Determining Contract Terms

Question 1

Parol Evidence Definition

Answer 1

Evidence extrinsic to a written agreement is inadmissible to supplement or contradict the written agreement.

• Applies if the writing is a complete integration.

Question 2

Parol Evidence

Complete Integration

Answer 2

Parties must intend the writing to express their final agreement.

Question 3

Parol Evience rule bars evidence of:

Answer 3

• Negotiations before contract becomes integrated
• Agreements before contract becomes integrated (oral or written)
  
  • Exceptions
    
    • Agreement was only partially integrated, or
    • Additional terms would ordinarily be in a separate agreement

Question 4

Parol evidence rule does not apply to, or bar admission of:

Answer 4

• Evidence of oral agreements made after the writing
• Evidence necessary to determine if there was a mistake in the process of reducing an agreement to writing
• Evidence concerning a party’s defense based on misrepresentation, fraud, duress.
• Evidence used to resolve ambiguities about the meaning parties intended to give particular terms in the writing.

Question 5

Seller’s delivery obligations if goods shippend by common carrier

Shipment Contracts Elements

Answer 5

Indicated by FOB – Seller’s City

• Seller’s Delivery Obligation satisfied when seller:

1. Delivers goods to a common carrier
2. Makes reasonable arrangements for delivery
3. Notifies buyer

Once complete, the risk of loss passed to the buyer.

Question 6

Seller’s delivery obligations if goods shippend by common carrier

Destination Contracts

Answer 6

Anything not FOB – Seller’s City

• Seller’s delivery obligations satisfied only when goods arive at buyer’s location

Question 7

Risk of Loss

Factors Determining Risk of Loss

Answer 7

Arises if goods are lost or destroyed by no fault of either party after contract formation but before buyer receives goods.

1. Prior agreement of the parties
2. Breach
   
   1. breaching party is liable for any uninsured loss, even if unrelated to the breach
3. Common Carrier
   
   1. risk shifts to buyer once seller completes delivery obligations
4. Default
   
   1. Merchant Seller/Non Merchant Seller

Question 8

Risk of Loss

Default

Merchant Seller

Answer 8

Risk of loss shifts to buyer once he takes physical possession of goods

Question 9

Risk of Loss

Default

Non-Merchant Seller

Answer 9

Ris of loss shidts to buyer upon tendering delivery

Question 10

UCC Default Terms: Warranty of Quality

Express Warranty

Answer 10

When seller makes promises or describes facts about a product or its use.

• Warranty will be breached if the product falls short of seller’s promise or description.

Question 11

UCC Default Terms: Warranty of Quality

Implied Warranty of Merchantability

Answer 11

Merchant selling goods automatically warrants goods are fit for their ordinary purpose.

Question 12

UCC Default Terms: Warranty of Quality

Implied Warranty of Fitness for a Particular Purpose

Answer 12

Seller warrants that goods are fit for buyer’s purpose if:

1. Buyer has a particular purpose
2. Buyer relies on seller to select suitable goods, and
3. Seller has reason to know of buyer’s purpose and relaince on seller.

Question 13

UCC Default Terms: Warranty of Quality

Limiting Warranty Liability by Contract

Answer 13

• Disclaimer – limits liability only for implied warranties.
  
  • As is or with all faults lanaguage is enforceable.
• Remedy Limitation
  
  • Generally valid for all warranties, unless the provision is unconscionable (e.g. breach causes serious injury).