Determing the Terms of a K Flashcards
(22 cards)
Parol Evidence Rule
Excludes evidence of prior or contemporaenous agreements contradicting the final writing.
If “oral final agreement,” parol evidence rule not triggered.
PER Exceptions
1) Partially Integrated Writing
2) Defense Against Formation
3) Explain a vague term
4) Correct Clerical Error (typo)
5) evidence of a condition precedent
Partially Integrated Writing Exception
If the integration is partial, the writing may be SUPPLEMENTED (but not contradicted) by proving consistent additional terms.
UCC and Partially Integrated Writing
THe UCC presumes all writings are partial integrations.
Merger Clauses
Recites that the agreement is the complete agreement. Usually makes it a complete integration.
Defense against formation exception
Parol evidence can be used to establish a defense to contract formation (such as misrepresentation)
Parol Evidence Form
Can be oral or written
Parol evidence after the writing
Doesn’t apply. PER only applies to evidence before the writing.
Modifcation rules apply.
Conduct as a source of terms and types
Conduct can supply terms.
(in order of power)
1) Course of performance
2) Course of Dealing
3) Trade usage or custom
Course of performance
Parties conduct under prior installments of CURRENT contract
Course of dealing
Parties’ conduct in PRIOR contract
Trade usage
Industry norms parties are aware of
Express warranties (UCC)
Any affirmation of fact made by the seller to the buyer, description of goods, and sample or model creates an express warranty if it is part of the BASIS OF THE BARGAIN.
Puffery and opinion is not an express warranty
Implied Warranty of Merchantibility (UCC)
Implied guarantee that the goods are fits for their ordinary, forseeable purpose.
MUST BE FROM A MERCHANT SELLER who regularly sells those type of goods
Implied Warranty of Fitness for a Particular Purpose (UCC)
When it applies:
1) Buyer comes in with special purpose
2) Seller knows of special purpose
3) Seller picks out goods fit for buyer’s special purpose
Limitations on warranty liability (UCC)
1) Disclaimers
2) Limitations of remedy provisions
Disclaimers
Sellers can disclaim implied warranties, but not express warranties.
Must be conspicious: a reasonable person would notice it.
Limitations of remedies/damages clauses and EXCEPTIONs
General rule: Seller can limit buyer’s remedies for breach of ANY warranty, including express.
1) Limitation can’t be UNCONSCIONABLE
2) Personal Injury in the case of consumer goods - presumably unconscionable
UCC: Goods get damaged or destroyed during delivery and neither buyer or seller is at fault. Who is at fault?
1) If agreement allocates risk, it controls.
2) Did one party breach? Liable even if breach is not related to loss.
3)
Noncarrier cases (direct delivery pickup):
-If seller is merchant, risk is on seller.
-If seller is nonmerchant, buyer assumes risk once the non-merchant seller tenders the goods (makes goods available to buyer)
Common carrier cases (third party in the shipping business):
-Risk of loss shifts to buyer when seller completes its delivery obligations (not actual delivery) (shipment or location contract)
UCC: Goods get damaged or destroyed during delivery.
What are the consequences to the party at fault?
If seller: Must provide new goods for free, otherwise liable for breach
If Buyer: Must pay K price, regardless.
UCC Delivery Obligations Types and obligations
1) Shipment contract
-seller delivers goods to common carrier,
-arranges for delivery, and
-notifies buyer…
-risk of loss passed to buyer on delivery to carrier.
(ASSUME THIS ON BAR)
2) Destination Contract
-seller must deliver goods to buyer’s location
Clear indication of Shipment vs Destination Contract
Term: FOB = Free on Board.
FOB followed by seller’s city: shipment contract.
FOB followed by any other city: destination contract.
