Terms of the Contract

Question 1

Which two facts should trigger your use of the parole evidence rule?

Answer 1

Final written k

Earlier words of one or both parties

Question 2

In PE parlance, what is an integration?

Answer 2

A written agreement that the court finds is in the final agreement. It triggers the parole evidence rule

Question 3

In PE parlance, what is partial integration?

Answer 3

Witten and final, but not complete

Question 4

In PE parlance, what is complete integration?

Answer 4

Written, final, and complete.

Question 5

In PE parlance, what is is a merger clause?

Answer 5

A contract claus such as “this is the complete and final agreement.”

Question 6

What is parole evidence? (3)

Answer 6

Oral or written

Words of party/parties

Before integration (i.e., before the agreement was put in written form)

Question 7

For what purpose can evidence of earlier agreements not be admitted under the PE rule?

Answer 7

Contradicting the terms in the written k.

Question 8

S contracts in writing to sell B 1200 chickens/month for 12 months. S delivers, but B claims that S told him just as they were signing the k that S would deliver as many chickens as B needs during the 12-month period, and offers evidence of pre-k faxes from S supporting this claim?

Can the court consider this evidence? Explain

Answer 8

No. Evidence of earlier agreements cannot be used to contradict the terms of written in the k.

Question 9

S contracts in writing to sell B 1200 chickens/month for 12 months. S delivers, but B claims that S told him after the k was executed that S would deliver as many chickens as B needs during the 12-month period, and offers evidence of post-k faxes from S supporting this claim?

Can the court consider this evidence? Explain

Answer 9

Yes. This is not PE at all because it occurred post-k. It can be considered.

Question 10

When may a court consider earlier agreements as evidence contradicting the written k?

Answer 10

For the purpose of determining whether there was a mistake in integration.

Question 11

S contracts in writing to sell B 1200 chickens/month for 12 months. Various earlier letters state that the deal is that S will deliver 2100 chickens/month for 12 months. If B sues for breach of k for delivering only 1200 chickens, can this evidence be considered for the purpose of determining whether there was a mistake in putting the agreement in writing? Explain.

Answer 11

Yes. A court may consider earlier agreements as evidence contradicting the k when it is for the purpose of determining whether there was a mistake in integration.

Question 12

Does the PE Rule prevent a court from considering evidence of earlier words of the parties for the purpose of determining whether there is a defense to the enforcement of the agreement, such as misrepresentation, fraud, or duress?

Answer 12

No

Question 13

S contracts in writing to sell B 1200 chickens/month for 12 months. B claims that S told him just as they were about to sign that S would deliver as many chickens as B needs during the term, and offers evidence of pre-k faxes supporting this claim.

If B sues for recission, can the court consider this evidence for the purpose of determining whether there is a misrepresentation defense to enforcement? Explain.

Answer 13

Yes.

PE Rule permits a court to consider evidence of earlier words of the parties for the purpose of determining whether there is a defense to the enforcement of the agreement, such as misrepresentation, fraud, or duress.

Question 14

Does the PER permit a court to consider evidence of earlier agreements to resolve ambiguities in the written k?

Answer 14

Yes.

Question 15

S contracts in writing to sell chickens to B. B contends that the word chickens in the k means only fryers, while S contends that it included boiling hens. Can the court consider evidence of pre-k statements by B and S as to what they mean by the word “chickens”? Explain.

Answer 15

Yes.

PER permits a court to consider evidence of earlier agreements to resolve ambiguities in the written k

Question 16

Does the PER permit a court to consider evidence of earlier agreements as a source of consistent, additional terms if the written agreement was a complete integration?

Answer 16

No.

Question 17

The PER prevents a court from considering evidence of earlier agreements as a source of consistent, additional terms UNLESS the court finds . . . (2)

Answer 17

That the written agreement was only a PARTIAL integration OR

The additional terms would ordinarily be in a separate agreement.

Question 18

What are the 5 most common PER fact patterns?

Answer 18

Chaning/contradicting terms in the written deal

Mistake in integration

Defenses

Ambiguity

Adding to the written deal

Question 19

In which two situations will a court permit introduction of PE to add to the written deal?

Answer 19

That the written agreement was only a PARTIAL integration OR

The additional terms would ordinarily be in a separate agreement.

Question 20

Can conduct be a source of k terms?

Answer 20

Yes

Question 21

On the bar, conduct that provides the source of k terms take one of three forms:

Answer 21

Course of performance

Course of dealing

Custom and usage to explain words in contracts or to fill gaps

Question 22

S contracts to sell 1200 chickens/month to B for 12 months. The first three shipments are boiling hens, and B does not complain.

On the fourth shipment, B complains and says that the deal is for 2,100 chickens, not 1,200. S responds by saying that B’s conduct provided the terms of the contract. What sort of argument has S set forth?

Answer 22

Course of performance

Question 23

S contracts to sell 1200 chickens/month to B for 12 months. Under prior chicken contracts, S sent B boiling hens and B never complained.

Suddenly, under this k, B is complaining that the contract is for fryers. S responds by saying that the deal is for boiling hens. What sort of argument?

Answer 23

Course of dealing

Question 24

S contracts to sell 1200 chickens/month to B for 12 months. S sends boiling hens, but B argues that the word chicken meant fryers.

S points out that it is customary in the chicken industry to use the word chicken when the deal covers up to six pounds of chickens, including boiling hens.

What sort of argument?

Answer 24

Custom and usage to explain words in contracts or to fill gaps

Question 25

If there is an agreement as to place of delivery by a common carrier in a goods deal, the question is: what does the seller have to do complete its delivery obligation. What are the two possible UCC answers to that question?

Answer 25

Shipment contracts

Destination contracts

Question 26

What does it mean for a sale of goods to be a “shipment contract” as far as a delivery obligation is concerned? The seller completes its delivery obligation when . . . (3)

Answer 26

Goods get to a common carrier

Seller makes reasonable arrangements for delivery

Seller notifies the buyer

Question 27

S, a Texas pet store, contracts to deliver X goods to B, a Buffalo pet store. What are S’s delivery obligations if this is a shipment k?

Answer 27

Goods get to a common carrier

Make reasonable arrangements for delivery

Notify the buyer

Question 28

What does it mean for a sale of goods to be a “destination contract” as far as a delivery obligation is concerned? The seller does not complete delivery until . . .

Answer 28

The goods arrive at their destination.

Question 29

What acronym is often used with shipment and destination contracts?

Answer 29

FOB

Question 30

When FOB is followed by the city where the seller or the goods are, this means what type of k?

Answer 30

Shipment k

Question 31

When FOB is following by any other city other than where the seller or goods are, it is what type of k?

Answer 31

Destination k

Question 32

S, a Texas pet store, contracts to deliver X goods to B, a Buffalo pet store. The k prives for the shipment of X to Chicago FOB Chicago.

What type of k? When will the seller’s delivery obligation be complete?

Answer 32

Desintation k.

When the goods arrive in Chicago.

Question 33

What three elements are present in a Risk of Loss problem?

Answer 33

Contract has been completed, but they buyer has yet to receive the goods

The goods are damaged or destroyed

Neither the buyer or seller is to blame.

Question 34

What should we think of when we think risk of loss?

Answer 34

A merchant in a small town who ordered coffee. In transit, the coffee became infested with rats.

Question 35

What is always irrelevant when dealing with risk of loss problems?

Answer 35

Title

Question 36

What is the first rule governing risk of loss?

Answer 36

Agreement of the parties controls.

Question 37

If there is no agreement addressing risk of loss, who is liable? To what extent?

Answer 37

Breaching party

Liabile for any uninsured loss EVEN though the breach is unrelated to the problem

Question 38

A merchant in a small town who ordered coffee. In transit, the coffee became infested with rats. The coffee is delivered two weeks late. Who is liable, to what extent, and why?

Answer 38

Seller is liable for the uninsured loss.

The breach (late delivery) is unrelated to the problem (rats in coffee), but that doesn’t matter.

Question 39

What is the common carrier rule of risk of loss?

Answer 39

Risk of loss shifts from seller to buyer at the time the seller completes its delivery obligations.

Question 40

When and only when does the “catch all” rule of risk of loss come into play?

Answer 40

When there is no agreement, no breach, and no common carrier involved.

Question 41

What is the determining factor (assuming there is no agreement, no breach, and no common carrier involved) in applying the “catch all” rule of risk of loss?

Answer 41

Whether the seller is a merchant.

Question 42

Risk of loss shifts from a merchant-seller when? From a non merchant seller when?

Answer 42

MS - when the buyer is in receipt

NMS - when he or she tenders the goods

Question 43

B buys a stove from S, a used appliance dealer. S tells B that he can pick up the stove at the loading dock. Before B can drive his truck to the dock, lightning strikes the stove. Does B have to pay for the damaged stove? Explain.

Answer 43

No. This is a merchant seller, so the risk of loss shifts only when the buyer is in receipt.

Question 44

Express warranties are words that promise, describe, or state _____.

Answer 44

Facts

Question 45

What does an implied warranty of merchantability say?

Answer 45

That the goods are fit for the ordinary purpose for which such goods are used.

Question 46

What is the triggering fact as to whether there is an implied warranty or merchantability?

Answer 46

Whether the seller is a merchant (deals in goods of that kind)

Question 47

What does it mean to be a merchant in the implied warranty of merchantability context?

Answer 47

The seller deals in goods of that kind

Question 48

Conviser buys a “gold” chain from Golden Fleece Jewelry Store. Nothing was written or said about the chain. When Conviser puts the new chain on, his seven chest hairs fall out. Can Conviser recover from seller on a breach of warranty theory? Explain.

Answer 48

Yes, on an implied warranty or merchantability theory.

Golden Fleece is a merchant in the sense that it deals in goods of the same kind as were sold to Conviser.

Question 49

What are the three elements of an implied warranty of fitness?

Answer 49

Buyer has a particular purpose

Buyer is relying on seller’s expertise to select suitable goods

Seller has reason to know of the purpose and buyer’s reliance.

Question 50

Bubba Conviser, Richard’s country cousin, tells a clerk at the store that he needs some shoes to wear to interviews on Wall Street. The clerk shows and sells Bubba a pair of white, patent leather loafers. The Wall Street lawyers take one look at Bubba’s shoes and terminate the interview.

Is there an implied warranty of fitness? Explain.

Answer 50

Yes.

Buyer has a particular purpose

Buyer is relying on seller’s expertise to select suitable goods

Seller has reason to know of the purpose and buyer’s reliance.

Question 51

Bubba Conviser, Richard’s country cousin, tells a clerk at the store that he needs some shoes to wear to interviews on Wall Street. The clerk shows and sells Bubba a pair of white, patent leather loafers. The Wall Street lawyers take one look at Bubba’s shoes and terminate the interview.

Did the clerk breach an implied warranty of fitness? Explain.

Answer 51

Yes. The goods weren’t suitable for Bubba’s particular purpose.

Question 52

Bubba Conviser, Richard’s country cousin, tells a clerk at the store that he needs some shoes to wear to interviews on Wall Street. The clerk shows and sells Bubba a pair of white, patent leather loafers. The Wall Street lawyers take one look at Bubba’s shoes and terminate the interview.

Is there an implied warranty of merchantability? Explain.

Answer 52

Yes. Bubba is buying shoes from a shoe store, so the seller is a merchant.

Question 53

Bubba Conviser, Richard’s country cousin, tells a clerk at the store that he needs some shoes to wear to interviews on Wall Street. The clerk shows and sells Bubba a pair of white, patent leather loafers. The Wall Street lawyers take one look at Bubba’s shoes and terminate the interview.

Did the clerk breach an implied warranty of merchantability? Explain.

Answer 53

No.

An implied warranty of merchantability guarantees that the goods are simply fit for a particular purpose. Here, the shows are fit to be worn.

Question 54

What is the SOL on warranty liability?

Answer 54

4 years

Question 55

When does the SOL on warranty liability begin to run?

Answer 55

When the tender of delivery is made, not when the buyer learns of the defect.

Question 56

Do implied warranties cover defects that would be obvious on examination?

Answer 56

No.

Question 57

Can express warranties be disclaimed?

Answer 57

No, generally not.

Question 58

Can implied warranties of merchantability and fitness be disclaimed?

Answer 58

Yes

Question 59

In which two ways can implied warranties of merchantability and fitness be disclaimed?

Answer 59

Conspicuous language of disclaimer

Language like “as is” or “with faults”

Question 60

What is the classic example of an express warranty?

Answer 60

Use of a model or sample product

Question 61

B buys a big screen TV “as is” from S TV store. Shortly after B turns the TV on in her home, it explodes. Can B sue S for breach of the implied warranty of merch? Explain.

Answer 61

No. Implied warranty was disclaimed through use of “as is”

Question 62

Can a seller limit remedies for breach of express warranty?

Answer 62

Yes.

Question 63

Using “as is” or “with all faults” has no effect as to which type of warranty?

Answer 63

Express warranties.

Question 64

B buys an oven from S. The k provides that “all operating parts are guaranteed for 2 years” and “warranty liability shall be limited to replacement parts.” A defective heating element causes a fire which destroys $100 worth of B’s property. If B sues S for breach, what can B recover?

Answer 64

Merely the replacements parts.

Question 65

A “course of __________” is a sequence of conduct between the parties to a particular transaction that exists if: (1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.

Answer 65

Performance

Question 66

A “course of ___________” is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

Answer 66

Dealing