A common misconception among idiots who go by their ears rather than their brain. The real way to say it is "Could HAVE", i.e. "I could HAVE gone to the party", rather than "I could OF gone to the party".
It's a common mistake, generally caused because the phrase "Could have" is said so quickly that it is conceived as "Could of", but that's wrong.
"Should of" is the exact same but slightly less common mistake.
Idiot(Through text message): "Man, I could of gone to that party, but instead I stayed home."
Smart person, not an idiot(Through text message): "Are you serious? It's 'Could HAVE', not 'Could of'. Are you stupid?"
Idiot(Through text message): "Well, my name IS idiot for a reason..."