Contract Content & Meaning

Question 1

parol evidence rule (PER)

Answer 1

evidence of a prior or contemporaneous negotation or agreement is INADMISSIBLE to contradict/supplement a later written K

Question 2

PER Exceptions

Answer 2

1. to correct a clerical error or typo
2. to establish a defense against formation
3. to interpret the vague or ambigious terms (but courts will interpret using the plain meaning rule)
4. to supplement a partially integrated writing

NOTE: PER does NOT apply to subsequent agreements

Question 3

partially integrated writing

Answer 3

the writing does NOT contain a complete statement of all terms
- evidence is allowed if it does NOT contradict the writing

Question 4

fully integrated writing

Answer 4

a complete and exclusive statement of terms; discharged prior agreements
- Merger Clause: is evidence that the writing is complete on its face (fully integrated)

Question 5

UCC omitted and implied terms

Answer 5

if NOT agreed upon, the court will fill in default K terms (“gap fillers”)

Question 6

UCC Gap Fillers

Answer 6

1. Price: reasonable price @ time of delivery
2. Time for payment: due @ time & place buyer is to receive goods
3. Time for shipement/delivery: w/in a reasonable time & @ a reasonable hour
4. Place for delivery: seller’s place of business
   - seller’s residence (if NO place of business)
   - if identified goods are known by parties to be at some other place, that is the place of the delivery

NOTE: K terms may be established by course of performance, course of dealing, and/or usage of trade

Question 7

UCC delivery & risk of loss (ROL)

Answer 7

the parties’ agreement governs delivery & risk of loss (ROL)
- If NOT agreed upon: UCC supplies default terms
- If agreed upon: K terms govern ROL
- If breach: ROL typically remainds w/ breaching party

Question 8

Shipment by common carrier

Answer 8

ROL depends on whether it’s a:
1. shipment K, or
2. destination K

NOTE: Shipment K is presumed if K does NOT specify AND shipment is by an independent carrier

Question 9

shipment K

Answer 9

seller must deliver goods to a suitable carrier @ seller’s location (“F.O.B. seller’s location”)
- ROL passes to buyer when goods are delivered to CARRIER

Question 10

destination K

Answer 10

seller must safely deliver goods to buyer’s location (“F.O.B. buyer’s location”)
- ROL passes to buyer when goods are delivered to BUYER

Question 11

Non-common carrier shipment

Answer 11

ROL depends on whether seller is merchant
- Merchant seller: ROL passes to buyer upon receipt of goods
- Non-merchant seller: ROL passes to buyer upon tender of delivery

Question 12

UCC output/requirement Ks

Answer 12

K where the quantity is measured by the output of seller OR requirements of buyer
- an unreasonably disproprotionate increase in quantity is NOT allowed