Contracts E&E question

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macattaq
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Contracts E&E question

Postby macattaq » Tue Apr 27, 2010 10:30 pm

I have a question about the K's E&E. In Ch.12, on the parol evidence rule, example 2 gives the following situation:

"Klaus Merger owned two adjoining quarter-acre lots. One had a house on it and the other, overgrown and neglected, had been used by Klaus as a dumping ground for assorted bits of junk, including a couple of broken-down cars. A few months ago Klaus placed the quarter-acre with the house on the market. Andy Gration expressed interest in buying it and negotiations ensued. Andy eventually agreed to buy it for the asking price on condition that Klaus cleared up the adjacent lot and removed all the junk. Klaus agreed to do this."

It then gives some other facts about the use of a standard-form agreement of sale, boilerplate merger clause, a blank space for additional terms, and the fact that the additional term was not written in the blank space. Klaus never clears the lot, and the question is what are Andy's chances of proving and enforcing the oral agreement.

The explanation gives a long rundown detailing the difference in the jurisdictions, and the various hurdles that Andy would have to face in bringing a claim. It goes into the fact that the term was not written into the blank space, and gives the overall impression that Andy would lose.

I simply wrote that Andy's odds were pretty good, since it seems like Andy's performance was conditioned upon the seller clearing the lot. Since an oral condition precedent is an exception to the parol evidence rule, all extrinsic evidence relating to it would be admitted. I didn't go into an analysis of the integration level of the document or anything like that, because of the exception.

WTF did I do wrong?

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macattaq
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Re: Contracts E&E question

Postby macattaq » Tue Apr 27, 2010 10:42 pm

betasteve wrote:
macattaq wrote:I have a question about the K's E&E. In Ch.12, on the parol evidence rule, example 2 gives the following situation:

"Klaus Merger owned two adjoining quarter-acre lots. One had a house on it and the other, overgrown and neglected, had been used by Klaus as a dumping ground for assorted bits of junk, including a couple of broken-down cars. A few months ago Klaus placed the quarter-acre with the house on the market. Andy Gration expressed interest in buying it and negotiations ensued. Andy eventually agreed to buy it for the asking price on condition that Klaus cleared up the adjacent lot and removed all the junk. Klaus agreed to do this."

It then gives some other facts about the use of a standard-form agreement of sale, boilerplate merger clause, a blank space for additional terms, and the fact that the additional term was not written in the blank space. Klaus never clears the lot, and the question is what are Andy's chances of proving and enforcing the oral agreement.

The explanation gives a long rundown detailing the difference in the jurisdictions, and the various hurdles that Andy would have to face in bringing a claim. It goes into the fact that the term was not written into the blank space, and gives the overall impression that Andy would lose.

I simply wrote that Andy's odds were pretty good, since it seems like Andy's performance was conditioned upon the seller clearing the lot. Since an oral condition precedent is an exception to the parol evidence rule, all extrinsic evidence relating to it would be admitted. I didn't go into an analysis of the integration level of the document or anything like that, because of the exception.

WTF did I do wrong?

I haven't dug into my outline much yet, so bare with me:
First question, does E&E discuss conditions in a subsequent chapter? If so, perhaps they simplified.

Otherwise, I feel like the merger clause is the operative fact here. Good question though. I think I am going to dig into my outline to see what I've got.


Ah yes, conditions are in Ch. 16. So it is possible they simplified. However, it briefly discusses conditions precedent as an exception. It mentions that the reasoning for allowing one is flimsy, but well-established. The answer to example 2 doesn't mention a condition precedent, so I'm guessing that they are simplifying.

I think you're right on the merger clause. The prior question dealt with a standard form, lacking a merger clause, but with an oral agreement (though not a condition). Makes sense that they would test a standard form with a merger clause, in order to show the difference in the analysis process.

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macattaq
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Re: Contracts E&E question

Postby macattaq » Tue Apr 27, 2010 11:04 pm

I'm think that if a situation like this appeared on an exam, that I would argue it as follows:

Seller argues that the parol evidence rule should bar admissibility, as it was a promise. Rather than being a condition, it was an additional, oral agreement. Then run through the test for integration and admissibility.

Buyer argues that it was not a promise, but a condition precedent. This is based on the language stating "on condition that". Therefore, it should be admitted because it is an exception to the parol evidence rule. I think the real meat of the arguments would be in determining whether or not this exception would be contrary to the merger clause. Policy arguments ensue, profit follows.

Thanks for the help!




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