Gap Fillers, Interpretation, and the Parol Evidence Rule Flashcards
In a contract for the sale of goods, what are the three implied warranties?
(1) warranty of title
(2) warranty of merchantability
(3) warranty of fitness for a particular purpose
What is the implied warranty of title?
warranty of:
(1) good title to the goods
(2) rightful transfer of the goods; and
(3) no liens or security interests are attached to the goods
How can the implied warranty of title be modified?
(1) specific language; OR
(2) circumstances which give buyer a reason to suspect the seller doesn’t claim unencumbered title
What is the implied warranty of merchantability?
(1) goods fit for the ordinary purpose for which they would be used
(2) ONLY applies if the seller is a merchant
How can the implied warranty of merchantability be modified?
(1) specific use of the work “merchantability” and conspicuousness if in writing; OR
(2) any other language or circumstances that would be reasonably understood by a buyer to exclude the warranty (“As is”)
What is the implied warranty of fitness for a particular purpose?
(1) goods being sold are fit for the particular purpose the buyer intends to use them for
(2) ONLY applies when, at the time of contracting, the seller has reason to know the particular purpose for which the goods are required AND buyer is relying on the seller’s expertise to select reasonable goods
How do you negate the implied warranty of fitness for a particular purpose?
(1) disclaimer is written, clear, and conspicuous; OR
(2) goods have patent defects which were easily detectable
What is an express warranty in terms of the sale of goods?
Saying that the goods will conform to some standard, arises whenever seller makes them as part of the basis of the bargain in the following ways:
(1) any affirmation of promise or FACT;
(2) any description of the goods; or
(3) any sample or model
What are the default UCC rules for leaving out the price term?
Price will be a reasonable price at the time established by the K for delivery
What are the default UCC rules for leaving out the time term?
Time will be a reasonable time
What are the default UCC rules for leaving out the place of delivery term?
Seller’s place of business
What is the common law default rule for a missing price term in a service contract?
If one party performs services at the request of another, but no price is discussed in advance, then common law default rule applies: REASONABLE VALUE FOR SERVICES RENDERED
What is the UCC/common law obligation of good faith and fair dealing?
good faith = honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade
What is an output contract?
Buyer agrees to purchase all or a percentage of a seller’s output for a particular good
In what two contexts do open quantity terms arise?
(1) output contract
(2) requirements contract
