Short Essay – Legal

– Short Essay (this is one essay with 3 different parts)

Question I – Explain some of the hurdles litigants have encountered when it comes to the Endangered Species Act and standing to bring a lawsuit. (200+ words)

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Question II – An illegal drug manufacturer and an illegal drug dealer enter into an oral contract in which the manufacturer will sell the drugs to the drug dealer for a set price.  The manufacturer changes his mind and sells his product to another dealer.  Could the dealer enforce the oral contract?  Why or why not? (200+ words)

Question III – A contract is made between two parties.  The terms of the contract are complete and unambiguous.  A dispute arises between the Parties.  Party A wants to pull out of the contract without penalty.  Party B argues that Party A’s proposed action is prohibited by the express terms of the contract.  Party A argues that the Parties verbally agreed to ignore that provision of the contract that would impose a penalty on Party A.  Which Party will prevail and why? (200+ words)

Chapter 10
Environmental Regulation and Sustainability

Its Legal, Ethical, and
Global Environment

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Marianne M. Jennings

Business
11th Ed.

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0

10-1
Nuisances
Interference with use and enjoyment
Damages and injunction possible
Balancing test employed
Case 10.1 Spur Industries, Inc. v. Del E. Webb Dev. Co. (1972)
What is “moving to the nuisance”?
Who wins? Who pays?
Common Law Remedies

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10-2
Air Pollution Regulation
Air Pollution Control Act (1955)
Clean Air Act (1963)
Air Quality Act (1977/1990)
Statutory Environmental Laws

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10-3
Statutory Environmental Laws
Clean Air Act Amendments of 1970
EPA authorized to establish standards
States required to adopt implementation plans (SIPs)
EPA approval required for plans
Economic and technological issues
Clean Air Act Amendments of 1977
Non-attainment areas
Prevention of significant deterioration (PSD) areas

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10-4
Statutory Environmental Laws
Economic Controls for Nonattainment Areas
New plants must have greatest possible emission control
All other operations must be in compliance
New plant emissions must be offset with reduction elsewhere
Follows bubble concept; for new plant to begin operations, its pollution must be offset by reduction in the area

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10-5
Statutory Environmental Laws
Control in PSD areas
Prevention of significant deterioration
EPA has right to review proposed plant construction
Plant has to show that there will not be significant deterioration

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10-6
Statutory Environmental Laws
1990 Amendments to Clean Air Act
Focuses on smog, alternative fuels, toxic emissions, and acid rain
Federal implementation plan (FIP) EPA Plan to reduce pollution in cities failing to submit adequate SIP
Plans must use maximum achievable control technology (MACT) (Michigan v. EPA)

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10-7
Statutory Environmental Laws
New Forms of Control: Administrative Regulation Expansion
Emissions offset policy
Bubble concept
Plant modification (Environmental Defense v. Duke Energy)
Clean Power Plan and the ultra vires challenge
Upwind and downwind liability

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7

Statutory Environmental Laws
Clean Power Plan and the ultra vires challenge
Upwind and downwind liability
Transport Rule under challenge
Climate Change/Global Warming
Paris Accord 2015
10-8

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10-9
Statutory Environmental Laws
1990 Amendments to Clean Air Act
Affected small businesses such as dry cleaners, paint shops, and bakeries
Created emissions permit market

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10-10
Water Quality Act of 1965
Created Federal Water Pollution Control Administration (FWPCA)
States required to establish water quality standards
No enforcement procedures − states did little
Water Pollution Regulation
Rivers and Harbors Act of 1899
Prohibited discharges into navigable waters
Used for enforcement since other laws had no teeth
Most industries got around the act quickly by obtaining the permits required under the act
Statutory Environmental Laws

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10-11
Statutory Environmental Laws
Water Pollution Regulation
Federal Water Pollution Control Act of 1972
Federal government responsible for standards and control
Emissions controlled by industrial groups
Ranges for groups referred to as effluent guidelines
National Pollution Discharge Elimination Permit (NPDES)
Renamed Clean Water Act in 1977

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10-12
Statutory Environmental Laws
Effluent guidelines
Conventional; Nonconventional; Toxic
National Pollution Discharge Elimination Permit (NPDES)
Best Conventional Treatment (BCT)
Best Available Treatment (BAT)
Cost-benefit analysis is required (Entergy Corporation v. Riverkeeper, Inc.)

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10-13
Other Water Regulation
Safe Drinking Water Act
Passed in 1986
States responsible for enforcement but must have minimum federal standards for drinking water systems
Oil Pollution Act of 1990
Passed in response to huge spills like Exxon Valdez
Companies must either clean up spill or pay federal government its costs for the clean-up
Applies to all navigable waters up to 200 miles offshore
Statutory Environmental Laws

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10-14
Solid Waste Disposal Regulation
Toxic Substances Control Act of 1976
Response to chemical dumping
EPA controls manufacture and disposal of toxic substances
Resource Conservation and Recovery Act of 1976
Regulates methods of disposal through a permit system
Discourages dumping
Statutory Environmental Laws

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10-15
Superfund
“SUPERFUND”: Comprehensive Environmental Response, Compensation, & Liability Act (CERCLA)
Suit can be brought to recover funds expended from company responsible for the dumping
1986 amendments Superfund Amendment and Reauthorization Act
EPA can now sue to recover clean-up funds from those who are responsible

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10-16
Liability For Clean-Up Cost May Extend to Lenders
Under the Asset Conservation, Lenders Liability, and Deposit Insurance Protection Act of 1966, Lenders are Protected From Liability So Long as They Do Not Participate in the Management of the Property
Superfund

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10-17
Four Classes of Responsible Parties
Owners and operates at the time of contamination
Current owners and operators – whether they were responsible for the contamination or not
Transporters of the hazardous material
Those who arranged for transport of the hazardous materials
Superfund

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10-18
Case 10.2
Case 10.2 Burlington Northern Railway/Shell Oil Co. v. U.S. (2009)
What is the meaning of “arranger” for purposes of CERCLA liability?
What is the basis for allocation of liability for CERCLA clean-ups?

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10-19
Due Diligence and EPA Standards
“All appropriate inquiries” pursuant to CERCLA section 101(35)(B) must be conducted within one year prior to the date of acquisition of the subject property and must include:
(1) An inquiry by an environmental professional as defined in §312.10, as provided in §312.21;
(2) The collection of information pursuant to §312.22 by persons identified under §312.1(b); and
(3) Searches for recorded environmental cleanup liens, as required in §312.25

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10-20
Due Diligence and EPA Standards
The following components of the all appropriate inquiries must be conducted or updated within 180 days of and prior to the date of acquisition of the subject property:
Interviews with past and present owners, operators, and occupants (see §312.23);
Searches for recorded environmental cleanup liens (see §312.25);
Reviews of federal, tribal, state, and local government records (see §312.26);
Visual inspections of the facility and of adjoining properties (see §312.23); and
The declaration by the environmental professional (see §312.21(d))

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10-21
Guidelines for Self-Audits
The violations were uncovered as part of a self-audit or due diligence done on property
The violations were uncovered voluntarily
The violations were reported to the EPA within 10 days
The violations were discovered independently and disclosed independently, not because someone else was reporting or threatening to report

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10-22
Guidelines for Self-Audits
There is correction of the violations within 60 days
There is a written agreement that the conduct will not recur
There can be no repeat violations or patterns of violations
There is no serious harm to anyone as a result of the violation
The company cooperates completely with the EPA

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10-23
Brownfield Issues
Many CERCLA Sites That are Abandoned and/or Unused (Brownfields)
Fear of Liability Precludes Development and Use
Cost of Cleanup is Prohibitive For Projects
Federal, State, and Local Programs to Encourage Redevelopment

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10-24
Environmental Quality Regulation
National Environmental Policy Act of 1969
Requires federal agencies to file environmental impact statements for all major actions (EISs)
Content of EIS
Environmental impact
Adverse effects
Alternatives
New effects – short term versus long term
Irreversible effects
Environmental Quality

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10-25
Environmental Quality
Case 10.3 Sierra Club v. United States Department of Transportation (1985)
What is the basis for the appeal?
What has the FAA allowed?
Is another EIS ordered?

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10-26
Other Regulations
Surface Mining and Reclamation Act of 1977 requires mining company to restore land
The Fracking Issue
Noise Control Act of 1972; EPA and FAA regulate noise pollution for aircraft
Pesticide Control Act
Must register with EPA to ship
Must label all pesticides
OSHA
Responsible for work place environment and safety issues
Other Environmental Laws

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10-27
Other Regulations
Asbestos Hazard Emergency Response Act (AHERA)
Schools must inspect for asbestos and take action
Asbestos is a toxic pollutant and community right-to-know substance
Duty to disclose presence of asbestos
Endangered Species Act
Powerful tool for environmentalists
Habitats cannot be disturbed
Other Environmental Laws

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10-28
Case 10.4 Babbitt v. Sweet Home Chapter of Communities for a Great Oregon (1995)
Did Congress intend to give the secretary authority to shut down an industry?
Endangered Species

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10-29
State Environmental Laws
State EPA
Regulation of fuel used
Incentives for carpooling

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10-30
Enforcement
Parties
Environmental Protection Agency (EPA)
Council on Environmental Quality (CEQ)
Part of executive branch
Sets national policies and makes recommendations

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10-31
Parties
Other agencies
Atomic Energy Commission
Federal Power Commission
HUD
Department of Interior
Forest Service
Bureau of Land Management
Department of Commerce
Enforcement

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10-32
Criminal Sanctions
Clean Air Act
$25,000 per day, up to one year in prison, or both
15 years for willful or repeat violations
$10,000 rewards for reporting violations
Clean Water Act
$25,000 per day, up to one year in prison, or both
Resource Conservation and Recovery Act
$250,000 and/or fifteen years for intentional
Enforcement

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10-33
Criminal Sanctions
Oil Pollution Act
$25,000 per day or $1,000 per barrel
$3,000 per barrel if willful or negligent
$250,000 and/or 5 years for failure to report
Civil Liability
Environmental groups can bring suits
Sierra Club
Environmental Defense Fund
League of Conservation Voters
Enforcement

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10-34
Case 10.5 U.S. v. Citgo Petroleum Corp. (2015)
Did Congress intend to prosecute the failure to take action to protect birds and other species from injury?
Is there strict liability when animals are injured or killed by conditions on private property?
Enforcement

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10-35
EU Has European Environment Agency
ISO 14000
LEED Certification
International Issues

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10-36
Eco-Audit Stickers
Shows products environmental impact
International Organization for Standardization (ISO) developed ISO 14000, a series of environmental standards
Companies seek ISO 14000 certification
International Issues

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36

BP and the Troubling History on Budget Cuts
Texas City Refinery
15 deaths; 170 workers injured
4,000 suits totaling $2.1 billion in damages
OSHA found 271 safety violations at the plant; they were not addressed prior to the explosion; post-explosion, 439 “willful and egregious violations”
$87 million OSHA fine (4X the last largest fine)
$50 million fine to EPA
Prudhoe Bay Pipeline Burst: No Smart-Pigging
10-37

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Findings on BP Atlantis Problems
“Put off repairing the pump in the context of a tight cost budget.”
“Leadership did not clearly question the safety impact of the delay in repair.”
Employee safety officer: “You only ever got questioned on why you couldn’t spend less.”
10-38

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BP Headlines
“BP Crew Focused on Costs” Wall Street Journal, June 15, 2010, p. A1.
“Unusual Decisions Set Stage for BP Disaster,” Wall Street Journal, May 27, 2010, p. A1.
“Oil Execs: BP Didn’t Meet Standards,” USA Today, June 16, 2010, p. 1B.
“Members of Past Disaster Panels See Recurring Pattern,” Wall Street Journal, June 16, 2010, p. A4.
“The Five Shortcuts That Prioritized Time and Money Over Safety,” Wall Street Journal, June 16, 2010, p. A4.
“BP Chose Riskier of Two Options for Well Casing,” Wall Street Journal, May 27, 2010, p. A1.
“Safety and Cost Drives Clashed As CEO Hayward Remade BP,” Wall Street Journal, June 30, 2010, p. A1.
“BP Relied on Cheaper Wells,” Wall Street Journal, June 19-20, 2010, p. A1.
10-39

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Chapter 11
Contracts and Sales: Introduction and Formation

Its Legal, Ethical, and
Global Environment

Marianne M. Jennings

Business
11th Ed.
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0

11-1
What Is a Contract?
“A contract is a promise (or set of promises) for breach of which the law gives a remedy.”
Defined in Restatement (Second) of Contracts − American Law Institute (ALI)

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11-2
Sources of Contract Law
Common Law
Based on English common law
Summarized in Restatement (Second) of Contracts
Applies to contracts with subject matters of land or services
Examples: Mortgage, lease or medical services

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2

11-3
Uniform Commercial Code (UCC)
Drafted by ALI and National Conference of Commissioners on Uniform State Laws
Common law is not uniform from state to state
First appeared in 1940s
Adopted in part or whole in all states
Article 2 governs contracts for the sale of goods; more liberal than common law
Sources of Contract Law

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11-4
Case 11.1 Accessory Overhaul Group, Inc. v. Mesa Airlines, Inc. (2014)
Is a maintenance contract one for service or parts if both are furnished?
What facts in the case would be important in answering this question?
Does the UCC apply?

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11-5
UCC v. Common Law
Car
Horse
Easement
Lease
Mortgage
Real Estate Listing Agreement
Fabric
Loan
Roof Repair
Air Conditioner UCC
X
X

X

X Common Law

X
X
X
X
X
X

Click to edit Master text styles
Second level
Third level
Fourth level
Fifth level

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11-6
Sources of Contract Law
Uniform Commercial Code (UCC)
Article 2A leases
New addendum to UCC
Covers leases of goods − long-term leases such as car leases
Adopted in most states

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11-7
E-Commerce and Contracts
Uniform Computer Information Transactions Act (UCITA)
Not widely adopted yet (Virginia and Maryland)
Governs transactions in software
Governs shrink-wrap and click-wrap contracts

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11-8
Bilateral: First party (offeror) makes a promise in exchange for the second party’s (offeree’s) promise
Example: You promise to pay back money with interest and the bank promises to loan you the money
Unilateral: First party (offeror) makes a promise in exchange for offeree’s performance
Example: “Drive my car across the country and I’ll pay you $500 plus expenses”
Bilateral vs. Unilateral

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11-9
Express Contracts are Written or Oral Agreements
Implied-in-fact Contracts are Non-spoken, Non-written Understandings
Example: When you go into a doctor’s office, you have an implied contract to pay her for her services even though you may not sit down and organize the details
Express vs. Implied

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11-10
Implied-in-Law
Fictional contract created by a court
Elements
One party confers a benefit on another
Both are aware of the benefit
Retention of the benefit without compensation would be unfair and unjust
Quasi Contracts

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11-11
Void Contracts are Ones to Do Something Illegal or Against Public Policy − Neither Side Can Enforce
Example: Contract to buy drugs
Void Contracts are illegal and do not exist at law!
Voidable Contracts are Contracts in Which One Party has the Right to End the Contract
Example: Contracts of minors are voidable
Void or Voidable Contracts

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11-12
Executed Contract is One in Which the Promises Under the Contract Have Been Performed
Executory Contract is One That Has Been Entered Into But Not Yet Performed
Contracts Can Be Partially Executory/Executed if One Side Has Performed
Executed vs. Executory

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12

11-13
Consumer Credit Contracts
Equal Credit Opportunity Act
Passed to be certain credit was awarded on applicant’s merits and not on extraneous factors such as age, sex, race, color, religion, or national origin
Equal Credit Opportunity Act

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11-14
Equal Credit Opportunity Act
Cannot consider
Marital status
Receipt of public assistance income
Receipt of alimony or child support
Plans for children
Spouses have rights to individual credit applications
Equal Credit Opportunity Act

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11-15
Equal Credit Opportunity Act
Penalties
Actual damage plus punitive damages of up to $10,000
Class action − punitive damages of up to $500,000 or 1 percent of creditor’s net worth (whichever is less)
Equal Credit Opportunity Act

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11-16
Case 11.2 A.B. & S. Auto Service, Inc. v. South Shore Bank of Chicago (1997)
What, according to Bonner’s expert is the impact of considering criminal records of applicants?
Do you think a criminal record is an indication of character?
ECOA Violation?

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Consumer Credit Contracts
Subprime or Predatory Lending
Loans for those with no credit history, bankruptcies, moderate incomes, or poor credit histories
Contracts are often difficult to understand
High interest rates and fees
11-17

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11-18
Truth-in-Lending Act (TILA)
Part of Consumer Credit Protection Act
Purpose was full disclosure
Elaboration and forms are found in Regulation Z
Application
Consumer credit transactions
Open-end transactions (credit cards and lines of credit)
Closed-end transactions (loans; financing)
Consumer Credit Contracts

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Truth-in-Lending
Regulation Z was Originally Part of the Federal Reserve Regulations
Consumer Financial Protection Bureau (CFPB) is New Agency Created Under Dodd-Frank
Will be housed in Federal Reserve
Will be funded by the Federal Reserve
11-19

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CARD
Credit Card Accountability, Responsibility, and Disclosure Act
Credit terms must last for one year
Restrictions on soliciting those under 21 and restrictions on colleges and universities
11-20

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Additional Credit Protections
Liability Limitations
$50 maximum liability if you comply with notification requirements
Credit card chips and liability limitations
Credit Balance Transfer Protections
Additional disclosures and regulations on transferring balances
11-21

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11-22
Formation of Contracts

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11-23
Offer is the First Part of the Contract
Parties
Offeror = person who makes offer
Offeree = person who receives offer
Must have language that indicates intent to contract
Not just inquiry
More than negotiation
Courts use an objective, not a subjective, standard
Formation: Offer

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Formation of Contracts
Case 11.3 Leonard v. PepsiCo (2000)
Was the commercial an offer for a Harrier Jet?
What was the acceptance?
Does the commercial satisfy the statute of frauds?

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11-25
Formation: Essential Terms
Under Common Law Offer Must Contain Essential Terms Of The Contract:
Parties
Subject matter
Price and Payment Terms
Delivery Terms
Performance Times
Under UCC Article 2 Offer Need Only Contain:
Parties
Subject matter
Quantity
Courts can consider industry custom and course of dealing in determining whether terms are sufficient

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11-26
Communication to Offeree
Offeree cannot accept offer that never arrives
Ads are generally considered invitations for offers − not offers
Formation: Offer

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11-27
Revocation: Offer Can be Revoked any Time Prior to Acceptance
Exception is option
Offeror is paid to hold offer open
It is a separate contract for time
UCC merchant’s firm offer UCC 2-205
Offer by merchant signed in writing states it will be kept open (irrevocable) for period stated (maximum of three months)
Offer: Termination

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Termination of an Offer by Rejection
Offeree indicates “no”
Rejection by changes in terms − counteroffer
Offer: Termination

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11-29
Offer: Termination (UCC)
Termination by Counteroffer – UCC 2-207
Non-merchants-addition of terms in acceptance does not equal a counteroffer
Acceptance results but additional terms are not part of contract

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11-30
Termination by Counteroffer – UCC 2-207
Merchants – “Battle of the forms”
Acceptance with additional terms = contract
Additional terms are part of contract unless:
Material − price, warranties (immaterial = shipment or payment terms)
Offer limited − “This offer is limited to these terms”
Objection to new terms
Offer: Termination (UCC)

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11-31
UCC Contract Formation

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Contract Formed
In Meeting of Minds on
Subject Matter
Parties Act
as if
Contract Exists
Parties Create
Record of
Contract
Terms
In Record
Control
Terms
Are Those in
Both Records
UCC Terms
Terms
They Agree
On
Court
Decides
Terms
11-32
Additional Terms Under New UCC Section 2-207

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Contract Formation
Case 11.4 C9 Ventures v. SVC-West, L.P. (2011)
Explain how tense physical circumstances affect contract signatures and validity
Discuss why whether this is a contract governed by UCC or common law is important to the decision
11-33

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11-34
Checklist for Drafting Contracts
Identify both parties clearly. Be certain corporate names are correct. Make sure the parties have the proper authority to enter into the transaction. (Are copies of board resolutions approving the contract available?)
Define the terms used in the contract, including industry terms.
List all terms: price, subject matter, quantity, delivery, payment terms.
Answer “what if” questions. (What if payment is not made? What if deliveries are late?)

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11-35
Checklist for Contract Preliminaries
Do your contract homework
a. Do background checks – check references, complaints at state and private agencies, court dockets
b. Learn the nature of the business and industry custom – learn to use the language
Negotiate details
a. Agree on terms that held you accomplish your purpose (“apple powder for bakery equipment,” not just “apple powder”)
b. Make sure your written agreement is complete

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11-36
Acceptance: Offeree’s Response
Offeree’s positive response
Must be communicated to offeror
Using proper means of acceptance
Only offeree has power to accept
Formation: Acceptance

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Acceptance: Offeree’s Response
The Mailbox Rule
Timing rule in contract acceptances that provides that acceptance is effective upon mailing if properly done
Acceptance by stipulated means
Mailbox rule applies
If offeree does not use means stipulated, then counteroffer and/or rejection
Formation: Acceptance

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Acceptance With No Stipulated Means
Mailbox rule if same means or stipulated means used
Arrival if different (slower) method used
If non-stipulated means used, it is a counteroffer and a rejection
Formation: Acceptance

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Timing Rules for Acceptance
TYPE OF OFFER
No means given

No means given

Means specified (specified or stipulated means)
Means stipulated (specified or stipulated means) METHOD OF ACCEPTANCE
Same or reasonable method of communication
Slower or unreasonable method of communication
Stipulated means used

Stipulated means not used ACCEPTANCE EFFECTIVE?
When properly mailed, dispatched (mailbox rule)
When received, is offer still open

Mailbox rule

Counteroffer and rejection

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Second level
Third level
Fourth level
Fifth level

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11-40
Case 11.5 Kass v. Grais (2009)
Discuss the FedEx issue in the case
What could the parties have done differently to avoid this confusion?
Formation: Timing

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11-41
E-Commerce and Contract Formation
Formation by ‘Clickon’, ‘Clickthrough’ or ‘Clickwrap’ agreements
Offeree agrees to terms contained in an online agreement
Offeree accepts by clicking the “I Agree” button
Formation: E-Contracts

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Case 11.6 Home Basket Co., LLC v. Pampered Chef, Ltd. (2005)
How were the orders placed?
How were the terms communicated?
What do you learn about on-going terms in transaction?
Formation: E-Contracts

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11-43
Distinguishes Gifts From Contracts
The Bargained-For Exchange
What each party is willing to give up for the other parties promise
Courts are not concerned with the adequacy of consideration, only the legal sufficiency of consideration
Formation: Consideration

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11-44
Unique Consideration Issues
Charitable subscriptions are enforceable even though detriment is one-sided
Reliance (promissory estoppel) provides element of detriment for contracts not yet begun
Formation: Consideration

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11-45
When Record is Required
Statute of Frauds (1677) controls what must be recorded
Types for contracts
Real property
Contracts that can not be performed in one year
Contracts to pay the debt of another
UCC-contracts for sale of goods for $5,000 or more
Statute of Frauds

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Exception: Performance
What Form of Record is Required?
Need not be one formal document − can be pieced together
Merchant’s confirmation memorandum-2-201
Statute of Frauds

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11-47
Case 11.7 Sununu v. Philippine Airlines, Inc. (2011)
What mistakes did the parties make in their communications?
Why is the court not sympathetic to Mr. Sununu?
Statute of Frauds

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11-48
The Recording Requirement in the Electronic Contract
Allows for the identification of electronically transferred documents using encryption technology
Digital signatures help authenticate users
Statute of Frauds

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48

Statute of Frauds
Uniform Electronic Transactions Act (UETA)
Contracts formed on the internet
Law in 47 states and D.C.
Electronic Signatures in Global and National Commerce Act of 2000 (E-sign)
Federal law
Requires parity for electronic signatures
11-49

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Statute of Frauds
Case 11.8 Rosenfeld v. Basquiat (1996)
Did the contract comply with the statute of frauds?
What is the effect of not complying with the statute of frauds?
Was the writing void?
11-50

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Statute of Frauds
Case 11.9 Brooks Peanut Co., Inc. v. Great Southern Peanut, LLC (2013)
Explain the back-and-forth paperwork between the parties
Is there a sufficient record of a contract?
11-51

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11-52
Common Law vs. UCC Rules on Formation
Area UCC Common Law
Application

Offers

Options

Acceptance

Consideration

Writing Requirement
Defenses
Sales of goods

Need subject matter (quantity), Code gives details
Merchant’s firm offer – no consideration needed
Can have additional terms; Mailbox rule works for reasonable means of acceptance
Required for contracts but not for modification or firm offers
Sale of goods $500 or more

Must be free of all defenses for valid contract Services, real estate, employment contracts
Need subject matter, price, terms, full details agreed upon
Need consideration

Mirror image rule followed; must use same/faster method for mailbox rules to get mailbox rule (old rule: same method)
Always required

Real estate contracts not to be performed in one year; paying the debt of another
Must be free of all defenses for valid contract

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Second level
Third level
Fourth level
Fifth level

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11-53
The Effect of the Record Contract
Contract reduced to its final and unambiguous form cannot be contradicted with extrinsic evidence
Exceptions include evidence on fraud, misrepresentations, and ambiguities
UCC exceptions: merchant’s confirmation memorandum
Parol Evidence

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11-54
UN’s Convention on Contracts for the International Sale of Goods (CISG)
Adopted in 1980
United States has adopted
Party Autonomy Still Controlling in International Contracts
Must Provide for Additional Risks
International Contracts

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Avoiding Legal Pitfalls in International Transactions
Use short, simple contracts. The tendency to place all possibilities in a contract is a U.S. tradition. In Germany, for example, the parties have a one-page agreement that references and incorporates terms and conditions of one of the parties.
Watch unconscionability protections. While the U.S. focuses its unfairness protections on consumers, other countries afford these same protections to commercial transactions.
Some disclaimers are void in other countries. For example, the clause, “We are only liable for loss of data which is due to a deliberate act on our part. We are not responsible for lost profits in any event,” would be valid in the U.S. but void in Germany. In Germany, sellers of software must assume liability for at least gross negligence.

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11-56
Avoiding Legal Pitfalls in International Transactions
One party’s attempt to limit liability would be void in Germany. Any liability limitation must be specifically addressed and negotiated for such a clause to be valid.
Unusually long periods for performance are typical in the U.S. but void in Germany.
Price increase limitations are typical in non-U.S. contracts.
In other countries, parties can refuse to pay on a current contract if performance on an earlier contract was less than satisfying and damages are owed.

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11-57
Case 11.10 Intershoe, Inc. v. Bankers Trust (1991)
Is the memo a final writing?
What dangers would the court introduce if orders such as this were contradicted by oral testimony?
International Contracts

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