Determining Contract Terms

Question 1

The parol evidence rule says:

Answer 1

Evidence extrinsic to a written agr is inadmissible to supplement or contradict the written agreement

Question 2

When does the parol evidence rule apply?

Answer 2

When the writing is a complete integration. Parties must intend the writing to e press their final agreement.

Question 3

Parol evidence rule bars evidence of:

Answer 3

1. negotiations before K becomes integrated

2. agreements before K becomes integrated (oral or written)

Question 4

What are the two exceptions to the parol evidence rule?

Answer 4

1. Agreement was only partially integrated, or

b) additional terms would ordinarily be in a separate agreement.

Question 5

Parol evidence rule DOES NOT APPLY TO or bar admission of (4 things):

Answer 5

1. evidence of oral agreements made after the writing
2. evidence necessary to determine if there was a mistake in the process of reducing an agreement to writing
3. evidence concerning a party’s defense based on misrepresentation, fraud, or duress
4. evidence used to resolve ambiguities about the meaning parties intended to give particular terms in the writing

Question 6

In a shipment K (FOB - seller’s city), when are the seller’s delivery obligations satisfied?

Answer 6

1. delivers goods to a common carrier
2. makes reasonable arrangements for delivery
3. notifies buyer;

Once these three things are complete, risk passes to the buyer.

Question 7

What are the four factors that will determine who bears the risk of loss?

Answer 7

1. prior agreement of the parties
2. Breach - breaching party is liable for nay uninsured loss, even if loss is unrelated to the breach
3. common carrier - risk shifts to buyer once seller completes delivery obligation
4. default - apply if the above factors are inapplicable
   - merchant seller - risk of loss shifts to buyer once he takes physical possession of goods
   - non-merchant seller - risk of loss shifts to buyer upon tendering deliveryWha

Question 8

What is an express warranty?

Answer 8

When seller makes promises or describes facts about a product or its use.

(Warranty will be breached if the product falls short of seller’s promise or description)

Question 9

What is the implied warranty of mercantibility?

Answer 9

merchant selling goods automatically warrants goods are fit for their ordinary purpose

Question 10

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

Answer 10

seller warrants that goods are fit for buyer’s purpose if:

1. buyer has a particular purpose
2. buyer relies on seller to select suitable goods, and
3. seller has reason to know of the buyer’s purpose and reliance on the seller.

Question 11

What are the two ways to limit warrant liability by K?

Answer 11

1. disclaimer

2. remedy limitation

Question 12

What are the two ways to limit warrant liability by K?

Answer 12

1. disclaimer - limits liability only for implied warranties (“as is” or “with all faults” language is enforceable); but disclaimer won’t limit liability for an express warranty
2. remedy limitation - limits recovery upon breach of warranty; generally valid for all warranties, unless the provision is unconscionable (e.g., breach causes serious injury)