All Contracts II

If PER 1 is supplementation, what is PER 2?

Context. The "to explain" exception

Would you explain the to explain exception outside of an interpretation analysis?

no, never

What issue do you not have to analyze in Restatement § 214(c) when you're doing the to explain exception?

integration

Do classical and modern approach to PER allow parol evidence to contradict the writing?

no, neither do

What does supplementation deal with in PER 1?

terms that didnt make their way into the party's agreement

are the classical and modern approach to the to explain exception similar or different?

very different

What analysis is the to explain exception part of?

interpretation analysis

What do the class. and modern approach require for the to explain exception?

ambiguity, but different kinds (dif flashcard)

what question do you need to keep in mind for PER 2?

Is the disputed contract language ambiguous

What ambiguity does the classical/textualist PER 2 require?

patent ambiguity

What ambiguity does the modern/contextualist PER 2 require?

latent ambiguity, BUT that's a lower standard, so it would also of course then allow patent ambiguity

What is patent ambiguity?

it means it appears on the face of the writing

What is latent ambiguity?

not on the face of the writing, but can be shown that something on the writing can be ambiguous

What test do patent and latent ambiguity use?

The Reasonably Susceptible Test

What is The Reasonably Susceptible Test?

“Is the disputed language reasonably susceptible to more than one meaning?”

What will the courts look at for each test for PER 2?

classical: only the contract itself. modern: the contract and the PE

high level question: What is PER? "A doctrine that…"

a doctrine that helps us figure out what one or both parties' obligations are

Why do you need to know what a party's obligations are for PER?

in order to know if they performed their contractual duties or are in breach

what is a breach, and what question does that pose?

ANY non-performance when performance is due. Can the NP be justified?

What does PER do?

it helps us sort out the parties' obligations

For what purpose is PE being offered? (this tells you which PEr scenario you have to do)

Is the PE a term? is it being offered to explain disputed language? is it being offered to show that the K is a product of a mistake?

How Do You Know to Discuss PER on a Fact Pattern?

If you see any PE in the fact pattern, you NEED to discuss the PE rule

What is the analysis for the PER 2: To Explain Exception under the Modern approach?

(1) requires latent ambiguity

How does the PER fit into the Ks II Big Picture?

It is one of the doctrines that help pin down one or both parties’ obligations.

What is the test for the Collateral Agreement Exception under the Classical approach?

Thompson: the subject matter of the PE must be distinct from the subject matter of the writing

What is the only thing the PER gets you?

it excludes evidence

What if a writing is completely integrated? What can and/or can’t be done?

It cannot be contradicted and the writing cannot be supplemented with a consistent additional term

What are the triggering facts for the PER?

You need all of the following: (1) a written agreement

What is the test for the Collateral Agreement Exception under the Modern approach?

(missing a word(s)) agreement is not completely integrated if the writing omits a consistent additional agreed term which is (a) agreed to for separate consideration, or (b) such a term as in the circumstances might naturally be omitted from the writing.

What if a writing is partially integrated? What can and/or can’t be done?

It cannot be contradicted but the writing can be supplemented with a consistent additional term

If a writing is integrated at all, what cannot be contradicted with what?

The writing cannot be contradicted with PE

What is the analysis for the PER 2: To Explain Exception under the Classical approach?

(1) requires patent ambiguity

What is the Ultimate question in an interpretation scenario?

whose meaning prevails

what are the steps of an interpretation analysis? (high level, they'll be broken down)

1) ask "will the court admit parol evidence to determine whose meaning prevails? 2) whose meaning prevails?

In the Interp. analysis, step one is "will the court admit PE to determine whose meaning prevails? What's the test and how does it answer it?

PER 2: to-explain test. PEr only answer if PE is in or out. Whether its in or out turns on whether the disputed K language is ambiguous. if ambiguous, it's in. if it's not, it's not in.

What is Step 1 of the Interpretation analysis?

Will a court admit PE to determine whose meaning prevails.

What do you get if the disputed K language IS patently ambiguous?

The PE would be admitted under both the Classical and Modern Approaches

What do you get if the disputed K language IS latently ambiguous?

The PE would be admitted under the Modern approach

What do you get if the disputed K language IS NOT patently ambiguous?

The PE would not be admitted under the classical approach.

What do you get if the disputed K language IS NOT latently ambiguous?

The PE would be for the judge only (not the trier of fact)

What is the integration rule/question (general)?

Turns on the parties intent - Did the parties intend the document to be a final expression of their agreement (or at least of the terms contained in the document)?

What is the four corners test?

the classical test for integration - courts focus on the writing and ONLY the writing

What is the merger clause (classical approach)?

A merger clause explicitly states the writing is intended to be final and complete. It is designed to trigger the parol evidence rule if someone offers parol evidence.

Where do you find the merger clause?

In the written contract

What is the Classical Approach for integration

4 corners test

What is the modern approach for integration?

facts and circumstances test

what are the factors used to determine the facts and circumstances test?

1) was the agreement a production of negotiation, 2) were mutiple drafts circulated before final was signed, 3) were there third party advisors present, 4) formality of the writing (ex was it an actual contract, written on a bar napkin, etc), formality of the execution of the writing (ex. executed in an office or restaurant over lunch)

what effect does the merger clause have on the integration under the modern approach?

the writing isn't conclusive. it's just one factor to consider

What is the only thing PER gets you?

it excludes evidence

What do you get if you argue a PER exception successfully?

the parol evidence comes in

Who is the only party that would ever argue a PER exception?

Party B

what are the exceptions to the PER?

1) to explain, 2) subsequent agreements, 3) oral condition precedent, 4) invalidating causes, 5) collateral agreements - NEED TO KNOW WHAT EACH OF THESE MEAN

When does PER not apply?

PER does not apply to any parol evidence that comes into existence after the execution of the writing

What are the two approaches for PER

classical and modern approach

What are the steps of the SUPP/CAT/CAE analysis?

1) Party A argues it's completely integrated. 4 corners test. 2) Pty A argues PE contradicts the writing. Party B will argue its partially integrated. Facts and circumstances test. Party by argument 2: modern approach: CAE R§216(2) (collateral agreement exception). Party A response - classical approach to CAE

what does the merger clause establish?

complete integration

What are the three big picture questions?

Is there a contract? If there is a K, was it breached? If there was a breach, is there a legal remedy?

What is a breach?

any non-performance when a performance is due.

what doctrines answer what a party's performance obligations are?

PER and Interpretation

What is parol evidence?

literally anything outside of a "final" writing

What does PER get you if you argue it successfully?

it excludes evidence

What categories does the PER exclude?

other terms not included in the writing AND context (context is another flashcard)

What's "context"?

how each party understood the agreement when they were negotiating it, and what they thought it was supposed to cover, mean, etc

How do you tell whether a missing term is “obvious” or “not obvious” in PER analysis?

A term is obvious if reasonable parties would certainly include it in the writing if they agreed to it. A term is not obvious if parties might reasonably assume it, discuss it orally, or omit it from the writing even if agreed upon.

Why does it matter whether a missing term is obvious or not obvious?

If a term is obvious, courts assume it was not agreed to if it is missing from the writing. If a term is not obvious, the court must continue the PER analysis (integration, collateralness, etc.).

What types of PER cases are there?

Supplementation, collateral, interpretation, and invalidation

What is supplementation?

using extrinsic evidence to add a term to the written agreement.