CONTRACTS 2 Flashcards
Where to Start?
What is the content of the K?
Next Step?
Lab Work: What is the language of the K.
L: Define what is in the K. Gotta look specifically in the K.
D. Will want to argue a narrow interpretation. K Language is supported by Context
P. Will want to argue a broad interpretation and want PER to apply. He will say that the K Language is supported by the Text.
Argue who really wants what here and why.
C. extrinsic evidence, perol, supported by text.
Parol Evidence Rule:
Taylor Sherrod R210
Does Parol Evidence Rule apply? In order to determine this we must see if the Document is Integrated. If no Integration then extrinsic evidence applies.
Integration 210
Test: Is the terms of the K final and exclusive. We have a split in jurisdictions therefore we analyze both formalist and flexible.
Formalist
Review within the 4 corners of the text
Merger clause is conclusive
Here. Find clause
Conclusion.
Flexible
Review the context with the text and look at the intent of the parties. Can overcome Merger clause with intent.
Counter: Boilerplate language. It was a standard K. No chance for client to really review. Look at age and shit too here.
However Rebuttal. Other Indications. Signed, Legal phrasing, 10 page, typed,
Conclusion? of integration
Looks Integrated. Most likely need an exception. Because without it PER will apply.
PER most likely applies or not.
Partial Integration?
Details will be discussed by parties, there is no real merger clause. Only has like dates and payments.
Exception to Explain.
Under both appraoches Courts will check to see if anything in the text needs explaining, (clarification) Not to add or contradict.
Formalist Court
Looks at Ambiguity, Patent Ambiguity. Formalist courts define this as “on its face” Otherwise known as the plain meaning rule. Is the term in language really ambiguious?
Look at the whole contract, cause there may be some shit in a different section that shows some ambiguity.
Flexible court
Looks at whether the text is reasonably susceptible. The judge will hear the evidence in chambers to discover any latent or hidden ambiguity regardless of context.
Interpretation Q
The court now needs to choose a meaning:
Joyner 201, Frigalament, Chicken Factors
2(201) (1) If it is possible that both parties had same meaning at the time of K formation the ct will choose that.
2(201) (2) If both had a different meaning, the court looks at who knew what or should have known based on Joyner and the chicken Factors.
We have to compare the knowlege of the parties.
Generally more innocent party will win.
Chicken Factors?
Language of the K Preliminary Negotiations: Legal Standards Trade Usage Course of Perofmrance.Behavior of P.
Maxims of Interpretation?
Rule against the Drafter 206 -
K terms most strongly construed against the drafter if: Drafter actually chose the words that require interpretation. Drafter is significantly stronger than the other party.
R2 -203 common sense interpretation.
Justifications
Mutual Mistake - Lenawee
Unilateral Mistake - Wilfred
Wilfred Approach
frustration - Mel Frank - A room with a view with no king to watch
Impossible - no music hall to rent - burnt
Impracticable - extracting gravel below water level. Karl Wednt
Modification - Alaska Packers
Mutual Mistake
Lenawee - Both parties had the wrong belief at the time of the K formation.
Elements:
Mistake of Both Parties: There was a gap between the reality and the belief between the parties at the time of K formation
In regards to a basic assumption of the K.
Has to do with the nature of the Transaction and not the value of the exchange.
That has material effect
Impracticle, impossible, frustration, seriosuly undercuts the equivalence of the exchange between parties.
No risk allocated to party seeking relief, either by agreement, by knowlege, or by court.
Policy: General Reluctance to help from courts, but because its MUTUAL then courts dont mind fixing their mistake.
They would be willing to consider undoing a K if there was no meeting of the minds.
Difficulty with working with beliefs. Educational goal: Lesson in Carefulness.
Unilateral mistake
Mistake of one party at the time of formation.
Policy: Much harder to prove in this case, and the court is careful not to hurt the non-breaching party, therefore, we have more elements.
Elements:
Mistake of one party at the time of formation.
With regards to Basic Assumption
That has material effect
And no assumption of risk by party seeking relief
+ either unconscionable result or other party caused/knew/should have known.
Wilfred Appraoch
Mistake of one party
With regards to BA
And that mistake relates to a material feature of the K
Mistake occurred despite reasonable care from injured party
Enforcement Unconscionable
No reliance on the non-mistake party.
Impossibility
no music hall to rent (burnt)
Was there an appearence of new facts after the formation of the K? Or were the facts present before formation? If the new facts were Market Changes, then no justification. However, if there was an exteme supervening event, then justifcation may be available.
Elements of Impossibility?
change happened after formation and caued EXTREME difficulty
Basic assumption was that change would not occur.
No fault on party seeking justification.
No assumption of risk - law and economic analysis of risk allocation - party IN THE BEST POSITION to minimize (insurance)
Foreseeability.?
