Week 4 - Test 1 Flashcards
rules that are applied to resolve contract disputes and to determine parties’ intentions
Rules of Construction
6 basic components of a contract
- identifications
- recitals
- consideration
- definitions
- body
- signatures
4 things the identifications section of a contract includes
- title
- identity of parties
- how parties will be referred to
- date of signing
Use the (1) to get accurate, up to date information on companies
Office of the Secretary of State
short statement that provide background or explain the reasons for the contract ; not technically part of the contract
recitals
a reference to an outside document, making that document part of a contract
incorporation by reference
If including a list of (1), it is extremely important to use them consistently throughout the contract
defined terms
2 things thte body of the contract describes
- obligations of the parties
2. consequences of failure to meet those obligations
Signatures will have to be witnessed by a (1) if the contract will be (2). These can serve as (3) in court.
- notary public
- recorded
- testimony
person authorized by state to administer oaths, certify deocuments, attest to the authenticity of signatures, and perform other official acts
notary public
to file a document with the official charged with keeping documents such as deeds and judgments
record
complies with formalities and can serve as testimony in court
self-proving document
a writing, intended by the parties to be a final embodiment of their agreement, cannot be modified by evidence that adds to, varies, or contradicts the writing. Assumes that what went on before the writing of the contract is irrelevant.
parol evidence rule
final and complete agreement
integrated
contract provision stating that the document is the complete and final statement of agreement
merger clause
5 questions that should be asked regarding parol evidence rule
- Was the contract integrated?
- Does oral evidence contradict contract or clarify it?
- Does the oral evidence show some way the contract may be void or voidable?
- Was there a separate/subsequent agreement (supported by consideration)?
- Does evidence indicate the existence of a condition precedent, such that agreement may never have become effective?
a separate, later agreement that changes or modfies the original agreement
subsequent agreement
Rules of construction: In choosing an interpretation of a contract, courts generally favor the (1). They also favor an interpretation that results in an (2). (3) are very important in establishing intent.
- party who drafted the contract (generally the offeror)
- effective contract
- Previous dealings
Rules of construction: Words are generally given their (1) unless another intention is clear. Courts will also frequently look at (2) to ascertain intent. (3) are generally interpreted to make sense with the rest of the agreement.
- commonly accepted meanings
- surrounding circumstances
- Disputed terms
Rules of construction: (1) terms govern over (2) terms. Terms negotiated (3) govern over (4). (5) terms govern over (6). (7) figures govern over (8).
- Specific
- general
- individually
- boilerplate
- Handwritten
- preprinted
- Spelled out
- numbers
“Standard” contract language used in many contracts without adaptations to individual circumstances
boilerplate
Never (1) the original of a contract.
unstaple
automatic renewal provisions in a contract, for which notice must be given to avoid renewal
evergreen clauses
Keep a good eye one (1) privisons, also called escalation/de-escalation clauses.
- indexing
Activity conduced to find security interests in personal property that have been recorded under UCC Article 9
UCC Search
Account held for the benefit of others, into which parties typicall deposit documents, instructions, and funds for a transfer of property
escrow
transfer of interst in property or some right (contractual entitlement) to another
assignment
evidence that property is security for debt, typically filed with the secretary of state
UCC Financing Statement (lien)
warranties created by the written or spoken word, demonstration, or depiction of a product
express warranties
an implied wwarranty, given by a merchant seller, that goods are fit for usual purpose
implied warranty of merchantability
implied warranty that arises when seller makes a recommendation
warranty of fitness for a specific purpose
feature in word processing software that enables changes in a document to be tracked
redline
contract provision that in the event that one part of the contract is found to be invalid, the rest of the contract shall remain in effect
severability clause
pass contractual obligations to another
delegation
overly formal, often archaic language sometimes used in legal documents
legalese
the subject of the sentence acts – clarifies expectations in a contract
active voice
subject is acted upon
passive voice
A contract is (1) to the client. It also must be (2) and (3) to the client
- personal
- communicated
- understandable
5 basic things to remember in drafting contracts
- objective
- drafting
- logic
- editing
- legal concepts
Be (1), even if (2) wrong.
- consistent
2. consistently
Once you use a form, you (1)!
- own it
It is ok to include (1) or (2) material in a contract if the client demands it, but cover yourself!
- illegal
2. unenforceable
A contract should flow from the (1) to the (2)
- most important
2. least important
Incorporation by reference is NOT the same thign as (1). It allows reference to (2).
- integration (e.g., merger clause integrating prior discussions)
- outside materials (exhibits, etc.)
Boilerplate is (1) that does NOT refer to the (2)
- standard language
2. parties
Severability allows (1) or (2) of (3) to allow a contract to be enforceable overall. The language in this type of clause is generally (4).
- removal
- modification
- unenforceable parts
- boilerplate
