George Mason School of Law

1. George Mason School of Law Contracts II Terms F.H. Buckley fbuckley@gmu.edu

2. So now we have an enforceable contractBut what is its content?

3. Sir William Blackstone First, Some Legal History

4. Sir William Blackstone • It is better that 10 guilty men should go free than that one innocent man suffer. • The public good is in nothing more essentially interested, than in the protection of every individual's private rights. • Free men have arms; slaves do not. • Herein indeed consists the excellence of the English government, that all parts of it form a mutual check upon each other. • Every wanton and causeless restraint of the will of the subject, whether practiced by a monarch, a nobility, or a popular assembly, is a degree of tyranny.

5. Sir William Blackstone Maybe I should take up this legal thing… Henry Fonda in Ford’s Young Mr. Lincoln

6. A Trio of English JudgesSir George Jessell M.R. Pender v. Lushington In re Hallett’s Estate Printing v. Sampson

7. A Trio of English Judges Lord Blackburn Tweedle v. Atkinson Taylor v. Caldwell Hughes v. Metropolitan Ry

8. A Trio of English JudgesBramwell L.J. Bank of England v. Vagliano Rylands v. Fletcher

9. What had all these men in common?Sir George Jessell M.R., Lord Blackburn, Bramwell L.J.

10. John Stuart Mill

11. Samuel Williston 1861-1963

12. Arthur Corbin 1874-1967

13. Karl Llewellyn 1893-1962

14. Identifying the Terms and Interpreting them • In either case, do we look outside the written contract? • Oral statements • Course of dealings • Trade customs

15. Here’s a thought… • Why not just ban written contracts? • The letter enslaves and the spirit makes free.

16. What would we lose if we banned written contracts? • Certainty as to terms • Recall McIntosh p. 518

17. What would we lose if we banned written contracts? • Certainty as to terms • Agency Costs of Seller’s Agents

18. What would we lose if we banned written contracts? • Certainty as to terms • Agency Costs of Seller’s Agents • Adjudication and Litigation Costs

19. What happens where there is a writing? • First question: Is this a binding contract? • As opposed to yesterday’s shopping list… • Or a memo about preliminary negotiations • Or an offer

20. What happens where there is a writing? • First question: Is this part of a binding contract? • Qu. Merit Music at 429 • “I imagined it was a note.” • What if that was Merit Music had told him?

21. What happens where there is a writing? • First question: Is this part of a binding contract? • Qu. Merit Music at 429 • “I imagined it was a note.” • Non est factum: • Restatement §§ 163, 211(c), 214(d) 21

22. What happens where there is a writing? • First question: Is this part of a binding contract? • Birmingham TV p. 431 • What if the writing on the back had been brought to the bailor’s attention?

23. What happens where there is a writing? • First question: Is this part of a binding contract? • Birmingham TV p. 431 • What if it had been signed? • Restatement §§ 211(a)

24. Can we look behind a signed written contract for the terms of the contract? • Integrated Agreements • Restatement § 209(1) • Does this exclude oral evidence? • See Comment a

25. Can we look behind a signed written contract for the terms of the contract? • Integrated Agreements • Additional terms supplied by courts • Fair dealing: Restatement § 205 • Good title: UCC § 2-312 • Merchantability: UCC § 2-314 • Fitness for purpose: UCC § 2-315

26. Can we look behind a signed written contract for the terms of the contract? • Integrated Agreements • Supplying omitted essential terms: Restatement § 204 • The one-year term on employment in McIntosh

27. Can we look behind a signed written contract for the terms of the contract? • Integrated Agreements • Supplying omitted essential terms: Restatement § 204 • Gap-filling as a method of reducing transaction costs

28. Can we look behind a signed written contract for the terms of the contract? • The Parol Evidence Rule • A agrees to sell his house to B in a signed agreement on Feb. 20. On the same day B sells a painting to A in an oral agreement. Problems?

29. Can we look behind a signed written contract for the terms of the contract? • The Parol Evidence Rule • A agrees to sell his house to B in a signed agreement on Feb. 20. On the same day B sells a painting to A in an oral agreement. Problems? • Williston at 546 on collateral contracts • How to tell them apart? 29

30. Suppose we have a signed written contractCan we ever look beyond it? • The test in Mitchill v. Lath Ice House

31. Parol Evidence Rule *Cannot “add to, vary or contradict”: Burke at 554 • The test in Mitchill v. Lath • In form a collateral agreement • Can’t contradict the written agreement* • One that would not ordinarily be embodied in the writing 31

32. Masterson v. Sine Jones v. Ahmanson Escola v. Coca-Cola Pacific Gas infra Perez v. Sharp Chief Justice Roger Traynor

33. Masterson v. Sine Justice Louis H. Burke Chief Justice Roger Traynor

34. Masterson What was the oral modification? 37

35. Masterson • What was the oral modification? • Dallas reserves an option to repurchase which does not convey to his assigns 38

36. Masterson • What was the oral modification? • What happens if an agreement is fully integrated per Traynor? 39

37. Masterson • What was the oral modification? • What happens if an agreement is partly integrated per Traynor? 40

38. Masterson • What was the oral modification? • How to tell if a writing is completely or partially integrated per Traynor? 41

39. Masterson • What was the oral modification? • How to tell if a writing is completely or partially integrated per Traynor? • “Any such collateral agreement must itself be examined…”?? 42

40. Masterson • What was the oral modification? • How to tell if a writing is completely or partially integrated per Traynor? • “The conception of a writing as wholly and intrinsically self-determinative…”??? 43

41. Masterson • Traynor on Parol Evidence • Would the reference excluding assigns “naturally be made as a separate agreement”? 44

42. Masterson • Traynor on Parol Evidence • Would the reference excluding assigns “naturally be made as a separate agreement”? • Is this about identifying the terms of the agreement or interpreting them? 45

43. Masterson • Are Burke’s charges correct? • The change contradicts a term which would ordinarily be supplied by operation of law. 46

44. How does the Restatement handle this? • Which way does the Restatement come down? Traynor or Andrews? • Cf. §§ 209(2), 210(3) comments

45. How does the Restatement handle this? • Which way does the Restatement come down? Traynor or Andrews? • Cf. § 214

46. How does the Restatement handle this? • Which way does the Restatement come down? Traynor or Andrews? • Cf. § 215

47. How does the Restatement handle this? • Which way does the Restatement come down? Traynor or Andrews? • Cf. § 216 • Separate consideration: Illustration 3 • Terms omitted naturally: Illustration 7

48. George Mason School of Law Contracts II Terms F.H. Buckley fbuckley@gmu.edu

49. The Content of the Contract • When can one look behind a writing for evidence of the terms of a contract? • Traditionally Parol Evidence could not “add to, vary or contradict” a writing

50. The Content of the Contract • When can one look behind a writing for evidence of the terms of a contract? • Traditionally Parol Evidence could not “add to, vary or contradict” a writing • Doesn’t include gap-filling terms, e.g. UCC warranties