Contend and Meaning of the contract

Question 1

interpreting express terms approach and related case

Answer 1

1. Is the language subject to more than one meaning?
2. if you have multiple meaning, whose meaning prevail? look at the evidence (statutes, dictionary ect.)
3. look at the rules of interpretation. narrow v broad. Broad meaning is preferred over the narrow meaning unless it is proven.
   Frigaliment (chicken case)

Question 2

Provisions dealing with types of evidence:

Answer 2

1-303: trade usage, course of performance, and course of dealing.

Question 3

1-303 (a)

Answer 3

1-303 (a) course of performance
A course of performance is a sequence of conduct between the parties related to a particular transaction that exist if:
- The agreement of the parties with respect to that transaction involves repeated occasions for performance, and
- If both parties know about the nature of that performers and accepts it without objection.

Question 4

1-303(b)

Answer 4

course of dealing: sequence of an established pattern of conduct from previous dealings between the parties.

Question 5

1-303(c)

Answer 5

trade of usage: any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify the expectation that it will be observed. customary practice.

Question 6

SUBJECTIVE INTENT v. OBJECTIVE MEANING

Answer 6

The general approach is to use the objective standard but sometime the court will use the subjective meaning.
The subjective view of interpretation means that where the parties have attached the same meaning to a promise or agreement or a term, it is interpreted in accordance that that meaning. If there is no way to chose between subjective and objective meaning, if both are plausible and neither party knew or had reason to know of the meaning attached by the other party, there may be no agreement at all.

Question 7

Determining when it is permissible to use extrinsic evidence

Answer 7

Determining when it is permissible to use extrinsic evidence, this comes up in 3 contexts:
1.if language is ambiguous
2.if the contract documents are integrated or completely integrated,
3. Parol evidence rule – what extrinsic evidence can be admitted.

Question 8

Plain meaning rule + case name

Answer 8

Plain Meaning Rule (minority approach)
If the party’s express their intention with a written contract that is clear and unambiguous, then the written agreement is considered according to the plain meaning of the language employed and no extrinsic evidence should be admitted. On the other hand, if the meaning of a writing contract is ambiguous then extrinsic evidence is admissible to explain the writing (C&A Constructions v. Benning Construction).

Question 9

Liberal approach + case name

Answer 9

The court does not look at whether the agreement is ambiguous or unambiguous, but at whether the evidence offered is relevant to prove a meaning to which the language of the instrument is reasonably susceptible. Pacific Gas & Electric case.

Question 10

When does the parol evidence rule come up? how do you apply the parol evidence rule?

Answer 10

A parol evidence rule issue arises when one party offers evidence of an obligation and the other party claims that that obligation is not part of the parties’ agreement.

analysis:
The nature of the written contract, and
o The nature of the evidence that a party offers.

Question 11

parol evidence rule

Answer 11

Integrated, if the parties has considered the agreement to be final, then the parol evidence rule bars the use ox extrinsic evidence from prior agreements and contemporaneous oral agreements that contradict or change the terms of the agreement but it allows to add term to the agreement.

Completely Integrated, both parties considered the agreement to be the final and sole expression, the parol evidence rule bars the use of evidence from prior agreements and contemporaneous agreements to contradict, add and change the terms of the agreement.

Question 12

when is the parol evidence rule not applicable?

Answer 12

1. involves more agreements on different topics,
2. issues of formation,
3. issues of modification,
4. issues of interpretation

Question 13

what is a merger/integration clause?

Answer 13

Requires a mutual intent by both of the contracting parties that the writing agreement contain all of the agreements of the parties and the further mutual intent that the writing agreement is intended to be the sole agreement, barring reliance upon any other prior or contemporaneous representation or agreements.

Question 14

can you use the parol evidence rule when a contract includes a valid merger/integration clause? yes/no? explain why?

Answer 14

When a contract includes a valid merger clause, parol evidence does not control, unless you are using the Extrinsic evidence to show:
1. That the writing was sham, not intended to create legal relations,
2. That the contract has no efficacy or effect because of fraud, illegality, or mistake,
3. That the parties did not integrate their agreements or assent to it as the final embodiment of their understanding or
4. That the agreement was only partially integrated because essential elements were not reduced to writing.

Question 15

Explain what implied contract terms means and give an example of a case.

reasons why the terms can be missing?

Answer 15

When a court decides it is faced with an omitted term, the process which the court engages in is commonly referred to as “implication” and the resulting term is referred to as an “implied term.”
Implication: adding terms to which the parties did not agree/had not included in the contract. Something is missing from the contract.

wood v. Lucy

reasons:
1. the parties did not foresee the circumstances that later arose,
2. the parties foresaw the circumstances, but decided no to deal with in the contract,
3. an agreement containing al the possible terms would be too long and the cost too high.

Question 16

duty of good faith

Answer 16

It is generally agreed that every contract carries with an implied covenant of good faith that may not be disclaimed. Good faith does not need to be in the contract in writing. Because it is implied.
R 205 and UCC 1-304 – use almost identical language to state that parties to every contract are subject to a duty of good faith and fair dealing in the performance and enforcement of the contract.
It excludes a variety types of conduct characterized as involving bad faith because they violate community standards of decency, fairness or reasonableness.

Question 17

What is a condition?

Answer 17

o R 224: A condition is an event, not certain to occur, which must occur, unless its nonoccurrence is excused, before performance under a contract becomes due.
o Conditions are either satisfied or fail – means the conditions was not met (unlike promises that can be breached). If it fails, the legal duty is discharge (party does not have to perform).

Question 18

Consequences if the condition does not occur?

Answer 18

The legal duty that was conditioned is discharged.

Question 19

difference between promise and condition?

Answer 19

promise: can be breached
condition: can be satisfied or fail

Question 20

types of conditions

Answer 20

1.contract formation/contract performance
2. concurrent, precedent, subsequent
3. express condition/implied condition

Question 21

Conditions of Satisfaction

Answer 21

usually means personal satisfaction - Make one party’s contractual duty conditional on the others party’s satisfaction with the other party’s performance.

Question 22

Waiver and Excuse of Conditions

Answer 22

Waiver of Conditions: finding that the person for whose protection the condition was placed in the contract has waived compliance with that condition.
 Restatement 84
 Must be communicated
 Can be express

Excuse of conditions: excusing the occurrence of the condition of equitable reasons, such as to avoid disproportionate forfeiture, or because the condition was not satisfied because of interference by the party that would be benefited if the condition were enforced.