Parol Evidence/ Interpretation

Question 1

What is an Integrated Agreement? (§ 209)

Answer 1

A writing or writings constituting a final expression of one or more terms of an agreement.

Question 2

What is a Completely Integrated Agreement? (§210)

Answer 2

An integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement.

Question 3

What is a Partially Integrated Agreement?

Answer 3

Only additional terms that are consistent with the original document get in (courts decide upon consistency).

Question 4

Exceptions to the Parol Evidence Rule

Answer 4

• Fraud/Mistake
• Formation defects (lack of offer, acceptance, consideration, certainty)
• Pre-contractual defenses (capacity, undue influence, duress,

misunderstanding)

• UCC (course of dealing, course of performance, trade usage)
• Condition precedent to formation
• Collateral agreement (different agreement to something else)

Question 5

Merger Clause

Answer 5

Purpose is that the clause is a statement of complete integration. That the writing is final and complete and which the parties have “adopted.” General Rule: Merger clauses are binding.

Question 6

Collateral Agreements

Answer 6

The fact that the parties have adopted a writing as an integration of one agreement has, of course, no effect on another, entirely separate agreement. Is such an agreement as might naturally be made as separate agreement by parties situated as were the parties to the written contract

Question 7

Course of Dealing

Answer 7

How did they act in previous contracts?

Question 8

Course of Performance

Answer 8

How did they act in the current contract?

Question 9

Trade Usage

Answer 9

How a particular industry will deal with a specific issue/term.

Question 10

Can extrinsic evidence be used? (NY)

Answer 10

A more restrictive approach. If the language is clear no extrinsic evidence is allowed, however, if the language is ambiguous extrinsic evidence may be allowed.

Question 11

Can extrinsic evidence be used? (CA)

Answer 11

Even if the language is clear or ambiguous extrinsic evidence may be allowed. The court will allow extrinsic evidence if it helps prove the intents of the parties. Read as broad as possible.

Question 12

Interpretation First Step

Answer 12

Plain Meaning Rule- what is the plain meaning of the word?

Question 13

Difference between P/E and Interpretation?

Answer 13

P/E word is not in the K Interpretation word is already in

Question 14

Who is contractual ambiguity held against?

Answer 14

The drafter, because should of used more clarity

Question 15

Different ways to interpret contract

Answer 15

• Plain meaning - Language of K: how is word used (may help with intent) - Preliminary Neg. - UCC (trade usage, course of dealings, course of perf.) - Economic terms: assume person wants to make profit

Question 16

Mistake vs Misunderstanding

Answer 16

• Mistake: There is a K, enforceable, but voidable. - Misunderstanding: No MUTUAL ASSENT, parties do not understand terms of K correctly, NO K. (Unless 1 party knows or should know of the others misunderstanding).

Question 17

Implied Warranty: Merchantability; Usage of Trade

Answer 17

Even if not applied in K, still part of K. -Use obj. std if item being used for ordinary purpose - particular purpose: what is customiarly used by public at large

Question 18

Implied Warranty: Fitness for Particular Purpose

Answer 18

For a specific purpose, where the seller knows

Question 19

How to Exclude Implied Warranties?

Answer 19

Parties must agree that the implied warranties do not apply to goods.

Question 20

Implied Warranties

Answer 20

UCC applies in sale of goods unless parties agreed that they do not,

Question 21

Parol Evidence Rule

Answer 21

A rule that precludes any proof that the terms of the contract are other than as expressed in the writing (only applies when there is a writing).

Question 22

Ask these things to determine if P/E evidence applies:

Answer 22

1. Do we have a written agreement? 2. Do the parties want the parol evidence rule to apply? 3. Do we have a partial integration or a complete integration? 4. How do we tell if we have a partial integration or a complete integration?

Question 23

When does the PER apply?

Answer 23

PER applies when an agreement is recorded in writing. One party to the agreement attempts to introduce extraneous evidence (usually oral) to expand on a term of the contract.

Question 24

Steps for PER

Answer 24

(1) Is it a writing? (2) Is there a merger clause If merger clause (easy case) Some Courts put it aside (Minority View) • Only put aside for high volume consumer transactions (Majority View) (ATT) b. If no merger clause (hard case) (3) Intent of the Parties a. Normally and Naturally b. Collateral, Does not Contradict Express or Implied Terms, Not Ordinarily Expected to be Included

Question 25

Difference between Vague and Ambiguous

Answer 25

Vague: Don’t know its meaning Ambiguous: Has 2 or more meanings

Question 26

Agreement (§3)

Answer 26

Manifestation of mutual assent on the part of two or more persons

Question 27

Does the PER preclude oral modifications after the adoption of the written agreement?

Answer 27

No, the PER have no effect on evidence of oral modification that the parties may have made after their adoption of the written version of the K.

Question 28

General Rule for New Market Entrant

Answer 28

His acceptance of the standard must be made to appear, by proving either that he had knowledge of the usage, or the usage is so generally known in the community that his actual individual knowledge of it may be inferred. (Reasonable Time = 1 year)

Question 29

Maxims (Interpretation of Statutes and Contracts)

Answer 29

Ejusdem Generis - Of the same kind

Expressio Unius Est Exclusio Alterius - The expression of one thing is the exclusion of another

Noscitur A Sociis - It is known from its associates

Contra Proferentem - Against its author or profferer

Question 30

Patent v. Latent ambiguous terms

Answer 30

Patent: use interpenetration (reasonable person std) Latent ambiguity: rescind K is a remedy

Question 31

Ejusdem generis

Answer 31

Of the same kind

Question 32

expressio unius est exclusio alterius

Answer 32

the expression of one thing is the exclussion of another

Question 33

contra proferentem

Answer 33

against its author or profferer

Question 34

No Oral Modification Clause

Answer 34

Where the parties state “No oral modification can be made, must be in writing.” Freedom of contract allows parties to change and make oral contract modifications if both parties accept.

Question 35

noscitur a sociis

Answer 35

it is known from its associates

Question 36

Condition precedent before formation of K

Answer 36

Must do something before a contract is formed

Question 37

Restatment 216 Consistent Additional Terms

Answer 37

an agreement is not completly intergrated if the writing omits a consisent additional agreed term which is

a) agreed to for separate considertion; or
b) such term as in the circumstances ight naturally be omitted from the writing.

Question 38

Mitchell Test

Answer 38

collateral agreement: an independent agreement must be 3 things

1) agreement must be collateral
2) must not contradict express or implied provisions of the written contract;
3) it must be one that parties would not ordinarily be expected to embody in the writing

Question 39

Gianni Test

Answer 39

Would certain terms be included normally and naturally in K?

If Yes then PER bars it.

If no then allowed.

Question 40

Reformation

Answer 40

Courts re-write the K

Question 41

Amendment

Answer 41

parties add or change K

Answer 42

Applies to