Examples of Mixed/Hybrid transactions from Bonebrake case... Flashcards
Would Article 2 of the UCC apply?
(predominant purpose test)
Contract with an artist to paint your portrait
No
Would Article 2 of the UCC apply?
(predominant purpose test)
Installation of water heater in bathroom
Yes
Would Article 2 of the UCC apply?
(predominant purpose test)
Designing, engineering and producing electrified flooring materials for whirly dodge vehicles to be used at a carnival?
Yes
Would Article 2 of the UCC apply?
(predominant purpose test)
Distribution agreement between Chrysler Motors (the manufacturer) and Warner Motors (a car dealership)?
Yes
Would Article 2 of the UCC apply?
(predominant purpose test)Distribution agreement between a beer manufacturer and a beer distributing agency?
Yes
Under the common law, based on the pre-existing duty rule, a contract modification will only be enforceable
if supported by adequate consideration (although courts may treat a mere token as adequate consideration for a modification).
Under the UCC, a good faith modification need not be supported by consideration; but even under the UCC, a modification will not be enforceable if it is the result of
(i) duress, or (ii) unconscionability.
Under the UCC, the modification must be in a signed writing if
(i) the Statute of Frauds applies, or (ii) the original agreement required any modification to be evidenced by a signed writing. [UCC 2-209(2)]
Common law parole evidence rule
If the parties’ written agreement qualifies as a partial or total integration then prior oral or written agreements cannot contradict the writing
The UCC Parol Evidence Rule
does not contemplate that a written agreement would be a complete integration; thus, it’s more likely that a subsequent agreement could “supplement” a prior written agreement (rather than contradict it). [UCC 2-202]
Even if the written agreement contains a “merger” clause (stating that there are no other agreements between the parties which are not contained in the writing), when will extrinsic evidence be admissible
to interpret the written agreement, including evidence of usage of trade, course of dealing, and course of performance.
Columbia Nitrogen Corp. v. Royster
The extrinsic evidence to interpret the contract may include (i) usage of trade; course of dealing, or course of performance. The language of the written contract need not be ambiguous in order to use such evidence to interpret the written contract.
SOF exception Merchant’s Confirmatory Memo:
The court in Bazak lists 4 elements for this exception to apply:
Element #1: Both parties are merchants;
Element #2: The written confirmation was sent within a reasonable time;
of the oral agreement (often it will be the seller sending the confirmation);
Element #3: The confirmation was received by someone with reason to know of its contents; and
Element #4: The other party failed to object within 10 days.
SOF exception Specially Manufactured Goods
Under this exception, the seller would need to prove: (i) that the items (they manufactured or acquired) cannot be sold to other customers in the ordinary course of their business; and (ii) their actions were triggered by the actions of the proposed buyer.
SOF exception Third Exception: Admissions
The party who otherwise might try to assert that the Statute of Frauds will not be able to do so if they admit there was an oral agreement in (i) pleadings; or (ii) a deposition; or (ii) in court during direct or cross examination. The Statute of Frauds could not be asserted for the quantity admitted.
