Construction

Question 1

What are the UCC rules relevant to the application of the Parol Evidence Rule?

Answer 1

All integrations are assumed to be partial and can therefore be supplemented as long as (1) they do not contain merger clauses and (2) the court does not conclude that the writing was intended as a complete and exclusive expression of the agreement from the totality of the circumstances.

Evidence of course of performance, course of dealing, and custom/trade usage is admissible to supplement terms even in complete integrations.

Question 2

What type of evidence is outside the scope of the parol evidence rule?

Answer 2

1) Evidence as to defects in contract formation and conditions precent

2) Evidence to correct clerical errors

3) Evidence of terms that would naturally be omitted from the K, where the term is not conflicting and concerns a subject that the parties would not ordinarily be expected to introduce.

4) Evidence to resolve the meaning of ambiguous terms

5) Evidence showing “true consideration” paid

Question 3

What is an express warranty in a contract for the sale of goods?

Answer 3

Any affirmation of fact or promises as to goods which are part of the basis of the bargain, meaning that the buyer could have relied on the statements when entering the K.

No express warranty where seller proves that there was no reliance in fact.

Question 4

What is the implied warranty of merchantability?

Answer 4

In every contract for the sale of goods by a merchant who regularly deals in goods of the kind sold, there is an implied promise that the goods are fit for the ordinary purpose for which such goods are used.

Question 5

How may the implied warranty of merchantability be disclaimed?

Answer 5

By mentioning merchantability (conspicuously, if in writing).

Question 6

What is the implied warranty of fitness for a particular purpose?

Answer 6

In a contract for the sale of goods by ANY seller, the seller warrants that goods are fit for the particular purpose for which they are to be used if…

1) The seller had reason to know that the buyer intended to use the goods for the particular purpose

2) The seller had reason to know that the buyer was relying on their skill or judgement to select suitable goods

3) The buyer did in fact so rely

Question 7

How may the implied warranty of fitness for a particular purpose be disclaimed?

Answer 7

By a conspicuous writing (writing that a reasonable person ought to have noticed)

Question 8

What is the warranty of title?

Answer 8

ANY seller of goods warrants that the title transferred is good, that transfer is rightful, and that there are no liens or encumbrances the buyer is unaware of.

Question 9

How may the warranty of title be disclaimed?

Answer 9

By specific language/circumstances indicating that the seller does not claim title and/or is only selling such rights as they or a third party have.

Question 10

When is general disclaimer of implied warranties available?

Answer 10

1) By “as is” or similar indication that there are no warranties, as long as language is not hidden

2) By course of performance/course of dealing/usage of trade

3) By inspection, or refusal by the buyer to inspect goods (no warranty as to defects which reasonable inspection would have revealed)

Question 11

When do warranties extend to a natural person in the buyer’s family/home?

Answer 11

When it was reasonable to expect that such a person may use/consume/be affected by the goods and that person suffers personal injury

Question 12

When are limitations on damages for breach of express/implied warranties PF unconscionable?

Answer 12

When they limit damages for personal injury caused by a breach of warranty of consumer goods

Question 13

In a non carrier case, when does the risk of loss pass from the buyer to the seller?

Answer 13

If the seller is a merchant, when buyer takes physical possession of the goods.

If a seller is not a merchant, when the seller tenders goods.

Question 14

In a carrier case, when does the risk of loss pass from the seller to the buyer?

Answer 14

If it’s a shipment contract, when the seller delivers goods to the third party carrier.

If it’s a destination contract, when the goods are tendered at the buyer’s destination.

Question 15

Who bears the risk of loss in a contract for the sale of goods when the seller fails to give perfect tender?

Answer 15

The seller, until they cure the defects or the buyer accepts the goods.

Question 16

What is the Parol Evidence sub-rule regarding partial integrations?

Answer 16

If an integration is partial, it can be supplemented by consistent additional terms.

Question 17

What is the Parol Evidence rule?

Answer 17

An integration (writing intended by the parties to manifest the final expression of their bargain) cannot be altered by evidence of prior written/oral agreements or contemporaneous oral statements.

Question 18

What are the UCC rules of construction when a contract for the sale of goods is silent as to payment and place of delivery?

Answer 18

Buyer must pay reasonable price for the goods at the time goods are tendered, and the seller must make the goods available at their place of business or home

Question 19

What is the rule pertaining to risk of loss for goods identified at the time the contract was made?

Answer 19

If goods were destroyed without fault by either party, before the risk of loss passed to the buyer, the contract is void