Contracts II – OUTLINE
Gaetke – Spring 2012
PAROLE EVIDENCE RULE (PER)
Looking at the meaning of the agreement:
What happens when there is presence of writing? à Some categories fall w/I SOF req writing
PER = Restatement § 213; UCC § 2-202
Mitchell: Integrate/Merger à controls the issues of prior promises, if its not written in the K, no promises are binding = means the parties intended the agreement to be the final expression of the agreement Rst § 209
1. Complete Int. = exclusive agreement that is final K and includes all the details à the deal is done à can’t use contradicting OR conflicting evidence
2. Partial Int. = precludes contradicting terms but not additional terms (Restatement)
See ft note in Hatley, Rst § 210
What is the agreement? à § 27 — parties give the effect they want re: a written memorial
Extrinsic evidence à negotiations before the K
* Best evidence of total integration = merger clause
**If you don’t have a writing à NO PER**
Differing views of Integration
1. Williston/Traditional/Rest 1st à Ct should be able to look at the 4 corners of the K to decide if integrated
2. Corbin/Rest 2nd à All we are concerned with is the intent of the parties and must hear PER before determining
Hatley
1. Integrated?
2. Partial/Total?
3. Inconsistent? à meaning conflict with express terms
* Conflicting terms à PER not allowed if complete OR partial Int.
Express v. Implied Terms: Hayden
UCC Implied Terms
1. Course of Dealings à past similar transactions/established practice
2. Course of Performance à repeated perf over time
3. Usage of Trade à if you are in a trade, you should know custom
Rest Approach 216 à a bit diff from Hayden
1. Hatley – Inconsistent in relation to express terms only = Narrow
2. Hayden – Inconsistent = Broad à A writing consists of express (stated) AND implied terms
3. Rest § 216 – Middle of road approach See Mitchell (implied – naturally arising)
a. Includes à Terms implied in Fact à unique to parties situation
b. NOT terms implied in Law à not as broad as Hayden
Hierarchy for UCC which takes Corbin’s View
1. Express Terms, 4 corner of the K
2. Course of Performance, arises out of prior conduct within K (repeated performance) i.e. installment Ks
3. Course of Dealings (Rst § 223)à way parties have behaved in past Ks
4. Usage of Trade (Rst § 222)à the industry norms for the terms
5. Interpret the K best we can under the principles of the UCC
6. UCC § 2-202, supplementing the terms
7. Perfect tender rule UCC § 2-507
Luria à Test for UCC Consistency = absence of reasonable harmony, certainly included in writing RATHER than naturally for UCC
Restatement § 217 à Corbin’s View = Gotta hear the evidence to know what the parties intended
You may use PER to clear up any Ambiguity à Frigaliment à chicken case (stewing v frying)
Fraud in an agreement: levels
1. Innocent Misrepresentation à Honest Mistake
2. Negl Misrep à Careless
3. Gross Negl Misrep
4. Reckless Misrep
5. Intl Misrep –WORST KIND
a. Fraud in the Factum à misrep what agreement is you are signing (divorce switch of docs for ex)
b. Fraud in the Inducement à overcome normal attitude to induce/lead you to enter K
Hoffman à Equity Court à reformation = rewrite the deal (doctrine of merger – a property term of art – like PER) Then you use Tort theory of fraud
Mutual Mistake v. Unilateral Mistake
Another way to show PER is to rebut that § 71 Consideration ever existed
PER SUMMARY
1. NO writing = NO PER
2. Prior Negotiations, customs, assurances to show at trial à must be prior to or contemporaneous with K NOT after
3. Binding K? à If not binding, Int effect isn’t either
4. Was the writing intended to be an integrated agreement? See Williston v. Corbin/ § 214 approaches
5. Completely intg or partial intg?
a. For Completely à NO inconsistent/additional
b. For Partial à NO inconsistent
c. Rest à Consistent terms (ordinary) = Mitchell Test
d. K includes implied Terms = Hayden
6.
v Zimbalist: violin case
This was a sale by description à thus, express wrrty and assump of risk by seller
UCC has a pro-wrrty stance and pro consumer stance, but you can have mutual mistake as well see UCC § 1-103 which applies ALL Common Law to problems if not covered in UCC such as mistake
UCC § 2-313 à Sale by description
When Express Warranties created (UCC § 2-313)
Affirmation/Promise
Any affirmation of fact or promise by seller that relates to the goods and becomes the basis of the bargainà then expressed warranty to conform to affirmation/promise
Description
Any description of goods which is made basis of the bargainà then express warranty to conform to description
Sample/Model
Any sample or model which becomes part of the basis of the bargainà then express warranty that it will conform to sample/model.
Π MUST SHOW:
1. BRCH OF WRRTY
2. CAUSATION OF HARM
3. HARM
4. REMEDY
Hauter à Golf Gizmo real life Geatke Hypo “perfectly Safe” à you don’t have to show Reliance on wrrty or have even read it, when you buy it, it comes w/ all assurances
Tribe à Horse case “Badger the non bucking Horse” à Sellers can promise things they have no control over
Implied Warranties
UCC §§ 2-312, 2-313, 2-315, 2-314
4 Types/Sources of Implied Warranties
1. Title ৠ2-312
2. Merchantability à § 2-315
3. Implied Fitness for Purpose à § 2-315
4. Usage of Trade, Course of Dealings, and Course of Performances à § 2-314(3)
See Conspicuous Reasonable Test (pg 236 Supp)
*In most if not all states, implied warranty merchantability applies to sale of homes à quality of workmanship and inhabitability
