Contracts

The Statute of Frauds is among the defenses to contract formation. This exercise assists the student in determining whether a transaction is within the statute of frauds, whether the agreement is evidenced by a writing, and whether an exception applies.

A hundred years ago, a law professor said of the parol evidence rule, "There are few things darker than this or fuller of subtle difficulties." Many students and professionals who have studied the rule would agree with that assessment. Hopefully this exercise will illuminate the rule. It does so by examining the functions served by the rule, taking the user through a series of questions that can be used to resolve most issues involving the application of the rule. The Uniform Commercial Code enactment of the rule is examined in detail.

Interpretation involves an ascertainment of the meaning of the words and provisions of a contract. Whereas "construction" of a contract relates to the legal effect of the words used by the parties, "interpretation" addresses the meaning of the parties. Whose meaning is to be given effect with respect to certain contract terms? What evidence may be taken into account when courts engage in interpretation? In this lesson, the parol evidence rule will be considered with respect to the admissibility of extrinsic evidence to determine the meaning of the contract as formed.

The terms of a contract include express and implied promises, conditions, provisos and presuppositions that bind the parties. Contracts often have "gaps" in them, either intentionally or unintentionally left that way by the parties. This exercise considers how courts supply terms to fill those gaps both at common law and under the UCC.

This lesson considers probably the most common type of implied term, that of good faith. At common law, courts often supply a term requiring the parties to exercise "good faith" or "good faith and fair dealing". Moreover, for the sale of goods, the UCC provides that every contract is subject to good faith requirements, which cannot be disclaimed by agreement.

A contract can contain many different types of promises, made up of both express and implied terms. Express and implied warranty terms are the subject of this lesson. For instance, when parties contract for the sale of goods, they have certain expectations about the goods to be sold. These expectations form the basis of warranties that arise under U.C.C. Article 2. That is, what has the seller agreed to sell?