Determining the terms of the contract

Question 1

“integration”

Answer 1

When the parties to a K express their agreement in a writing with the intent that it embody the final expression of their bargain, the writing is an integration`.

Question 2

Are expressions made prior to the final writing admissible to vary the terms of the writing?

Answer 2

Any other expressions, written or oral, made prior to the writing, are inadmissible to vary the terms of the writing. That is the Parol Evidence Rule.

Question 3

Is the writing an integration?

Answer 3

There are two components: (1) whether the writing was intended as the final expression of the agreement; and (2) whether the integration was intended to be complete or partial. Evidence is admissible to show the parties’ intent.

Question 4

Partial integration–additional terms are permitted

Answer 4

If an integration is complete, the writing cannot be contradicted or supplemented. If, however, the integration is partial, the writing may not be contradicted but may be supplemented by proving consistent additional terms. UCC presumes that all writings are partial integrations

Question 5

Effect of merger clause

Answer 5

A merger clause recites that the agreement is the complete agreement between the parties. The presence of a merger clause is usually determinative in large commercial contracts.

Question 6

What can extrinsic evidence be introduced for?

Answer 6

Cannot be introduced to vary or contradict the integration; but it can be used for validity issues, if the alleged parol agreement is collateral to the written obligation, if there is uncertainty or ambiguity that needs to be interpreted, showing “true consideration”, reformation, subsequent modifications, or additional terms under Article 2.

Question 7

General rules of construction:

Answer 7

Contracts will be construed as a whole; words are construed to their ordinary meaning; written or typed provisions will prevail over printed provisions if inconsistent; courts will try to reach a determination that a K is valid and enforceable; ambiguities are construed against the drafter; parties’ course of dealing will be considered; a usage of trade; the parties’ course of performance;

Question 8

Usage of trade v. course of performance v. course of dealing

Answer 8

course of performance > course of dealing > usage of trade

Question 9

Art. 2 Gap filler–price

Answer 9

if nothing has been said as to price, then the price is a reasonable price at the time for delivery

Question 10

Art. 2 Gap Filler–place of delivery

Answer 10

if not specified, the place usually is the seller’s place of business, if they do not have one, then it is the seller’s home.

Question 11

Time of shipment–Art. 2 Gap Filler

Answer 11

If not specified, it is due within a reasonable time