Terms of the K Flashcards
Parole evidence rule
- Words in the written k: look here first
Parole evidence applies to
ii. the EARLIER words of one or both parties:
b. Overview of PE rule
i. Policy: underlying premise is that the final writing replaces earlier agreements, negotiations and conversations
a. BUT!! the court MAY consider evidence after the written k was signed
i. PE rule doesn’t apply
PE rule vocab
- Integration: written agreement that court finds is the final agreement, triggers the PE rule
- Partial integration: written and final, but not complete
- Complete integration: written and final and complete
- Merger clause: k clause such as “ This is the complete and final agreement”
a. persuasive but not conclusive - Parol evidence: only applies to oral and written words that came before the k
d. basic idea
i. cannot introduce more evidence to vary / contradict terms of written k if that k is deemed an integrated agreement.
ii. Lots of exceptions
1. Doesn’t bar evidence of fraud, illegality, undue influence, duress, mistake, conditions precedent, (lack of) consideration, trade usage, course of dealings, industry practice
PE rule if there’s a clerical mistake
- court MAY however, consider evidene of such terms for the limited purpose of determining mistake in integration
a. bar exam fave is numerical errors.
PE rule for defenses
- PE rule doesn’t prevent a court from considering evidence of earlier words of the parties for the limited purpose of determining whether there is a defense to the enforcement of the agreement, like misrepresentation, fraud or duress
Ambiguity and PE rule
- PE rule allows consideration of evidence of earlier agreements to interpret ambiguous terms
- word chicken means both boiling hens and not just fryers
UCC: Conduct as a source of k terms
for sale of goods ks may look to
course of performance,
course of dealing,
custom and
trade usage
UCC for terms in sale of goods– determining delivery obligations of seller if delivery is by common carrier
a. Delivery obligations of seller of goods if delivery by common carrier- 2 answers
i. Shipment ks—seller completes its obligation
1) gets goods to common carrier 2) makes arrangements for delivery and 3) notifies buyer
ii. Destination ks.
1. means that seller doesn’t complete its delivery obligation until the goods ARRIVE at the destination
iii. Determining whether k is shipment or destination k:
3. FOB of city where seller is–> shipment k.FOB of any other city means destination k.
4. Seller doesn’t complete its obligation until the goods arrive WHERE the FOB city is. can be anywhere.
Risk of loss and the UCC : definition and consequences
Risk of loss problem: when goods are damaged after k formed, but before the buyer receives them and neither the buyer nor the seller is to blame.
- if risk of loss is on the buyer—he has to pay full price for goods.
- if seller has risk of loss- no obligation on the buyer and possible liability on the seller for nondelivery.
Rules for risk of loss (4 rules)
agreement, breach, common carrier, catchall (if seller is merchant–> bears risk until delivery; if seller is not merchant–> bears risk until tender)
- # 1: Agreement of the parties controls
- # 2: Breach: breaching party is liable for uninsured loss even though breach is unrelated to problema. for ex. coffee came with rat shit not due to anyone’s fault. but coffee was 2 weeks late. still put liability on seller who sent coffee late even though that breach had nothing to do with rat shit.
- # 3: Common carrier delivery: risk of loss shifts from seller to buyer at time seller completes its delivery obligations
- # 4: Catchall—no agreement, no breach, no delivery by carrier:a. If seller is a merchant (doesnt matter what buyer is):
b. risk of loss shifts from merchant-seller to buyer on the buyers RECEIPT of goods (possession by the buyer),
c. risk of loss shifts from a nonmerchant seller when he or she tenders the good.
e. for ex merchant sells stove to be picked up at loading dock, before buyer reaches loading dock lighting strikes the stove.
i. no agreement, no breach, no common carrier.
ii. risk of loss is on the seller.
f. contra: nonmerchant sells his stove to be picked up on back porch. stove gets damaged.
i. tender = makes available.
ii. buyer has to pay for damaged stove. b had risk of damaged loss.
Insurable interest and identification
In order to aid buyers who bear the risk of loss before receiving goods , Art 2 gives buyers a special property interest in goods as soon the seller sets them aside for the buyer. this special property interest is insurable.
Warranties of quality: express warranty
i. Express: look at words that promise, describe or state facts. Distinguish from general sales talk, like an opinion.
Or, look for sample or model
1. for ex: seller showing sample creates warranty that goods will be like sample, guarantee to operate for 2 years, “all steel.”
Implied warranty of merchantability
Every sale of goods by a merchant has an implied warranty of merchantabiliy—that the goods are fit for ORDINARY purpose for which such goods are used
- Triggering fact: seller is a merchant, SPECIFICALLY IN GOODS OF THIS KIND
only place in ks
Implied warranty of fitness for a particular purpose
- Triggering facts: buyer has particular purpose, buyer is relying on seller to select suitable goods, seller has reason to know of purpose and reliance.
- Warranty: goods fit for particular purpose.
Limitations on warranty liability: SOL
i. SOL: there is a 4 year SOL and generally the statute starts running on possible warranty actions when the tender of delivery is made, NOT when buyer learns of defect.
1. not 4 years from when microwave explodes. 4 years from when purchased.
Limits on warranty liability : privity
- requirement of privity has been largely eliminated.
3. vertical privity is lacking when the ∆ was not party bc ∆ was remote manufacturer
