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End of Semester Review

End of Semester Review

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End of Semester Review

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  1. End of Semester Review Announcements office hours—Tuesday, May 9, 11am-3pm Wednesday, May 10, revised hours--1pm-4pm Part 1: Structured review Part 2: Q & A End of Semester Review

  2. Today is an excellent day to review contracts. End of Semester Review

  3. Typical Executory K prelim. executory negotiations period -----------------|-------------------------|---------------------- t K formation performance due focal point during the second half of this semester: figuring out what the rights and duties of the parties are to ascertain whether there has been a breach of a duty and what the appropriate remedy should be End of Semester Review

  4. A sues B • K • A asserts that B breached a duty owed under K • duty may be • express term, subject to interpretation and parol evidence rule • implied term • result of a modification • possible responses by B • I did not owe this duty because _________ • I may avoid or disaffirm the K because ____________ • even if the K existed and the duty would otherwise be owed, I was justified in not performing because of ________________ End of Semester Review

  5. Duty • express term • K interpretation • parol evidence rule • implied term—default rules/gap fillers • later—we’ll add modification End of Semester Review

  6. subjectivist approach: Raffles v. Wichelhaus K for the sale of cotton to arrive “ex Peerless from Bombay” October Peerless—buyer’s understanding December Peerless—seller’s understanding Subjective v. objective (redux) End of Semester Review

  7. Restatement §20. Effect of Misunderstanding (1) There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and (a) neither party knows or has reason to know the meaning attached by the other; or (b) each party knows or each party has reason to know the meaning attached by the other. (2) The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if (a) that party does not know of any different meaning attached by the other, and the other knows the meaning attached by the first party; or (b) that party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first party. End of Semester Review

  8. §201. Whose Meaning Prevails (1) Where the parties have attached the same meaning to a promise or agreement or a term thereof, it is interpreted in accordance with that meaning. (2) Where the parties have attached different meanings to a promise or agreement or a term thereof, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made (a) that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party; or (b) that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the first party. (3) Except as stated in this Section, neither party is bound by the meaning attached by the other, even though the result may be a failure of mutual assent. End of Semester Review

  9. Joyner v. Adams North Carolina Court of Appeals 87 N.C. App. 570, 361 S.E.2d 902 (1987) End of Semester Review

  10. Frigaliment Importing Co. v. B.N.S. International Sales Corp. United States District Court 190 F. Supp. 116 (S.D.N.Y. 1960) End of Semester Review

  11. What does the court look at? • term itself • other provisions in K • negotiations/communications • course of performance • course of dealing • trade usage End of Semester Review

  12. C & J Fertilizer v. Allied Mutual Insurance Co. Supreme Court of Iowa 227 N.W.2d 169 (1975) End of Semester Review

  13. Reasonable Expectations Doctrine • majority rule • narrow and broader versions • narrow—requires ambiguity • broad Restatement 211? probably too limiting, favoring too much the “stronger” party; probably not followed by many courts End of Semester Review

  14. canons of interpretation • contra proferentum • ejusdem generis—e.g., K to sell farm with “cattle, hogs, and other animals”—would this include the prior owner’s family dog? sheep? • expressio unius exclusio alterius—e.g., K to sell farm with “cattle and hogs”—family dog? sheep? • n.4, pp. 358-59 End of Semester Review

  15. Thompson v. Libby Minnesota Supreme Court 34 Minn. 374, 26 N.W. 1 (1885) End of Semester Review

  16. 1. What is the parol evidence rule? See also Restatement §213; UCC 2-202 End of Semester Review

  17. 2. What is parol evidence? End of Semester Review

  18. 3. When does the parol evidence rule come up? End of Semester Review

  19. Visual PER may be likened to a semi-permeable membrane that surrounds an executed writing Executed Writing Extrinsic evidence Extrinsic evidence Extrinsic evidence End of Semester Review

  20. Different visual prelim. executory negotiations period -------------------|-------------------------------------|------------------- t K formation performance due prior contemp. oral subsequent oral or oral or written contemp. written written PER applies End of Semester Review

  21. When the parties have reduced their understanding to a writing, the court must decide what the parties intended by the writing.--not integrated--integrated End of Semester Review

  22. If integrated, and not dealing with contradictory parol evidence, the question now turns to the degree of integration.--Traditional 4 corners approach--Modern contextual approach End of Semester Review

  23. Integration--turns on the intention of the parties with regard to the writing they execute. • 4 corners rule, p. 385 • Under this rule, where do you look to determine the intention of the parties? • Compare with the modern, contextual approach End of Semester Review

  24. 4 & 5--application • a. Traditional, 4 corners approach • b. Modern, contextual approach End of Semester Review

  25. modern, contextual approach • as with the 4 corners approach, integration depends on the intention of the parties • under this rule, where do you look to determine the intention of the parties? • under this approach, a writing cannot establish its own completeness • court looks at the writing and the offered parol evidence and then makes a determination re: intention of the parties End of Semester Review

  26. 4 corners v. modern contextual • with each, court asks—when the parties have reduced their agreement to a signed writing, what inference are we to draw for two matters: (1) the finality of the terms contained therein; (2) the completeness of the writing—does it embody the complete agreement of the parties so that parol evidence is inadmissible End of Semester Review

  27. Levels of integration • complete integration • partial integration • not integrated at all End of Semester Review

  28. Merger or integration clause • e.g., Entire Agreement. This document constitutes the entire agreement of the parties and there are no representations, warranties, or agreements other than those contained in this document. End of Semester Review

  29. interpret/explain admissibility turns on ambiguity difference in jurisdictional approach add to/vary admissibility turns on integration (1) is the writing integrated? [are the terms in the writing final?] (2) how integrated is it? [is the writing complete/exclusive?] PER(1) parties execute a writing(2) one or both attempt to introduce extrinsic evidence End of Semester Review

  30. add to/vary • admissibility turns on integration • (1) is the writing integrated? [are the terms in the writing final?] If no, then writing doesn’t bar extrinsic evidence; if yes, then contradictory evidence is excluded; if dealing with evidence of a consistent additional term, must ask the second integration question re: degree • (2) how integrated is it? [is the writing complete/exclusive?] End of Semester Review

  31. add to/vary • (2) how integrated is it? [is the writing complete/exclusive?] 4 corners—does the writing appear complete on its face; merger/integration clause nearly dispositive modern contextual—factors—completeness of writing; merger/integration clause; transactional setting; parties End of Semester Review

  32. Exceptions • 1. Collateral agreement. Even a completely integrated writing does not exclude a collateral agreement. Key points are subject matter + consideration. • 2. Evidence to show no valid agreement. Example--one party wants to introduce evidence that the writing was produced as a joke. Admissible because it is offered to show that there was no valid agreement. It doesn't mean that you will win. • 3. Evidence that would allow one party to avoid the contract. Evidence to establish any of the policing doctrines from the previous chapter is admissible--fraud, misrepresentation, duress, etc. • 4. Mistake, fraudulent misrepresentation. Although mistake under certain circumstances allows a party to avoid the contract, mistake here refers to where the parties, by mistake, fail to include a term in the contract. Evidence is admissible which may lead a court to reform the contract to reflect the intent of the parties. • 5. Oral condition precedent. Written K might be subject to oral condition precedent not contained in writing. End of Semester Review

  33. 1. Collateral agreement. Even a completely integrated writing does not exclude a collateral agreement. Key points are subject matter + consideration. End of Semester Review

  34. 2. Evidence to show no valid agreement. Example--one party wants to introduce evidence that the writing was produced as a joke. Admissible because it is offered to show that there was no valid agreement. It doesn't mean that you will win. End of Semester Review

  35. 3. Evidence that would allow one party to avoid the contract. Evidence to establish any of the policing doctrines from the previous chapter is admissible--fraud, misrepresentation, duress, etc. End of Semester Review

  36. 4. Mistake, fraudulent misrepresentation. Although mistake under certain circumstances allows a party to avoid the contract, mistake here refers to where the parties, by mistake, fail to include a term in the contract. Evidence is admissible which may lead a court to reform the contract to reflect the intent of the parties. End of Semester Review

  37. 5. Oral condition precedent. Written K might be subject to oral condition precedent not contained in writing. End of Semester Review

  38. Taylor v. State Farm Supreme Court of Arizona 175 Ariz. 148, 854 P.2d 1134 (1993) End of Semester Review

  39. Levels of integration • not integrated at all • partial integration • complete integration End of Semester Review

  40. Merger or integration clause • e.g., Entire Agreement. This document constitutes the entire agreement of the parties and there are no representations, warranties, or agreements other than those contained in this document. End of Semester Review

  41. Exceptions End of Semester Review

  42. Taylor v. State Farm Supreme Court of Arizona 175 Ariz. 148, 854 P.2d 1134 (1993) End of Semester Review

  43. ambiguity • 4 corners plain meaning approach End of Semester Review

  44. ambiguity modern contextual approach • is the express language reasonably susceptible to the meaning that the party is trying to establish? End of Semester Review

  45. Nanakuli Paving & Rock Co. v. Shell Oil Co. United States Court of Appeals 664 F.2d 772 (9th Cir. 1981) End of Semester Review

  46. express K term • “Shell’s Posted Price at time of delivery.” End of Semester Review

  47. express terms • course of performance • course of dealing • trade usage End of Semester Review

  48. what is a waiver? End of Semester Review

  49. Wood v. Lucy, Lady Duff-GordonNew York Court of Appeals222 N.Y. 88, 118 N.E. 214 (1917) End of Semester Review

  50. Leibel v. Raynor Manufacturing Co.Kentucky Court of Appeals571 S.W.2d 640 (1978) End of Semester Review