Terms Flashcards
(12 cards)
Terms
Once a court determines that a valid K exists, they will determine the validity of its terms. Courts will construe terms according to their “plain meaning.” But if the plain meaning is in dispute the court will look to 1) performance under the current contract, 2) performance under past contracts between the parties, 3) custom and usage in the industry.
Modification
Under the common law, a modification in the K requires new consideration. Under the UCC, no new consideration is needed for a modification so long as it is made in good faith. All modifications are subject to the Statute of Frauds
Parol Evidence Rule
Evidence of oral or written statements are either party made prior to or contemporaneous to the contract, that contradict the contract terms, will be inadmissible if the written contract is intended as a “complete integration.”
Admissibility of Parole evidence
Will be admissible to show: 1) defects in formation, 2) conditions precedent, 3) interpretation of ambiguous terms, 4) Collateral agreements (related to the subject matter, but not part of the agreement), or 5) subsequent modifications (agreements after the contract)
UCC Risk or Loss
If goods are damaged, but neither party is at fault, look to 1) terms of agreement 2) then to a breaching party responsibile, 3) and if terms are silent and no breach, then the seller has risk of loss if a merchant.
2
In a shipment contract, the seller must get goods to a common carrier, make reasonable arrangements for delivery, and notify the buyer of shipment.
3
IN a destination contract, the seller does not complete the delivery obligation until the goods arrive to the buyer.
4
In FOB (City contracts, if city listed is the seller’s city then it is a shipment contract, otherwise it is a destination contract.
UCC Warranties of Quality
Express warranties promise a specified quality, e.g. “all steel” or “guaranteed for 2 years.” This is more than mere sales talk like “top quality.”
2
Implied Warranty of merchantability applies to all sales of goods by a merchant and warrants the goods are fit for “ordinary” purposes.
3
Implied warranty of fitness for a particular use requires 1) buyer has a particular purpose, 2) buyer is relying on seller to select a suitable good, and 3) Seller knows of purpose and reliance.
4
Disclaimers eliminate merchantability warranties through conspicuous language, or the words “as-is” or “with all faults” even if not conspicuous.
