties’ intention)
 Constructive (read into the K by the court w/o regard to parties’ intention)
ii. WAS THE CONDITION EXCUSED?
 Waived?
 Breach of duty/party caused nonoccurence of condition?
(g) WAS THERE A BREACH?
i. Material breach? (see R2 §241)
ii. Substantial performance?
iii. Divisible K?
iv. Anticipatory repudiation?
(h) IF NO K  CAN PARTY RECOVER UNDER ONE OF THE FOLLOWING THEORIES?
i. Promissory estoppel? (promise induced reliance – action/forbearance)
 Option K?
 Non-commercial or commercial promise?
ii. Promise for past benefits?
 Moral obligation doctrine
 Material benefit rule (rarely applied)
iii. Unjust enrichment?
(i) REMEDIES AVAILABLE
i. Money Damages
 Expectation Damages: “benefit of the bargain”
 Reliance Damages: reimburse for loss caused by reliance on the K
 Where expectation is not recoverable (e.g., promissory estoppel)
 “Losing” K?
 Restitution: restore to the injured party benefit he/she conferred on
breaching party
 Unjust enrichment
ii. Limitations on recovery?
 Reasonable certainty
 Foreseeability?
 Avoidability?
iii. Specific Performance? (inadequacy of money damages & discretionary
considerations)