Contract Content and Meaning

Question 1

What is the “parol evidence rule”?

Answer 1

Under the parol evidence rule, a party cannot introduce extrinsic evidence of prior or contemporaneous agreements offered to contradict, vary, or modify unambiguous writing which the parties intended to be a full and final expression of an agreement

Question 2

What are the 7 exceptions to the parol evidence rule?

Answer 2

Parol Evidence MAY be introduce to prove:

1. defects int he formation of the contract (such as fraud, duress, mistake or illegality)
2. parties’ intent regarding ambiguous terms in the contract
3. problems with the consideration (eg, consideration was never paid)
4. a prior valid agreement that is incorrectly reflected in the written instrument in question
5. a related agreement, if it does not contradict or change the main contract
6. a condition that had to occur before contract performance was due
7. subsequent modification of the contract

Question 3

What is a “merchant”?

Answer 3

A person who regularly deals in the kind of goods involved in the transaction OR who otherwise holds themself out as having knowledge or skill particular to the practices or goods involved in the transaction

*service contracts do NOT involve merchants

Question 4

What is “good Fatih” under the UCC?

Answer 4

requires honesty in fact and observance of reasonable commercial standards of fair dealing

Question 5

What is “integration” under the parol evidence rule?

Answer 5

A written K constitutes an “integration” if the parties to the K intended the writing to be the final and complete expression of their agreement

Question 6

Does the parol evidence rules apply to oral contracts?

Answer 6

NO.

only written

**however, the stat of frauds MAY apply to an oral contract

Question 7

What are the 2 requirements for a term to be “naturally omitted” from a written agreement?

Answer 7

A term will be treated as naturally omitted IF:

1. it does not conflict with the written integration; AND
2. similar situated parties would not ordinarily be expected to include the term in the worsen agreement

Question 8

What are the 4 areas of contract interpretation that differ depending on if the K falls under Common Law or UCC?

Answer 8

1. acceptance
2. option k’s v. firm offers
3. contract modification AND
4. substantial performance v. perfect tender

Question 9

What is the “predominant purpose test”?

Answer 9

In a mixed or hybrid contract involving both the services and sale of goods, courts apply the “predominant purpose test” to determine whether CL or UCC applies

*looks at the dominant aspect of the contract and applies that law to the ENTIRE contract

Question 10

Define “goods”

Answer 10

tangible movable property

Question 11

What types of contracts are governed by UCC?

Answer 11

contracts for sale of goods

Question 12

Does the common law ever apply to an aspect of a contract for the sale of goods?

Answer 12

Option contracts and firm offers (remember firm offers only between merchant’s) so CL principles remain applicable when not displaced by UCC

Question 13

What is a “merger clause”?

Answer 13

Is a provision in a written contract that states the terms of this agreement are the complete and final agreement between the parties

Question 14

What is a fully integrated writing?

Answer 14

A complete and final expression of the party’s agreement

Where the agreement is fully integrated it cannot be contradicted or supplemented with additional consistent terms

*a merger clause is an indication that the writing is complete on its face

Question 15

What is a partially integrated writing?

Answer 15

Does NOT contain a complete statement of all the terms the parties agreed to

Where the agreement is only partially integrated, a prior oral agreement is discharged only if it is INCONSISTENT with the written agreement