Contracts - Terms Of The K

Front 1

Parole Evidence Rule

Back 1

= Where parties to a K express their agreement in a final writing, other expressions made prior to or contemporaneously w/ writing are not admissible to vary the K’s terms (PER does not apply to POST-K statements or writings).

Front 2

DIFF BTWN SOF & PER

Back 2

- SOF: Absence of a writing
- PER: superior reliability of a written agmt.

Front 3

PER Vocabulary
- Integration
- Partial Integration
- Complete Integration

Back 3

- Integration: written agreement that is final agreement, triggers the PER
- Partial Integration: writing is final, but not complete (tends to be wrong answer)
- Complete Integration: writing is final but not complete (tends to be wrong answer b/c irrelev if there is partial/complete integr as long as there is an integr)

Front 4

PER Vocabulary
- Merger Clause
- Parol Evidence
- Reformation

Back 4

- Merger Clause: “this is the complete & final agreement”; highly persuasive
- Parol Evidence:
1. Words of party (or parties) to contract
2. Came before integration, before agmt was put in written form
3. Oral or written
- Reformation: equitable action to modify written K to reflect actual agmt

Front 5

PER Fact Pattern:
Changing/Contradicting the written deal (Reformation)

Back 5

1. Regardless of whether the writing is complete or partial integration, ct cannot even consider parol evid where there is attempt to change the written deal. Rationale is that written doc is actual evid abt what parties intended & parole evidence can’t contradict
2. EXCEPTION - Mistake in integration (clerical error)
a. Numbers or words got transposed but not material to the K.
b. Will be considered in deciding whether mistake,
c. Admissible although may not be persuasive

Front 6

PER Fact Pattern:
Getting out of a written deal (Rescission)

Back 6

Ct may admit evidence of earlier words of parties for the limited purpose of determining whether there is a defense to enforcement of agmt such as misrepresentation, fraud or duress

Front 7

PER Fact Pattern:
Explaining the terms in the written deal – Reliability Rule

Back 7

Ct may admit evidence of earlier agmts to resolve ambiguities in written K

Front 8

PER Fact Pattern:
Adding to the Written Deal

Back 8

Only fact pattern where level of integration matters
a. fully integrated: can’t consider parol evid
b. partially integrated OR that additional terms would ordinarily be in a separate agreement: may consider parol evid

Front 9

Conduct & Course of Performance (use in UCC parol evidence case)

Back 9

Vocabulary in order of persuasive force; used as gap-fillers
i. Course of performance: same people, same contract (i.e., installment K)
ii. Course of dealing: same people, different but similar contract
iii. Custom and usage: different but similar people, different but similar contract

Front 10

UCC Terms in Sale of Goods Ks (“gap-filler” terms) - Delivery obligations of seller of goods if delivery by common carrier
- Shipment Ks & Delivery Ks

Back 10

If agmt as to place of delivery, to complete its delivery obligation, seller must:
1. Shipment Ks (the norm) – seller is legally obligated to: Get goods to a common carrier; Make reas delivery arrangement; & Notify buyers
2. Destination Ks – (more rare) Seller does not complete delivery oblig until goods arrive where they are shipped.
3. Determining diff betw shipment & delivery Ks: a. FOB [city name] (free on board), obligates seller to get goods to location after the term: so seller not obligated to pay shipping costs beyond that location
i. If city is where seller is, then shipment K
ii. If city where buyer is, then delivery K
iii. Followed by any other city means the destination K

Front 11

UCC Terms in Sale of Goods Ks (“gap-filler” terms)
Risk of Loss [UCC Issue] Elements:

Back 11

1. After the K has been formed but before the buyer receives the goods
2. Goods are damaged/ destroyed &
3. Neither party is at fault.
ii. Ex: coffee sold & rats get in it during delivery.

Front 12

UCC Terms in Sale of Goods Ks (“gap-filler” terms)
4 Risk of Loss Rules

Back 12

4 Risk of Loss Rules listed in order of applic’n (if unsatisfied, go to next rule)
1. Agreement – agreement of parties controls (not tested)
2. Breach – breaching party is liable for any uninsured loss even though breach is unrelated to problem
3. Delivery by common carrier other than seller – risk of loss shifts from seller to buyer at the time that the seller completes its delivery obligations. Seller must give Buyer notice of shipment
4. No agreement, no breach, no delivery by a carrier (“catch all”)
- Whether the buyer is a merchant irrelevant. Risk of loss shifts from a merchant-seller to the buyer on the buyer’s receipt of the goods/when she “tenders” the goods.
- Anything bad that happens before it gets to the buyer from a seller-merchant, seller-merchant bears risk.

Front 13

Warranties of Quality: Express

Back 13

1. Words that promise, describe, state facts OR use of sample or model (non-verbal express warranty) and become basis of the bargain
2. Not mere opinion or puffing

Front 14

Implied Warranty of Merchantability

Back 14

1. When any person buys any goods from any merchant, automatically added to the K by operation of law:
2. Goods are fit for the ordinary purpose for which such goods are used.

Front 15

Implied Warranty of Fitness for a Particular Purpose

Back 15

Added by operation of law. Elements:
a. Buyer has a particular purpose;
b. Buyer is relying on seller to select suitable goods; and
c. Seller has reason to know of purpose and reliance

Front 16

PRIVITY: Vertical & Horizontal

Back 16

1. Vertical: Manufacturer - wholesaler - retailer - customer
2. Horizontal customer - spouse - neighbor - bystander (When P is someone other than immediate buyer)

Front 17

Contractual Limitations on Warranty Liability
- Disclaimer & Limitation of Remedies

Back 17

- Disclaimer –Eliminates IMPLIED warranties – “there are no warranties”
1. Disclaim by “as is” or “with all faults”; or 2. Conspicuous written language of disclaimer mentioning merchantability
- Limitation of Remedies – does not eliminate warranty, simply limits or sets recovery for any breach of warranty
1. Possible to limit remedies even for express warranties; 2. General test is unconscionability; 3. Prima facie unconscionable if breach of warranty on consumer goods causes personal injury