1 George Mason School of Law Contracts II Terms F.H. Buckley
[email protected]
Slide 2
So now we have an enforceable contract But what is its content?
2
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Identifying the Terms and Interpreting them Identifying: what
are the terms Interpreting: what do they mean? Conditions and
Warranties Mistake 3
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Identifying the Terms and Interpreting them In any event, do we
look outside a written contract? Oral statements Course of dealings
Trade customs 4
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Some jargon What is Parol Evidence? The Parol Evidence Rule as
a legal presumption 5
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Some jargon What is Parol Evidence? The Parol Evidence Rule as
a legal presumption Merger Clauses 6
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Some jargon What is Parol Evidence? The Parol Evidence Rule as
a legal presumption Merger Clauses Textualism 7
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Some jargon What is Parol Evidence? The Parol Evidence Rule as
a legal presumption Merger Clauses Textualism Four Corners rule
8
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Some jargon Textualism and Contextualism 9
Slide 10
What would we lose if we banned written contracts? Certainty as
to terms Recall the rationale for the Statute of Frauds in McIntosh
p. 518 10
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What would we lose if we banned written contracts? Certainty as
to terms Adjudication and Litigation Costs 11
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What would we lose if we banned written contracts? Certainty as
to terms Adjudication and Litigation Costs Agency Costs of Sellers
Agents 12
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What happens where there is a writing? First question: Is this
a binding contract? 13 Lady Gaga signs an autograph
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First question: Is this part of a binding contract? Recall
Merit Music at 429 I imagined it was a note. 14 What happens where
there is a writing?
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First question: Is this part of a binding contract? Signed
writings: Restatement 211(a) 15 What happens where there is a
writing?
Slide 16
First question: Is this part of a binding contract? Non est
factum: Restatement 163, Illustration 2 Restatement 211(c), 214(d)
16 What happens where there is a writing? 16
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First question: Is this part of a binding contract? Birmingham
TV p. 431 17 What happens where there is a writing?
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Can we look behind a signed written contract for the terms of
the contract? Integrated Agreements: Restatement 209(1), comment a
18
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Can we look behind a signed written contract for the terms of
the contract? Integrated Agreements: Completely and Partially
Integrated Writings: Restatement 210 19
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Can we look behind a signed written contract for the terms of
the contract? Integrated Agreements: Completely and Partially
Integrated Writings: Restatement 210 Ch 210(3): what happened to
the parol evidence rule? 20
Slide 21
Can we look behind a signed written contract for the terms of
the contract? The traditional Parol Evidence Rule Burke at 554 in
Masterson Where the writing is integrated, parol evidence is not
admitted to add to, vary or contradict the writing 21
Slide 22
Can we look behind a signed written contract for the terms of
the contract? The traditional Parol Evidence Rule Burke at 554 in
Masterson Where the writing is integrated, parol evidence is not
admitted to add to, vary or contradict the writing Fully integrated
writings: Restatement 213(2) 22
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Limits to the Parol Evidence Rule Additional terms supplied by
statute or courts Omitted Essential Terms Collateral Agreements
23
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Limits to the Parol Evidence Rule Additional terms supplied by
statute or courts Good title: UCC 2-312 Merchantability: UCC 2-314
Fitness for purpose: UCC 2-315 24
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Limits to the Parol Evidence Rule Omitted essential terms:
Restatement 204 The one-year term on employment in McIntosh at 516
25
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Limits to 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 for $400 in an oral agreement. Problems? 26
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Limits to the Parol Evidence Rule: Collateral Contracts 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 for $400 in an oral agreement.
Problems? Two entirely distinct contracts may be made at the same
time, and will be distinct legally. Williston at 546 27
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Collateral Contracts The test in Mitchill v. Lath 28 Ice
House
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Collateral Contracts The test in Mitchill v. Lath In form a
collateral agreement Cant contradict the written agreement One that
would not ordinarily be embodied in the written agreement 29
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Collateral Contracts The test in Mitchill v. Lath In form a
collateral agreement Cant contradict the written agreement One that
would not ordinarily be embodied in the writing What was the oral
agreement here? 30
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Collateral Contracts The test in Mitchill v. Lath In form a
collateral agreement Cant contradict the written agreement One that
would not ordinarily be embodied in the writing Andrews: s fail no.
3 and maybe no. 2 31
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Collateral Contracts Would the ice house covenant naturally be
found in the land sale contract? What would Williston say? 32 Chief
Judge Irving Lehman 32
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Integration: Masterson v. Sine 33 Chief Justice Roger Traynor
Jones v. Ahmanson Escola v. Coca-Cola Pacific Gas infra Perez v.
Sharp
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Integration: Masterson v. Sine 34 Chief Justice Roger Traynor
Justice Louis H. Burke
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Integration: Masterson v. Sine What was the deal? 35
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Integration: Masterson v. Sine What was the deal? 36 Dallas and
Rebecca Masterson Medora and Lu Sine (sister and brother-in-law)
ranch
Slide 37
Integration: Masterson v. Sine What was the deal? 37 Dallas and
Rebecca Masterson Medora and Lu Sine (sister and brother-in-law)
Option to repurchase
Slide 38
Integration: Masterson v. Sine What rights does a trustee in
bankruptcy have? 38
Slide 39
Integration: Masterson v. Sine What rights does a trustee in
bankruptcy have? The commencement of a case creates an estate. Such
estate is comprised of all the following property: all legal or
equitable interests of the debtor in property as of the
commencement of the case. 39
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Integration: Masterson v. Sine What rights does a trustee in
bankruptcy have? So could the trustee step in the shoes of
Masterson to assert the option What do you infer from the fact that
the trustee wanted to do so? 40
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Integration: Masterson v. Sine What was the alleged oral
modification? 41
Slide 42
Integration: Masterson v. Sine What was the oral modification?
Dallas reserves an option to repurchase which does not convey to
his assigns 42
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Integration: Masterson v. Sine What was the oral modification?
What happens if an agreement is fully integrated per Traynor?
43
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Integration: Masterson v. Sine What was the oral modification?
What happens if an agreement is partly integrated per Traynor?
44
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Integration: Masterson v. Sine What was the oral modification?
How to tell if a writing is completely or partially integrated per
Traynor? 45
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Integration: Masterson v. Sine 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??
46
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Integration: Masterson v. Sine 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??? 47
Slide 48
Integration: Masterson v. Sine What was the oral modification?
How to tell if a writing is completely or partially integrated per
Traynor? Does that mean that contextualism is imposed in every
case? 48
Slide 49
Integration: Masterson v. Sine What is the policy argument for
contextualism? 49
Slide 50
Integration: Masterson v. Sine What is the policy argument for
contextualism? the party urging the spoken as against the written
word is most often the economic underdog 50
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Integration: Masterson v. Sine What is the policy argument for
contextualism? the party urging the spoken as against the written
word is most often the economic underdog Is that the case here?
51
Slide 52
Integration: Masterson v. Sine What is the policy argument for
textualism? 52
Slide 53
Integration: Masterson v. Sine What is the policy argument for
textualism? Written evidence as more accurate than memory 53
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Integration: Masterson v. Sine What is the policy argument for
textualism? Written evidence as more accurate than memory Juror
bias 54
Slide 55
Integration: Masterson v. Sine What is the policy argument for
textualism? Written evidence as more accurate than memory Juror
bias [Uncertainty and Litigation costs?] 55
Slide 56
Integration: Masterson v. Sine Traynor on Parol Evidence Would
the reference excluding assigns naturally be made as a separate
agreement? 56
Slide 57
Integration: Masterson v. Sine Traynor on Parol Evidence Would
the reference excluding assigns naturally be made as a separate
agreement? Do you agree with Traynor? 57
Slide 58
Masterson Are Burkes charges correct? 58
Slide 59
Masterson Are Burkes charges correct? Does this undermine the
security of real estate title searches? 59
Slide 60
Masterson Are Burkes charges correct? Opens the door, albeit
unintentionally, to a new technique for defrauding creditors?
60
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Masterson Are Burkes charges correct? Opens the door, albeit
unintentionally, to a new technique for defrauding creditors? Was
Burke being too generous? 61
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Masterson Are Burkes charges correct? The change contradicts a
term which would ordinarily be supplied by operation of law.
62
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How does the Restatement handle this? Which way does the
Restatement come down? Cf. 209(2), 210(3), 214 63
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How does the Restatement handle this? Which way does the
Restatement come down? But cf. 211(1), 215, 216 64
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How does the Restatement handle this? Collateral agreements Cf.
216(2)(c) 65
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How does the Restatement handle this? Collateral agreements Cf.
216 Separate consideration: Illustration 3 Terms omitted naturally:
Illustration 7 66
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How does UCC 2-202 handle this? 67
Slide 68
How does UCC 2-202 handle this? The writing may be explained or
supplemented with consistent additional terms unless the writing
was intended as complete and exclusive 68
Slide 69
How does UCC 2-202 handle this? Comment 3: would the oral term
certainly have been included in the writing? 69
Slide 70
How does UCC 2-202 handle this? Comment 3: would the oral term
certainly have been included in the writing? How does this compare
with restatement 216(2)(b): would the oral term naturally be
omitted? 70
Slide 71
How does UCC 2-202 handle this? Comment 3: would the oral term
certainly have been included in the writing? How does this compare
with restatement 216(2)(b): would the oral term naturally be
omitted? Which language is narrower? 71
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How does UCC 2-202 handle this? Comment 3: would the oral term
certainly have been included in the writing? How does this compare
with restatement 216(2)(b): would the oral term naturally be
omitted? In Masterson, might the term have naturally but not
certainly been included? 72
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73 George Mason School of Law Contracts II Terms F.H. Buckley
[email protected]
Slide 74
Next day Scott casebook: Conditions Scott casebook: Warranties
659-68 Scott article on ww.buckleysmix.com under American Illness
74
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Textualism and Contextualism Departures from Textualism 75
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Textualism and Contextualism Departures from Textualism
Collateral agreements 76
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Textualism and Contextualism Departures from Textualism
Collateral agreements Contextualism The prior question of whether a
writing is fully integrated Traynor and the Restatement 77
Slide 78
How does UCC 2-202 handle this? Hunt Foods What was the
allegedly omitted term? 78
Slide 79
How does UCC 2-202 handle this? Hunt Foods What was the
allegedly omitted term? The option to purchase to be used only if
Doliner shopped Eastern Can around 79
Slide 80
How does UCC 2-202 handle this? Hunt Foods What was the
allegedly omitted term? Why do you think Hunt refused to include
the term in the writing? 80
Slide 81
How does UCC 2-202 handle this? Hunt Foods What is the standard
for determining whether parol evidence might be considered? 81
Slide 82
How does UCC 2-202 handle this? Hunt Foods What is the standard
for determining whether parol evidence might be considered? It is
not sufficient that the existence of the condition is implausible.
It must be impossible. 82
Slide 83
How does UCC 2-202 handle this? Hunt Foods What is the standard
for determining whether parol evidence might be considered? What
about Hunts ultimatum? 83
Slide 84
How does UCC 2-202 handle this? Hunt Foods What is the standard
for determining whether parol evidence might be considered? What
about Hunts ultimatum? Were these sophisticated bargainers? 84
Slide 85
How does UCC 2-202 handle this? Snyder p. 560 What was the
alleged omitted term? 85
Slide 86
How does UCC 2-202 handle this? Snyder Is a cancellation clause
inconsistent with the written contract? Why might Greenbaum have
wanted to exclude unilateral exit rights? 86
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What is the effect of a Merger Clause? Traynor at 551 87
Slide 88
Merger Clauses Danann at 418 Alleged fraudulent representations
about operating profits on a lease of a building 88
Slide 89
The Merger Clause in Danann Absent the merger clause, what
result? The representations would ordinarily be excluded by the
Parole Evidence Rule 89
Slide 90
The Merger Clause in Danann Absent the merger clause, what
result? The representations would ordinarily be excluded by the
Parole Evidence Rule Here however the fraud exception to the Parole
Evidence Rule would apply 90
Slide 91
The Merger Clause in Danann Absent the merger clause, what
result? The representations would ordinarily be excluded by the
Parole Evidence Rule Here however the fraud exception to the Parole
Evidence Rule would apply, but for the merger clause. 91
Slide 92
The Merger Clause in Danann Absent the merger clause, what
result? The representations would ordinarily be excluded by the
Parole Evidence Rule Here however the fraud exception to the Parole
Evidence Rule would apply, but for the merger clause. Was the
draftsmanship important? 92
Slide 93
Merger Clauses: UAW 93 Doral Resort and Country Club,
Miami
Slide 94
Merger Clauses: UAW You tellin me I should stay at a scab
hotel!!! Concerned Union Executive 94
Merger Clauses: UAW Can you think of something the UAW could
have done to satisfy its concerns? 96
Slide 97
Merger Clauses: UAW Can you think of something the UAW could
have done to satisfy its concerns? Markman: The Parol Evidence Rule
gives the parties the incentive to cure the problem in the express
contract 97
Slide 98
Merger Clauses: UAW Can the parties bargain around
contextualism with a merger clause? Markmans spectre of
super-merger clauses 98
Slide 99
Merger Clauses: UAW Williston and Corbin on merger clauses Do
they end up in the same place? Dueling quotes from Corbin Pp. 565,
566, 571, 572, 573 99
Slide 100
Merger Clauses: UAW Williston and Corbin on merger clauses Do
they end up in the same place? 100
Slide 101
Merger Clauses: UAW Does fraud corrupt all? In what
circumstances, per Markman? 101
Slide 102
Merger Clauses: UAW What was the allegation of fraud? Did Carol
Management falsely represent that the union clause was in the
contract? Or that there was no merger clause? 102
Slide 103
Merger Clauses: UAW What was the allegation of fraud? Keeping
mum about plans for sale of the hotel? Was there an assertion that
CMC or Roush knew that the new owners would fire all the staff. Did
she know she was about to be fired? 103
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Merger Clauses: UAW On Holbrooks analysis, what does a merger
clause do? 104
Slide 105
Merger Clauses: UAW On Holbrooks analysis, what does a merger
clause do? What sense do you make of restatement 216, cmt e
105
Slide 106
Merger Clauses: UAW On Holbrooks analysis, what does a merger
clause do? Seibel at 577 on inconspicuous clauses 106
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Merger Clauses: UAW How would Markman have decided Hachmeister
at p. 572? 107
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Textualism and Contextualism How would you resolve the debate?
108
Slide 109
Textualism and Contextualism How would you resolve the debate?
Do the parties to the contract get a right to choose? 109
Slide 110
Textualism and Contextualism How would you resolve the debate?
Do the parties to the contract get a right to choose? Suppose the
presumptive rule is textualism: how might the parties bargain
around this? 110
Slide 111
Textualism and Contextualism Suppose the presumptive rule is
textualism: how might the parties bargain around this? Include more
detail Recitals: Whereas. No merger clause 111
Slide 112
Textualism and Contextualism Suppose the presumptive rule is
contextualism: how might the parties bargain around this? Trainor?
112
Slide 113
Textualism and Contextualism Suppose the presumptive rule is
contextualism: how might the parties bargain around this? Trainor?
Merger Clauses 113
Slide 114
Textualism and Contextualism Suppose the presumptive rule is
contextualism: how might the parties bargain around this? Trainor?
Merger Clauses??? Choice of Law 114
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115 George Mason School of Law Contracts II Interpretation F.H.
Buckley [email protected]
