Issues Flashcards
PE Rule R. 2d Contracts 230
If the court agrees with
the argument, the parol evidence will be excluded only if the court concludes that
the parties intended the letter agreement to be both final and complete (i.e.
completely integrated).
A court may exclude the evidence as
contradicting a partially integrated agreement or as adding to a completely
integrated agreement.
breach of this duty to act in good faith
Wrongfully interfering with another party’s ability to fulfill a condition will generally be viewed by the courts as a breach of this duty to act in good faith
Conditions
Conditions are interpreted strictly; there is no room for substantial
performance of a condition.
PE Contradiction
When parol evidence is being offered to contradict
a writing, the court must exclude the evidence if it concludes that the parties
intended the letter agreement to be final with respect to the terms included in the
letter agreement (i.e. at least partially integrated).
Identify PE
It is PE b/c “an express oral
agreement made prior to execution of the letter agreement”
4 corners rule
Under the traditional “four corners” rule, the court would construct the parties’
intent concerning finality or completeness by looking exclusively at the letter
agreement. (Is there a merger clause?)
- look at length of agreement
- terms of agreemnt (are all possible terms included?)
How to address Modification clause in writing for PE?
(The
clause prohibiting oral modification is not a merger clause and is not relevant on
the issue of integration; it applies to purported changes after the contract has
been formed.)
Modern View PE
The modern view on parol evidence calls for one to also consider the
surrounding circumstances and the parol evidence itself in attempting to
ascertain (i.e. construct) the parties’ intent.
Considerable factors:
(the document,
the circumstances, and the parol evidence),
Interpretation of Terms (Subjective View)
court could interpret the term by looking at what the
parties actually thought the words meant (a subjective view). That view is
appropriate only if both parties meant the same thing or, if they didn’t mean the
same thing, one party knew or had reason to know of the meaning attached by
the other. See R.2d Contracts 201.
tools of interpretation that allow us to construct a
meaning for the words (an objective view).
the generally prevailing meaning of
the words R.2d Contracts 202(3)(a).
Interpretation tool
interpretation in a manner
consistent with the circumstances and the principal purpose of the contract. See
R.2d Contracts 202(1).
Frustration of purpose
Comment a to R.2d Contracts 265, The participation in the
event was so completely the basis of the contract that, as both parties
understand, without “the basic assumption of the contract” the transaction would make little sense.
Obligations under the contract are discharged by establishing that the principal purpose for performance
was substantially frustrated by the occurrence of an event the non-occurrence of
which was a basic assumption of the contract.
- The doctrine requires that the frustration be severe, and not fairly
within the risks assumed under the contract. It is not enough that the transaction
has become less profitable
- unforeseeable events
Krell v. Henry, in which someone who had promised to pay for use of a flat to
view the king’s coronation parade was discharged from his obligation when the
parade was postponed. We saw the doctrine discussed but its application
rejected in 7200 Scottsdale Road (applying R.2d Contracts 265), in which a
corporation’s obligation to a hotel for convention bookings was not discharged
because of threat to travel posed by the 1991 Gulf War.
Anticipatory Repudiation
A clear, definite, and unequivocal statement from the breaching party that the promise will be breached discharges the remaining duties of nonbreaching party if the failure to provide the promise would be a material breach of performance. See
R.2d Contracts 250, 251, 253.
Factors to determine whether failure would be material. R.2d Contracts 241.
- Deprivation of Benefit
- Adequate/Measurable damages for breach
- Forfeiture
- Cure of breach
- Good Faith
Condition subsequent
R. 2d Contracts 230
an even that terminates duty
