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🎧 EPISODE SUMMARY 🎧

Formation establishes that a contract exists, while interpretation determines its requirements.

Contract terms can derive from oral statements, writings, course of performance, course of dealing, trade usage, statutory gap fillers, warranties, and implied duties.

Contracts are read as a whole, prioritizing specific and negotiated terms over boilerplate, applying trade meanings to technical terms, and construing unresolved ambiguities against the drafter.

Ambiguity requires multiple reasonable meanings; mere disagreement is insufficient.

The parol-evidence rule bars prior or contemporaneous evidence that contradicts an integrated writing. A complete integration bars supplemental terms, whereas a partial integration allows consistent additional terms.

The rule does not bar evidence proving fraud, mistake, invalidity, ambiguity, conditions precedent, lack of consideration, or subsequent modifications.

Express terms receive the greatest weight, prevailing over inconsistent course of performance, course of dealing, or usage of trade.

UCC Article 2 provides default terms for price, delivery, time, and termination, but quantity must be stated or measured via valid requirements or output terms.

The battle of the forms separates formation from terms. A definite acceptance forms a contract despite additional or different terms unless acceptance is expressly conditional on assent.

Between merchants, additional terms enter the agreement unless the offer limits acceptance, the terms materially alter it, or the offeror objects. Different terms are removed via the knockout rule, and conduct can establish a contract.

Express warranties arise from affirmations, descriptions, or samples forming the basis of the bargain, excluding mere puffery.

The implied warranty of merchantability ensures fitness for ordinary purposes, while fitness for a particular purpose requires the seller's knowledge of the specific use and the buyer's reliance.

Warranty disclaimers must meet conspicuousness requirements and generally cannot negate inconsistent express warranties.

Remedy limitations restrict available relief rather than eliminating the underlying contractual obligation.

Every contract imposes a duty of good faith in performance and enforcement, preventing opportunistic abuse of discretion without rewriting express terms.

The central lesson is that a contract extends beyond a single document, incorporating express text, commercial context, statutory rules, warranties, and good-faith obligations.

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