Determining Terms

Question 1

parol evidence rule (PER)

Answer 1

extrinsic evidence to written k is inadmissible to supplement or contradict k

Question 2

PER application

Answer 2

applies for final writing / complete integration

merger clause is evidence of finality but NOT dispositive

ET: if oral, it’s a SoF issue

Question 3

PER bars evidence of

Answer 3

negotiations and (prior or contemporaneous) agreements before final k
- cannot contradict formal writing

Exceptions: extrinsic evidence allowed if either:
1. k was only partially integrated (not complete), or
2. additional terms would ordinarily be in a separate agreement

ET: partial agreement on exam is usually a red herring

Question 4

PER allows evidence of

Answer 4

1. defense against formation: misrepresentation, fraud, duress, illegality, etc.
2. explain a vague term: meaning parties intended to give particular terms in the writing (oral, written, conduct)
3. clerical error: mistake in process of reducing agreement to writing
4. condition precedent to agreement becoming effective
5. modification (oral or written) made after writing
6. UCC exception

NOTE: in any k, express k terms generaly carry greater weight than extrinsic evidence

Question 5

UCC exception (PER allows)

Answer 5

a written k’s terms may be explained or supplemented by evidence of a course of dealing, performance, or trade
- can be used to show parties’ customs take precedence over an industry’s custom of trade

Question 6

course of performance

Answer 6

(most important)
* parties’ conduct under prior installements of current k

Question 7

course of dealing

Answer 7

(second most important)
* parties’ conduct in prior ks

Question 8

trade of usage

Answer 8

(least important)
* industry norms parties are aware of

Question 9

ET: PER v. modification

Answer 9

PER issue: stuff BEFORE contract
modification issue: stuff AFTER contract

PER only applies to stuff before K

Question 10

warranty definition

Answer 10

a promise regarding a contract

UCC ks have default implied warranties, which can be disclaimed

Question 11

types of warranties

Answer 11

• express warranty
• implied warranty of merchantability
• implied warranty of fitness for a particular purpose

Question 12

express warranty

Answer 12

promise/description about the quality or feature of a product (including showing sample/model)
- breach if product falls short of seller’s promise or description

NOTE: does NOT include puttting up a product opinion

eg, manufacturer claims cell phone is water proof to 20 feet

Question 13

implied warranty of merchantability

Answer 13

merchant automatically warrants goods are fit for their ordinary purpose
- MUST be foreseeable

merchant to consumer

MUST be a merchant

Question 14

implied warranty of fitness for a particular purpose

Answer 14

seller warrants that goods are fit for buyer’s particular purpose if:
1. buyer has a particular purpose
2. seller has reason to know of buyer’s particular purpose
3. seller picks out goods fit for buyer’s particular purpose
4. buyer relies on seller’s selection

does NOT have to be a merchant

Question 15

limiting warranty liabiity

Answer 15

k can limit liability for warranties in two ways:
1. disclaimers
2. remedy limitations

Question 16

disclaimers

Answer 16

limits liability for implied warranties NOT express warranties
* must be conspicuos: meaning reasonable person would notice it
* “as is” or “with all faults” language disclaims all implied warranties + is enforceable

disclaimers will NOT limit EXPRESS warranties

Question 17

remedy limitation

Answer 17

limits recovery upon breach of warranty (that is NOT unconsciousable)
* generally valid for all warranties
* can limit any remedy EXCEPT personal injury for consumer goods

Question 18

damages for breach of warranty

Answer 18

generally damages amount to the difference between current value and value as warranted by seller
* warranted value - current value