MEE - How to Analyze Contracts Issues

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STEP ONE: ALWAYS start by asking yourself – Is this issue going to be resolved by the
common law or Article 2 of the UCC?
This is A HOT TOPIC. They love just asking us straight up, “What body of contract law governs
this dispute.”
Imagine you walk into a dive bar located in city you’ve never been to before. Your initial vibe
sets the tone as soon as you step through the doors. This is how I want you to imagine opening
up the MEE booklet and seeing a contracts essay. You need to do a quick #VIBECHECK.
Are we dealing with goods? Sick, Article 2 of the UCC. Services? DOPE, common law.
STEP TWO – After you decide what body of contract law applies to your facts, determine what
law is RELEVANT to this issue.
Do NOT just write, “A contract is a legally enforceable promise that requires an offer,
acceptance, and consideration,” when the issue is about what damages this rando may be entitled
to.
If you go on autopilot and smile to yourself thinking that HYPERLINK
"https://www.reddit.com/u/malrauxaundre/" \t "_blank"u/malrauxaundre taught me this simple
and efficient rule statement, I am going to flip out… NO! YOU’RE GOING TO GET A 1 ON
YOUR ESSAY DUDE.
The point of the MEE is to see how well you can (1) SPOT THE ISSUE, (2) APPLY THE
RIGHT LAW TO THIS ISSUE, and (3) WRITE AS CLEAR AS FUCKING POSSIBLE SO
THE EXAMINER CAN SEE YOU ARE NOT DUMB AF.
Unlike my trusts and secured transactions posts, contract law is a whole different animal. While
we are 99% going to get an issue of whether a security interest is attached to a debtor’s
collateral, we have no fucking clue what issue in contracts they can throw at us on test day.
There's not going to be a question where we are asked to determine all at once whether there was
an offer, whether it was accepted, and if legal consideration was extended. Rather, we will
address these in isolation.
Now that we have cleared things up, let's power through the scenarios.
DISCLAIMER: This is a dense thread. Do not rush through this thread. There are a ton of
issues and rules to consider. And yes, there's going to be a shit ton of typos. I don't know
howHYPERLINK "https://www.reddit.com/u/SnooGoats8671/" \t
"_blank"u/SnooGoats8671 never has typos. He's a certified wizard. But leave me alone, I
have no air conditioning, and I haven't had a cigarette in TWO days! The misery.
Scenario 1 - Hybrid Contracts.
Oh, wait, we have both goods and services in the question? Look for the PREDOMINANT
PURPOSE, meaning we decide which contract principles apply to our situation based on what is
clearly the main purpose of the transaction.
In February 2018, they asked us whether Article II of the UCC or common law applied to a
dispute under a mixed contract. Here’s how I would write the rule statement:
“In contract law, formation principles differ based on whether the common law or the Uniform
Commercial Code (UCC) governs. When a contract involves both services and the sale of goods,
it is considered a hybrid contract. The governing formation principles for such a contract are
determined by the "predominant purpose" test. Under this test, if the primary purpose of the
contract is the sale of goods, then the contract is governed by Article 2 of the UCC. On the other
hand, if the primary purpose of the contract is the provision of services, then the contract is
governed by common law.”
Then, I would pick one and run with it in your analysis.
Scenario 2 - The UCC Applies
Let's assume that we are just dead certain that the UCC applies. The July 2018 MEE is a great
example of this. The first question asked, "Was the homeowner bound by his promise to
keep the offer open for a week? Explain."
STEP ONE PEOPLE. What body of contract law applies? We need to know this in order to
answer affirmatively whether the homeowner is bound by his promise.
In this problem, we had the sale of a lawnmower. A LAWNMOWER IS A TANGIBLE,
MOVABLE THING.Also known as a GOOD. We are going to apply the UCC, easy money.
Because we first have to decide what law applies to a situation where a promise to keep an offer
open (AN OPTION CONTRACT) is being disputed, I would go for a sub-rule divided into 1(a)
and 1(b), where (a) applies the body of law and (b) applies UCC principles to the dispute.
Here's how it would look:
"A. Does the common law or Article II of the Uniform Commercial Code (UCC) apply?
Article II of the UCC governs transactions for the sale of goods. Goods are tangible and movable
things. Common law principles that are not displaced by the UCC may also apply to any
contractual dispute.
A lawnmower is a tangible and movable thing. Therefore, the dispute is governed by Article II of
the UCC, as well as any common law principles relating to option contracts that are not
displaced by the UCC."
It is that simple. Nothing fancier than this. Get in, get out! It's not necessary to mention that the
common law applies to contracts for services, but I don't think this would lose you any points per
se. But if we only have 30 minutes to work through this essay, we need to prioritize simplicity in
our analysis when possible.
However, I do think it is important to mention that common law principles apply when it is not
displaced by the UCC because common law principles always fill in the gaps where the UCC
does not apply. Don't forget that!
OK. So, at this point, the examiner knows where we are heading, sees that we know why the
UCC applies and also LOVES that we noted that common law principles might also come into
play unless the UCC governs the particular issue.
Scenario 3 - Option Contracts
In general, an offer can be revoked by the offeror at any time prior to acceptance. However,
an enforceable option will render the offer irrevocable. An option is an independent promise
to keep an offer open for a specified period of time. Such a promise limits the offeror’s power
to revoke the offer until after the period has expired, while also preserving the offeree’s power to
accept. Under the common law, if the option is a promise not to revoke an offer to enter a new
contract, the offeree must generally give separate consideration for the option to be
enforceable.
The UCC provides an alternative to the common law option rules if three requirements are
met. Under the UCC, an offer to buy or sell goods is irrevocable if: (i) the offeror is a
merchant, (ii) there is an assurance that the offer is to remain open either for a specified time or a
reasonable time not to exceed 3 months, and (iii) the assurance is contained in a signed writing
from the offeror. Unlike the common law, no separate consideration is required to keep the
offer open under the UCC firm offer rule. A merchant is generally described as a person who
regularly deals in the type of goods involved in the transaction.
Same July 2018 MEE. Here's how I would handle the analysis relating to the option contract:
B. Was an enforceable option contract entered into between the homeowner and the neighbor?
"Offers are generally revocable prior to acceptance. An option contract is a promise to keep an
offer open. To be enforceable in common law, the option contract must be supported by
consideration and include specific and definite terms regarding how long the offer will remain
open. Once a valid option contract exists, the offer is irrevocable, and the offeror is bound to
keep the offer open. However, under the UCC, an option contract can be created without
consideration through a merchant’s "firm offer" if the offer is in writing, signed, and provides
assurances that the offer will remain open either for a stated time or a reasonable time not to
exceed three months. The UCC defines a “merchant” as a person who regularly deals in the
goods of the kind sold and has specialized knowledge or skill."
Although 1(a) determined that the UCC governs this dispute, we need to flex a bit for the
examiner to show that we know (1) the general rule regarding revocation of offers, (2) that an
option contract can be created under both common law and the UCC and (3) since the UCC
applies to this question, the definition of a merchant so that we can discuss "firm offers."
Scenario 4 - Option Contracts Again, But More Detail About Offer, Acceptance, and Revocation
Let's look at the February 2017 MEE. There, we were asked, is the gardener bound to sell the
cook all the tomatoes he grows that summer for $25 per bushel?
A quick recital of the facts:
 A professional cook expressed interest in buying tomatoes (GOODS, UCC) from
her neighbor, an amateur gardener, to make salsa, to which he agreed to sell for
$25 per bushel and signed a document stating his offer would be held open for
14 days. (NOT A MERCHANT UNDER UCC, C/L OPTION CONTRACTS
NEED CONSIDERATION, NO CONSIDERATION HERE) Four days
later, the gardener entered into a contract with a farmers' market proprietor to
sell all his tomatoes for $35 per bushel (INDIRECT REVOCATION). On the
9th day***, the cook called to accept the gardener's offer, but he informed her he
had sold his tomatoes to someone else*** (CAN'T ACCEPT TERMINATED
OFFERS, NEED NEW ONE)
The call of the question here is open-ended, so you need to think about STEPS ONE AND TWO
-- what body of law applies? what issues are being tested, and what law can resolve them?
Compare this to the July 2018 MEE questions:
 1. Was the homeowner bound by his promise to keep his offer open for a
week?
o This already tells us we have an offer, so why spend the time going
into what an offer is? Skip ahead to the real issues: (1) what body of
contract law applies, and (2) was there a valid option contract in
effect?
 2. Assuming that the homeowner was not bound by his promise to keep the
offer open, did the neighbor’s statement “I accept your offer” create a
contract with the homeowner for the sale of the lawn mower?
o Again, this already tells us what to assume. All we had to do was
apply the law concerning revocation of offers.
Pairing the 2017 and 2018 MEEs side by side gives us a perfect exercise of knowing when to
apply more meat to our rule statement and when to opt for a slimmed-down rule statement.
Ok, let's run through the 2017 MEE.
* FIRST ISSUE - What body of contract law applies?
PLEASE DON'T LET ME DOWN. Step One???? #VIBECHECK. We are in UCC land!
"Article II of the UCC governs transactions for the sale of goods. Goods are tangible and
movable things. Common law principles that are not displaced by the UCC may also apply to
any contractual dispute."
Tomatoes are fucking GOODS. Movable. Tangible. Don't play games with me!
* SECOND ISSUE - Was the gardener entitled to revoke his offer before the cook accepted it?
We know that the amateur gardener REVOKED the offer through indirect revocation when the
gardener entered into a new contract for $35 per bushel. But the offeror promised to keep it open
for 14 days. Uh oh, option contracts again. But read closely! This dude is an "amateur," so this
cannot be a merchant's firm offer under the UCC.
Let's let the examiner know you are not someone to be fucked with.
"Offers are generally revocable prior to acceptance. An option contract is a promise to keep an
offer open. To be enforceable in common law, the option contract must be supported by
consideration and include specific and definite terms regarding how long the offer will remain
open. Once a valid option contract exists, the offer is irrevocable, and the offeror is bound to
keep the offer open. However, under the UCC, an option contract can be created without
consideration through a merchant’s "firm offer" if the offer is in writing, signed, and provides
assurances that the offer will remain open either for a stated time or a reasonable time not to
exceed three months. The UCC defines a “merchant” as a person who regularly deals in the
goods of the kind sold and has specialized knowledge or skill."
Now, let's analyze.
  Here, the gardener's promise to keep the offer to sell tomatoes to the cook open
for 14 days can be construed as an option contract if it meets the elements of a
firm offer set forth under Article II of the UCC.
 Here, the promise is evidenced by a signed and written document that provided
assurances that this offer would keep this offer open for a specified period (ex. 14
days) and no consideration is required for an enforceable option contract under
the UCC. However, the gardener is not a "merchant" as defined by the UCC
because he doesn't regularly deal in goods of the kind sold and lacks specialized
knowledge or skill in the sale of tomatoes. As such, the gardener’s promise to
hold the offer open was not binding in the absence of consideration since the
UCC's firm offer rules do not apply here. Thus, the gardener is not bound to the
original $25 per bushel contract unless common law principles create a binding
option contract.
 As stated above, there is no evidence of any consideration given by the cook to
the gardener for keeping the offer open. Thus, the gardener's promise to keep the
offer open for 14 days may not be enforceable since consideration is required
under common law option contracts.
* THIRD ISSUE - Did the gardener revoke that offer before the cook accepted it, thereby
preventing the formation of a contract?
You may be thinking that this is no longer an issue since we already determined that there is no
enforceable option contract.
NOPE.
Sure, there's no option contract. But the facts tell us that that the cook ACCEPTED THE
OFFER. Now, we have to analyze whether this acceptance was valid.
Spoiler: It wasn't.
"An offeree’s acceptance of an offer must be unambiguous and exhibit unequivocal words,
conduct, or agreement indicating acceptance. An offeror can revoke an offer before an offeree
accepts. Once an offer is terminated, an offeree cannot accept, and a new offer must be made. An
offeror can revoke an offer directly through express words or can be implied through conduct,
such as entering into a contract with another offeree before he or she was bound to perform for
the original offeree."
I omitted the following from the rule statement:
"Also, some courts have held that revocation may also be communicated to the offeree
indirectly, when the offeror takes definite action inconsistent with an intention to enter into
the proposed contract and the offeree acquires reliable information to that effect."
The reason being... it's NOT relevant. The offeree, the cook, learned about this revocation from
the offeror, the gardener, DIRECTLY. If the facts stated that the cook learned of the revocation
from somebody else (which is exactly what happened in the 2018 MEE), then the indirect
revocation rule would have been included here.
Here's how we analyze this shit:
Here, the cook expressed interest in the gardener's offer but did not unequivocally accept
the offer until after the gardener had already sold his tomatoes to the proprietor. The
gardener expressly revoked the offer to the cook when he informed her that he had sold his
tomatoes to the proprietor of the farmers' market. This clear manifestation of his intention
not to proceed with the original proposed contract constitutes a valid revocation.
Since the offer was revoked, the cook could not accept, and a new offer must have been
made. Therefore, no contract was formed between the cook and the gardener with respect
to the tomatoes.
SCENARIO 5 - MODIFICATIONS
Here is how I would start the rule statement if we are in common law land:
"Under the common law, an agreement modifying an existing contract generally must be
supported by new consideration."
Let's say the question is testing us about our pre-existing duties to our counterparty.
The revised rule statement would be:
"Under the common law, an agreement modifying an existing contract generally must be
supported by new consideration. A pre-existing duty to perform under a contract is not adequate
new consideration."
The same goes for the following, and work these into your revised rule statement, if applicable:
 Gifts are not exchanged for a bargain, so there is NO consideration for gifts.
 Past consideration—under common law, this a no-go, but the modern trend says
that if someone provided a very specific, meaningful benefit to somebody and that
person then promises back, that MAY be considered consideration.
 Promissory Estoppel: may be enforceable as a consideration substitute if the
person making that promise reasonably expected the promise to induce action or
forbearance, the promise actually induces action or forbearance, and injustice can
only be avoided by enforcement of the promise. NOTE: Typically, only reliance
damages are available for promissory estoppel.
Now consider what this would look like under the UCC:
"Under the UCC, an agreement modifying an existing contract does not need new consideration
to be enforceable. As long as the modification is made in good faith, it is valid even without
additional consideration."
BOOM. That's fucking clean.
SCENARIO 6 - THE MAILBOX RULE
I really like this rule. It's just so simple. When is shit ever simple?!
Here's how I would write it:
"Under the common law "mailbox rule," an acceptance of an offer is effective upon dispatch. But
when both an acceptance and a rejection are dispatched, whichever reaches the offeror first is
effective."
But this is only the beginning. Things are getting complicated again, ugh.
The issue will be something like, "Did this rando accept this other rando's offer?"
We need to expand the rule statement a bit more to address this issue fully.
"A rejection is a manifestation of intent not to accept an offer. A rejection terminates the
offeree’s power to accept an offer. However, a rejection does not extinguish the offeree’s right to
accept an offer until the rejection is received by the offeror."
NOW ENTERS OUR HANDY MAILBOX RULE.
"A rejection is a manifestation of intent not to accept an offer. A rejection terminates the
offeree’s power to accept an offer. However, a rejection does not extinguish the offeree’s right to
accept an offer until the rejection is received by the offeror. Under the common law "mailbox
rule," an acceptance of an offer is effective upon dispatch. But when both an acceptance and a
rejection are dispatched, whichever reaches the offeror first is effective."
This is a nice top-down approach that leads our examiner to our analysis. We start with the high-
level shit, and then get down to the minutia so that we can address the actual issue, namely, did
this fucker receive the revocation or acceptance first?
SCENARIO 7 - THE STATUTE OF FRAUDS
There's been of handful of times the statute of frauds has been tested on the MEE. What comes
up with particular frequency is the interplay of the statute of frauds with Article II of the UCC.
Let's work through the February 2021 MEE together, and hopefully some shit clicks.
The facts:
 A grocer planned to open a supermarket and needed shopping carts for her store.
On March 1, she went to the showroom of a shopping cart supplier to look at a
variety of samples of modern shopping carts. After looking around the
showroom, the grocer pointed to a shopping cart that bore a price tag of $125
and said to the supplier, “These are the carts I want for my store. When can
you get me 100 of them?” The supplier said that he could deliver 100 of those
shopping carts to the grocer’s supermarket within 30 days. The grocer
responded, “That’s great. Please ship me 100 of these shopping carts by March
31, and I will wire you payment of $12,500 as soon as they arrive.” The supplier
said, “You’ve got a deal!”
o Up until this point, this is all oral agreements. This is key. What
agreements need to be in writing under the statute of frauds? Sale of
goods > $500.
o SOUND THE ALARMS. We have two merchants here.
 One of the exceptions to the rule in UCC § 2-201(1)
(WHICH REQUIRES CONTRACTS FOR THE
SALE OF GOODS OF $500 OR MORE TO BE IN
WRITING AND SIGNED BY THE PARTY
AGAINST WHOM ENFORCEMENT IS
SOUGHT) is triggered when we have a contract
formed between merchants. (FYI: Moving forward,
we look at 2-201(1) and see STATUTE OF
FRAUDS. This is the UCC's Statute of Frauds
 provision. There's no need to cite this section of
Article II of the UCC on exam day, but just so you
know.)
 The exception is that if written confirmation of a
contract is received within a reasonable time and
the party receiving it has reason to know its
contents, it satisfies the UCC's Statute of Frauds
requirements UNLESS written notice of objection
to its contents is given within 10 days after it is
received. (DO NOT SKIP OVER THIS BULLET)
 On March 2, the grocer sent the supplier an unsigned note, handwritten on
plain paper, stating in its entirety: “It’s a pleasure doing business with you.
This will confirm the deal we made yesterday for 100 shopping carts at $125
each.” The supplier received the note on March 4 and read it immediately
but never responded to it in any way.
o An unsigned note. Uh oh. In order for the document to be sufficient
to make the contract enforceable against the supplier under the
UCC's Statute of Frauds requirements, the document must be signed
by the supplier.
 On March 31, the grocer received an envelope delivered by an express delivery
service. Inside the envelope was a document printed on the supplier’s letterhead.
The document stated, in its entirety: “Thanks so much for your business. The 60
shopping carts you ordered from us are on the way. Be on the lookout for our
delivery truck—it may even arrive today! Please send us payment of $7,500 (60
carts x $125/cart) as soon as you receive the carts.”
o WTF is this "letterhead" nonsense? Is this a form of signature? IT
COULD BE! According to the UCC, "signed" includes using any
symbol executed or adopted with present intention to adopt or
accept a writing.
o But here, this is a super liberal reading of what went down. Just
noting this as a potential argument to make, but it's flimsy imo.
 Later that day, the supplier’s truck arrived at the grocer’s supermarket, and the
truck driver said to the grocer, “I’ve got 60 shopping carts for you in the truck.”
The grocer replied, “I didn’t order 60 shopping carts; I ordered 100. You go
back to your boss and tell him to send me the right order.” The grocer refused
to allow the truck driver to unload the 60 shopping carts from the truck and did
not pay for them. The grocer would like to sue the supplier for breach of
contract for failing to deliver 100 shopping carts.
 CALL OF THE QUESTION: Is there an enforceable contract requiring the
supplier to sell 100 shopping carts to the grocer for $125 each? Explain.
Well, well, well. If it isn't good ol' #VIBECHECK TIME.
This is clearly the UCC. If you do not know that a shopping cart is tangible and MOVAVBLE
(?!?!), we have bigger issues to address...
Great.
Now let's tackle the call of the question.
What do we know about enforceable contracts?
 Here, we have a nice bi-lateral contract. A promise for a promise. I promise to
ship the shopping carts if you promise to pay me $12,500.
 We already know an offer and acceptance occurred, with consideration in the
form of promises... so there is no need to rehash this in the IRAC.
 We know this was all done orally. Does the UCC recognize oral contracts? FUCK
YEAH, THEY DO. So, here's how we address the first part of the analysis:
"Under the UCC, a contract for the sale of goods may be made in any manner sufficient to show
agreement, including conduct by both parties which recognizes the existence of such a contract.”
YES, there is a contract between the supplier and the grocer. The UCC is DTF.
But is this contract enforceable?
Why wouldn't it be? Because, silly, the statute of frauds requires contracts for the sale of
goods for $500 or more to be in WRITING AND SIGNED BY THE PARTY AGAINST
WHOM ENFORCEMENT IS SOUGHT (i.e., the supplier)! We know this shit!
2-201(1) is our bitch.
"A contract for the sale of goods for $500 or more is not enforceable against a party unless there
is a writing sufficient to indicate that a contract has been made that is signed by against whom
enforcement is sought or an exception applies."
We discussed this above in the fact analysis section, but let's briefly recap.
 The 100-cart order based on the March 2 letter is fucked because (1) this contract
needs to be in writing and signed to satisfy 2-201, and (2) the follow-up letter on
March 2 serving as the written proof of the oral contract was not signed by the
supplier (the party against whom enforcement is sought), so the exception to 2-
201 cannot apply.
 The 60-cart order can be either enforceable or unenforceable. The document that
the supplier sent to the grocer is a written confirmation of a sale, but it doesn't
necessarily indicate a "signature" from the supplier. This is crucial because
enforceability requires a written and signed confirmation of the contract by
the party against whom enforcement is sought.
o While the document was on the supplier's letterhead, which could be
considered a form of signature under a broad interpretation of the
UCC, it is not explicitly stated that the supplier intended it as
such. If the supplier's letterhead is deemed a valid signature, the
contract would still only be enforceable up to the quantity stated
in the document, i.e., 60 shopping carts, not the 100 originally
requested by the grocer.
Ultimately, the examiner was looking to see if you could spot that:
 An oral contract exists since a contract for the sale of goods may be made in any
manner sufficient to show agreement.
 The UCC applies to this dispute since this is a transaction in the sale of goods.
 The 100-cart order is not enforceable since it failed the UCC's Statute of Frauds
requirements (writing AND signed), and the merchant's exception is NOT
available.
 The 60-cart order may be enforceable under a loose interpretation of signature for
2-201 purposes.
 One more time for people in the back who didn't hear me...
o WHEN YOU HAVE (1) AN ORAL CONTRACT (2) BETWEEN
MERCHANTS (3) FOR THE SALE OF GOODS FOR $500 OR
MORE, LOOK TO SEE IF THE MERCHANT'S
EXCEPTION CAN OVERRIDE THE GENERAL RULE SO
THAT THE CONTRACT DOES NOT VIOLATE THE STATUTE
OF FRAUDS FOR FAILING TO BE IN WRITING.
o General Rule: A contract for the sale of goods for a price of $500
or more is not enforceable unless there is a sufficient writing signed
by the party against whom enforcement is sought.
o Merchant's Exception: The UCC's merchant's exception alters this
rule in a specific manner. If one merchant sends another merchant a
written confirmation of the contract that is sufficient against the
sender (i.e., it would be enforceable against the sender under the
general rule), and the receiving merchant doesn't object within 10
days, then the confirmation is also enforceable against the
receiver, even if the receiver didn't sign it.
o So, while the exception can make a confirmation enforceable
against a party who didn't sign it, this only works if the
confirmation is "sufficient against the sender." If the sender's
confirmation (letter, document, note) is NOT signed, it is NOT
enforceable against the sender under the general rule, and the
merchant's exception can't make it enforceable against the receiver.
o In our situation, the grocer's note sent on March 2 was NOT signed
when it was sent to the supplier (the party against whom
enforcement was sought); hence. it would not be enforceable against
the grocer under the general rule. Therefore, the merchant's
exception can't make it enforceable against the supplier.