Contracts · Breach

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MBE Contracts: Breach

A comprehensive overview of breach of contract law for the Multistate Bar Examination, including key rules and practice questions.

Overview

Breach of contract occurs when one party fails to fulfill their obligations as outlined in a contract. It can be classified into different categories, including material breach and minor breach, which can affect the aggrieved party’s rights and remedies. Understanding the distinction between these types of breaches is crucial, as it determines the consequences that may follow, including the possibility of seeking damages or specific performance.

On the MBE, questions concerning breach often involve fact patterns where one party has not fulfilled their contractual duties. You may be tested on the identification of whether a breach is material, the type of remedies available, including compensatory and consequential damages, and the impact of factors such as anticipatory breach and impossibility. Familiarizing yourself with terms such as

Key Rules
  1. A breach is material if it significantly impairs the benefits of the contract to the aggrieved party.
  2. An anticipatory breach occurs when a party indicates they will not perform their contractual duties before the performance is due.
  3. The non-breaching party is entitled to remedies, which include expectation damages, reliance damages, or restitution.
  4. In the case of a minor breach, the aggrieved party can sue for damages, but is still obligated to perform their contractual duties.
  5. Parties may limit or alter the remedies available under their contract as long as the limitations are not unconscionable.
Common Question Patterns
  • Identifying whether a breach is material or minor based on the facts presented.
  • Determining the appropriate remedy for the non-breaching party given the specifics of the breach.
  • Assessing situations involving anticipatory breach and its implications for damages.
Practice Questions

1. A homeowner contracts with a contractor to build a deck by June 1. The contractor delays the completion until June 15 without justification. What type of breach has occurred?

A. A) Minor breach

B. B) Material breach(Correct)

C. C) Anticipatory breach

D. D) No breach

Explanation: The contractor's delay in performance significantly impairs the homeowner's ability to enjoy the deck in a timely manner, constituting a material breach.

2. A buyer orders 100 widgets from a seller to be delivered by May 1. On April 1, the seller informs the buyer that he will not be able to deliver the widgets on time. What is this an example of?

A. A) Minor breach

B. B) Anticipatory breach(Correct)

C. C) Material breach

D. D) Impossibility

Explanation: The seller's communication indicates he will not perform his obligation, which is a classic example of anticipatory breach.

3. A restaurant contracted to purchase fresh seafood every week from a local fisherman. After three weeks of successful delivery, the fisherman is unable to deliver due to a storm but offers to make good on the contract the following week. What should the restaurant do?

A. A) Sue for damages immediately

B. B) Accept the delayed delivery(Correct)

C. C) Terminate the contract

D. D) Require specific performance

Explanation: The fisherman’s temporary inability to perform due to unforeseen circumstances does not automatically provide grounds for the restaurant to terminate the contract if he intends to fulfill it afterwards.

4. A contract for the sale of goods states that 'time is of the essence.' If one party fails to perform on the specified date, what type of breach has occurred?

A. A) Compensatory breach

B. B) Material breach(Correct)

C. C) Minor breach

D. D) No breach

Explanation: Since the contract specifies that time is of the essence, any failure to perform on the due date constitutes a material breach.

5. A contractor builds a garage that is 50% larger than specified in the contract. The homeowner wants damages for the breach. What should they consider?

A. A) The homeowner must accept the work as it is

B. B) The breach is material as it deviates from the contract(Correct)

C. C) The homeowner can only claim nominal damages

D. D) Specific performance is required

Explanation: The contractor's performance deviated significantly from the specifications, thus the homeowner has grounds to claim damages due to a material breach.

Test-Taking Tips
  • Pay attention to the language used in the contract, particularly terms like 'time is of the essence.'
  • Analyze the facts for indications of whether a breach is minor or material, as this can shift the available remedies.
  • Consider the context of any anticipatory breach and whether the non-breaching party is obligated to wait for performance.

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