4. Terms of the contract?

Question 1

Terms to Remember

Answer 1

Parolees Interpret the UCC with Good Faith.

Warrants disclaimers and modifications.

Question 2

a. Parol Evidence Rule:

Answer 2

a. Parol Evidence Rule: When parties intend that a writing is a final expression of their bargain, no prior/contemporaneous expressions are admissible to vary the terms of the writing
i. Integration:
1. If incomplete, evidence admitted to supplement
2. Merger clause is evidence of full integration
3. UCC allows terms to be explained for fully integrated contract
ii. Evidence outside scope:
1. Validity
2. Interpret
3. True consideration was paid
4. Reformation (valid antecedent agreement, mistake causes writing to inaccurately reflect agreement, evidence to prove these elements)

Question 3

b. Interpretation

Answer 3

i. Objectively reasonable meaning of contract term prevails
ii. Mutual understanding of same term
iii. Dickered terms take precedent
iv. Trade usage, course of dealing, course of performance

Question 4

c. UCC Default Terms

Answer 4

i. Article II provides: price (reasonable at time of delivery), place (seller’s business), time of shipment (reasonable), time for payment (receipt of goods), and assortment (buyer’s option)

Question 5

d. Good Faith and Fair Dealing

Answer 5

i. Implied in all contracts (UCC and R2C)
ii. Only applied to performance (not negotiation)
iii. Applies to open terms
iv. “Arbitrary” removes good faith requirement in a contract

Question 6

e. Warranties

Answer 6

UCC §2-313

i. Express Warranty- affirmation of fact or promise made by the seller to the buyer which relates to the goods which becomes the basis for the bargain. Issue – Puffery vs. Affirmation of Fact
ii. Implied merchantability (fit for ordinary purpose)—implied in all sale of goods contract when merchant is a seller of that kind of goods
iii. Implied fitness (for particular purpose)—implied when seller has reason to know the purpose for which the goods are being purchased and buyer is relying on seller’s skill/knowledge

Question 7

f. Disclaimers of warranties

Answer 7

i. Merchantability: doesn’t need to be in writing but must be conspicuous if it is and use the word “merchantability.” “As-is,” buyer’s refusal to examine, or course of dealing can also disclaim
ii. Fitness: must be in writing and conspicuous; also “As-is,” buyer’s refusal to examine, or course of dealing can also disclaim
iii. Express warranties (any affirmation of fact): no disclaimers
iv. MMWA: express warranty brings in implied warranties (no disclaimers on these) subject to state law

Question 8

g. Modifying terms of a contract

Answer 8

i. CL (Restatement): Additional consideration needed, written contract can be modified orally
1. No consideration needed when: mutual agreement, unforeseen (and unallocated) circumstances arise
2. Voluntary and good faith modifications will be allowed
ii. UCC: no additional consideration, if contract is for $500 or more—writing, must be in good faith
iii. Cannot affect vested rights
iv. Substitute performance for unliquidated debts (Accord and Satisfaction)