OUTLINE OF RULES
Avoidance
PUBLIC POLICY
1. R.2d § 179 Bases of Public Policy Against Enforcement
a. Derived by the court from
i. Legislation OR
ii. Need to protect public welfare
1. Trade
2. Family relations
3. Other protected interests
1. R.2d § 178 When a Term is Unenforceable on Grounds of Public Policy
a. Legislation provides that is it unenforceable OR
b. Public policy against enforcement clearly outweighs interest in enforcement
i. Against enforcement
1. Strength of policy manifested by legislation or judicial decision
2. Likelihood refusal to enforce… will further policy
3. Seriousness of any misconduct involved AND extent that it was deliberate
4. Directness of connection between misconduct and the term
ii. In enforcement
1. Parties’ justified expectations
2. Resulting forfeiture if enforcement denied
3. Special public interest in enforcement
Terms and Performance
SOURCES OF TERMS- Parol evidence
1. UCC § 2-202 Final Written Expression: Parol or Extrinsic Evidence
a. Final expression of an agreement terms may not be contradicted by evidence of prior agreement or contemporaneous oral agreement, BUT may be explained or supplemented
i. Considerations for complete integration
1. Course of performance,
2. Course of dealing (i.e. contractual relationship and performance of same parties prior to contract), OR
3. Usage of trade (i.e. industry custom)
ii. Considerations for partial integration
1. Three above AND evidence of consistent additional terms
b. Cal. Code Civ. Proc. § 1856
2. U.C.C. § 2-313 Express Warranties by Affirmation, Promise, Description, Sample
a. Express warranties by the seller are created as follows:
i. Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise
ii. Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description
iii. Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model
b. It is not necessary to the creation of an express warranty that the seller use formal words such as “warrant” or “guarantee” or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty
3. U.C.C. § 2-314 Implied Warranty of Merchantability
a. Unless excluded or modified (§ 2–316), a warranty that the goods shall be merchantable is implied in a contract for their sale IF the seller is a merchant with respect to goods of that kind. Under this § the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale
b. Goods to
ing and conspicuous; language to exclude all implied warranties of fitness is sufficient if it states, for example, that “There are no warranties which extend beyond the description on the face hereof.”
c. Notwithstanding sub§ (2)
i. Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like “as is”, “with all faults” or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty; and
ii. When the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and
iii. An implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade
d. Remedies for breach of warranty can be limited in accordance with the provisions of this Article on liquidation or limitation of damages and on contractual modification of remedy (§§ 2–718 and 2–719).
6. Cal.Civ. C. § 1638 Plain Meaning Cal. Civ. C. § 1641 Interpreting Whole of the Contract
