Parol Evidence Rule
Under the PER, evidence that is extrinsic to a written K is inadmissible to supplement or contradict the written K
- Applies if the writing is a complete integration - parties must intend the writing to express their final agreement
PER bars evidence of:
- Negotionations before K becomes integrated
- Agreements before K becomes integrated (oral or written)
- Exceptions - extrinsic evidence may be allowed if either:
- Agreement was only partially integrated, or
- Addtional terms would ordinarily be in a separate agreement
PER does not apply to, or bar admission of:
- Agreements (oral and written) 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 misrepresentaiton, fraud, or duress
- Evidence used to resolve ambiguities about the meaning parties intended to give particular terms in the writing
Delivery & Risk of Loss in UCC Contracts
Under UCC Ks, risk of loss issues arise when goods are lost or destroyed
Goods shipped by common carrier - if goods are shipped by carrier (e.g. Fed Ex), risk of loss depends on type of K between buyer and seller
- Shipment Ks - seller only obligated to ship goods to buyer
- Seller’s obligation satisfied when she delivers goods to carrier and notifies buyer; risk of loss then passes to buyer
- Destination Ks - seller obligated to ensure goods reach buyer
- Risk of loss passes to buyer only when buyer takes delivery
Non-common carrier deliveries - if goods are lost or destroyed by no fault of either party, below factors determine who assumes risk of loss:
- Prior agreement of the parties
- Breach - if one party is in breach, they are liable for any uninsured loss, even if unrelated to the breach
- Default - apply if the above factors are inapplicable:
- Merchant seller - risk of loss shifts to buyer once he takes physical possession of goods
- Non-merchant seller - risk of loss shifts to buyer upon delivery
“FOB [location]” - signifies passage of risk of loss between parties
- Seller bears risk and expense of getting goods to the named location, at which point risk passes to buyer
- E.g. A in Akron sells goods to B in Boise; K states “FOB Boise”; A is responsible for getting goods to Boise, then risk passes to B
Warranties & UCC Implied Warranties
A warranty is a promise regarding a contract
- UCC Ks have default implied warranties, which can be disclaimed
Express warranty - affirmative promise about the quality or feature of a product
- E.g. manufacturer claims cell phone is water proof to 20 feet
- Warranty will be breached if the product falls short of seller’s promise or description
Implied warranty of merchantability - seller automatically warrants goods are fit for their ordinary purpose
Implied warranty of fitness for a particular purpose - seller warrants that goods are fit for buyer’s purpose if:
- Buyer has a particular purpose;
- Buyer relies on seller to select suitable goods; and
- Seller has reason to know of buyer’s purpose and reliance on seller
Limiting warranty liability - K can limit liability for warranties
- Disclaimer - limits liability for implied warranties
- “As is” or “with all faults” language is enforceable
- Disclaimers will not limit liability for express warranties
- Remedy limitation - limits recovery upon breach of warranty
- Generally valid for all warranties, unless the limitation provision is unconscionable
