Part B--Interpretation, Parol Evidence Flashcards
UCC Implied Warranties
1) Warranty of Title + Against Infringement = warrant good title, rightful transfer, + no liens
2) Warranty of Merchantability= goods fit for ordinary purpose
3) Warranty of Fitness for a Particular Purpose = fit for purpose buyer intends to use
Not every contract has–esp. important re: merchants
Warranty of Title and Against Infringement
Implied warranty that good title, rightful transfer, + no liens/sec. interests
Warranty of Merchantability
UCC–IF seller is merchant with respect to goods of that type THEN Implied warranty that goods fit for ordinary purpose for which used (ex. if sell knives–warrant knives won’t break)
ONLY if merchant of that type of goods–N/A if not merchant, one-off, not usual type
Disclaimer of Warranty of Title + Against Infringement
1) specific lang OR if
2) buyer has reason to know otherwise
Disclaimer of Warranty of Merchantability
Oral or written language mentioning “merchantability”
In writing = must be conspicuous
Warrant of Fitness for a Particular Purpose
IF seller has good reason to know
1) Purpose for which goods req. AND
2) Buyer relying on seller’s skill/judgement re: goods
THEN
Implied warranty that goods sold fit for purpose
Disclaimer of Warranty of Fitness for a Particular Purpose
In writing with conspicuous language
Exclusion of all warranties
Can do via
1) Express statement (ex “no warranties apply”) OR
2) Language plainly puts buyer on alert that no implied warranty OR
3) Course of dealing, course of performance, trade usage OR
4) Buyer fully examined goods before entering contract OR refused AND defects would have been apparent if inspected
Express UCC Warranties
Affirmation of fact or promise + part of basis for bargain = express warranty that goods will conform to affirmation/promise
Description of goods + part of basis = e. warranty that goods will conform to description
Sample or model + part of basis = e. warranty that goods will conform to sample/model
EVEN IF don’t explicitly say “warrant”, etc. –still have
Damages for breach of warranty
Difference between value of goods at time accepted vs. value would have been worth if as warranted
Place of Delivery Gap Filler (UCC)
Seller’s Place of Business
Price Gap Filler (UCC)
R. price at time of delivery
Time Gap Filler (UCC)
Reasonable time
Price Gap Filler (CL)
Typically quantum meruit–r. value of services rendered
Contra Proferentem
Ambiguous terms are interpreted against the party who supplied the term
Doctrine of Reasonable Expectations
Even if term not ambiguous–will be interpreted vs. drafting party if conflict w/ r. expectations of other party
Order for Interpretation of Ambiguous Terms
Course of Performance–> Course of Dealing –> Trade Usage
Parol Evidence Rule Exceptions
1) Subsequent Agreements
2) Collateral Agreements
3) Evidence that Written Agreement Invalid/Unenforceable
4) Failure of Condition Precedent
5) Reformation
Course of Performance v. Course of Dealing
Course of performance = actions w/in same contract (ex. prior shipments knowingly accepted)
Course of dealing = actions in prior contracts/interactions– (ex. made this sort of contract before, + did x)
Reformation
MUST show c + c evidence that
1) Prior valid agreement AND
2) Incorrectly reflected in writing (ex. by mistake)
Idea–writing doesn’t reflect actual contract (ex. clerical error)
Remedy–contract rewritten w/ correct terms
Exception to parol evid. rule
Fully/Partially Integrated
Parties meant for terms in contract to be final–but can have other provisions not mentioned
CAN introduce evidence that supplements agreement, so long as doesn’t contradict
Completely Integrated
Parties meant for contract to be complete + exclusive statement of all terms
CANNOT introduce evidence that supplements agreement
CAN introduce evidence re ambiguous terms, course of performance/dealing, trade custom
Partially v. Completely Integrated
Partially = can introduce extrinsic evidence re: terms, as long as don’t contradict
Completely = cannot look outside 4 corners, introduce extrinsic evidence re: supplemental terms
Complete Integration Factors
Look at totality of the circum
Most important– merger clause? saying that this is “complete + entire agreement or equiv.
Some cts–merger clause conclusive–have = completely integrated
Other courts–persuasive–also look at level of detail, length, etc.
Non-Carrier Cases
Parties not moving goods via common carrier (i.e. not shipping)
UCC = seller must tender delivery
Carrier Cases
Parties intend for goods to be moved by common carrier–i.e. shipped
UCC =
Shipment contract (default)–only need to give goods to carrier, make appropriate arrangements, + notify buyer
Destination contract–have responsibility to ensure goods get to particular destination
F.O.B.
Free On Board
FOB [place] –> place = delivery pt
FOB [seller] = shipment contract
FOB [buyer] = destination contract
F.A.S.
Free Alongside
Seller must deliver goods alongside vessel in manner usual at port of delivery OR buyer-designated dock, AND must give receipt
Risk of Loss (Carrier Cases)
Default = buyer liable once goods given to carrier (shipment contract)
Exception: contract req. seller to deliver goods to x location (destination contract)
Risk of Loss (Non-Carrier Cases)
Seller merchant–passes to buyer when buyer takes possession of goods
Seller non-merchant = passes to buyer on tender of delivery
