Module 9 Flashcards
What is the definition of rely in promissory estoppel?
There must be a cost to the promisee of doing something in reliance on the promise
What is the primary reason that promises without consideration are enforced?
The premises have relied on the promises
What is the parol evidence rule?
Bars evidence of communications, written or oral, extrinsic to the final writing.
What do critics say about the parole evidence rule ?
Difficult to understand and unworkable
What are the two questions that should be asked when considering the parol evidence rule?
- Is the contract integrated/does it contain the entire understanding of the parties
- If so, is the integration total or partial
- How is the meaning of the terms of the contract to be ascertained
- What is the interpretation of 1/more terms of the contract
How does a final agreement affect tentative terms discussed earlier negotiations?
Earlier tentative agreements and negotiations are in operative in determining the content of the contract. The final agreement supersedes them
What is total integration?
When I contract is final and complete. Cannot be contradicted by parol evidence and can’t be supplanted by consistent additional terms
What is a partial integration?
When the writing is final, but doesn’t completely express the parties’ contract. Cannot be contradicted by parol evidence, but may be supplanted by consistent additional terms
How does the parol evidence rule affect extrinsic evidence of terms that were agreed upon prior to or at the same time as a total integration?
Parol evidence bars those terms regardless of whether they were written or oral
How does parol evidence deal with contemporaneous agreements?
A) majority: they should be treated like prior agreements that should be deemed to be a part of the integration and admissible into evidence
What is a typical example of a parol evidence problem?
One of the parties offers into evidence a term that is not in the writing but which the party says was orally agreed to prior to or contemporaneously with the writing
What is the reason for the parol evidence rule?
To stop at perjured testimony and uncertain testimony of slippery memory
The basic idea of the parol evidence rule is if the term didn’t survive the writing, what….?
It wasn’t intended to
What is the theory of merger?
The offer term is excluded because it has been superseded by the writing
Parole evidence rule is designed to make parties but the complete agreement, including contemporaneous oral agreements, in writing at the risk of what?
Losing anything they had agreed on
Questions of intent with regard to parol evidence are usually for whom?
Courts of transmuted this question into one of law and it is decided by the trial judge and then subject to appellate review
If the court decides that oral evidence rule has been violated, what will happen to the argued term?
It will be excluded, not because it was not agreed on, but because it is legally immaterial. The term is admitted into evidence and the jury determines it if it was actually agreed on
Can the parole evidence rule be raised for the first time on appeal?
Yes because it is a substantive rule it can be raised for the first time on appeal despite the failure to object
If a writing appears to evidence a contract that is not a final embodiment of the contract or some of its terms, does parole evidence apply?
No
When is a confirmation an integration?
When it is prepared by only one party, and sent to another party, and that party makes no response to it prior to performance
What are the rules for a final writing?
It doesn’t have to be written any particular way or even signed. It just has to have been regarded by the parties as the final embodiment of their agreement. The more complete and formal it is the more likely it was intended to be final
What are the tests used to determine total integration?
- four corners rule
- collateral contract concept
- Williston’s rules
- Corbins approach
- UCC
What is the four corners rule?
Determines the existence of a total integration by concentrating on the words of the writing. If it appears complete on its face is presumed to be total, and this is decided by the judge looking solely at the writing.
*** critics think it is illogical and impossible just by looking at writing
What is the collateral contract concept?
Determines existence of a total integration by concentrate in the words of the writing
- does not prevent collateral agreement/independent writings from being introduced as long as the main agreement isn’t contradicted
- A separate oral agreement about anything the contract is silent about that isn’t inconsistent with the terms can be proven by parol
- ** criticism: using this test no writing is considered more than a partial integration
What is Williston’s rules? (A.k.a. majority approach/restatement)
The existence of the total integration depends on the intention of the parties
- if the writing has a merger clause in total integration is established
- A contemporaneous written agreement becomes part of the integration
- a oral agreement is subject to parole evidence rule
- look at the writing, if it is obviously incomplete, consistent additional terms can be introduced
- The court decides what reasonable parties similarly situated would naturally do with respect to the term
- ** criticism: difficult to apply
What are the two ways Williston rule can be rebutted?
A) if the document is obviously incomplete
B) the merger clause was a mistake or any other sufficient reason to set aside the contract
What Does Williston’s rule mean when it talks about intent?
Presumed/fictitious intent
What is Corbins approach?
Parol evidence rule doesn’t apply to any kind of contemporaneous agreement. Terms are either prior to or subsequent to the writing and the existence of a total integration depends on the intention of the parties
- searches out the actual intent of prior agreements and the court makes decisions on whether the parties actually agreed or intended for it to be total
- ** critics say this is misguided
What is the UCC rule about parole evidence?
Terms that confirmatory memoranda agree are intended as final expressions cannot be contradicted by evidence of any prior agreement or of the contemporaneous oral agreement but can be explained/supplanted:
A) the course of dealing, usage of trade, or course of performance
B) by evidence of consistent additional terms unless the writing was intended to be a complete and exclusive statement of terms
- The actual intentions of the parties should be found out
What does the UCC say about course of dealing?
Can be used to supply any additional terms even if the writing is thought to be total
Under the UCC parole evidence rule can a total integration be contradicted or supplemented?
No
What does the CISG say about the parol evidence rule?
A contract of sale doesn’t have to be in writing and is not subject to any other requirement of form. It can be proved by any means, including witnesses
What does the restatement say about the parol evidence rule?
Even if the evidence shows it is a total integration, additional terms are still admissible if:
- The new agreement is made for a separate consideration, or
- The new agreement isn’t within the scope of the integrated writing, or
- The new term might naturally be omitted from the writing
What is a merger clause?
The writing is a final, complete, and exclusive statement of all the terms agreed.
A merger clause will usually resolve the issue of total integration, with two exceptions, making the merger clause alone avoidable:
- Where the instrument is obviously incomplete, or
- The merger clause was included as a result of fraud, mistake, any reason that is sufficient to set aside a contract
* ** some courts no say that a merger cause should only be one of the factors considered in determining total integration and he shouldn’t have any effect unless it is agreed on
If the writing appears to be a contract was never formed what can be used to show this?
Parol evidence
Parol evidence is admissible to show that an agreement is what?
Void, voidable, has no grounds for granting, denying Reformation, specific performance, duress, or other remedy
If the party testifies that an agreement wasn’t meant to be operative, saying it was sham or nonfinal, how does that affect the contract?
There was no contract
What does it mean if the contract is subject to an express condition?
The parties agree that a condition precedent must occur before the contract is effective, and the failure of that condition to occur maybe shown despite a writing or other record because of the absence of finality
Until an express condition that a contract is subject to occurs, is there a contract?
No no binding contract exists.
What are the three types of fraud?
- Promissory fraud
- Fraud In the inducement
- Fraud in the execution
What is promissory fraud?
When a party makes a promise with the intent not to perform it. This is a misrepresentation of fact, and can give rise to an action for deceit, avoidance of the contract, or its reformation
What is the fraud in the inducement?
False statements of fact that induce the party into contracting
What is fraud in the execution?
Deception about the nature of the instrument. If you failed to read the instrument, fraud cannot be offered in many circumstances, but sometimes it can be
What is mistake?
An agreement induced by mistake is usually voidable. If a party says that the integrated writing doesn’t reflect the chocolate green, the writing can be reformed so that it does
What do you legality and unconscionability due to a contract?
Can make avoid or unenforceable. Perla evidence is admissible to prove it legality, and the clause may be excused from an agreement because it is unduly oppressive
How does the parol evidence rule affect consideration?
Parol evidence doesn’t preclude a showing of absence of consideration
- majority: a recital of consideration in the writing can be contradicted because PER doesn’t bar the contradiction of recitals of fact
- minority: the parties are stopped from contradicting the writing or the recital gives rise to an implied promise to pay
What is a sham agreement?
The only promise made by one party in a total integration wasn’t intended to be performed
What is the UCC rule of nonformation?
Do UCC doesn’t speak to when a party can show there was no contract even if there is integration, but when the UCC is silent, common-law should be applied. This has been used to permit evidence of fraud in the inducement even though fraud isn’t mentioned in the UCC PER provision. Court will apply all aspects of the nonformation rule to the UCC cases
Are third-party beneficiaries bound by PER?
Yes, but strangers are not
What is extrinsic evidence?
Prior and contemporaneous statements, but also surrounding circumstances including things like market conditions, evidence of subjective intent, what the party said to each other about meaning, usages, course of dealing, course of performance
What is the plain meaning rule ?
If a writing/term is plain and unambiguous on its face, the meaning is determined from the document without resorting to outside evidence
- is presumed that the parties intended what they expressed, even if they didn’t actually mean that at the time
If the term of an agreement is ambiguous, how does the plain meaning rule deal with that?
Division of authority on whether extrinsic evidence is admissible
- most courts allow counsel to inform the court what the nature of the alleged ambiguity is and what evidence is available to show the actual intended meaning
When ambiguity is found to exist, what happens next?
The evidence is admitted, and the jury determines the meaning
Can parol evidence be admitted in a plain meaning jurisdiction?
Yes to define terms of art that are not generally understood
What is the standard of interpretation according to Williston’s rules?
A reasonably intelligent person acquainted with all operative usages and knowing all of the circumstances prior to and contemporaneous with the making of the integration what attached to the integration or to any disputed term of integration
- excludes what the party said to each other about meaning and what they subjectively believed the writing meant
- this kind of contract takes on a life of its own that is separate from the meaning the parties attached to it. Court is looking for the meaning of the words when they were used, not the intention of the parties
What is the tentative working test?
The party’s intention is what a reasonable person in the position of the other party would conclude the manifestation to me
What is the standard of reasonable expectation?
The meaning the party making the manifestation should reasonably expect the other party to give it
For a non-integration is extrinsic evidence admissible?
All extrinsic evidence is admissible except subjective intent
If the non-integration is ambiguous, can subjective intent be allowed?
Yes
What are three situations that subject of intent is allowed?
A) parties put the same meaning on the word –> contract
B) parties had conflicting understandings about the meaning –> contract based on what the party that is unaware of the ambiguity thinks
C) if there is a conflict on the material term and both parties are guilty/blameless –> no contract
What does Corbins approach/restatement/UCC say about unambiguous integration ?
Extrinsic evidence is allowed regarding meaning, including subjective intent, and what the party said to each other about meaning
Corbin’s approach/restatement/UCC are also partly subjective approaches, meaning what?
Evidence of what the parties intended the language to mean can be introduced
A) parties meant the same thing = contract
B) different understandings = contract will weigh relative fault
C) if one party is more guilty than the other, the meaning of the less guilty party goes
Who decides whether the asserted meaning is susceptible to ambiguity in light of the evidence?
Trial judge
What is standards of preference?
All admissible evidence is put on the record and the rules of interpretation are applied
- in the term is added, it is preferred over a conflicting term
- specific terms are preferred over conflicting general ones
- Express terms then course of performance then course of dealing then trade usage
- it is uncertain whether language is a condition or promise, it is a promise
What is an omitted term ?
When a dispute arises about situations that the parties haven’t agreed on or discussed, and the parties either didn’t foresee it arising or first thought but didn’t make any provision for it
Can parole evidence be used for omitted terms?
Yes to find out if the parties have expressed any intention on the matter extrinsic to the writing
If the courts are dealing with an omitted term, what should they do?
They should supply a term that comports with community standards or find what the parties would’ve included had the anticipated that thing
The meaning of language is thought of as a question of…
Fact
The interpretation of a writing is treated as a question of….
Law before the court because the court thinks that jurors are too unsophisticated to do it
If parole evidence is introduced to help with interpretation the meaning is who to decide?
The jury
What is UCC the Triad?
Trade usage, course of performance, and course of dealing, which are all super important for interpretation
What is course of dealing?
Sequence of previous conduct between the parties that is fairly to be regarded as establishing a common basis of understanding for interpreting expressions and conduct
What is course of performance?
Conduct after the agreement is made that involves repeated occasions for performance with knowledge of the nature of the performance and opportunity for objection to it by the other
What is usage of trade?
Any practice or method of dealing happens so often in a place, vocation , or training, that an expectation that it will be observed is justified
Once a trade usage has been proved, what does that do?
A party that is our should be aware of it is then bound even if they’re ignorant of the usages because everyone in that trade should know them
Each of the trio needs to be evaluated in light of what?
It’s conscionability
What is promissory estoppel?
The promisee has detrimentally, reasonably, and foreseeably relied on a promise, the promise becomes enforceable even though it otherwise wouldn’t be
What are the two UCC substitutes for consideration?
A) merchant’s firm offer rule
B) modification to the contract
What is the UCC’s merchant’s firm offer rule?
if a merchant puts an offer in writing thing it will be held open it will be an even revocable offer for a period of up to three months. It can be open for longer than three months if consideration is given. UCC supplies three month’s worth of consideration as a substitute
How does the UCC deal with modification to a contract?
You don’t have to have consideration for a modified promise as long as it is made in good faith
If you have offer and acceptance and consideration, what do you have?
An enforceable contract
Parol evidence says that if you have a final expression of the agreement, what ?
No prior oral or written negotiations or contemporaneous oral negotiations will be introduced into evidence to vary or contradict the terms of the writing
If you want to raise a defense to the contractor undermine the entire agreement what can you always use?
Parol evidence
If there is an ambiguity, can you always explain it?
Yes and you can use parol evidence to do that
What is the best definition of the parol evidence rule?
A Final agreement supersedes tentative terms discussed in earlier negotiations
What are the big pictures of contract?
Formation (includes offer, acceptance, consideration)
performance
remedies
What is consideration?
Bargained for exchange between the parties to a contract in which both parties have some legal detriment
What is legal detriment?
Giving up something in order to get something better (refrain from doing something you have a right to do, or do something that you don’t have a legal duty to do)
Is the usual measure of legal detriment?
Money exchanged
What is a requirements contract?
Contracted to buy all of your requirements of whatever items from the seller, and the seller agrees to sell that amount to the buyer
What is an output contract?
Contract to sell your entire stock to a buyer and the buyer agrees to purchase it
Because it is difficult to figure out consideration for requirements and output contracts, the seller/buyer must act in…
Good faith
If you make a modification to an agreement, what do you need!
A) CL: consideration
B) UCC: no consideration as long as it is made in good faith
What is a requirements contract?
Contracted to buy all of your requirements of whatever items from the seller, and the seller agrees to sell that amount to the buyer
What is an output contract?
Contract to sell your entire stock to a buyer and the buyer agrees to purchase it
Because it is difficult to figure out consideration for requirements and output contracts, the seller/buyer must act in…
Good faith
If you make a modification to an agreement, what do you need!
A) CL: consideration
B) UCC: no consideration as long as it is made in good faith
