Contracts II - interpretation

Question 1

parol evidence rule analysis

Answer 1

1 identify terms
2 do writing, words, or communications constitute full contract
3 is there an integration clause
4 does the document cover all terms between parties in depth
5 what is the scope of integration (complete or partial)
6 what are the promises conditions warranties recitals that are in that part of the contract
7 is the parol evidence term a term covered in the scope of the integration
8 is the parol term beyond the scope of the writing
9 is the parol evidence an addition or interpretation

Question 2

parol evidence rule (restatement)

Answer 2

terms the parties have agreed to in an integrated contract may not be contradicted by evidence from any prior agreements or writings or contemporaneous oral agreements but may be explained or supplemented by course of performance, course of dealing, or usage of trade and by evidence of consistent additional terms unless the court finds the writing is the a complete and exclusive statement of the terms of the agreement.

Question 3

parol evidence rule

Answer 3

later integrations supersede all earlier written or oral agreements if they are on the same subject. can use parol evidence to help define terms in the contract if they do not contradict the contract but can’t use parol evidence to add terms.

Question 4

integrated agreement

Answer 4

a written agreement that contains all the terms of a contract, as agreed and negotiated by the parties, which supersedes all previous oral and written agreement.

Question 5

completely integrated agreement

Answer 5

an integrated agreement adopted by the parties as a final, complete, and exclusive statement of the terms of the agreement, supersedes all previous agreements

Question 6

partially integrated agreement

Answer 6

an integrated agreement other than a completely integrated agreement, has some terms but not all terms of the agreement between the parties.

Question 7

interpretation of an integrated agreement

Answer 7

interpretation is direct to the meaning of the terms of the writing or writings in light of the circumstances. Interpretation is to be made by the trier of fact if it depends on the credibility of extrinsic evidence or on a choice among reasonable inference to be drawn from extrinsic eficen.

Question 8

effect of integrated agreement on prior agreements

Answer 8

1 it discharges prior agreements that are inconsistent with it or are within its scope

Question 9

promise

Answer 9

creating a duty to do or not do something

Question 10

condition

Answer 10

an event that triggers a duty or terminates a dut

Question 11

warranty

Answer 11

a promise regarding quality or performance of goods - but distinguished from a representation that is not part of the contract.

Question 12

disclaimer or limitation of warranty

Answer 12

eliminating or limiting a warranty that might otherwise have applied to the transaction

Question 13

specification

Answer 13

the promised character or performance of something to be made or build

Question 14

remedy

Answer 14

a provision providing rules or limits on consequences of beach (atty fee provision, liquidated damages clauses, alternative remedy clauses)

Question 15

dispute resolution

Answer 15

a provision stating what jurisdiction’s law governs the contract or the forum and process of resolving dispute

Question 16

recital

Answer 16

a statement of facts (stating circumstances and purpose of the transaction)

Question 17

interpretive aid

Answer 17

a definition for a term used in the contract, or a rule for resolving disputes over meaning

Question 18

merger or integration clause

Answer 18

am agreement that a certain document has become the final and exclusive statement of the parties’ agreement, overriding other earlier or contemporaneous agreements

Question 19

termination

Answer 19

stating the duration or ending point of the contract, or a manner or procedure for termination or renewal.

Question 20

modification

Answer 20

a change to the original contract made with consent of both parties
no consideration required for it to be binding
a failed modification can operate as a waiver

Question 21

express terms

Answer 21

term that is written or orally stated

Question 22

implied term

Answer 22

term that is unstated but either implicit in the nature and circumstances of the transaction or implied as a default term in all similar transactions

Question 23

collateral agreements

Answer 23

agreements made at the time of the signing of the final integrated contract

Question 24

supplemental agreements

Answer 24

agreements made after the signing of the final integrated contract that are used to address terms not in the contract or define terms included in the contract.

Question 25

naturally omitted terms

Answer 25

terms that are omitted because they are standard industry terms or customary terms the parties failed to include because they are naturally assumed to exist as part of doing business.

Question 26

condition precedent

Answer 26

a condition that must occur in order for a contract to exist, both parties can walk away until the condition is met and contract is created

Question 27

mutual mistake rule

Answer 27

mistake by both parties, related to typing or writing, earlier draft or testimony may be used to correct or corroborate error.

Question 28

concealment

Answer 28

intentional failure to disclose facts

Question 29

representation

Answer 29

a statement of fact not a promise

Question 30

warranty

Answer 30

a promise that goods are of a particular quality, representations alone are not enough to create warranty

Question 31

checklist for final - warranties

Answer 31

1 is it UCC or restatement 2 what warranty are you relying on - implied or expressed 3 identify dispute 4 identify plaintiff's term 5 identify defendant's term 6 what term is seller relying on 7 has merchant negated warranty with warning 8 not enough to eliminate implied warranties

Question 32

how do you create express warranties?

Answer 32

affirmation of fact, promise, description, samples, not necessary for seller to use the words warrant or guarantee

Question 33

affirmation of fact or promise

Answer 33

affirmation or promise made by seller to buyer which relates to the goods and becomes part of the basis of the bargain and warranties the goods shall conform to the affirmation or promise

Question 34

description

Answer 34

description made part of bargain and warranties the whole of the goods will conform to description

Question 35

sample or model

Answer 35

model made part of bargain and warrants the whole of goods will conform to description

Question 36

implied warranty of merchantability

Answer 36

a product is safe enough to be sold tot he public and will perform the function it is intended to perform arises in all merchant sales

Question 37

implied warranty of fit for a particular purpose

Answer 37

arises when seller knows buyer's intended use and that buyer is relying on sellers knowledge and skill

Question 38

AS IS

Answer 38

has significant legal meaning and is used to eliminated expressed and implied warranties

Question 39

disclaimer

Answer 39

used to eliminate expressed and implied warranties

Question 40

contract of adhesion

Answer 40

when parties use a standard form and they are not given the opportunity to modify it

Question 41

waiver

Answer 41

a one-time change in terms of the contract | agreed by the parties

Question 42

options when delay cause by seller

Answer 42

1 no forgiveness - fire seller and reject goods 2 accept and pay for delivery - reserve right to sue 3 accept and pay for delivery - do not sue 4 agree to allow delay now and in the future (modification)

Question 43

no oral modification clause

Answer 43

clause that prevents the parties from modifying contract verbally generally not enforced

Question 44

standards of preference in interpretation

Answer 44

1 prefer reasonable, lawful interpretation 2 first express terms, then course of performance, then course of dealing, then usage of trade 3 specific terms and exact terms over general language 4 negotiated or added terms over standardized terms 5 prefer interpretation that serves public interest

Question 45

ambiguity

Answer 45

test has either one or two entirely different meanings, one includes something while the other excludes it

Question 46

vague

Answer 46

text has either broad or narrow meaning, one includes something while the other excludes it

Question 47

interpretation

Answer 47

clarifies meanings of terms in contract and is done by the judge or jury, it doesn't add terms to contract

Question 48

four corners rule

Answer 48

considers everything written on the document itself, will only consider extrinsic evidence if the term is vague or ambiguous.

Question 49

tools for interpreting using 4 corners rule

Answer 49

1 words uncertain in isolation might be clear in other parts of contract 2 read text in light of stated purpose 3 correct obvious errors - grammar, spelling, punctuation 4 handwritten notes take precedence over typed words 5 handwritten notes would not be there unless the parties intended to use them 6 avoid interpretations that render contract illegal or in violation of public polity 7 avoid interpretations that lead to conflict with contract 8 avoid interpretations that lead to unreasonable outcome or effect 9 prefer interpretation that gives meaning to all words in text

Question 50

extrinsic evidence

Answer 50

evidence used to show meaning of terms in contract, used when meaning is patently unclear

Question 51

What happens when both parties have different honest reasonable interpretations of essential terms?

Answer 51

contract may not exist or can be voided because there is no meeting of the minds, no mutual assent

Question 52

interpretation against the draftsman

Answer 52

in choosing between reasonable meanings of a promise or agreement, it is generally preferred to use one that favors the party that did not draft contract.

Question 53

immaterial term

Answer 53

terms not essential to the deal even if they later become central to the dispute - choice of law, forum, or liquidated clauses

Question 54

essential term

Answer 54

term required as part of agreement | may be supplied by court if necessary

Question 55

duty of good faith and fair dealing

Answer 55

every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement

Question 56

custom

Answer 56

* a practice that is sufficiently regular to justify assumption it will be followed * common in place, trade or industry * can be binding on person outside community or industry if they are aware of the custom * parol evidence rule does not bar custom because it can be a naturally omitted term

Question 57

practice between the parties

Answer 57

terms may be omitted from contract and implied if they are common practice in the interaction between parties

Question 58

course of performance

Answer 58

custom that evolved during the performance of the contract

Question 59

usage

Answer 59

* habitual or customary practice | * enforced in contract if parties knew or had reason to know of the usage

Question 60

usage of trade

Answer 60

usage or system of rules associated with a place, vocation or trade. enforceable by court when parties knew or have reason to know of its existence and use in industry

Question 61

course of dealing

Answer 61

sequence of previous conduct between parties that is regarded as establishing common basis of understanding