V. Determining the Terms of the Contract Flashcards
General Rules of contract construction
- Construed as a whole–subordinate specific clauses to get general contract intent
- construe words according to their ordinary meaning unless it is clearly shown they meant to be used in technical sense
- if inconsistent, written or types provisions will prevail over printed provisions
- look to see waht custom and usage is in the particilar busines and local
- try to reach a determination that contract is valid and enforceable
- ambiguities in contact are cnostured agasint the party preparing the contract, absent evidence of the intentnion of the parties
Parol Evidence Rule–Supplementing Explaining or Contradicting Terms
when parties to a K express in writing with itnet that it embody final expression of bargain, any other expression made prior to writing, as well as contemporanous with the writing are inadmissible to vary the terms of the writing
Is the writing an Integration?
To determine:
- Is the writing intended as a final epxression? more complete, more likely to be an integration
- Is the writing a complete or partial integration? If it contains a merger clause reciting that the agreement is complete on its face, clause strengthens presumption that all negotations were merged
Who decides whether it is an integration?
The jduge in the majority
Corbin Test
- Majority
- specific circumstances of transaction involved and asks whether parties like these, situated as they are, would naturally and normally include in their writing the extrinsic matter that is sought
- if peopel like thsese would normal include extrinsic matter, it will be excluded
Extrinsic Evidence OUtside Scope of Rule/Where Parol Evidence Does not Apply
- other forms of extrinsic evidence that does not seek to vary, contradict or add to integration, can be brougth in
- Attackign Validity: can attack the validity that the agreement never cam into being b/c of formatin defects or conditions precedent–can show extrinsic evidence
- INterpretation: if there is uncertainty or ambiguity in the written agreement’s terms or a dispute as to the meaning of those terms, parol evidence can be received to aid the fact finder. If plain–nope
- True Consideration: showing that true consdieration is paid
- Reformation: alleging (mistake) that reformation
Collateral Agreements and Naturally Omitted Terms
Naturally Ommited Terms:
allows evidence of terms that would naturally be ommited from the written agreement. Nat. Omit. if:
- it does not conflict with the written integration AND
- it concerns a subject that similarly situated parties would not ordinarily be expected to include in the written instrument
Subseuqnt Modifications
Parol evidence not applicable to subsequent modifications
Article 2 Rule
follows same general rules but says a party cannot contradict a written K but may add consistent additional terms unless
1) there is a merger clause OR
2) courts find from all circ that the writing was intended as a complete and exclusive
WRitten K terms may be explained by the following whether or not ambigous
1) parties couse of dealing (previous transactions)
2) usage of trade
3) course of perfomance (repeated occasions for performance)
Battle of the Forms/Art 2
K can be formed even though terms of accepts do not match. Specific rules for determining what terms are cinlucde in K
- K involving a nonmerchant–>terms of offer govern
- Contracts between Merchanges–>additional terms in acceptaance usually included UNLESS
- materially alter the original terms
- offer expessly limits acceptance to terms of offer
- offeror has already objected or objects w/in reasonable time
- Contrants between Merchants–> diff terms in acceptance may or may not be included
- split over terms that are different rather than jsut in addition to
- Some follow previosu rule while others do knockout rule–get rid of the conflicting terms–gaps filled by UCC
Supplemental Gap Filler Terms
Those terms missing filled by this
- Price: 1)if nothing has been said; 2) price is left open to be agreed upon by parties and they fail to agree OR 3) price is to be fixed in terms of some standard set by 3P and it is not; then it is the REASONABLE PRICE AT TIME OF DELIVERY
- Place of Delivery: selleer’s palce of business if he has one or if not, his home
- Time for SHipment or Delivery: reasonable time
- Time for Payment: time and place at which buyer is to receive goods
- Assortment: at the buyer’s option. If does not, other party is excused from delay and may proceed reasonably or treat as breach
Noncarrier case
- sale in which it appears parties did not intend the goods would be moved by a common carrier.
- if seller is merchant, risk of loss passes to buyer only when she takes physical psosession
- if not merchant, risk passes to buuyer upon tender of delivery
Carrier Case
- Sale in which it appears parties intended good to be moved by a carrier
- Shipment Contract: authorizes or requires seller to ship good but does not require a particular destination. Passes to buyer once delivered to carrier
- absent evidence, all K assumed to be this under art 2
- Destination K: rewquires seller to deliver at particilar destiation, risk of loss passes when goods are tendered to buyer at destination
- Shipment Contract: authorizes or requires seller to ship good but does not require a particular destination. Passes to buyer once delivered to carrier
- Common Delivery Terms
- CIF Cost insurance and freight (shipment K
- C&F cost and freight (shipment)
- FAS–free alongside (boat–risk passes when dleivered to dock)
- FOB–Free on board (at named location)
Defective Goods
if so defecitve that has right to reject, risk of loss does not go to buyer until they are cured or she accepts despite defects
Revocation of Acceptance
Risk of loss is treatsed as having rested on seller from beginning to the extent in any deficincy in buyer’s insurance if buyer rightfully revokes
