1L Contracts

Front 1

What are the three categories of damages?

Back 1

1) Restitution - returns unjust enrichment

2) Reliance - returns unjust impoverishment

3) Expectation - returns benefit of the bargain

Front 2

What is the reasonableness test for whether damages should be awarded?

Back 2

Fact finder must determine whether it is reasonable to award damages based on the cost of fixing the defect/issue or award based on the diminution in value.

Front 3

What is the economic waste rule for damages?

Back 3

Fact finder should consider whether the cost of fixing grossly exceeds the market value of item after it has been fixed.

Front 4

If the fact finder is applying the economic waste rule to a breach in the construction of the house and the cost to fix the damages would be $100k and the market value of the home is $10k then what kind of damages will the fact finder most likely award?

Back 4

Most likely the fact finder will award the difference in market value and not the cost to fix.

Front 5

What is a losing contract?

Back 5

A losing contract is one on which the non-breaching party would have lost money or the benefit of her bargain if the contract had not been breached.

Front 6

Under the UCC does the non-breaching party have a duty to cover?

Back 6

Yes, the non-breaching party has a duty to attempt to cover under the UCC and if they fail to do so they may not be able to recover damages.

Front 7

If a business covers by taking on a new job can the breaching party subtract the profits from the new job from damages the business incurs because of the breach?

Back 7

No, because the courts assume that most businesses can take on an unlimited number of jobs -- so the non-breaching party could have taken on the new job whether the breach occurred or not.

Front 8

Does a non-breaching party have a duty to discontinue performance once there has been notification of the breach?

Back 8

Yes, under Luten Bridge case they do so that they do not keep "piling on damages"

Front 9

What is the rule for the kind of job that the non-breaching party is required to take on in order to "mitigate their damages"?

Back 9

They must take on a job that is of equal level, pay, and similar character.

Front 10

What are consequential damages?

Back 10

Consequential damages are...

Front 11

When are consequential damages recoverable?

Back 11

1) When the breaching party had reason to foresee that the damages would probably result from the breach.

2) When they arise naturally from the breach

3) when they were contemplated by both parties

Front 12

What is the "Hairy Hand Formula" for determining damages (Hawkins v. McGee)?

Back 12

The value of the promised product (the perfect hand) minus the value of the delivered product (hairy hand).

Front 13

When is a warranty found to be inducement (Hawkins v. McGee)?

Back 13

1) When the promisor benefits directly or indirectly from the warranty

2) When the promisor actually pursues the promisee

Front 14

When is the non-breaching party awarded the "cost of performance" as damages? (Groves v. Wunder)?

Back 14

When the promisor has already been paid in full, there will be no economic waste, and when the promisee's loss exceeds the monetary loss in market value.

Front 15

Under the Restatement Section 346 what constitutes economic waste?

Back 15

When the cost of performance would include the tearing down and reconstructing of an existing structure and the cost to do so is disproportionate to the cost of performance.

Front 16

If a Plaintiff contracts to have a house built and the the Defendant builds but with the wrong windows and in order to put in the right windows the structure would have to be torn down and rebuilt and the difference in market value with the new windows is only $5k will the Plaintiff be able to recover the cost of having new windows?

Back 16

No, the Plaintiff will most likely only be awarded the difference in market value ($5k) under Peevyhouse and Groves v. Wunder.

Front 17

What is the most notable exception to the cost of performance rule?

Back 17

If there is some other aesthetic/personal reason why the Plaintiff wanted the performance done a certain way i.e. the plaintiff wanted the house painted with purple walls because his late wife loved the color purple then court may make an exception even if the non-purple walls do not effect the market value of the house

Front 18

When deciding whether to award damages for cost of performance of market value what other factor should the court consider besides the economic waste?

Back 18

What is going to make the Plaintiff most whole (Landis v. Fannin Brothers)? So if the aesthetics are the most important factor then cost of performance might be what makes the Plaintiff whole.

Front 19

When will the court apply the reasonableness test (i.e. what is going to make the Plaintiff whole again) over the economic waste test?

Back 19

When there is no risk of a windfall - if there is a risk of a windfall then the burden to prove that this is the correct method is placed on the Plaintiff.

i.e. it is up to the Plaintiff to show why it is more reasonable for the court to award him the $100k he needs to tear down his house and repaint the walls purple.

Front 20

What is the contract price formula and for what kinds of contracts is it most commonly used (Acme Mills v. Elevator Co.)?

Back 20

Formula is Contracted for Price subtracted from the Price at the time of breach.

i.e. If you contracted for Tuna at $3/lb and at the time of breach they cost $10/lb then the damages are $7/lb.

Most commonly used on contracts for goods not services.

Front 21

What factors need to be present in order for the court to apply the "contract price formula" to determine damages?

Back 21

There needs to be a fixed time and place of delivery so that the court can determine what the "market value" is on that date and in that place

Front 22

What is "Disgorgement"?

Back 22

Damages that a Defendant receives from unfair profit on the breach.

i.e. the Plaintiff actually benefits from the breach because it would have been a losing contract regardless.

Front 23

What are some of the circumstances under which a court will allow disgorgement?

Back 23

If the breaching party's behavior was especially nefarious or malicious or if the benefit to the defendant could have been the plaintiff's.

Front 24

What is a forward contract?

Back 24

It is a contract to pay for each future installment at a price fixed by the market price at the time of the contract.

i.e. the market price for blue fin tuna is $5 at the time of the forward contract and so I will pay $5 for every installment even if the price drops or increases.

Front 25

How does the court determine damages for a Plaintiff who has entered into a new forward contract to cover loses?

Back 25

They will use the market price at the time the new forward contract is formed in order to avoid the Plaintiff potentially benefitting by forming a disproportionately high forward contract.

Front 26

When can a Plaintiff generally recover or not recover expectation damages?

Back 26

Plaintiff will not be able to recover expectation damages when they are too difficult to determine (although the court may bolster reliance recoveries to compensate for this). If expectation damages are awarded they will be the total amount expected to receive minus the total amount exepcted to have been lost on the contract.

Front 27

What is the Hadley rule for consequential damages (i.e. factory shut down because of breach)?

Back 27

The damages must arise naturally and the breaching party must have either consented or have had reason to have reasonably expected the consequences to arise.

Front 28

What are the variations on the Hadley rule?

Back 28

1) Breaching party actually agreed to assume the risk

2) Breaching party tacitly agreed to assume the risk

3) Breaching party had actual notice of the risk

4) Breaching party had constructive notice of the risk (i.e. should have known based on the circumstances)

Front 29

What are the main limitations on recoverable damages?

Back 29

1) Mitigation - non-breaching party can not recover if she failed to attempt to mitigate her damages

2) Foreseeability - if the losses were consequential and there was no actual or constructive notice

3) Speculative - the losses were too speculative or unpredictable (usually applies to expectation damages)

Front 30

What is the New Business Rule?

Back 30

If a business is new and there is therefore no prior model off of which to determine what future profits would have been then no expectation damages will be awarded.

Front 31

When can reliance damages be recovered and not recovered?

Back 31

When the costs are incurred based on the promises of the other party's contract and are not barred by the statute of frauds.

Front 32

Are pre-contractual reliance damages ever recoverable? (i.e. I contracted a doctor to examine a player before contracting him to play on my team?)

Back 32

Not usually. Only exception is when the damages are suffered in contemplation of the defendant's performing its contract as a whole.

Front 33

Who has the burden to show that losses arose from reliance on the contract and not because the contract itself was a losing contract?

Back 33

The non-breaching party

Front 34

Who has the burden of showing that the non-breaching party's losses did not arise from the breach, but rather from regular outlay costs (i.e. costs of running the factory or purchasing supplies that would have been expended regardless of the contract)?

Back 34

The breaching party

Front 35

What are essential reliance damages under the Restatement?

Back 35

Cost of preparation for performance or actual performance on the contract.

Front 36

What are incidental reliance damages under the Restatement?

Back 36

Cost of collateral transactions that a party plans to carry out when the contract in question is performed.

Front 37

Factory A contracts to provide Buyer B with 100 cans of tomato soup. Factory A always has 10 employees working, but hires 2 additional employes before Buyer B breaches the contract. What savings costs can Buyer B argue should be deducted from A's damages?

Back 37

B can argue that A's savings of not having had to pay the extra 2 workers should be deducted from A's damages, but not the cost of paying the 10 workers who A would normally have working for him.

Front 38

When can A (breaching party) subtract from B's (non-breaching party) damages the profits that B received from a new contract that B was freed to enter into because of A's breach?

Back 38

When B is performing a specialized service such as painting a portrait or maybe performing a play.

Front 39

Who has the duty to show that the non-breaching party should have mitigated damages by entering into a new contract that was neither substantially different or inferior?

Back 39

The breaching party

Front 40

In trying to establish that a breaching party should have reasonably contemplated the consequential damages arising from his breach (i.e. shut down of entire factory or cost of sending train cars thousands of miles) is it sufficient for the non-breaching party to show that such consequences were simply mentioned?

Back 40

No, they must have not simply been mentioned, but he must show that the breaching party reasonably believed that he would be liable at the time the contract was made for such consequences.

Front 41

If the cost of a consequential damage is disproportionately high to the cost of avoiding the consequential damage (i.e. would have cost only $25 to install a light-bulb in a tractor so farmer could harvest at night, but the farmer claims the consequential damages of not having been able to harvest is $1000) then what will a court do?

Back 41

Unless express assumption of risk for the consequential damage it is unlikely a court would find the breaching party liable in this circumstance.

Front 42

When will court's allow for recovery "off of the contract" or in "quantum meruit"?

Back 42

1) When the contract is not valid for some reason (i.e. barred by the statute of frauds, lack of consideration, etc.); and

2) Some benefit is incurred by the Defendant (breaching party)

Front 43

What types of damages will be awarded in quantum meruit?

Back 43

The amount that the breaching party benefited (i.e. restitution damages)

Front 44

Do losses that breaching party would have incurred in completing performance matter for purposes of determining quantum meruit damages?

Back 44

No, breaching party may recover the full benefit conveyed to the non-breaching party without subtracting losses he would have incurred had he completed the contract (United States v. Algernon Blair)

Front 45

If A contracts to manufacture B 100 iron pipes and then breaches after delivering 90 of the iron pipes what can he recover under quantum meruit?

Back 45

A can recover the cost of the 90 iron pipes and does not need to subtract the savings of having not had to produce the last 10 pipes.

Front 46

Does the non-breaching party need to have expressly consented to and requested the benefit in order for the breaching party to recover in quantum meruit?

Back 46

Yes, the breaching party can not simply confer a benefit on the other party and attempt to recover it in quantum meruit.

Front 47

Can costs for preparation of performance be recovered on quantum meruit?

Back 47

No, only actual benefit conferred

Front 48

Can Plaintiff get recovery under quantum meruit if the performance has been substantially completed?

Back 48

No, no recovery on quantum meruit if performance has been substantially completed.

Front 49

What types of contracts are unenforceable under the statute of frauds?

Back 49

1) Sales for interest in land that are not put into writing

2) Sales for goods of more than $5000 not put into writing

3) Promises to answer for the debt, default, or miscarriage of another

4) Contracts to be performed not within a year not put into writing (unless the contract could potentially be performed within the year)

5) Contracts in consideration of marriage

Front 50

Can laborers on pay as you go contracts (who have not completed the contract) recover wages for work performed in quantum meruit?

Back 50

Yes, minus the employer's damages.

Front 51

What are the common counts?

Back 51

1) An underlying obligation (usually contractual; can be implied relationship)

2) There was a benefit conferred (basis of recovery theory)

3) Promise to pay after the benefit has already been conferred

Front 52

What are liquidated damages?

Back 52

Damages for which parties have already agreed to pay in a clause of the contract.

Front 53

What are the reasons why a court might not enforce a liquidated damages clause?

Back 53

1) The damages are disproportionately large

2) The damages are disproportionately small

3) The damages are arbitrarily small

4) It looks like a penalty because for some reason the amount is not proportional to the value of the contract

5) The damages are compensatory for peace of mind or comfort and not for actual monetary losses

Front 54

When will a court find that a liquidated damages clause is enforceable (i.e. is not proposing a penalty)?

Back 54

When the potential losses are difficult to measure and the amount proposed is reasonable and proportional to the anticipated or actual loss either at the time of contracting or at the time of injury.

Front 55

What is a shotgun clause and is it enforceable?

Back 55

A shotgun clause is one which proposes a single set of liquidated damages for many different types of breaches.

Front 56

Why might a court not enforce a liquidated damages clause for a parent who withdraws his child from camp after the proposed refund date?

Back 56

If the damages are not a reasonable forecast of the loss the camp might incur from the child not going (i.e. they could replace the child with another camper).

Front 57

How will a court determine whether a liquidated damages clause applies to a particular breach?

Back 57

Will look to the intent of the parties as evidenced by the language of the contract.

i.e. If the clause is for a daily amount of damages for each day of delay then not likely to be enforced in event of total abandonment

Front 58

What is the reason for moving from a court of law to a court of equity?

Back 58

If there are insufficient remedies at a court of law. When there is irreparable injury for which damages would not compensate for the loss incurred.

Front 59

what is the remedy in a court of equity?

Back 59

Specific performance

Front 60

When are no competition clauses enforceable and in what court are they enforceable?

Back 60

They are generally enforced in courts of equity and are only enforceable when

1) The former employer is exposed to specific harm such as the disclosure of trade secrets

2) It is necessary to protect customer lists

3) Necessary to protect good will or employer's business

Front 61

How if ever will a court of equity force personal service (i.e. force someone to perform work)?

Back 61

A court at equity will generally not force someone to work for someone else because it would be so unpleasant for everyone involved, however a court will sometimes bar that person from doing the same work for someone else during the time of the contract.

Front 62

What is an affirmative injunction in a court of equity?

Back 62

Forcing someone to perform their end of a bargain.

Front 63

What is a negative injunction in a court of equity?

Back 63

Barring someone from doing the same work in the contract for anyone else during the time limit of the contract.

Front 64

Under the second restatement what factors do courts use to determine whether damages should be enforced in a court of equity or a court of law?

Back 64

1) How difficult it would be to prove the damages with reasonable certainty

2) How difficult it would be to procure a suitable substitute performance by means of money damages awarded

3) The liklihood that an award of damages could not be collected

Front 65

When is a court more willing to enforce an affirmative injunction in a court of equity?

Back 65

When the terms of enforcement are easily ascertainable either by terms of the contract itself or from looking at other circumstances.

i.e. If the court can look at how other similar contracts would have been enforced.

Front 66

Will courts generally enforce arbitration clauses?

Back 66

Yes and arbitration awards will become enforceable as a judgement would be

Front 67

What is the main difference between a gift and a bargain?

Back 67

Looking to whether there was consideration or not

Front 68

What is nominal consideration?

Back 68

Consideration that is meant to look like there was a bargain, but in reality there was no bargain. Usually refers to a huge monetary disparity otherwise courts will not look at the value of the consideration. (i.e. a court is not going to try and determine what value is attached to a peppercorn)

Front 69

When does a promise have consideration?

Back 69

1) When the act promised act or the forebearance of the act promised is a deprivation of a legal right to do or not do something - a benefit has been conferred on the promisor and a harm on the promisee.

2) When the promise is actually sought by the promisor

Front 70

Under the Restatement Section 71 what are the requirements for an exchange to have been found?

Back 70

1) The performance or return promise must have been bargained for to constitute consideration

2) Performance may consist of an act, a forbearance, or the creation, modification or destruction of a legal relation

3) Performance may be given to/by the promisor/promisee or to/by third parties

Front 71

Is "love and affection" ever meritorious consideration?

Back 71

No, under Fischer Union v. Trust Co. love and affection of father for his mentally disabled daughter not considered to be meritorious consideration.

Front 72

Are promises under seal enforceable even if there is no consideration?

Back 72

Yes

Front 73

When are promises grounded in the past enforceable?

Back 73

When there has been a material benefit incurred (i.e. saving someone's life) and the enforcement of the contract is necessary to prevent injustice. (Webb v. McGowin).

Front 74

If there is a moral obligation to pay on a promise, but no material benefit to the promisor that could be construed as consideration then is a subsequent promise enforceable?

Back 74

No, this is why the father's promise in Mills v. Wyman was not enforceable - because there was no material benefit construed on the father who had basically disinherited his son.

Front 75

Can contracts barred by the statute of limitations be revived by subsequent promises?

Back 75

Yes, but only if

1) there is a new promise expressly acknowledging the old promise

2) and/or payments made on the old debt

Front 76

What are two examples of past promises that courts will allow to be revived by subsequent promises?

Back 76

1) Promises barred by the statute of limitations

2) Promises barred by the infancy rule

Front 77

When will a gratuitous promise be found to be enforceable even with lack of consideration?

Back 77

When there has been detrimental reliance on the promise and the party making the promise had reason to know that the promise would induce the party to detrimentally rely on it.

Front 78

When is a promise for a benefit previously conferred not binding?

Back 78

1) if it is not necessary to prevent injustice

2) If the benefit was conferred as a gift or for some other reason the promisor has not been unjustly enriched by the previous benefit

3) If the value of the new promise is grossly disproportionate to the previous benefit

Front 79

When can equitable estoppel be used to enforce a gratuitous promise, which a court finds should be enforced because there has been detrimental reliance on the promise and the promising party should have reasonably known that such detrimental reliance would occur?

Back 79

1) When one party has misrepresented a fact

2) When a fact is known by one party and that party knows that the other party is not aware of it

3) Knowledge of the fact is used to induce reliance

4) The other party detrimentally relied upon his lack of knowledge of the fact that the other party knew

Front 80

What is promisory estoppel?

Back 80

A court will estop one party from claiming that there was lack of consideration in order to make the gratuitous promise enforceable.

Front 81

When will a court enforce promissory estoppel?

Back 81

1) When the promisor should reasonably expect to have induced the action or forebearance of the promisee

2) the promisee does act or forebears from acting

Front 82

What is an option contract?

Back 82

It is a contract for a contract or rather a contract for the right to enter into a contract.

Front 83

How does a court determine whether or not there is valid consideration for an option contract?

Back 83

Court looks at whether the consideration for the underlying contract would have been valid and if so then consideration also found on the option contract.

Front 84

Can there be nominal consideration on an option contract?

Back 84

Yes, nominal consideration on an option contract operates like a seal on a regular contract so the court may not even check the underlying contract to find out if consideration is valid.

Front 85

When is an offer binding as an option contract under the second restatement?

Back 85

When the offeror should reasonably expect it to induce action or forebearance of a substantial character on the part of the offeree and the offeree does act or forebear then it is binding to the extent necessary to avoid injustice.

Front 86

When is a bid treated as an option contract?

Back 86

As long as it has not been revoked, if someone acts upon it in a manner consistent with the manner of acceptance dictated by the offeror then it is a binding contract.

Front 87

Mutual Assent

Back 87

Parties must have a meeting of the minds in order to be enforceable.

Front 88

When is there no mutual assent because of a misunderstanding as to a material term in the contract?

Back 88

1) When neither party knows or has reason to know of the meaning attached by the other party

2) When both parties know or have reason to know of the meaning attached by the other party

Front 89

When will there be mutual assent even if there is a difference in meaning attached to a term?

Back 89

1) When one party does not know of a different meaning attached by the other party, but

2) The other party has reason to know that a different meaning has been attached by his counterpart

Front 90

How will a court figure out whether or not there was mutual assent to a contract when the words and circumstances are ambiguous? (i.e. will the try to figure out what how a "reasonable objective" person would have interpreted the words or will they take into account the "subjective circumstances" to find out what these parties meant)?

Back 90

Courts today will look at both the objective meaning of the words and the subjective understanding of the parties.

Front 91

When does Acceptance take effect under the Second Restatement?

Back 91

If the acceptance is made in the manner and medium requested by the offeror then it is effective as soon as it leaves the offeree's possession regardless of whether it reaches the offeror UNLESS it is an acceptance of an option contract in which case it is not operative until received by the offeror.

Front 92

How will a court distinguish between a mere advertisement and an offer to sell?

Back 92

To be an offer it should place some reasonablye limit on the amount offered to be sold even one so vague as "as much as you can purchase or need"

Front 93

Under the Second Restatement Section 62 how can an offeree accept an offer when given the choice between acceptance by promise and acceptance by performance?

Back 93

He may either accept by beginning the invited performance or by beginning to provide tender of a beginning of the invited performance

Front 94

Under the Second Restatement Section 45 when does performance create acceptance of an option contract?

Back 94

Where an offer invites an offeree to accept by rendering a performance then an option contract is created when the offeree begins the invited performance or tenders a beginning of it and the offeror's duty to perform under such a contract is conditional on the completion of the performance in accordance with the terms of the offer.

Front 95

Who may accept a unilateral contract?

Back 95

Anyone who reasonably believes himself included by the manifest intent of the offeror. (So the golfer who saw the signs saying that anyone who scored a hole in one could win a car)

Front 96

When does power of acceptance terminate?

Back 96

At the end of the time period specified by the offeror, BUT the court will find this time period begins when the offeree receives notice of the offer not when the offer leaves the offeror.

Front 97

When an offer does not explicitly require a specific mode of acceptance how can an offeree accept?

Back 97

If there is no specified mode of acceptance then offeree can accept by any reasonable mode (such as beginning performance)

Front 98

Under the Second Restatement Section 69 when does an offeree's silence (failure to reply to an offer constitute acceptance)?

Back 98

1) When the offeree accepts the benefit of the offered with reasonable opportunity to reject them and has reason to know that they were offered with the expectation of compensation

2) When the offeror has given the offeree reason to understand that assent may be manifested by silence of rinaction

Front 99

How may the power of acceptance be terminated under the Second Restatement Section 36?

Back 99

1) The offeree's rejection of the offer of making of a counter offer

2) Laps of time

3) Revocation of the offer by the offeror

4) Death or incapacity of the offeror or offeree

Front 100

Under Dickson v. Dodds is "notice of inability to accept" tantamount to revocation of an offer?

Back 100

Yes, Defendant's knowledge that land had been sold to someone else interpreted as revocation of the offer.

Front 101

When is a counter offer treated as revocation of the original offer?

Back 101

When new terms are suggested and the original offeror does not make a subsequent counter offer that renews the original offer.

Front 102

Davis v. General Foods Corp.

Back 102

Offer for new recipe without definite terms of control found to be indefinite contract because offeror retained unlimited right to later decide the nature and extent of the promise bargained for.

Front 103

When does the power to cancel at any time make a contract illusory?

Back 103

When it is given only to the buyer and is unrestricted (i.e. the buyer can cancel at any time for any reason)

Front 104

Wood v. Lucy, Lady Duff-Gordon

Back 104

Implied promise found even though the exact terms of the Plaintiff's performance were not specified based on looking at the benefits incurred on the Defendant.

Front 105

Will courts allow for the enforcement of provision thats grant future flexibility in price?

Back 105

Yes, they will allow for sliding price scales based on market value of goods or for the rent on a piece of land to depend on the tenant's profits

Front 106

What is an output requirement contract?

Back 106

A contract for an amount of goods where the amount is determined by the needs of the buyers.

Front 107

When is an output requirement contract enforced?

Back 107

When the buyer's requirements are likely to be known to the seller through past business transactions and/or where the contract also bars the buyers from turning elsewhere for his requirements.

Front 108

When can a seller on an output requirement contract for all goods produced cease production? (Feld v. Henry Levy & Sons)

Back 108

Only when he is ceases production in good faith i.e. his losses in failing to cease production would be more than trivial.

Front 109

When will court allow for termination of an output contract in the absence of a good faith reason? (Corenswet v. Amana Refrigeration Inc.)

Back 109

1) The time span of the contract is indefinite

2) The contract specifically allows for "termination for any reason"

3) The termination for any reason clause is extended to both parties so there is no risk of superior bargaining power

Front 110

What is a unilateral contract?

Back 110

A promise exchange for a performance

Front 111

When can an offer be revoked on a unilateral contract?

Back 111

An offer on a unilateral contract can not be revoked once performance has begun.

Front 112

What is a bilateral contract?

Back 112

A promise exchanged for a promise

Front 113

What is an illusory contract?

Back 113

One that is so unrestricted that it is too easy for either party to either get out of the contract.

1) unrestricted cancellation clause for one party

2) Phrases like "if you chose" or "if I decide to"

3) So many express conditions that it would be impossible for them all to be met

Front 114

What is the Parol Evidence Rule (broadly defined)

Back 114

It restricts the use of evidence of negotiating history to vary the terms of a written agreement intended to be the final expression of the parties' deal

Front 115

What is the Modern Rule for the application of the Parol Evidence Rule?

Back 115

1) A partially integrated writing may be supplemented by parol evidence of consistent additional terms

2) A completely integrated writing may be neither contradicted not supplemented

Front 116

What is a partially integrated writing?

Back 116

A writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein.

Front 117

How can a partially integrated writing be supplemented by parol evidence?

Back 117

May be supplemented by non-contradictory additional terms.

Front 118

What is a totally integrated writing?

Back 118

Writing that the parties intend as the final and complete and exclusive statement of their agreement (may not be supplemented at all by parol evidence)

Front 119

Does the modern rule application of the parol evidence rule permit the admission of extrinsic evidence simply to discover whether an ambiguity exists in the first place?

Back 119

Yes, allows the admission of parol evidence simply to prove that ambiguities exist.

Front 120

Under the modern run application of the parol evidence rule when will extrinsic evidence not be barred?

Back 120

1) When it aids in the interpretation of existing terms

2) When it shows whether the integration is partial or complete

3) When it shows subsequent agreements or modifications between the parties

4) When it shows the terms were product of illegality, fraud, or lack of consideration

Front 121

What is the Post Realist Approach to Parol Evidence favored by the UCC 2-202?

Back 121

1) Allows the admission of extrinsic evidence to see if there are any ambiguities at all not simply to resolve apparent ambiguities

2) Will rarely bar evidence that is consistent with the writing and merely provides additional terms because it does not assume that all partially integrated writings are also totally integrated

3) May even prefer an oral agreement if the terms seem unreasonable or to contradict each other

Front 122

What type of evidence is barred by the PER for completely integrated writings?

Back 122

Evidence of prior or contemporaneous agreements to contradict or supplement the contract.

Front 123

What type of evidence is barred by the PER for partially integrated writings?

Back 123

Prior agreements whether written or oral that contradict a term of the contract and contemporaneous oral agreements.

Front 124

What are the different methods of determining whether a writing is completely or partially integrated?

Back 124

1) "Four Corners" approach looks to whether the writing appears complete on its face

2) "Collateral Contract" approach assumes htat all writings are deemed to be partial integra

3) "Reasonable Person" approach assumes a writing is a complete expression of the parties' agreement unless the additional terms are such that it would be natural to enter a separate agreement as to such terms

4) "Intention of the parties" approach allows relevant evidence on the issue intent, including evidence of prior negotiations

Front 125

Mitchell v. Latch

Back 125

Court did not find that prior oral agreement to remove icehouse prior to sale of property was a separate collateral contract that the parties would not have been ordinarily expected to embody in the written contract and therefore evidence of such an agreement was not permissable under the PER because it introduced an additional contradictory term.

Front 126

What types of ambiguities is parol evidence used to clarify?

Back 126

1) Industry Practice

2) Industry Customs

3) Prior Course of Dealing: what two parties have done in prior dealings

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What is the Deviant Acceptance Rule?

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The introduction of new or variant terms means the offer is dead and the contract formation process must start over

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Livingstone v. Evans

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Buyer's telegram response inquiring whether seller could do $1600 to seller's original offer of $1800 found to be a counter-offer and therefore a rejection of the original offer

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What are the exceptions to the Deviant Acceptance Rule?

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1) Immaterial variances between an offer and acceptance

2) Attempts to make explicit terms already implicit in the offer

3) Suggestion of a new term without insistence on its inclusion

4) Expression of lack of enthusiasm or even outright dissatisfaction with a term

5) Binding Option offers - if there is a set period of time during which acceptance may occur and a deviant offer is made during that time it does not constitute rejection