Terms of the Contract

Question 1

Contracts are construed as a _____________.

Answer 1

whole

Question 2

Courts will construe words according to their _____________

Answer 2

ordinary meaning

Question 3

If provisions appear to be inconsistent, what kind of terms will previal?

Answer 3

written or types provisions will prevail over printed provisions.

Question 4

Courts try to find that a contract is _____________

Answer 4

valid and enforceable.

Question 5

Ambiguities in a contract are construed against _____________

Answer 5

the party preparing the contract.

Question 6

Parol Evidence Rule

Answer 6

expressions made prior to the writing of a contract, whether oral or written, as well as oral expressions contemporaneous with the writing, are inadmissible to vary the terms of the writing.

Question 7

When is a writing an integration?

Answer 7

When it is written and both parties intend it to be the embodiment their final expression of assent.

Question 8

If an integration is partial, can it be changed?

Answer 8

yes, but only with additional, consistent terms.

Question 9

The UCC presumes all writings are ____________.

Answer 9

partial integrations.

Question 10

What is a merger clause?

Answer 10

recites that the agreement is the complete agreement between the parties.

Question 11

It a merger clause definitive proof of a contract being formed?

Answer 11

No, it is one of several factors considered by a court.

Question 12

Does the parol evidence rule prevent a party from introducing extrinsic evidence challenging the validity of a contract?

Answer 12

No, because challenging the validity of a contract does not involve the integration; i.e. involve the terms of the contract in the writing.

Question 13

Where words of a contract are ambiguous, can a party introduce extrinsic evidence to assist the court in interpreting the terms?

Answer 13

Yes. The parol evidence rule does not prevent the introduction of extrinsic evidence to assist in the interpretation of an ambiguous term. It only prohibits evidence whose introduction is meant to *change the terms of the contract.

Question 14

Plain Meaning Rule

Answer 14

where the terms of a contract are plain and understandable, even if mistaken, they will not be disturbed.

Question 15

What kind of terms are allowed to be entered into a gap in a contract for the sale of goods?

Answer 15

terms regarding price, the place of delivery, time for delivery, time of payment, assortment, etc.

Question 16

What is a noncarrier case under the UCC?

Answer 16

a sale in which the parties did not intend that the goods be delivered by way of common carrier.

Question 17

When does the risk of loss transfer to the buyer in a noncarrier case where the seller is a merchant?

Answer 17

when the buyer takes physical possession of the goods, not when they are delivered.

Question 18

When does the risk of loss transfer to the buyer in a noncarrier case where the seller is a non-merchant?

Answer 18

when the goods are delivered.

Question 19

What is a carrier case under the UCC?

Answer 19

a sale where the parties intended the goods to be delivered by way of common carrier.

Question 20

What are the two types of carrier cases under the UCC?

Answer 20

shipment contracts and destination contracts.

Question 21

Shipment Contract

Answer 21

a contract which requires the seller to ship the goods by common carrier but does not require him to deliver them at a particular destination.

Question 22

Destination Contract

Answer 22

a contract which requires the seller to ship the goods by common carrier and to deliver them to a particular location.

Question 23

When does the risk of loss transfer to the buyer in a shipment contract?

Answer 23

when the goods are delivered to the carrier.

Question 24

When does the risk of loss transfer to the buyer in a destination contract?

Answer 24

when the goods are tendered to the buyer at the destination.

Question 25

If goods are nonconforming, the risk of loss is on the __________.

Answer 25

seller

Question 26

Warranty of Title

Answer 26

an automatic warranty arising in sales of goods by any seller saying that title is good and that the transfer is rightful.

Question 27

Warranty Against Infringement

Answer 27

a merchant seller regularly dealing in goods of the kind sold automatically warrants that the goods are delivered free of any patent, trademark, etc.

Question 28

Implied Warranty of Merchantability

Answer 28

implied in every contract by a merchant that the goods are merchantable; i.e. fit for the ordinary purpose for which such goods are used.

Question 29

Implied Warranty of Fitness for a Particular Purpose

Answer 29

a warranty which arises impliedly in a contract for the sale of goods whenever any seller, merchant or not, has reason to know the particular purpose for which the buyer is buying the goods and that the buyer is relying on the seller’s expertise and judgment. The buyer must actually rely.

Question 30

Any sample, demonstration, or description of the goods to the buyer by the seller creates an ________________.

Answer 30

express warranty.

Question 31

Does a seller’s opinion of goods count as an express warranty?

Answer 31

No.

Question 32

A contract cannot be modified unless the modification . . .

Answer 32

is supported by new consideration.

Question 33

Does the UCC require new consideration when the contract is modified?

Answer 33

No, if the modification is made in good faith.

Question 34

When can a contract for non-goods be modified without tendering new consideration?

Answer 34

where there are unforeseen circumstances and the modification is fair and equitable.

Question 35

Can a written contract be modified orally?

Answer 35

Yes, but if the contract as modified would place it within the statute of frauds, the modification must be written.

Question 36

A common law contract contains a provision which prohibits oral modification. What result?

Answer 36

the clause is ineffective. Even where a written contract states that it can only be modified by writing, it is still capable of being modified orally.

Question 37

A sale of goods contract contains a clause stating that it can only modified by a writing. What result?

Answer 37

It is effective. Under the UCC, clauses prohibiting the modification of a contract except through a writing is effective.

Question 38

When will a sale of goods contract which requires that it only be modified by a writing but which is orally modified be held effective?

Answer 38

despite the clause requiring a written modification being valid under the UCC, the modification will be given effect if the other party changed position in reliance on the oral modification.