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Contracts II
University of Toledo School of Law
Pizzimenti, Lee Ann

Common Law — Contracts II
 
I                Applicable Law?
A       UCC does NOT apply à NO 2-102 OR 2-105
 
II             Enforceable agreement?
A       Agreement
B        Offer
C        Acceptance
D        Communication of Manifestation of Assent
E         Termination of Power of Acceptance
F         Interference w/ Termination (Option K)
G        Consideration
H        Statute of Frauds
 
III          What are the Terms?
A       Terms
1       General Presumption =
i        terms of the agreement are all terms agreed + custom (C/P, C/D, U/T)
1       Parol Evidence Rule à
a       Definition:
i        Can NOT supplement OR contradict a complete integration
ii       Can supplement but NOT contradict a partial integration
(i)            judge decides whether party can plead AND prove existence of an extrinsic agreement)
b       Integration:
i        Is there a final written expression?  (deals w/ intent of parties)
(i)            must show evidence that the parties intended to be bound
(a)     more formal the writing à better evidence that the parties intended this to be the final agreement
c       Extrinsic Evidence:  
i        Is there some agreement prior to OR contemporaneous w/ the integration?
(i)            Can be oral, written, OR circumstantial (inferred from custom)
(ii)          Must be an “agreement” à can NOT be mere preliminary negotiations
(a)     Does it rise to the level of agreement or just mere negotiation?
(b)     Is this something that would NOT be included in this type of agreement?
d       Contradiction: 
i        Does the extrinsic evidence contradict the express terms of the integration?
(i)            Contradiction = must be “direct” (modern rule)
(a)     If extrinsic evidence contradicts         à evidence is NOT admissible
(b)     If extrinsic evidence is consistent       à see if it is “complete”
e       Complete Integration:
i        Is the integration complete OR partial?
(i)            Complete Integration = final written agreement exhibiting parties intent that writing is final and exclusive writing of party’s agreement  
(a)     Completeness Test:
a.       Final integration is complete if a ® person would have naturally AND normally included the extrinsic evidence in the integration AND did NOT
i.         Merger clause = strong evidence of intent that the writing is the complete integration
b.      Other evidence: relationships, prior dealings, subject matter…
(ii)          § 216 – Consistent Additional or Omitted Terms
(a)     Agreement is NOT completely integrated if writing omits a consistent additional agreed term which is à
a.       agreed to for separate consideration
OR
b.      term is such that might naturally be omitted from this type of written agreement
(iii)         Partial Integration =other agreements may supplement, so judge admits extrinsic agreements & jury decides whether evidence indicates extrinsic agreements will b

    NOMC = can not modify writing w/ an oral agreement
(i)            Still argue reliance if “substantial change in position based on oral modification”
(a)     Modification = NOM + oral modification + reliance
(ii)          Protects principals from modification entered into by agents à don’t want such easy modification
e       NOT a P.E.R. issue:
C       Course of Dealings / Usage of Trade
1       Rule
a       May ALWAYS modify written agreement unless parties carefully negate in K
i        General Merger Clause: may not be enough à parties should express intent to negate in writing
(i)            Columbia Nitrogen – adopts comment 2 of the 2-202
(a)     Try to read C/D and U/T as consistent w/ express terms of the K
(b)     Rarely will C/D or U/T contradict, usually must be stated as the exact opposite in order to contradict
(ii)          How to exclude U/T and C/D à
(a)     Argue contradiction or careful negation
a.       Careful Negation: parties must state U/T or C/D specifically if they are excluding it from the agreement
i.         general merger clause will not be enough
2       R.2d
a       provides NO evidence that C/D or U/T apply to agreements