3. Determining Terms Flashcards
Parol Evidence Rule: Exception
♣ Agreements (oral/written) made after writing
♣ Evidence necessary to determine if there was a mistake in the process of reducing an agreement to writing
♣ Evidence concerning a party’s defense based on misrepresentation, fraud or duress
♣ Evidence used to resolve ambiguities about meaning parties intended to give particular terms in writing.
♣ Additional terms would ordinarily be in separate agreement.
Parol Evidence Rule
Evidence that is extrinsic to a written contract is inadmissible to supplement or contradict the written contract
♣ Applies if the writing is a complete integration
Delivery & Risk of Loss in UCC Contracts:
Goods shipped by common carrier (aka DHL)
♣ Shipment Contracts: seller only obligated to ship goods to buyer
♣ Destination Contracts: seller obligated to ensure goods reach buyer
Delivery & Risk of Loss in UCC Contracts:
Non-common carrier deliveries:
- Prior agreement of parties
- Breach: if one party is in breach, they are liable for any uninsured loss, even if unrelated to the breach
- Default: apply if the above factors are inapplicable
o Merchant seller: risk of loss shifts to buyer once he takes physical possession of goods
o Non-merchant seller: risk of loss shifts to buyer upon delivery
Delivery & Risk of Loss in UCC Contracts:
FOB [location]
Seller bears risk and expense of getting goods to named location at which point risk passes to buyer
WARRANTIES:
Types:
- Express warranty
- Implied warranty of merchantability
- Implied warranty of fitness for a particular purpose
- Limiting warranty liability
WARRANTIES:
Express warranty
♣ Affirmative promise about the quality or feature of a product
♣ Warranty will be breached if the product falls short of seller’s promise or description
WARRANTIES:
Implied warranty of merchantability
Seller automatically warrants goods are fit for their ordinary purpose
WARRANTIES:
Implied warranty of fitness for a particular purpose
♣ Seller warrants that goods are fit for buyer’s purpose if:
• 1. Buyer has a particular purpose
• 2. Buyer relies on seller to select suitable goods; and
• 3. Seller has reason to know of buyer’s purpose and reliance on seller
WARRANTIES:
Limiting warranty liability
♣ Contract can limit liability for warranties
♣ Disclaimers will not limit liability for express warranties.