Gapfillers, interpretation, parol evidence

Question 1

UCC default provisions - 3 implied warranties

Answer 1

warranty of title

• own it free and clear, good title, right to transfer
• only modifiable by specific language or circumstances that give buyer reason to suspect

warranty of merchantibility

• goods fit for ordinary purpose for which used
• only applies if seller is a MERCHANT
• displaced by specific use of word “merchantibility” OR patent defect (car has no tires)

warranty of fitness for particular purpose
- goods fit for PARTICULAR PURPOSE of buyer
- ONLY applies when seller has reason to know of purpose AND buyer relying on seller’s
expertise to select
- negated when disclaimer is written, clear, and conspicuous, or by patent defect

Question 2

UCC - express warranties

Answer 2

• affirmation or promise of fact
• description of goods
• sample or model

Question 3

UCC missing terms

Answer 3

If terms missing, replace with:
price: reasonable price at time of delivery
time: reasonable time
place of delivery: seller’s place of business

Question 4

Obligation of Good Faith and Fair Dealing

Answer 4

This is BOTH in UCC and common law

Comes in when critical terms are open to discretion. If they have discretion, they MUST exercise it in good faith

UCC also prohibits unreasonably disproportionate demand/tender, if there was either a stated estimate or a past course of dealing

Question 5

Interpreting ambiguous language

Answer 5

Objective meaning trumps subjective meaning
- EXCEPTION: when one party has reason to know of other’s subjective understanding,
they’re bound by it

Contra proferentem
- in case of doubt, construe ambiguities against draftor if one party drafted

Question 6

Trade usage, course of dealing, course of performance

Answer 6

Trade usage is what all members of trade do/know
Course of dealing is previous contracts
Course of performance is actions to date under current contract

Can be used to fill in gaps/resolve ambiguities, NOT to contradict express terms
Priority order:
performance>dealing>trade

Question 7

Parol evidence rule

Answer 7

Parol evidence is evidence of negotiations and other communications prior to/contemporaneously with execution of contract

Partial integration: terms within the writing are intended as the final expression of THOSE TERMS
- assume this without merger clause
Complete integration: the writing is intended to represent the COMPLETE AND EXCLUSIVE statement of ALL the terms
- Merger clause: “this is the full and exclusive agreement” etc. means complete integration

Question 8

Purposes for which parol evidence is introduced

Answer 8

To explain or interpret terms of the written contract
- rule: ALWAYS admissible for this

To supplement terms of written contract
- admissible UNLESS completely integrated
- UCC disctinction: trade usage, course of dealings, course of performance can
supplement even if completely integrated

To contradict terms of written contract
- NOT admissible unless court finds contract expressly NOT completely integrated