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12 Cards in this Set

  • Front
  • Back
  • 3rd side (hint)
Parties' Words
Parol Evidence Rule (PER): excludes oral/written evidence of a prior agreement that contradicts a later writing

* PER Problem requires writing. If facts involves oral agreement, it's a SOF problem!
* PER is backwards looking. If subsequent developments, look for modifications or SOF.
PER Exceptions [allows evidence]
1) Correct a clerical error (e.g., a typo)

2) Establish defense against formation (flaw in agreement)- not trying to rewrite, want out!

3) Interpret a vague or ambiguous term (if not vague/ambiguous, court gives plain meaning)

4) *Supplement a partially-integrated writing [final statement of terms, but not complete statement of all agreed-to terms]

5) If lease contains “merger clause” (“This K is limited to the terms herein"), writing is complete and can’t be supplemented
Conduct can explain terms or gap-fill
In decreasing order of importance:

1) Course of performance: what parties did under this K
2) What they did under prior K with each other [prior deals]
3) What others in trade do in similar K
Seller's Warranties of Quality in a Sale of Goods (Article 2)

Express Warranties: statements of fact, promises, descriptions of good, use of sample or model. Does not include opinions. Must be a basis of bargain—if buyer could have relied on express warranty, it was “basis of bargain”
Implied Warranty of Merchantability: Goods are fit for ordinary purpose. Seller is a merchant who deals in goods of the kind (special knowledge about particular goods in transaction)

Implied Warranty of Fitness for a Particular Purpose: Goods are fit for buyer’s particular purpose. Seller knows buyer has special purpose and is relying on seller to select suitable goods. Seller does NOT have to be any kind of merchant
Limitations on Warranty Liability in Sale of Goods

1) Seller can disclaim implied, not express, warranties
2) “As is” “with all faults”- magic disclaimer phrases
3) W/o magic words, disclaimer must be conspicuous (draw attention of a reasonable buyer- large type, font, etc.); also must actually use “merchantability”
Limitation of Buyer’s Remedies: seller can generally limit buyer’s remedies for breach of any warranty if the limitation is not unconscionable

Limiting buyer’s remedies for personal injury w/ consumer goods is presumed unconscionable. Seller can try to rebut presumption, but very difficult to do
Limitations on Warranty Liability in a Sale of Goods
A seller can disclaim implied, but NOT express warranties. [just use a magic phrase- as is! with all faults!]

Also, can't make express warranty on one hand and disclaim on another.
Without "magic phrases," a disclaimer must be conspicuous. Likely draw attention of a reasonable buyer (large type, font, etc.)
If doesn't use magic words, must actually use "merchantability" to disclaim that
Seller can limit buyer's remedies for breach of any warranty (express or implied) if the limitation is not unconscionable.
EXCEPTION: Limiting buyer's remedies for personal injury in the case of consumer goods is presumed unconscionable. Can try to rebut, but very difficult to do.
Risk of Loss ("ROL") in a Sale of Goods (Article 2)

[goods are damaged before buyer gets them; neither buyer/seller is to blame]
If seller bears ROL, must provide new goods for no additional cost or be liable for breach of K.

If buyer bears ROL, must still pay contract price!
Hierarchy of things to look for in determining ROL

-Agreement [parties' agreement controls]
-Breach [breaching party bears ROL, even if loss unrelated to breach]
-Delivery by Common Carrier
Non-Carrier Cases
**Delivery by Common Carrier: ROL shifts to buyer when seller completes delivery obligations
1) Shipment K: Seller must get goods to a common carrier, make delivery arrangements, and notify buyer
2) Destination K: Seller must get goods to specific destination (usually, where buyer's location)

--> Look for shipment K, where buyer bears ROL before it gets goods!
**If K provided for delivery "FOB" (Free on Board"; followed by name of a place)
If it's where seller is located--> K is a shipment K

If it's any other city--> K is a destination K
Non-carrier cases (buyer picks up or seller delivers), answer depends on whether seller is a merchant
Merchant-Seller: seller bears ROL until buyer takes possession
[policy: merchant is better able to insure against risk]

Non-Merchant-Seller: Seller bears ROL until it "tenders" goods to buyer (i.e., makes them available to buyer)