Contracts II Outline

Myerson’s Outline of how he wants his exam question answered:
This K is governed by…UCC or CL
Under the literal language of the K…
I. What does the K Require?
II. Was it Complied with?
III. What is legal consequence [ie remedy for breach, no duty owed]?
IV. Then: Consider whether there are reasons to not accept result
If so,  redo necessary steps.
 
Step # 1 What does the K require
I. Language – Find key language
A. Literal meaning
                                 i. Plain meaning à dictionary meaning & grammar, legal definitions
§ What does literal meaning requireà was it complied w/à legal consequence
§Always try to win on literal language & grammar it’s the end all
                               ii. Interpret in a way that gives reasonable, lawful, and effective meaning to all terms of the K
§K won’t be interpreted literally if it would have absurd results
§Could a rational person interpret the K this way?
–  Literal meaning can’t always capture the meaning/intent
§Is it a just result that the court can live with?
                             iii. The stranger the intended result the clearer the language must be to prove that what the parties actually intended
C. Is it ambiguous?
§Ambiguous = reasonably capable of more than one meaning.
§ Ex. Ill ship delicious apples
o  Is it delicious taste or
o  Species of apple
§Two approaches to determining if writing is ambiguous
1. Four corners approach – only look at what’s in the document.
§ Can plain English definition lend itself to more than 1 interpretation
o   I’m a judge I figure it out myself
§ Doesn’t listen to arguments as to why the language is ambiguous
§ Criticism:
o   It presumes that all words have same meaning to everyone
–          Objective meaning 
o   Presumes that judge knows
–          His subjective meaning will match parties meaning
2. CA Approach – allow lawyer to explain
§ Judge has to listen to arguments & hear PE why its ambiguous
§ Criticism
o  If parties are willing to claim its ambiguous than cts. Are forced to hear unreliable evidence that is outside the scope of the 4 corners of the writing.
o  Cheapens the common meaning of words
o  Diminishes certainty and absolutes
§If it is ambiguous…PE prior to & @ making of K is admissible to clarify what the parties intended the term to meant
§Allow parol evidence to explain special meanings which the individual parties to a contract may have given certain words.   
D. What was the parties’ likely intent?
                                 i. Use if the literal meaning is ambiguous or unacceptable
§What would a reasonable person have understand it to mean?
§What would P want it to mean?
§What would D want it to mean?
                               ii. If there is unequal bargaining power interpret ambiguity against the drafter
§Drafter had opportunity to have clear & careful writing
§Prevent drafter from using ambiguity to get more than they should
                             iii. Context- Look at the K as a whole
§Past practices of the parties
§Post K conduct
i. Did they accept the product w/o complaint
ii. Did client complain about X & now is complaining about Y
o  If you complained about X & not Y you affirmed Y was ok
                             iv. Price à Objective meaning
§Doesn’t undermine freedom to k à can set any price
§Not dispositive but can be persuasive evidence of the parties likely intent
                               v. Choice of words
§Look to see if ambiguous word is use or defined elsewhere in K
§Why did they choose word A & not word B.
i. Why would you use a broader word when you could have used a specific word(s) to show what you meant
ii. Why didn’t you say what you wanted?
iii. The stranger the result the more specific you need to be
                             vi. Trade usage of the word
§Experts
§Industry publications
§Assumes ppl w/in a trade all use the same vocab to refer to something.
II. Will the Ct. Consider outside evidence àParol Evidence
B. Parol evidence – all that proceeds the written K
                                 i. Always allow in evidence after a written K –it’s a MODIFICATION
C. Factual Trigger/when does it apply
§Prior agreement ( written or oral) à followed by a writing
D. Issue
                                 i. Whether terms of the prior agreement should be viewed as part of the K
§If PE is included do K interp. W/ PE
§If PE is excluded do K interp w/o P/.E
                               ii. Doesn’t rule out PE to add in interpreting a ambiguous K
§If its ambiguous can consider parties PE statements/writtings
E. Flow Chart
                                 i. Is it integrated writing? –is writing intended be final?
§Yes à Go to next step
§No àLet it in
                               ii. If wri