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CISG and Parol Evidence Rule: A Legal Analysis, Lecture notes of Contract Law

A court case where the plaintiff retailer sought to review a judgment in favor of the defendant manufacturer regarding the application of the parol evidence rule under the united nations convention on contracts for the international sale of goods (cisg). The implications of the cisg on the parol evidence rule and the importance of parties' subjective intent in contract interpretation.

Typology: Lecture notes

2011/2012

Uploaded on 10/05/2012

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MCC-Marble Ceramic Center v. Ceramica Nuova D’Agostino pg 385
Facts:
Plainti retailer sought review of a judgment entered in the
court below that granted summary judgment in favor of
defendant manufacturer. Plainti contended that evidence of
the parties' subjective intent at the time of contracting was
improperly excluded because the parol evidence rule was
erroneously applied in derogation of the United Nations
Convention on Contracts for the International Sale of Goods
(CISG) that governed judicial interpretation of the parties'
agreement. The court reversed the lower court's decision and
remanded the cause for further proceedings. The court held
that the CISG did preclude application of the parol evidence
rule. Furthermore, the court held that summary judgment was
precluded because plainti had presented evidence that
raised an issue of material fact about whether the parties
subjectively intended to be bound by terms contained on the
reverse side of a preprinted contract used to memorialize the
terms of their agreement
What is the scope of CISG?
Applies wherever the location of the business of both
parties to the contracts have ratied the treaty.
CISG pg 359 of contract law: selected source materials
MCC-PL/Buyer-Located in FL
D’Agostino-DF/Seller-Located in Italy
PL: Complaint: failure to supply
DF: Answer: Non shipment justied b/c MCC didn’t pay
DF: Counterclaim: to collect unpaid money
PL: CISG allows set o of money owed for non conforming
goods.
DF: Contract required written notice of dissatisfaction
PL: we did not intend written terms to apply
DF argument:
Clear
Conspicuous
“ I was just kidding”/ I didn’t mean that-not a defense
MCC argument:
Intent was neutral
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MCC-Marble Ceramic Center v. Ceramica Nuova D’Agostino pg 385 Facts:

  • Plaintiff retailer sought review of a judgment entered in the court below that granted summary judgment in favor of defendant manufacturer. Plaintiff contended that evidence of the parties' subjective intent at the time of contracting was improperly excluded because the parol evidence rule was erroneously applied in derogation of the United Nations Convention on Contracts for the International Sale of Goods (CISG) that governed judicial interpretation of the parties' agreement. The court reversed the lower court's decision and remanded the cause for further proceedings. The court held that the CISG did preclude application of the parol evidence rule. Furthermore, the court held that summary judgment was precluded because plaintiff had presented evidence that raised an issue of material fact about whether the parties subjectively intended to be bound by terms contained on the reverse side of a preprinted contract used to memorialize the terms of their agreement
  • What is the scope of CISG?
    • Applies wherever the location of the business of both parties to the contracts have ratified the treaty.
  • CISG pg 359 of contract law: selected source materials

MCC-PL/Buyer-Located in FL D’Agostino-DF/Seller-Located in Italy

  • PL: Complaint: failure to supply
  • DF: Answer: Non shipment justified b/c MCC didn’t pay
  • DF: Counterclaim: to collect unpaid money
  • PL: CISG allows set off of money owed for non conforming goods.
  • DF: Contract required written notice of dissatisfaction
  • PL: we did not intend written terms to apply

DF argument:

  • Clear
  • Conspicuous
  • “ I was just kidding”/ I didn’t mean that-not a defense

MCC argument:

  • Intent was neutral

If you know that another party has a subjective intent and you do not take steps to correct the subjective intent then you are bound to the intent

Parol (oral) evidence

  • May be barred by parol evidence rule or integration clause
  • When offered to alter/amend or contradict the writing.
    • All other words are okay. Supplement/explain or interpret F 0 D F----------------------------------|------------------------------------------^

F 0 E 0 Executed K Before contract was made: agreed that he would fix the furnace free for 2 years. It is not stated in the contract b/c it was a written agreement. Cannot bring up oral contract that is prior or contemporaneous with the executed K. If it is brought up after the contract is signed then it is okay.

8.2 of CISG

  • Where you have something from both sides it is evidence and it comes in.

Integration clause/Merger clause

  • This is the final agreements between the parties. No amending, altering, contradicting, explaining or interpreting by other things is not allowed.

Objective and Subjective Elements 4 principles:

  • (1) If parties subjectively attach different meanings to an expression, neither party knows that the other attaches a different meaning, and the two meanings are not equally reasonable, the more reasonable meaning prevails. - Lucy
  • (2) If the parties subjectively attach different meanings to an expression, neither party knows that the other attaches a different meaning, and the two meanings are equally reasonable, neither meaning prevails - Peerless
  • (3) If the parties subjectively attach the same meaning to an expression, that meaning prevails even though it is unreasonable
  • (4) If the parties, A and B, attach different meanings, Alpha and Beta, to an expression, and A knows that B attaches meaning Beta, but B does not know that A attaches meaning Alpha, the meaning Beta prevails even if it is less reasonable than the meaning Alpha
  • TC ruled for Trustee Agreement
  • No express term
  • Pay until college- $
  • Pay $1,200 if son is pre-college status OR
  • Pay 0 if not in college Purpose of contract
  • Maintain support in pre-college years
  • Maintain and support, educate in college years Purpose is gone since Richard joined the Army.
  • Court stated that Army is maintaining and supporting Richard so George no longer has to do it. No obligation for George

Lawson v. Martin Timber pg 404 Facts:

  • DF had two years to cut and remove timber, “in event of high water after this time” then DF would get an additional one year
  • Stating that the “in event of high water” really meant that in cases were high water prevented them from removing the timber in a timely fashion.
  • Purpose of the contract