MEE Contracts & Sales Flashcards
When does the “predominant purpose” test apply?
When a transaction involves both the sale of goods and the rendering of services, the “predominant purpose” test applies to determine whether the common law of contracts of Article 2 of the Uniform Commercial Code (UCC) applies to the entire transaction.
Purpose: If the sale-of-goods aspects of the transactions predominate, the UCC applies to the entire transaction, but it does not preclude the application of other law in appropriate circumstances to aspects of the transaction that do not relate to the sale of goods.
Purpose: But if the services aspects of the transaction predominate, only the provisions of the UCC that relate primarily to the sale-of-goods aspects of the transaction apply.
State the common law Parole Evidence Rule.
General Rule: The common law parole Evidence Rule (PER) generally prevents the introduction of prior extrinsic evidence that contradicts the terms of the written contract.
Standard: For the PER to apply, the parties’ writing must be integrated - i.e., the parties must intend it to be their final agreement.
- Integration (total): If the writing completely expresses all of the terms to which the parties’ agreed, then it is a total integration, and the parties CANNOT introduce any extrinsic evidence (oral or written) of prior or contemporaneous understandings or negotiations.
-Integration (partial): If the writing sets forth the parties’ agreement about some - but not all - terms, then the writing is a partial integration. In that case, the parties MAY introduce supplementary extrinsic evidence of other terms so long as this evidence is consistent with the writing.
COMMON LAW: Under the common law, a court could look only to the writing itself (within the “four corners” of the document) for evidence of the parties’ intent. If the written contract appeared to be detailed, then a court would likely conclude that it was totally integrated.
(MERGER CLAUSE): If there is a statement such as “this is our complete agreement,” it is a merger clause and is evidence of complete integration.
Modification (common law)
General Rule: At common law, modification of an existing contract must be supported by consideration.
Exception: An agreement to modify a contract may still be enforced if there are new obligations on both sides.
