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mistake in integration (PER)
court may consider evidence of such terms for the limited purpose of determining whether there was a mistake in integration - a mistake in reducing the agreement to writing.
(PER) adding to the written deal
- rule prevents court from admitting evidence of earlier agreements as source of consistent, additional terms unless the court finds
- (i) that the written agreement was only a partial integration or
- (ii) that the additional terms would ordinarily be in a separate agreement.
conduct and course of performance
- conduct can be source of contract terms. in order or importance -
- 1. course of performance - same people, came contract
- 2. course of dealing - same people, different but similar K.
- 3. costom and usage
- seller does not complete delivery obligation until goods arrive where the buyer is.
- FOB - free on board. FOB follow by city where the seller is or where goods are means shipment K; followed by any other city means destination K.
risk of loss rules
- 1. agreement
- 2. breach - breaching party is liable for any uninsured loss even though breach is unrelated to problem.
- 3. delivery by common carrier other than seller. risk of loss shifts from seller to buyer at the time the seller completes its delivery obligations.
- 4. no 1 ~ 3, then the determining factor is whether the seller is a merchant. WHETHER THE BUYER IS A MERCHANT IS IRRELEVANT. risk of loss shifts from a merchant-seller to the buyer on the buyer's "receipt" of the goods; risk of loss shifts from a non-merchant seller when he "tenders" the goods.
- requires or authorizes
- 1. delivery of goods in seperate lots
- 2. to be separately accepted
- 3. buyer has right to reject an installment only where there is a substantial impairment in that installment that cannot be cured.
revocation of acceptance of the goods
- if buyer accepts goods, it cannot later reject them. in limited circumstances, buyer can effect a cancellation of the K by revoking its acceptance of the goods. requirement for revocation are as follows:
- 1. nonconformity substantially impairs the value of the goods, and
- 2. excusable ignorance of grounds for revocation or reasonable reliance on seller's assurance of satisfaction, and
- 3. revocation within a reasonable time after discovery of nonconformity
- right of unpaid seller to get goods back
- key facts are that ...
- 1. buyer must have been insolvent at the time it recieved goods, and
- 2. seller demands return of goods within 10 days of receipt (becomes "reasonable time" if before delivery there had been an express representation of solvency by buyer), and
- 3. buyer still has goods at time of deman
expectation damages for breach of K
- 1. determine dollar vlaue of performance without breach
- 2. then determine dollar value of perfomance with breach
- 3. compare the two to determine the amount of damages.
damages for sale of goods
seller breached, buyer keep the goods
fair market value if perfect-fair market value as delivered.
damages for sale of goods
seller breaches, seller has the goods
market price at time of discovery of the breach - contract price or replacement price - contract price
damages for sale of goods
buyer breaches, buyer keeps the goods
seller gets contract price
damages for sale of goods
buyer breaches, seller has the goods
- contract price - resale price
- in some situations, provable post profits (for lost volume seller)
costs incurred in dealing with the breach such as costs of storing rejected goods or finding a replacement in a service K - always recoverable
foreseeable consequential damages
- (special damages)
- kind of loss special to the plaintiff.
- consequential damages are limited to damages arising from P's special circumstances and recovery of consequential damages is limited to situations in which D had reason to know of these special circumstances at the time of the K.
excuse because of non-occurrence of an express condition
- express condition - a mutually agreed upon promise modifier. it is language in a K - not merely language in a response to an offer - that does not create a new obligation, but merely limits obligations created by other language in the K.
- watch for words like "if", "only if", "provided that," "so long as" ...
accord and satisfaction (substituted performance)
- accord = an agreement by the parties to an already existing obligation to accept a different performance in satisfaction of the existing obligation.
- effect of accord and satisfaction - if new agreement (accord) is performed (satisfaction), then performance of the original obligation is excused.
novation (substituted person)
- an agreement between both parties to an existing K to the substitution of a new party (same performance, different party)
- who is liable after novation?
- novation excuses the contracted for performance of the party who is substituted for or replaced.
- unile novation, delegation does not require the agreements of both parties and does not excuse.
third party beneficiary
- third party beneficiary - not a party to the K. able to enforce K others made for her benefit.
- promisor - person who obtains the promise that benefits the 3rd party.
- intended/incidental - only intended beneficiaries have K law rights. intent of parties to contract determines whether intended or incidental.
- creditor / donee - intended beneficiaries are either donees or creditors. usually donees.
- * efforts to cancel or modify - test is whether the 3rd party knows of and has relied on or assented as requested. if so, her rights have vested and the K cannot be canceled or modified without her consent unless the K otherwise provides.
- * Who can sue whom?
- 1. beneficiary can recover from promisor
- 2. promisee can recover from promisor (but cannot both recover)
- 3. generally, beneficiary cannot recover from promisee
- 4. creditor beneficiary can recover from promisee but only on pre-existing debt.
- * Defenses - if the third party beneficiary sues the promisor, the promisor can assert any defense that he would have had if sued by the promisee.
- transfer of rights under a K. 2 steps - K between only 2 parties, and one later transfers rights under that K to a 3rd party.
- vocabulary -
- assignor: party to the K who later transfers rights under the K to another.
- assignee: not a party to the K. able to enforce the K because of the assignment.
- obligor: other party to the K.
common law bar on assignment that substantially changes the duties of the obligor
- a. assignment of right to payment (never substantial change).
- b. assignment of right to contract performance other than right to payment (usually substantial change)
requirement for assignment
general rule is that consideration is NOT required but gratutious assignments (and only such) can be revoked.
assignment and respective rights
- 1. assignee can recover from the obligor.
- 2. assignor for consideration cannot recover from obligor.
- 3. obligor has same defenses against assignee as it would have against assignor.
- 4. payment by obligor to assignor is effective until obligor knows of assignment. similarly modification agreements between obligor and assignor are effective if the obligor did not know of the assignment.
implied warranties of assignor in an assignment for value
- in an assignment for consideration, the assignor warrants:
- 1. the right assigned actually exists.
- 2. the right assigned is not subject to any then existing defenses by the obligor and
- 3. the assignor will do nothing after the assignment to impair the value of the assignment. assignor, however, does not warrant what the obligor will do after the assignment.
- * multiple assignments - last assignee generally wins.
- * assignment for consideration - 1st assignee for consideration wins.
- party to a K transferring work under that K to 3rd party.
- P K to paint O's house for $1000. P (delegating party) and X (delegatee) agree that X will paint O's (obligee) house.
duties that are delegable
- generally K duties are delegable.
- limitations on delegation - (1) K prohibits delegations or prohibits assignments or (2) "personal service K" calls for very special skills.
non-performance by delegate
- 1. delegating party always remaind liable.
- 2. delgatee liable only if she receives consideration from delegating party.
provisions prohibiting oral modification
- common law - even if a written K expressly provides that it may be modified only by a writing, the parties can orally modify the K.
- UCC - if a K explicitly provides that it may not be modified or rescinded except by a signed writing, that provision is given effect. if the K is between a merchant and a non-merchant, however, this provision requires the nonmerchant's separate signature.
allow the innocent party to suspend further performance on her side until she receives adequate assurances that performance will be forthcoming. if other party fails to provide adequate assurances, innocent party may be excused from her own performance and may treat the failure to provide assurances as a repudiation.
- 1. the performance of each party is divided into 2 or more parts under the K;
- 2. the number of parts due from each party is the same; and
- 3. the performance of each part by one party is agreed on as the equivalent of the corresponding part from the other party--i.e., each performance is the quid pro quo of the other.
if the obligee does not receive the substantial benefit of her bargain, the breach is considered material. if the breach is material, the nonbreaching party (i) may treat the K as terminated (her duty to perform will be discharged), and (ii) will have an immediate right to all remedies for breach of the entire K, including total damages.
perfect tender rule - sale of goods
Article 2 generally does not follow the common law substantial performance doctrine. instead, it follows the perfect tender rule--if goods or their delivery fail to conform to the K in any way, the buyer generally may reject all, or accept any commerical units and reject the rest.
right to reject when a K is an installment K (when there is to be more than one delivery) is much more limited than in a single delivery K situation. installment K follow a rule akin to the common law substantial performance doctrine. in an installment K situation, an installment can be rejected only if the nonconformity substantially impairs the value of that installment and cannot be cured. in addition, the whole K is breached only if the nonconformity substantially impairs the value of the entire K.