ICCSSL Business Law common mistakes
ICCSSL Business Law · Understand the traps and how to avoid them.
On a hybrid contract for goods and services, the candidate applies UCC Article 2 rules (firm offer, merchant's confirmatory memo, perfect tender) to the entire deal instead of first running the predominant-purpose test and applying the UCC only to the goods portion.
Casebooks drill the reflex 'goods means UCC', while the mixed-contract rule gets one class session and never fires under exam time pressure.
What to do instead
Run a 15-second intake on every contract fact pattern: (1) subject matter, that is goods, services, land or intangibles; (2) if mixed, predominant purpose by contract language, nature of the supplier's business and the price ratio; (3) only then choose UCC 2-201/2-205/2-601 or common-law rules. Write the purpose conclusion on scratch paper before answering, and cite the test you applied.
Treating the UCC Statute of Frauds as an absolute bar to an oral sale over $500 and missing the merchant confirmatory memorandum, the specially manufactured goods exception, the admission exception and payment-and-acceptance.
Candidates memorize 'over $500 needs a writing' from the common law and stop; the merchant memo exception requires two merchant statuses and a 10-day objection window that is rarely practised.
What to do instead
For any oral sale over $500, run four questions in order: is there a writing signed by the party to be charged; was a merchant confirmatory memo sent and not objected to within 10 days; were goods specially manufactured and not suitable for resale in the ordinary course; was payment made and accepted, or goods received and accepted? Cite the subsection you rely on for each.
Classifying a claimant as a holder in due course without checking all four requirements, then skipping the shelter-rule analysis when the HDC status fails.
Candidates conflate 'holder' with 'HDC' and treat good faith as satisfied by the absence of actual knowledge, ignoring the notice-of-claim and notice-of-defense branch.
What to do instead
Run the grid on paper: is the instrument negotiable; is the person a holder through a proper indorsement chain; was value given; was there good faith; was there notice that the instrument was overdue or dishonored, or of a claim or defense? If any element fails, check whether any prior party was an HDC, because the shelter rule can still cut off defenses. State the failing element explicitly.
Applying the 90-day preference period to an insider transfer, or concluding a payment is preferential without testing the ordinary-course-of-business and contemporaneous-exchange-for-new-value defenses.
The 90-day number is overlearned, while the one-year insider reach-back and the statutory defenses usually appear on a single lecture slide and are never drilled.
What to do instead
Label the transferee first: insider (one-year reach-back) or non-insider (90 days). Then walk each element of the prima facie case, including the improvement-in-position test for insiders, before turning to defenses: contemporaneous exchange for new value, ordinary course of business, enabling loan, and subsequent new value. Conclude only after both stages.
Holding a principal liable on apparent authority where the only evidence is the agent's own statement about their authority, or where the third party knew the agent was exceeding instructions.
Apparent authority feels like a fairness doctrine, so candidates reason from who should bear the loss rather than from manifestations made by the principal to the third party.
What to do instead
Ask whose conduct created the appearance. Apparent authority requires a manifestation by the principal, or a position carrying customary authority such as a purchasing manager or officer, relied on by the third party. An agent cannot bootstrap authority from their own words, and undisclosed limitations do not defeat apparent authority while disclosed ones do. Check ratification as a separate route before writing 'no liability'.
Piercing the corporate veil on a bare showing of thin capitalization or wholly owned subsidiary status, without identifying and proving the specific elements the forum requires.
Students remember 'alter ego' as a slogan and treat the conclusion as self-evident; the two-prong control-plus-injustice structure is rarely tested in class exercises.
What to do instead
Write both prongs expressly: (1) unity of interest and ownership such that the separate personalities no longer exist, evidenced by commingling, missing records, ignored formalities, or undercapitalization; (2) treating the entity as separate would sanction fraud or promote injustice. Say which jurisdiction's standard you apply, because it differs, and mention reverse piercing or enterprise liability only if the facts raise it.
Answering a design-defect question with 'the product failed and someone was hurt' instead of selecting the controlling test and analysing a reasonable alternative design or an inadequate warning.
Strict product liability is taught through its elements, but the design-defect standard is a jurisdictional split, so candidates fall back on res-ipsa-style reasoning.
What to do instead
Name the defect theory first, because proof differs: manufacturing, design, or failure to warn. For design, apply the consumer-expectations or risk-utility test your jurisdiction uses and require evidence of a feasible reasonable alternative design. For warnings, ask whether the risk was obvious and whether the warning was adequate and proximate. Then address misuse and assumption of risk as apportionment issues, not automatic bars.
Assuming the CISG automatically governs a cross-border sale, or assuming an Incoterm such as FOB or CIF fixes when title passes as well as risk.
Candidates generalize from UCC Article 2 and from domestic shipping terms, missing that parties may opt out of the CISG and that Incoterms allocate delivery, risk and cost rather than title or contract validity.
What to do instead
Check in order: do the parties have places of business in different contracting states; has the CISG been excluded expressly under Article 6; which exact Incoterm and which version applies, and where does it place delivery and risk; how is payment secured, typically a letter of credit under UCP 600, which is independent of the underlying sale contract.
Answering professional responsibility items with what the candidate personally would do, or what seems fair, rather than identifying the governing rule and the action it requires or permits.
Ethics questions read like ordinary judgment items, and the mandatory versus permissive distinction ('shall' versus 'may') blurs under time pressure.
What to do instead
Rewrite each stem into a rule trigger: who is the client; is the conflict current, former or prospective; is confidential information implicated; is there a duty of candor to a tribunal? Recall whether the rule permits disclosure only to prevent death or substantial bodily harm or to comply with law, then choose the answer that tracks the rule instead of your instinct.
Applying the rule of reason to horizontal price fixing or market allocation, or applying per se treatment to a vertical minimum resale price agreement.
The per se line has moved for vertical restraints, and candidates carry a blanket heuristic that cartels are per se and everything else gets full analysis.
What to do instead
Sort first by horizontal versus vertical and by the nature of the conduct. Horizontal price fixing, bid rigging and customer or territory allocation are per se unlawful; vertical minimum resale price maintenance and other vertical non-price restraints get the rule of reason. Only in rule-of-reason cases work through market definition, market power, anticompetitive effect and procompetitive justification.