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Flashcards in Terms of the Contract Deck (38):

Contracts are construed as a _____________.



Courts will construe words according to their _____________

ordinary meaning


If provisions appear to be inconsistent, what kind of terms will previal?

written or types provisions will prevail over printed provisions.


Courts try to find that a contract is _____________

valid and enforceable.


Ambiguities in a contract are construed against _____________

the party preparing the contract.


Parol Evidence Rule

expressions made prior to the writing of a contract, whether oral or written, as well as oral expressions contemporaneous with the writing, are inadmissible to vary the terms of the writing.


When is a writing an integration?

When it is written and both parties intend it to be the embodiment their final expression of assent.


If an integration is partial, can it be changed?

yes, but only with additional, consistent terms.


The UCC presumes all writings are ____________.

partial integrations.


What is a merger clause?

recites that the agreement is the complete agreement between the parties.


It a merger clause definitive proof of a contract being formed?

No, it is one of several factors considered by a court.


Does the parol evidence rule prevent a party from introducing extrinsic evidence challenging the validity of a contract?

No, because challenging the validity of a contract does not involve the integration; i.e. involve the terms of the contract in the writing.


Where words of a contract are ambiguous, can a party introduce extrinsic evidence to assist the court in interpreting the terms?

Yes. The parol evidence rule does not prevent the introduction of extrinsic evidence to assist in the interpretation of an ambiguous term. It only prohibits evidence whose introduction is meant to *change the terms of the contract.


Plain Meaning Rule

where the terms of a contract are plain and understandable, even if mistaken, they will not be disturbed.


What kind of terms are allowed to be entered into a gap in a contract for the sale of goods?

terms regarding price, the place of delivery, time for delivery, time of payment, assortment, etc.


What is a noncarrier case under the UCC?

a sale in which the parties did not intend that the goods be delivered by way of common carrier.


When does the risk of loss transfer to the buyer in a noncarrier case where the seller is a merchant?

when the buyer takes physical possession of the goods, not when they are delivered.


When does the risk of loss transfer to the buyer in a noncarrier case where the seller is a non-merchant?

when the goods are delivered.


What is a carrier case under the UCC?

a sale where the parties intended the goods to be delivered by way of common carrier.


What are the two types of carrier cases under the UCC?

shipment contracts and destination contracts.


Shipment Contract

a contract which requires the seller to ship the goods by common carrier but does not require him to deliver them at a particular destination.


Destination Contract

a contract which requires the seller to ship the goods by common carrier and to deliver them to a particular location.


When does the risk of loss transfer to the buyer in a shipment contract?

when the goods are delivered to the carrier.


When does the risk of loss transfer to the buyer in a destination contract?

when the goods are tendered to the buyer at the destination.


If goods are nonconforming, the risk of loss is on the __________.



Warranty of Title

an automatic warranty arising in sales of goods by any seller saying that title is good and that the transfer is rightful.


Warranty Against Infringement

a merchant seller regularly dealing in goods of the kind sold automatically warrants that the goods are delivered free of any patent, trademark, etc.


Implied Warranty of Merchantability

implied in every contract by a merchant that the goods are merchantable; i.e. fit for the ordinary purpose for which such goods are used.


Implied Warranty of Fitness for a Particular Purpose

a warranty which arises impliedly in a contract for the sale of goods whenever any seller, merchant or not, has reason to know the particular purpose for which the buyer is buying the goods and that the buyer is relying on the seller's expertise and judgment. The buyer must actually rely.


Any sample, demonstration, or description of the goods to the buyer by the seller creates an ________________.

express warranty.


Does a seller's opinion of goods count as an express warranty?



A contract cannot be modified unless the modification . . .

is supported by new consideration.


Does the UCC require new consideration when the contract is modified?

No, if the modification is made in good faith.


When can a contract for non-goods be modified without tendering new consideration?

where there are unforeseen circumstances and the modification is fair and equitable.


Can a written contract be modified orally?

Yes, but if the contract *as modified* would place it within the statute of frauds, the modification must be written.


A common law contract contains a provision which prohibits oral modification. What result?

the clause is ineffective. Even where a written contract states that it can only be modified by writing, it is still capable of being modified orally.


A sale of goods contract contains a clause stating that it can only modified by a writing. What result?

It is effective. Under the UCC, clauses prohibiting the modification of a contract except through a writing is effective.


When will a sale of goods contract which requires that it only be modified by a writing but which is orally modified be held effective?

despite the clause requiring a written modification being valid under the UCC, the modification will be given effect if the other party changed position in reliance on the oral modification.