Terms? Flashcards
A K is not rendered invalid b/c one party has the right to cancellation while the other does not
Laclede
Traditional rule: A modification of a K is itself a K, which is unenforceable unless supported by consideration on
both sides
Angel
UCC Rule: An agreement modifying a K for the sale of goods needs no consideration to be binding
UCC Rule
(Exception to Baseline Rule): Enforce modification, even if don’t have consideration on both sides, if:
- Parties voluntarily agree
- The promise modifying the original K was made before K fully performed on either side
- Underlying circumstances which prompted the modification were unanticipated by the parties
- Modification is fair/equitable
RS 89/Angel
A condition can be waived by one party to the K if:
- Known/voluntary relinquish of right
- The condition in the K is solely there to benefit the party waiving that condition
- The condition is not a material part of the agreed exchange (immaterial term)
- A waiver condition needs to be express/explicit
West
A condition can be waived and withdrawn if:
- Other party receives notification of withdrawal of waiver while there is still reasonable time to cause the
condition to occur or an extension is given - The reinstatement of the condition is not unjust because of a material change of position by the other
party
RS 84
Subjective Theory of K Formation
No assent or K unless there is an actual meeting of the mind (subjectively both parties understood the terms to mean that same thing)
Objective Theory of K Formation (Dominant Theory)
Assent is determined based on what party says/does, not what thought
If party manifests assent, there is assent
Principle I
If the parties subjectively attach different meanings to an expression, neither party knows that the other attaches a different meaning, and the two meanings are not equally reasonable, then the more reasonable meaning prevails
Principle II
If the parties subjectively attach different meanings to an expression, neither party knows that the other attaches a different meaning, and the two meanings are equally reasonable, neither meaning prevails
(may have no K if cannot fill hole)
Principle III
If the parties subjectively attach the same meaning to an expression, that meaning prevails even though it is unreasonable
Principle IV (information forcing rule)
If the parties, A and B, attach different meanings, alpha and beta, to an expression, and A knows that B attaches meaning beta, but B does not know that A attaches meaning alpha, the meaning beta prevails even if it is less reasonable than meaning alpha
Mental assent of parties is not requisite for the formation of a K
Lucy
If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is
immaterial except when an unreasonable meaning which he attaches to his manifestation is known to the other
party
RS 71
Courts look to outward expression of person as manifesting his intention rather than to his secret and unexpressed
intention
Lucy
A person cannot set up that he was merely jesting when his conduct and words would warrant a reasonable person in believing that he intended a real agreement
Lucy
Meaning consistent with trade usage is the reasonable one
Sprucewood
Other party starts to perform K but falls in SoF and does not satisfy SoF b/c party has not signed (party w/
defense), party with defense wants out – have SoF defense – K not enforceable o
Other party can get one of three remedies out of court (Court decides)
- Reliance damages
- Restitution – value other party conferred upon SoF defense party that they did not deserve (get
unjust enrichment back) - Expectation damages – measure value of what conferred
To determine what term interpretation is reasonable, look to trade usage
Exception: When other party is a neophyte to the trade (not a member)
Exception to exception: If you had actual knowledge of trade usage or term so generally known
Frigaliment/Chicken
To determine reasonableness, look at:
- Trade usage
- Realities of the market/market price
- Dictionary
- Testimony at trial
Frigaliment/Chicken
Gap filler rule: Look at intent/shared purpose to try to fill the hole
Spaulding
Every instrument in writing to be interpreted:
- With a view to the material circumstances of the parties at the time of the execution
- In the light of the pertinent facts within their knowledge
- And in such a manner as to give effect to the main end designed to be accomplished
Spaulding
A written K is usually enforced in accordance with the ordinary meaning of the language used in them and without recourse to evidence beyond the K itself as to what parties meant
Beanstalk
Parol Evidence Rule- applies to written K only
- Is there an integrated agreement? (Is the K the final statement/agreement about something/not everything)
- Is agreement partially integrated or completely integrated?
-Complete/total integration (full complete final statement of everything): Can’t let parol evidence in – no additional terms – neither party can
present evidence that part of our agreement was this thing that isn’t in
the written K
- Partial integration (final statement of some things): Can bring in evidence of consistent terms (inconsistent terms out) – does not contradict the written K
- Exception: can introduce parol evidence to clarify ambiguity
Hayter
