Contracts and Commercial Law
What this domain tests
Contracts and commercial law tests formation, enforceability, performance, breach, remedies, and statutes governing commercial transactions. CNMI courts apply common-law contract doctrine and the commercial statutes in the CNMI Code.
Core rules
- A contract requires offer, acceptance, consideration, and mutual assent. An acceptance must be definite and communicated in the manner invited.
- The Statute of Frauds requires a writing for categories such as land sales, suretyship, marriage-related promises, and contracts not performable within one year.
- Material breach excuses the non-breaching party's performance. Remedies include expectation damages, reliance, restitution, specific performance, and consequential damages when foreseeable.
- The implied covenant of good faith and fair dealing applies to performance and enforcement.
- Where the CNMI Code adopts UCC-style rules for sales of goods, those statutes displace common-law defaults on scope, risk of loss, and warranties.
Worked example
A restaurant owner asks a supplier for a price quote on a year's produce. The supplier quotes a fixed price; the owner replies, 'We have a deal.' The supplier later refuses to deliver because prices rose. The exchange shows offer and acceptance, and the price and quantity are sufficiently definite. Expectation damages include the cost of cover, not the supplier's lost profit. If the contract is not performable within one year, the Statute of Frauds may require a signed writing.
Traps
Treating an invitation to negotiate as an offer. Awarding consequential damages without foreseeability. Assuming the UCC applies to every CNMI commercial dispute. Ignoring the parol evidence rule.
Exam approach
Chart formation, enforceability, breach, excuse, and damages.