Business Law 420, Commercial Law
How to Support Your Conclusions
or,
How to Receive Full Credit for Your Knowledge on Essay Exams
1. Recognize the difference between a conclusion and a fact. A fact is, e.g., that Bob holds three
yard sales each year. A fact is, e.g., that a car has a new engine. A “fact” is defined in the text’s
glossary as “an event that took place or a thing that exists”. It is not a matter of opinion; it is
objectively determinable. On the other hand, a conclusion is a judgment that you reach. For
example, it is a conclusion whether holding three yard sales a year makes Bob a “merchant”
under the UCC.
2. If it is important (under some other rule) whether Bob is a merchant, then the first thing to do
is to explain why Bob’s status as a merchant or non-merchant is relevant. To do this you must
state the content of the other rule. Every rule has certain requirements. For example, the UCC
Firm Offer Rule (2-205) requires that a seller promising to keep an offer open must be (1) a
merchant, (2) give the buyer a written promise to keep the offer open, and (3) the writing must be
signed by the merchant.
If you need use the Firm Offer Rule in your answer, first state its content/requirements, as above.
Now you know that you will have to prove all three of those requirements. The first requirement
is merchant status of the seller promising to keep his/her offer open.
At this point you have shown why it is important and relevant whether Bob is a merchant. You
have recognized (and shown in your answer) that Bob’s merchant status is a conclusion. Now
you must use your judgment to decide what your conclusion is: is he a merchant or not?
You do this by first stating the content/requirements of the UCC rule defining “merchant”.
Those are: either a dealer (defined as one who regularly and routinely buys or sells goods of the
type being considered), or an expert in the type of goods being considered, or having an agent
who is such an expert. You can try to establish that Bob is a merchant by choosing any of the 3
ways the UCC provides for establishing merchant status. You can argue, for example, that only
3 yard sales per year is not regular or often enough to make Bob a dealer. That is OK. Or you
could argue that 3 yard sales every year is certainly regular enough to make him a dealer. That is
OK too. It would be helpful if there were some standard, such as an industry standard (like
FASB rules in accounting) that determines how many yard sales a year makes one a dealer. If
the City has a rule that four or more yard sales require a business license or a dealer license, this
will bolster the argument that Bob is not a dealer; you could argue that the city’s license
requirement is the relevant standard to determine whether Bob is a dealer. It really makes no
difference whether you conclude that Bob is or is not a dealer. What is important is that you
show that you understand that Bob’s status as a merchant or non-merchant is a conclusion and
that you support your conclusion. You can get full credit either way. Ultimately, it is the quality
of your support that determines how much credit your answer will receive. If you provide no
support at all, you receive minimal credit.
IT is helpful, but not necessary, to use the IRAC form of responding to law essay questions.
Elsewhere in this website there are articles describing IRAC. However, regardless of the form of
your answer, it is always necessary and important to state the content of rules used. You are
being tested on whether you have learned those rules. The easiest way to show that you know
the rule is to have a section of your answer titled “rules”, then state their content/requirements.
Since every rule has certain requirements, you are automatically led back to the facts of the
question in order to determine whether those requirements have been met. You will need to
make an argument with respect to each requirement. If all the requirements have been met, the
rule will operate. For example, if the UCC Firm Offer Rule operates, then the seller’s promise to
hold the offer open is binding; if the seller breaks that promise then the seller is liable.
You might also add, for extra credit, that if the contract did not involve sale of goods, then the
Common Law would apply; because CL contracts require mutual consideration, the promise to
hold the offer open is merely an unenforceable “gift promise”, as the buyer has given no
consideration to the seller in exchange for the seller’s promise to hold his offer open.
In every exam question it is always the same: recognize what conclusion is necessary, then
remember a legal rule that, if it operates, will support that conclusion. Always list the
content/requirements of that rule. Check the facts of the exam question to see whether the facts
establish each requirement. Use your judgment. This is where you argue that requirements
have, or have not, been met.
In this way, by supporting your conclusions, you will earn the highest possible score on the essay
portion of your exams.