4) Gap-Fillers, Interpretation, Parole Evidence Rule Flashcards
UCC implied warranties: result
default rule – applies unless conditions met to negate
UCC implied warranties: kinds
1) title
2) merchantability
3) fitness for particular purpose
UCC implied warranty of TITLE: def
implied warranty of:
1) good title to the goods
2) rightful transfer
3) no liens/etc
UCC implied warranty of TITLE: how to negate
1) specific language OR
2) circs that give buyer reason to suspect seller dnh unencumbered title
UCC implied warranty of MERCHANTABILITY: def
implied warranty that goods fit for ordinary purpose.
ONLY APPLIES IF SELLER IS MERCHANT
UCC implied warranty of TITLE: when apply?
always, unless negated
UCC implied warranty of merchantability: when apply?
only if seller is merchant (and not negated)
UCC implied warranty of MERCHANTABILITY: how to negate
1) specifically say “merchantability.” If in writing must be conspicuous, OR
2) other lang or circs that would be reasonably understood by buyer to exclude
UCC implied warranty of MERCHANTABILITY: exs of lang or circs that would be reasonably understood by buyer to exclude the warranty
1) “as is”
2) patent defects
UCC implied warranty of FITNESS FOR PARTICULAR PURPOSE: def
goods being sold are fit for particular purpose (not ordinary purpose) that buyer wants to use them for
(conditions)
UCC implied warranty of FITNESS FOR PARTICULAR PURPOSE: when apply?
at time of k, seller has reason to know:
1) the particular purpose AND
2) buyer is relying on seller’s expertise to select reasonable goods
UCC implied warranty of FITNESS FOR PARTICULAR PURPOSE: how to negate?
1) disclaimer is written, clear, and conspicuous OR
2) goods have easily detectable patent defects
UCC express warranty: def
warranty that goods will conform to some standard, arises whenever seller expressly makes it part of basis of the bargain
UCC express warranty: ways to make one
1) affirmation of promise or fact
2) description of the goods
3) sample/model
UCC express warranty: exception
sales puffery not a warranty! (is st vague, or a falsifiable fact?)
UCC default rules for missing terms: can still have a k if any of these terms are missing
1) price
2) time
3) place of delivery
UCC default rule for missing term: price. what’s filled in?
reasonable price (market value) at time established by k for delivery
UCC default rule for missing term: time. what’s filled in?
reasonable time
UCC default rule for missing term: place of delivery. what’s filled in?
seller’s place of business
CL default rule for missing price term
if a SERVICES K –> reasonable value for services rendered
good faith and fair dealing: UCC or CL?
both!
GF: result
can be source of gap filling re. performance, enforcement
GF: def
1) honesty in fact AND
2) observance of reasonable commercial standards of fair dealing in the trade
good faith obligation triggered when:
terms of k leave critical term: 1) price 2) satisfaction clause 3) quantity open to the determination of ONE PARTY
satisfaction clause: def
k says performance only complete when recipient is satisfied
satisfaction clause: is it illusory?
no –> doesn’t trigger the “if I feel like it” bc of addition of GF requirement
are open quantity terms allowed?
UCC yes, CL no
open quantity term: 2 kinds
1) output k
2) requirements k
output k: def
buyer agrees to buy all, or a %, of seller’s output of a particular good
requirements k: def
seller agrees to supply buyer w all or % of buyer’s requirements for particular good
UCC open quantity term: GF requirement
the party that can determine the quantity (seller who said would sell ALL I make or buyer who said give me ALL I need):
1) must make determination in GF AND
2) no unreasonably disproportionate demand or tender, IF there was an estimate or past course of dealing
UCC open quantity term “no unreasonably disproportionate” applies if:
1) stated estimate OR
2) past course of dealing
interpreting ambiguous language: consider these doctrines
1) objective vs subjective
2) contra preferenem
objective vs subjective: def
in interpreting ambiguous k, objective language trumps subjective meaning
objective vs subjective: exception
if 1 party has reason to know of other party’s subjective understanding, then 1st party is bound by that meaning
contra preferenum: def
in interpreting ambiguous k, construe the ambiguous term against the drafter
contra preferenum: scope
–applies to all ks, but courts may not use this rule in every case
interpreting ambiguities, filling gaps: consider these possible sources of extrinsic evidence
1) trade usage
2) course of dealing
3) course of performance
4) parol evidence rule (re pre-k coms btwn the 2 parties)
extrinsic evidence: def
outside the 4 corners of the k
admissible to use extrinsic evidence for:
1) interpret ambiguities
2) fill gaps
3) UCC ONLY: add additional terms (even if completely integrated agreement)
trade usage (def)
practice so regularly observed in a place/trade that it justifies expectation that it will be observed re this transaction (what all members of the trade do)
course of dealing (def)
pattern of conduct in previous transactions btwn these parties that is fairly regarded as common basis of understanding for subsequent conduct (same parties, previous k)
course of performance (def)
multiple occasions for performance under this k and other party, knowing of nature of performance and had opportunity to object, accepts the performance (same parties, same k)
inadmissible use of extrinsic evidence
contradict express terms of the k
ranking of kinds of extrinsic evidence
if in conflict, priority =
1) course of performance
2) course of dealing
3) usage of trade
parol evidence rule: scope
applies to admissibility of:
1) oral or documentary evidence
2) of negotiations or other communications
3) between the parties
4) BEFORE or CONTEMPORANEOUS w the (written) k
PER: integration: kinds
1) partial
2) complete
3) (not at all)
PER: partial integration: def
terms in the k are INTENDED as final expression OF THOSE TERMS
PER: complete integration: def
the k is intended to be complete, exclusive statement of all terms
PER: how to know if partial or complete integration? majority rule
merger clause = complete integration
merger clause: def
says that the writing is complete, entire agreement
PER: how to know if partial or complete integration? minority rule
merger clause is persuasive but also consider other evidence to decide whether parties intended the k to bar the evidence now proposed
PER: rule re. explaining or interpreting terms of written k
parol evidence ALWAYS admissible for this (majority)
PER: rule re. supplementing terms of written k (add a term)
parol evidence admissible for this purpose UNLESS k is completely integrated
if agreement is completely integrated, can external non-PER evidence (trade/course d / course p) supplement it?
UCC: yes
CL: no
PER: rule re. contradicting terms of written k
parole evidence NOT admissible for this (unless not integrated re. that term)
PER: rule re. using PER to decide if it’s integrated or not
always ok use the PER for this
PER Exceptions (times PER does not apply)
1) subsequent agreements
2) collateral agreements
3) attack on validity of written agreement
PER exception: subsequent agreement: rationale
the whole point of PER is it’s about prior / contemporaneous evidence –> this is outside the def
PER exception: collateral agreement: def
PER does not affect agreements that are entirely distinct from the written k at issue (even if same transaction–car sale vs parking)
PER exception: attack on validity of written agreement: rationale
if you’re arguing k not enforceable for one of these reasons, the evidence can come in for your argument. (PER requires a valid written agreement, unlike here)
PER exception: attack on validity of written agreement: kinds
1) failure of oral condition precedent to agreement
2) mistake or duress
3) fraud
4) reformation
PER exception: failure of oral condition precedent to agreement
tricky bc normally prior written stuff falls under PER. But PER DOES NOT APPLY and can’t exclude evidence if it was a condition precedent, such that there was no agreement at all if not met
reformation: steps
A P trying to get reformation must show:
1) antecedent valid agreement
2) AA is incorretly reflected in the writing bc of mistake or fraud, AND
3) proof is established by clear/convincing evidence
