International Business Transactions - Essential rules in the USA Contract Law 2

CONTRACT  TERMS  

Parol  evidence  rule:  something  that  is  written  later  is  more  important  that  everithing  is  said  

before.  There  are  many  things  said  between  the  parties  and  then  the  parties  sign  a  contract  so  

there  are  also  agreement  not  in  the  contract.  The  rule  says  that  what  is  in  the  contract  is  more  

important  that  everything  it  is  said  before.  There  are  some  exceptions:  

1. Correct   clerical  errors,  errori  materiali  evidenti,  the  judge  can  consider  witnesses.  

2. When  is  necessary  to   establish  a  defense,  so  will  be  necessary  to  call  witnesses.  

3. When  the  parol  evidence  is  necessary  to  interpret  an   ambiguous  term.    

4. There  is  an  exception  to  the  exception.  The  parole  evidence  is  not  admitted  anyway,  for  

example  with  a   merger  clause.  This  contract  is  complete  and  no  parole  evidence  should  

be  admitted  anyway.  

PERFORMANCE  

Is  our  adempimento,  you  have  an  obligation  and  you  have  to  fulfill  it.  There  are  different  rule  in  

common  law  and  in  statutory  law.  Art.  2  UCC:   perfect  tender  rule,  the  parties  have  to  perform  

precisely  what  is  said  in  the  contract.  Although  the  other  part  can  reject  and  refuse  to  accept  the  

performance.  There  is  also  an  exception  called   option  to  cure.  If  the  other  party  refused  the  

performance  and  the  time  is  not  expired  yet  to  fulfill  the  obligation.  I  have  an  option  to  cure,  I  

still  have  time  to  fulfill  my  obligation.  This  rule  can  be  used  also  if  the  parties  have  been  flexible  

in  the  contract.  You  can  sue  the  other  party  for  damages  only  if  the  time  for  the  obligation  has  

expired.    

Installment  contracts,  contracts  where  you  do  not  just  perform  once,  but  you  keep  performing.  

A  baker  has  to  bring  the  bread  to  a  hotel  every  day.  The  perfect  tender  rule  does  not  apply  in  

this  case,  because  it's  difficult  to  say  when  the  obligation  is  perfect.  Unless  the  reach  is  so  

substantial  that  includes  a  substantial  breach.    

These  rules  are  valid  only  for  the  sale  of  goods  contracts,  different  story  for  the  common  law  

contracts.  Therefore,  every  other  contract  that  is  not  cover  by  the  UCC,  for  example  contract  of  

service.  The  rule  in  these  cases  is  that  the  performance  might  not  be  perfect,  so  it  does  not  

apply  the  perfect  tender  rule.  This  rule  is  called  substantial  performance,  ex.  I  have  to  paint  this  

room  in  a  day  but  I  do  it  in  a  day  and  an  half.  A  day  and  an  half  is  fine  because  finishing  a  job  

later  is  never  considered  a  breach  unless  there  is  a  specific  clause  in  the  contract  that  states  that  

time  is  all  the  essence.  If  you  breach  this  time,  then  i  can  reject  your  performance  and  request  

damages.  We  must  discover  the  essential  element  of  the  contract.    

EXCUSE  

Is  something  that  allows  you  to  not  performance  based  on  late  events.  Is  similar  to  our  

risoluzione.    

1. Other  party's  breach,  I  can  decide  not  to  pay  and  I  can  ask  damages  like  in  our  system.  

in  contract  law  I  can  recover  damages  but  I  can  only  in  case  of  a  material  breach  I  have  

an  excuse  to  not  perform.