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Flashcards in Terms of the Contract Deck (35)
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1

What is parol evidence?

Words of the parties not in the written contract (said before or contemporaneously with the agreement to the contract)

2

What are the triggering facts for the parol evidence rule?

Final written contract and earlier words of one or both parties

3

What is the underlying policy regarding the parol evidence rule?

The final version of a deal/contract is more reliable than anything said or written earlier.

4

The Parol evidence rule is like an evidence rule in the sense that?

1) the issue is whether parol evidence is admissible and 2) admissiblity often depends on the purpose for which the evidence is being introduced.

5

What is an integrated contract?

Written agreement that courts find is the final agreement.

6

What is partial integration of a contract?

Written and final contract, but not complete

Bar exam pro-tip: See this on MBE it is wrong

7

What is complete integration?

Written and final contract, that is complete

Bar exam pro-tip: See this on MBE it is wrong

8

What is a merger clause? What is its effect on integration?

A contractual clause saying "This is the complete and final agreement". The merger clause is persuasive evidence of integration but not conclusive.

9

What constitutes parol evidence?

Oral OR written words of a party before integration

10

Can parol evidence be used to change or contradict terms in the written deal?

No. Evidence of earlier agreements is not admissible for the purpose of contradicting the terms of a written contract.

11

What is the result of a clerical mistake in integration?

This is a mistake in integration. Parol evidence is admissible for the limited purpose of determining whether there was a mistake in the integration.

12

S contracts
in writing to sell B 1,000 chickens a month for 12 months. When S limits
deliveries to 1,000 chickens a month, B sues for breach of contract. B claims that
S told him just as they were signing the contract that S would deliver as many
chickens as B needs during the 12-month contract term, and offers evidence of
pre-contract telefaxes from S supporting this claim. Can the court admit this
evidence that changes/contradicts the terms of the contract?

No. cannot use parol evidence to contradict or change an integrated contract.

13

Is parol evidence admissible for the purposes of proving defenses?

Yes. And, regardless of whether the writing is a complete or partial
integration, the parol evidence rule does not prevent a court from
admitting evidence of earlier words of the parties for the limited
purpose of determining whether there is a defense to the
enforcement of the agreement, such as misrepresentation, fraud, or
duress.

14

Is parol evidence admissible for resolving ambiguity in contracts?

Yes. Regardless of whether the writing is a complete or partial
integration, the parol evidence rule does not prevent a court from
admitting evidence of earlier agreements to resolve ambiguities in
the written contract.

15

Can you use parol evidence to add to written deals?

The parol evidence rule prevents a court from admitting evidence of
earlier agreements as a source of consistent, additional terms
unless the court finds (i) that the written agreement was only a
partial integration or (ii) that the additional terms would ordinarily be
in a separate agreement.

16

How can conduct be used as a source of contract terms?

Course of performance-same people; same contract
Course of dealing-same people; different but similar contract
Custom and usage-different but similar people, different but similar contract.

17

How does a seller of goods complete his delivery obligation in a shipment contract? As an aside, what law governs?

UCC governs: (i) gets goods to common carrier, (ii) makes reasonable arragnements for delivery, and (iii) notifies the buyer.

18

How does a seller of goods complete his delivery obligation in a destination contract? As an aside, what law governs?

UCC governs: The seller will not complete his delivery obligation until the goods arrive at the destination.

19

How do you differentiate between a shipment contract and a delivery contract?

Look at FOB. FOB (City seller is in)=shipment contract. FOB (ANY OTHER CITY)=destination contract

20

When does a risk of loss problem arise?

Where (i) after the contract has been formed, but before the buyer receives the goods, (ii) the goods are damaged or destroyed, and (iii) neither the buyer nor the seller is to blame.

21

What are the possible consequences in a risk of loss problem?

If the risk of loss is on the buyer, he must pay the full contract price for the lost or damaged goods. If it is on the seller, he has possible liablility for nondelivery.

22

What are the risk of loss rules?

1) Agreement of the parties controls
2) Breach: breaching party is liable for any uninsured loss even though breach is unrelated to the problem
3) Common carrier delivery: risk of loss shifts from seller to buyer at the time the seller completes delivery obligation
4) Catch-all: Risk of loss shifts from a merchant-seller to the buyer on the buyer's receipt of the goods (leaves physical possession); risk of loss shifts from a nonmerchant seller when he or she "tenders" the goods (makes available)

23

B buys a stove from S, a used appliance dealer. S tells B that he can pick up the
stove at the loading dock. Before B can drive his truck to the loading dock,
lightning strikes the stove. Does B have to pay for the damaged stove?

NO. Risk of loss shifts from merchant to buyer on buyer's receipt of goods.

24

B, a used appliance dealer, buys a used stove from S. S tells B to pick up the
stove at his convenience that the stove is on S’s back porch. Later, vandals
damage the stove before B gets it. Does B have to pay for the damaged stove?

Assume not a merchant, this is a tender because S made it available and B does have to pay for the damaged stove

25

What is an express warranty of quality?

Words that promise, describe, or state facts. Distinguish from sales talk which is more general, an opinion.

26

Which is not an express warranty? All steel? Top quality? Guaranteed to operate for two years? A sample.

Top quality.

27

What is the implied warranty of merchantability?

A seller is a merchant that deals in goods of that kind, warrants that the goods are fit for ordinary purposes for which they are used.

28

Does the implied warranty of merchantability attach to all contracts with a merchant?

Yes.

29

What is the implied warranty of fitness for a particular purpose?

A buyer has a particular purpose for a good, the buyer relies on the seller to select suitable goods, and the seller has reason to know of the purpose and reliance. The seller impliedly warrants that the goods are fit for that particular purpose.

30

What are the four limitations on warranty liability?

1) Statute of limitations
2) Privity
3) Buyer examination of the goods
4) Disclaimers