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35 Cards in this Set
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Restatement (Second) of Contracts (R2d) 2-200 Interpretation of Promise or Agreement |
Interpretation of a promise or agreement or a term thereof is the ascertainment of its meaning |
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Restatement (Second) of Contracts (R2d) 2-202 Rules of Aid in Interpretation |
1. Words and other conduct are interpreted in the light of all the circumstances, and if the principal purpose of the parties is ascertainable, it is given great weight 2. A writing is interpreted as a whole, and all writings that are part of the same transaction are interpreted together 3. Unless a different intention is manifested a. Where language has a generally prevailing meaning, it is interpreted in accordance with that meaning b. Technical terms and words of art are given their technical meaning when used in a transaction within their technical field 4. Where an agreement involves repeated occassions for performance by either party, with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection is given great weight in the interpretation of the agreement 5. Wherever reasonable, the manifestations of intention of the parties to a promise or agreement are interpreted as consistent with each other and with any relevant course of performance, course of dealing, or usage of trade
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Restatement (Second) of Contracts (R2d) 2-203 Standards of Preference in Interpretation |
In the interpretation of a promise or agreement or a term thereof, the following standards of preference are generally applicable: A. An interpretation which gives reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect; B. Express terms are given greater weight than course of performance, course of dealing, and usage of trade, course of performance is given greater weight than course of dealing or usage of trade, and course of dealing is given greater weight than usage of trade C. Specific terms and exact terms are given greater weight than general language D. Separately negotiated or added terms are given greater weight than standardized terms or other terms not separately negotiated |
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Restatement (Second) of Contracts (R2d) 2-206 Interpretation against the draftsman |
In choosing among the reasonable meanings of a promise or agreement or a term thereof, that meaning is generally preferred which operates agains the party who supplies the words or from whom a writing otherwise proceeds |
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Restatement (Second) of Contracts (R2d) 2-219-Usage |
Usages is a habitual or customary practice |
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Restatement (Second) of Contracts (R2d) 2-220-Usage Relevant to Interpretation |
1. An agreement is interpreted in accordance with a relevant usage if each party knew or had reason to know of the usage and neither party knew or had reason to know that the meaning attached to the other was inconsistent with the usage 2. When the meaning attached by one party accorded with a relevant usage, and the other knew or had reason to know of the usage, the other is treated as having known or had reason to know the meaning attached by the first party |
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Restatement (Second) of Contracts (R2d) 2-221-Usage Supplementing an Agreement |
Each agreement is supplemented or qualified by a reasonable usage with respect to agreements of the same type, if each party knows or has reason to know of the usage, and neither party knows or has reason to know that the other party has an intention inconsistent with the usage |
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Restatement (Second) of Contracts (R2d) 2-222-Usage of Trade |
1. A usage of trade is a usage having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to a particular agreement. It may include a system of rules regularly observed, even though particular rules are changed from time to time 2. The existence and scope of a usage of trade are to be determined as questions of fact. If a usage is embodied in a written trade code or similar writing, the interpretation of the writing is to be determined by the court as a question of law 3. Unless otherwise agreed, a usage of trade in the vocation or trade in which the parties are engaged or a usage of trade they know or have reason to know gives meaning to or supplements or qualifies their agreement |
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Restatement (Second) of Contracts (R2d) 2-223 Course of Dealing |
1. A course of dealing is a sequence of previous conduct between the parties to an agreement which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct 2. Unless otherwise agreed, a course of dealing between the parties gives meaning to or supplements or qualifies their agreement |
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Uniform Commercial Code 1-303, Course of Performance, Course of Dealing, and Usage of Trade |
1. Usage of trade-any practice ormethod of dealing having such regularity or observancein a place, vocation or trade, as to justify an expectation that it will be observed with respect to the transaction in question. The existence and scope of such a usage mustbe proved as facts. 2. Courseof Dealing-a sequence of conduct concerning previoustransactions between the parties to a particular transaction that isfairly to be regarded as establishing a common basis ofunderstanding for interpreting their expressions and other conduct 3. Course of Performance A sequence of conduct between theparties to a particular transaction that exists if -The agreement of the parties withrespect to the transaction involves repeated occasionsfor performance by a party and -The other party,with knowledge of the nature of the performance,and opportunity for objection to it, accepts the performance or acquiesces in it without objection A course of performance or a courseof dealing between the parties or usage of trade a. In the vocation or trade in which they areengaged or of which they are or should be aware is relevant in ascertaining,the meaning of the parties’ agreement, and may supplement or qualify the termsof the agreement. A usage of trade applicable in the place in which part of theperformance under the agreement is to occur may be so utilized as to that partof the performance. (1)express terms (trumps everythingelse) prevail over (2) course ofperformance, (3) course of dealing,and (4) usage of trade (second placewhen it is a brand new dealing because of no repeated dealings); And Ex. Industry custom is 30 days past contracts 45 days because of previouscontracts 45 days is the timely payment. courseof performance prevails over course of dealing and usage of trade; and; courseof dealing prevails over usage of trade. Subject to section 2-209, a course ofperformance is relevant to show a wavier or modification of any terminconsistent with the course of performance. Evidence of a relevant usage of trade offered byone party is not admissible unless that party has given the other party noticethat the court finds sufficient to prevent unfair surprise to the other party |
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Patent Ambiguity |
Ambiguity that can be detected from the face of the agreement Express terms-detected from the face of the agreement-obvious ambiguities Sources-words that have multiple meanings, bad grammar |
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Plain Meaning Rule |
Extrinsic evidence of the meaning of a term is prohibited if the term has a plain meaning |
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Latent Ambiguity |
Ambiguity that can only be detected from looking outside the express terms of the contract |
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Vague |
Terms susceptible to two or more meanings Example-reasonable-intentionally vague |
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Ambiguity |
Term susceptible to two or more specific meanings Example-Pint could mean american pint (16 Ounces) or Imperial Pint (20 Ounces) |
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Ejusdem Generis |
Refers to items of the same kind |
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Expressio Unis Est Exclusion Alterius |
Expression of one thing is the exclusion of others |
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Misunderstanding |
Parties use the same term, but attach completely different meanings to the term |
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Semantic Cannons |
Rules based on assumptions about ordinary language usage Leads to presumptions about what the parties likely intended the particular language to mean |
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Substantive Cannons |
Rules that create a contract meaning in light of public policy concerns |
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UCC 1-201(b)(3) General Definitions and Principles of Interpretation |
b. Subject to definitions contained in other materials of the UCC that apply to particular articles or parts thereof 3. "Agreement" is distinguished from "contract" means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in section 1-303 |
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2-202: Final WrittenExpressions-Parol or Extrinsic Evidence |
Terms with respectto which the confirmatory memoranda of the parties agree or which are otherwiseset fourth in a writing intended by the parties as a final expression of theiragreement with respect to such terms as are included therein may not be contradictedby evidence of any prior agreement or of a contemporaneous oral agreement, butmay be explained or supplemented : By a course of performance, course of dealing, or usage of trade (UCC 1-303); and By Evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement |
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R2d 209-IntegratedAgreements |
(1) An integratedAgreement is a writing or writings constituting a final expression of one ormore terms of an agreement (2) Whether there isan integrated agreement is to be determined by the court as a questionpreliminary to determination of a question of interpretation or to applicationof the parol evidence rule (3) Where theparties reduce an agreement to a writing, which in view of its completeness andspecifity reasonably appears to be a complete agreement, it is taken to be anintegrated agreement unless it is established by other evidence that thewriting did not constitute a final expression |
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R2d 210-Completelyand Partially Integrated Agreements |
(1) A completelyintegrated agreement is an integrated agreement adopted by the parties as acomplete and exclusive statement of the terms of the agreement (2) A partiallyintegrated agreement is an integrated agreement other than a completelyintegrated agreement (3) Whether anagreement is completely or partially integrated is to be determined by thecourt as a question preliminary to determination of a question ofinterpretation or to application of the parol evidence rule |
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R2d 211-StandardizedAgreements |
(1) Except as statedin subsection 3, where a party to an agreement signs or otherwise manifestsassent to a writing and has reason to believe that like writings are regularlyused to embody terms of agreements of the same type, he adopts the writing as anintegrated agreement with respect to the terms included in the writing (2) Such a writingis interpreted wherever reasonable as treating alike all those similarlysituation, without regard to their knowledge or understanding of the standardterms of the writing (3) Where the otherparty has reason to believe that the party manifesting such assent would not doso if he knew that the writing contained a particular term, the term is notpart of the agreement |
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R2d-213 Effect ofIntegrated Agreement on Prior Assignments (Parol Evidence Rule) |
(1) A bindingintegrated agreement discharges prior agreements to the extent that isinconsistent with them (2) A bindingcompletely integrated agreement discharges prior agreements to the extent thatthey are within its scope (3) An integratedagreement that is not binding or that is voidable and avoided does notdischarge a prior agreement, but an integrated agreement, even though notbinding, may be effective to render inoperative a term which would have beenpart of the agreement if it had not been integrated |
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R2d-214- Evidence ofa Prior or Contemporaneous Agreements and Negotiations |
Agreements andnegotiations prior to or contemporaneous with the adoption of a writing areadmissible in evidence to establish: That the writing is or is not an integrated agreement; That the integrated agreement, if any, is completely or partially integrated; The meaning of the writing, whether or not integrated Illegality, fraud, duress, mistake, lack of consideration, or other invalidating cause Ground for granting or denying recession, reformation, specific performance or other remedy |
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R2d-215-Contradictionof Integrated Terms |
Except as stated in214, where there is a binding agreement, either completely or partiallyintegrated, evidence of prior or contemporaneous agreements or negotiations isnot admissible in evidence to contradict a term of the writing |
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R2d 216-ConsistentAdditional Terms |
(1) Evidence of aconsistent additional term is admissible to supplement an integrated agreementunless the court finds that the agreement was completely integrated (2) An agreement isnot completely integrated if the writing omits a consistent additional agreedterm which is Agreed for separate consideration, or Such a term as in the circumstances might naturally be omitted from the writing |
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UCC 2-305: OpenPrice Term |
The parties if theyso intend can conclude a contract for a sale, even though the price is notsettled. In such a case, the price is areasonable price at the time for delivery if: Nothing is said asto the price; or The price is left tobe agreed by the parties and they fail to agree; or The price is to befixed in terms of some agreed market or other standard as set or recorded by athird person or agency and it is not so set or recorded A price to be fixedby the seller or the buyer means a price for him to fix in good faith When a price left tobe fixed otherwise than by agreement of the parties fails to be fixed throughfault of one party, the other may at his option treat the contract as cancelledor himself fix a reasonable price Where, however, theparties intended not to be bound unless the price be fixed or agreed and it isnot fixed or agreed, then there is no contract. In such a case, the buyer must return any goods already received or ifunable to do so, must pay their reasonable value at the time of delivery andthe seller must return any portion of the price paid on account |
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UCC 2-306: OutputRequirements and Exclusive Dealings |
A term whichmeasures the quantity by the output of the seller or the requirements of thebuyer means such actual output or requirements as may occur in good faith,except that no quantity unreasonably disproportionate to any stated estimate orin the absence of a stated estimate to any normal or otherwise comparable prioroutput or requirements may be tendered or demanded A lawful agreementby either the seller or the buyer for exclusive dealing in the kind of goodsconcerned imposes unless otherwise agreed, an obligation by the seller to usebest efforts to supply the goods and by the buyer to use best efforts topromote their sale |
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UCC 2-307: DeliveryIn Single Lot or Several Lots |
Unless otherwiseagreed, all goods called for by a contract for sale must be tendered in asingle delivery and payment is due only on such tender but where thecircumstances give either party the right to make or demand delivery in lotsthe price if it can be apportioned may be demanded for each lot |
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UCC 2-308: Absence of a Specified Place for Delivery |
Unless otherwiseagreed The place fordelivery of goods is the seller's place of business or if he has one, hisresidence; but In a contract forsale of identified goods, which to the knowledge of the parties at the time ofcontracting are in some other place, that place is the place for theirdelivery; and Documents of titlemay be delivered through customary banking channels |
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UCC 2-309 Absence of Specific Time Provisions: Noticeof Termination |
The time forshipment or delivery or any other action under a contract, if not provided inthis article or agreed upon, shall be a reasonable time Where the contractprovides for successive performances, but is indefinite in duration, it isvalid for a reasonable time, but unless otherwise agreed, may be terminated atany time by either party Termination of acontract by one party, except on the happening of an agreed event, requiresthat reasonable notification be received by the other party and an agreementdispensing with notification is invalid if its operation would beunconscionable |
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Restatement (Second) 205-Duty of Good Faith and FairDealing |
Every contractimposes upon each party a duty of good faith and fair dealing in itsperformance and enforcement |
