Class 22, Tuesday, Feb. 28

1. Class 22, Tuesday, Feb. 28 Announcements Thursday 407-26 Friday Essay Midterm Today’s agenda Finish up review Thompson v. Libby PER Handout Taylor v. State Farm Class 22

2. Today is a good day to get our feet wet learning the parol evidence rule. But before that, we will complete our review for the midterm. Class 22

3. Statute of Frauds Class 22

4. Overall structure/approach • Is the K within S/F? • If so, has it met the requirements of S/F? • If not, does it fall under an exception? Class 22

5. 1. Is it within S/F? • see p. 296 in casebook—reproduces Rest. §110 You are responsible for: (1)(b) suretyship provision (1)(d) land provision (1(e) one year provision (2)(a) UCC 2-201 If not within S/F, then defense fails; if within, go to Question 2 Class 22

6. 2. If within S/F, has it met its requirements? • written memorandum evidencing an agreement • identifying the parties and subject matter • containing material terms and conditions • signed by the party to be charged If all of these requirements are met, then defense fails Class 22

7. 3. If requirements of S/F not met, does an exception apply? If no, then defense succeeds and K is not enforceable If yes, then defense fails (does not preclude enforcement) Class 22

8. Exceptions to s/f General exceptions narrow estoppel (equitable and promissory) broader promissory estoppel Clause-specific exceptions land--part performance one year—part performance suretyship—main purpose or leading object rule goods—see 2-201(3) and 2-201(2) Class 22

9. 2-201 • recall the differences between 2-201 and what we have been calling the general statute of frauds Class 22

10. Interpretation • we just covered interpretation, at least to the extent that you’ll be tested on it on March 3. • pay attention to the duty which P is claiming that D owed and which D breached • effect of misunderstanding • process of sorting out whose meaning should prevail Class 22

11. Thompson v. Libby Minnesota Supreme Court 34 Minn. 374, 26 N.W. 1 (1885) Class 22

12. Who is suing whom? For what kind of damages? What is the subject matter of the transaction? What is the legal basis for the claim? What is the duty that P is claiming that D breached? Class 22

13. What is the factual basis for the claim? Arguments/defenses? Who won at the trial court level? This appeal? Class 22

14. Issue? Authorities/Rule? Application to facts in case? What policies does it further/ignore? Class 22

15. AGREEMENT Hastings, Minn., June 1, 1883 I have this day sold to R.D. Libby, of Hastings, Minn., all my logs marked “H.C.A.,” cut in the winters of 1882 and 1883 for ten dollars a thousand feet, boom scale at Minneapolis, Minnesota. Payments cash as fast as scale bills are produced. [Signed] J.H. Thompson Per D.S. Mooers, R.C. Libby Class 22

16. p. 384 last paragraph on page “No ground was laid for the reformation of the written contract, and any charge of fraud on part of plaintiff or his agent in making the sale was on the trial expressly disclaimed.” What’s the point of this sentence? Class 22

17. 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? • Under this rule, why isn’t parol evidence admissible to determine the intention of the parties with regard to the writing they have executed? Class 22

18. note this court’s approach to interpretation and admissibility of parol evidence • collateral agreement exception? Class 22

19. 1. What is the parol evidence rule? See also Restatement §213; UCC 2-202 Class 22

20. 2. What is parol evidence? Class 22

21. 3. When does the parol evidence rule come up? Class 22

22. Visual PER may be likened to a semi-permeable membrane that surrounds an executed writing Executed Writing Extrinsic evidence Extrinsic evidence Extrinsic evidence Class 22

23. 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 Class 22

24. When the parties have reduced their understanding to a writing, the court must decide what the parties intended by the writing.--not integrated--integrated Class 22

25. 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 Class 22

26. 4 & 5--application • a. Traditional, 4 corners approach • b. Modern, contextual approach Class 22

27. Levels of integration • complete integration • partial integration • not integrated at all Class 22

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. Class 22

29. Policy behind the rule Class 22

30. Criticism of the rule Class 22

31. Exceptions Class 22

32. Taylor v. State Farm Supreme Court of Arizona 175 Ariz. 148, 854 P.2d 1134 (1993) Class 22

33. Who is suing whom? For what kind of damages? What is the subject matter of the transaction? What is the legal basis for the claim? What is the duty that P is claiming that D breached? Class 22

34. What is the factual basis for the claim? Arguments/defenses? Who won at the trial court level? Appeal? This appeal? Class 22

35. Issue? Authorities/Rule? Application to facts in case? What policies does it further/ignore? Class 22

36. 3 party accident Anne Ring,driver James Rivers, passenger Bobby Taylor Douglas Wistrom Class 22

37. Taylor had two attorneys. One was retained by State Farm—Leroy Hofmann—to defend Taylor. Why did State Farm do this? • Taylor hired an attorney, Norman Bruce Randall, to pursue a counterclaim against Ring for Taylor’s damages. Class 22

38. Ring, her husband, and Rivers settled with Wistrom. • The Rings and Rivers sued Taylor. As noted before, Taylor counterclaimed. Taylor lost the counterclaim. The Rings and Rivers obtained a judgment that, combined, was $2.5 million in excess of Taylor’s policy limits. • These judgments were affirmed by the court of appeals. • The Rings settled with State Farm. • Taylor sued State Farm for the excess Rivers judgment. Class 22

39. Taylor released “all contractual rights, claims, and causes of action he had or may have against State Farm under the policy of insurance in connection with the collision . . . and all subsequent matters.” Class 22

40. is the express language reasonably susceptible to the meaning that Taylor is trying to establish? • what is the meaning that Taylor is trying to establish? • what extrinsic evidence supports Taylor’s meaning? • what evidence supports State Farm’s meaning? Class 22

41. 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 Class 22

42. 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?] Class 22

43. 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 Class 22

44. 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. Class 22

45. 1. Collateral agreement. Even a completely integrated writing does not exclude a collateral agreement. Key points are subject matter + consideration. Class 22

46. 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. Class 22

47. 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. Class 22

48. 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. Class 22

49. 5. Oral condition precedent. Written K might be subject to oral condition precedent not contained in writing. Class 22

50. End of Class Thursday 407-26 Friday Essay Midterm Class 22