Terms of the K Flashcards

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1
Q

Parole evidence rule

A
  1. Words in the written k: look here first

Parole evidence applies to
ii. the EARLIER words of one or both parties:

b. Overview of PE rule
i. Policy: underlying premise is that the final writing replaces earlier agreements, negotiations and conversations

a. BUT!! the court MAY consider evidence after the written k was signed
i. PE rule doesn’t apply

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2
Q

PE rule vocab

A
  1. Integration: written agreement that court finds is the final agreement, triggers the PE rule
  2. Partial integration: written and final, but not complete
  3. Complete integration: written and final and complete
  4. Merger clause: k clause such as “ This is the complete and final agreement”
    a. persuasive but not conclusive
  5. Parol evidence: only applies to oral and written words that came before the k

d. basic idea
i. cannot introduce more evidence to vary / contradict terms of written k if that k is deemed an integrated agreement.
ii. Lots of exceptions
1. Doesn’t bar evidence of fraud, illegality, undue influence, duress, mistake, conditions precedent, (lack of) consideration, trade usage, course of dealings, industry practice

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3
Q

PE rule if there’s a clerical mistake

A
  1. court MAY however, consider evidene of such terms for the limited purpose of determining mistake in integration
    a. bar exam fave is numerical errors.
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4
Q

PE rule for defenses

A
  1. PE rule doesn’t prevent a court from considering evidence of earlier words of the parties for the limited purpose of determining whether there is a defense to the enforcement of the agreement, like misrepresentation, fraud or duress
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5
Q

Ambiguity and PE rule

A
  1. PE rule allows consideration of evidence of earlier agreements to interpret ambiguous terms
  2. word chicken means both boiling hens and not just fryers
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6
Q

UCC: Conduct as a source of k terms

A

for sale of goods ks may look to

course of performance,
course of dealing,
custom and
trade usage

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7
Q

UCC for terms in sale of goods– determining delivery obligations of seller if delivery is by common carrier

A

a. Delivery obligations of seller of goods if delivery by common carrier- 2 answers

i. Shipment ks—seller completes its obligation
1) gets goods to common carrier 2) makes arrangements for delivery and 3) notifies buyer

ii. Destination ks.
1. means that seller doesn’t complete its delivery obligation until the goods ARRIVE at the destination

iii. Determining whether k is shipment or destination k:
3. FOB of city where seller is–> shipment k.FOB of any other city means destination k.
4. Seller doesn’t complete its obligation until the goods arrive WHERE the FOB city is. can be anywhere.

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8
Q

Risk of loss and the UCC : definition and consequences

A

Risk of loss problem: when goods are damaged after k formed, but before the buyer receives them and neither the buyer nor the seller is to blame.

  1. if risk of loss is on the buyer—he has to pay full price for goods.
  2. if seller has risk of loss- no obligation on the buyer and possible liability on the seller for nondelivery.
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9
Q

Rules for risk of loss (4 rules)

A

agreement, breach, common carrier, catchall (if seller is merchant–> bears risk until delivery; if seller is not merchant–> bears risk until tender)

  1. # 1: Agreement of the parties controls
  2. # 2: Breach: breaching party is liable for uninsured loss even though breach is unrelated to problema. for ex. coffee came with rat shit not due to anyone’s fault. but coffee was 2 weeks late. still put liability on seller who sent coffee late even though that breach had nothing to do with rat shit.
  3. # 3: Common carrier delivery: risk of loss shifts from seller to buyer at time seller completes its delivery obligations
  4. # 4: Catchall—no agreement, no breach, no delivery by carrier:a. If seller is a merchant (doesnt matter what buyer is):
    b. risk of loss shifts from merchant-seller to buyer on the buyers RECEIPT of goods (possession by the buyer),
    c. risk of loss shifts from a nonmerchant seller when he or she tenders the good.
    e. for ex merchant sells stove to be picked up at loading dock, before buyer reaches loading dock lighting strikes the stove.
    i. no agreement, no breach, no common carrier.
    ii. risk of loss is on the seller.

f. contra: nonmerchant sells his stove to be picked up on back porch. stove gets damaged.
i. tender = makes available.
ii. buyer has to pay for damaged stove. b had risk of damaged loss.

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10
Q

Insurable interest and identification

A

In order to aid buyers who bear the risk of loss before receiving goods , Art 2 gives buyers a special property interest in goods as soon the seller sets them aside for the buyer. this special property interest is insurable.

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11
Q

Warranties of quality: express warranty

A

i. Express: look at words that promise, describe or state facts. Distinguish from general sales talk, like an opinion.

Or, look for sample or model
1. for ex: seller showing sample creates warranty that goods will be like sample, guarantee to operate for 2 years, “all steel.”

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12
Q

Implied warranty of merchantability

A

Every sale of goods by a merchant has an implied warranty of merchantabiliy—that the goods are fit for ORDINARY purpose for which such goods are used

  1. Triggering fact: seller is a merchant, SPECIFICALLY IN GOODS OF THIS KIND
    only place in ks
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13
Q

Implied warranty of fitness for a particular purpose

A
  1. Triggering facts: buyer has particular purpose, buyer is relying on seller to select suitable goods, seller has reason to know of purpose and reliance.
  2. Warranty: goods fit for particular purpose.
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14
Q

Limitations on warranty liability: SOL

A

i. SOL: there is a 4 year SOL and generally the statute starts running on possible warranty actions when the tender of delivery is made, NOT when buyer learns of defect.
1. not 4 years from when microwave explodes. 4 years from when purchased.

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15
Q

Limits on warranty liability : privity

A
  1. requirement of privity has been largely eliminated.

3. vertical privity is lacking when the ∆ was not party bc ∆ was remote manufacturer

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16
Q

Limits on warranty liability: buyer’s examination of the goods

A
  1. if buyer examined the goods, no implied warranties as to defects which would be obvious on examination,
  2. examination doesn’t affect express warranties– anything stated or samples shown
17
Q

Limits on warranty liability: Disclaimer

A
  1. express warranties generally cannot be disclaimed.
    a. for ex seller shows buyer a sample. written k says nothing about the sample and has disclaimer.
    b. disclaimer has no effect, because showing sample is an express warranty.
  2. implied warranties of merchantability and fitness can be disclaimed in either of the following ways
    a. conspicuous language of disclaimer mentioning merchantability
    OR selling something “As is” “with all faults
18
Q

Limits on warranty liability: Limits on remedies

A
  1. possible to limit remedies even for express warranties
  2. general test is unconscionability
  3. prima facie unconscionable if breach of warranty on consumer goods causes personal injury.
    a. buyer can recover for personal injury
19
Q

PE and existence of a condition precedent

A

v. Existence of a condition precedent—can introduce PE to show a condition precedent to the existence of a k
like this k would only take effect if XYZ hapened
for ex. we make a contract to paint my hose, condititon precedent is week of sunny weather

20
Q

PE rules and exceptions

A

rules:
full integration: no parol evidence, unless there is an exception. if exception, can be used for any purpose, even to contradict
Merger clauses: “this is a final and complete documents”–> persuasive but not conclusive evidence of full integration. up to the judge to decide if final integration

partial integration: only to supplement, not contradict (even if no exception). if exception, can be used for any purpose

no integration: parol evidence admissible

a. BUT!! the court MAY consider evidence after the written k was signed
i. PE rule doesn’t apply– only applies to words before the written k

exceptions: parol evidence is admissible for any purpose, even to CONTRADICT FULLY INTEGRATED DOCS:
- naturally omitted terms: admissible to show evidence of terms that do not conflict with the integration and that would not be expected to be included in the written instrument
- defenses: can be proven without violating parol evidence rule (misrepresentation, fraud, duress, etc.)
- defect in formation (offer, acceptance, lack of consideration)
- mistake in integration
- ambiguous terms (like chickens means broiling hens)
- clerical mistake
- conditions precedent: to show existence of conditions precedent (ex. earlier oral agreement that buyer only has to pay if x)
- subsequent modification
i. e. can use parol evidence to show there was a subsequent modification
- distinguish SoF requirements: modification must be in writing if modified K within SoF
- UCC: course of performance, course of dealing, and trade usage, are always admissible to explain or supplement a contract’s terms (even without ambiguity)

-PE rule is like evidence, whether something can be considered depends on the purpose for which it is considered.

21
Q

Supplemental “gap filler” terms – if other terms are missing, Art 2 will fill them

A

PPTTA

i. price: reasonable price at the time for delivery
ii. place: seller’s place of business
iii. time of delivery: reasonable time
iv. time for payment: time and place which buyer is to receive the goods
v. assortment: if assortment of goods (like blouses) assortment is at the buyer’s option.
1. if buyer fails to choose, the seller may choose a reasonable assortment or treat the failure as a breach.

22
Q

Warranties summary

A
  • express warranties
  • implied warranty on merchantability (merchants dealing in that kind of good)
  • implied warranty of fitness for a particular purpose

-remember:
SOL (4 yrs)
-privity usu not a req
-buyer’s examination- curtails implied warranties
-disclaimer
-seller limits on remedies– allowed for all warranties. test is unconscionability. pria facie unconscionable if it results in consumer injury